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How can I increase my income with a low income and contractual job in a small town in Odisha?

Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 01, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Khirod Question by Khirod on Oct 22, 2024Hindi
Money

Hello Patel Sir, I am a middle class person income of Rs. 25000/- pm through contractual job resides in small town in Odisha. How could I increase my income by investing or doing extra work in future .

Ans: Your question reflects a sincere and goal-oriented approach towards financial growth. With careful planning and some extra efforts, you can lay the groundwork for increasing your income, whether through investments or additional sources of income. Below, let’s discuss actionable and effective strategies for increasing your income from a 360-degree perspective.

1. Assess and Optimise Your Monthly Budget

Understanding your spending is the first step. Track your expenses to identify savings. Prioritising your essential expenses helps you set aside funds for investments. Even small savings can compound into a solid base over time.

2. Start Building an Emergency Fund

An emergency fund safeguards you during unexpected times. Aim to set aside at least six months’ worth of expenses. Use a liquid fund or recurring deposit, which keeps funds accessible and offers moderate returns. Once stable, move to long-term investments.

3. Increase Skills and Seek Additional Job Opportunities

Improving your skills can open doors to better job opportunities. Look for skill courses in your field or learn something new online. Skilled professionals can command higher pay, whether in current roles or new opportunities. Additionally, part-time freelance or contract work is a viable option. Platforms like Upwork or Fiverr connect you to work-from-home opportunities, bringing extra income.

4. Systematic Investment in Mutual Funds

Mutual funds can be a significant addition to your income-building strategy. As a beginner, consider starting small, investing as little as Rs. 500 to Rs. 1,000 each month. SIPs (Systematic Investment Plans) are accessible, offer compounding growth, and support disciplined investing. Avoid direct funds as these can be challenging to track and manage. Opting for regular plans through a trusted CFP is advisable. A Certified Financial Planner can help you select funds aligned with your financial goals and needs. Regular plans offer the advantage of continuous guidance, portfolio reviews, and support from financial experts.

5. Side Business or Passive Income Options

Consider starting a small side business or exploring passive income options. If you have skills like cooking, gardening, or teaching, you can monetise these in your local community. Passive income options like creating content online or renting equipment may require some initial work but generate consistent revenue. Research local demand to choose the best opportunities in your area.

6. Low-Cost Investment Options

To maximise returns, choose cost-effective investments. For instance, actively managed mutual funds help outperform standard returns, unlike index funds which may not suit your goal of increasing income. Actively managed funds enable you to benefit from expert decision-making, improving growth prospects. Index funds lack flexibility and often fall short in uncertain markets.

7. Avoid Insurance-Linked Investments

Since you are considering investments, avoid mixing insurance with investment, like ULIPs or endowment plans. Insurance-linked investments often have higher fees, locking you into long terms without high returns. Opt for pure insurance for protection and separate investments for growth.

8. Focus on Equity-Oriented Funds for Higher Returns

Equity mutual funds can offer higher returns but come with market-related risks. If you invest with a long-term horizon of 5-7 years, equity mutual funds can be rewarding. They require patience, but equity-based funds have a history of outperforming inflation, making them suitable for your income-increasing goal. Stay invested and avoid frequent withdrawals to benefit from compounding.

9. Create a Long-Term Investment Plan

A well-structured investment plan helps you achieve both short and long-term goals. Alongside monthly investments in mutual funds, create a roadmap for career progression, additional skills, and other investment avenues. A long-term plan provides stability and keeps you on track to increasing income and wealth.

10. Look into Debt Mutual Funds for Stability

Debt mutual funds are suitable for shorter-term goals, offering stability with low to moderate returns. When you need capital preservation or prefer steady growth, debt funds serve well. While equity offers growth, debt funds balance your portfolio. Remember, income from debt funds is taxed based on your tax slab.

11. Minimise Tax Liability on Gains

Investing in mutual funds comes with tax implications. Equity mutual funds are taxed on long-term gains over Rs. 1.25 lakh at 12.5%, and short-term gains at 20%. Proper planning can help you minimise tax outgo, maximising returns.

12. Review and Adjust Portfolio Regularly

As a beginner, you might need help with adjusting investments. Working with a Certified Financial Planner can ensure your portfolio is regularly reviewed and adjusted as per market conditions. This guidance is beneficial in maximising returns and staying on track with your financial goals.

Final Insights

Increasing income requires a balance between smart investments and skill development. By focusing on regular investments, building skills, and exploring passive income, you lay a strong foundation for financial growth. Working closely with a Certified Financial Planner helps ensure your investments align with your goals, providing the guidance you need to progress confidently.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 06, 2024

Money
Hi sir I'm hemanth working in postal department with 21k and doing sip of 7k in 9 Mfs from past 3 years and 1 lakh in direct stocks....can u suggest me to do something else to increase my passive income
Ans: Hi Hemanth! First, let me congratulate you on your disciplined investment approach. Investing Rs. 7,000 monthly in SIPs and holding Rs. 1 lakh in direct stocks is commendable. Let’s explore how you can increase your passive income.

Understanding Your Current Investment Portfolio
You’re currently investing Rs. 7,000 per month in 9 mutual funds and have Rs. 1 lakh in direct stocks. This is a great start and shows your commitment to building wealth. Here’s how you can optimize and diversify further.

Diversifying Mutual Funds
While investing in mutual funds, diversification is key. You’ve chosen 9 mutual funds, but it's essential to review their categories and performance regularly.

Types of Mutual Funds
Equity Funds: High risk, high return. Suitable for long-term goals.
Debt Funds: Low risk, stable returns. Ideal for short to medium-term goals.
Hybrid Funds: Mix of equity and debt. Balances risk and return.
Advantages of Mutual Funds
Professional Management: Managed by experts.
Diversification: Spreads risk across various securities.
Liquidity: Easy to buy and sell.
Evaluating Direct Stocks
You have Rs. 1 lakh in direct stocks. It’s crucial to regularly review and assess their performance.

Benefits of Direct Stocks
Potential for High Returns: Direct ownership of company shares.
Control: You decide when to buy or sell.
Risks of Direct Stocks
Market Volatility: Prices can fluctuate widely.
Need for Research: Requires constant monitoring and analysis.
Exploring Other Investment Options
To increase your passive income, consider diversifying into other investment avenues. Here are some options:

1. Systematic Investment Plan (SIP)
Continue with your SIPs but ensure they are well-diversified. SIPs offer the benefit of rupee cost averaging, reducing the impact of market volatility.

2. Fixed Deposits (FDs)
FDs are a safe investment option offering fixed returns. Though the returns are lower compared to equities, they provide stability.

3. Public Provident Fund (PPF)
PPF is a long-term, government-backed investment. It offers tax benefits and a decent return, making it a safe and attractive option.

Generating Passive Income
Passive income streams can provide financial stability and additional income. Here are some ideas:

1. Systematic Withdrawal Plan (SWP)
SWP allows you to withdraw a fixed amount from your mutual fund investments at regular intervals. This can provide a steady income stream while your remaining investment continues to grow.

Benefits of SWP
Regular Income: Provides a predictable cash flow.
Capital Preservation: Only part of your investment is withdrawn, leaving the rest to grow.
Tax Efficiency: Only the gains portion is taxed, which can be more tax-efficient than regular income.
Power of SWP
SWP harnesses the power of compounding and market growth. By withdrawing only a portion, your principal amount continues to earn returns. This can provide a sustainable income stream over a long period.

Importance of Financial Planning
A solid financial plan is crucial for achieving your financial goals. Here’s how to go about it:

1. Set Clear Goals
Define your financial goals, both short-term and long-term. This helps in creating a focused investment strategy.

2. Budgeting
Create a monthly budget to track your income and expenses. This ensures you have enough savings to invest.

3. Emergency Fund
Maintain an emergency fund to cover 6-12 months of expenses. This provides financial security in case of unforeseen events.

Power of Compounding
The power of compounding is a critical aspect of wealth creation. It allows your investments to grow exponentially over time.

Example of Compounding
Investing Rs. 10,000 monthly at an average annual return of 12% for 20 years can significantly grow your wealth due to compounding.

Regular Review and Rebalancing
Regularly review your investment portfolio. Rebalance it annually to maintain the desired asset allocation and achieve optimal returns.

Benefits of Actively Managed Funds
Actively managed funds are controlled by fund managers who make strategic decisions. Here’s why they are beneficial:

Flexibility: Managers can adapt to market changes.
Potential for Higher Returns: Can outperform the market.
Risk Management: Fund managers can mitigate risks.
Disadvantages of Index Funds
Index funds mimic the performance of a market index. Here are some disadvantages:

Lack of Flexibility: Cannot adapt to market changes.
Market Risk: Exposed to the entire market’s ups and downs.
Lower Returns: May not outperform actively managed funds.
Disadvantages of Direct Funds
Direct funds have no intermediary, so you save on commission. However, there are drawbacks:

Lack of Guidance: No professional advice.
Time-Consuming: Requires constant monitoring.
Higher Risk: Without expert advice, the risk of poor decisions increases.
Benefits of Regular Funds through CFP
Investing through a Certified Financial Planner (CFP) offers several benefits:

Professional Advice: Expert guidance on fund selection.
Regular Monitoring: Continuous review and adjustments.
Tailored Portfolio: Customized investment strategy based on your goals.
Tax Planning
Effective tax planning enhances your savings and investment returns.

1. Utilize Section 80C
Maximize your deductions under Section 80C through investments in PPF, ELSS, and other eligible instruments.

2. Leverage Section 80CCD
NPS contributions offer additional tax benefits under Section 80CCD.

3. Health Insurance
Premiums paid for health insurance provide deductions under Section 80D.

Estate Planning
Estate planning ensures your assets are distributed as per your wishes.

1. Will
Draft a will to specify asset distribution. This prevents legal complications and ensures your wishes are honored.

2. Nominees
Appoint nominees for your bank accounts, insurance policies, and investments. This simplifies the transfer of assets in case of your absence.

Final Insights
You’re doing a fantastic job with your investments. To increase your passive income, consider diversifying further and exploring new investment avenues. Regularly review and rebalance your portfolio, and consult a Certified Financial Planner (CFP) for personalized advice.

Stay disciplined and focused on your financial goals. Small, consistent efforts can lead to significant financial growth over time.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 20, 2024

Money
I worked in IT industry for 18 years and 5 Years in MFG, lost job was getting 1.4 lakh/month , have loan of 13 lakh, rental income 20k ,PF 10 Lakh saving 5 Lakh . how to improve to income for children 12 & 3 studies and other expenses
Ans: You have a solid financial base, including rental income, PF, and savings. Losing your job is a difficult phase, but it also offers an opportunity to reassess your goals. Your priorities—managing expenses, repaying loans, and planning for your children’s future—are achievable with a systematic approach.

Let’s analyse your situation from all angles and create a comprehensive financial plan.

Detailed Analysis of Your Assets and Liabilities
1. Loan Liabilities

Your outstanding loan of Rs 13 lakh is a major priority.
Paying EMIs consistently while maintaining liquidity will help ease this burden.
2. Rental Income

Rs 20,000 per month is a valuable, steady income source.
This income can support loan repayment or household expenses.
3. Provident Fund (PF)

Rs 10 lakh in PF is a significant safety net for your retirement.
Avoid using PF for immediate needs unless absolutely necessary.
4. Savings

Rs 5 lakh in savings can be utilised strategically.
Reserve a part for emergencies, and use the rest for growth-oriented investments.
Strategies to Improve Income
A. Leverage Professional Experience

Your 18 years in IT and 5 years in MFG offer opportunities to monetise your skills.
Seek freelance consulting or project-based roles in IT, supply chain, or manufacturing.
Register on platforms that connect experienced professionals to global employers.
B. Upskill for High-Demand Roles

Enrol in short-term certifications in areas like cloud computing, AI, or supply chain analytics.
Consider online platforms offering affordable courses to boost employability.
C. Explore Passive Income Streams

Convert savings into investments that generate steady returns.
Look for low-risk instruments that complement your rental income.
Loan Management
A. Prioritising Debt Repayment

Allocate rental income of Rs 20,000 monthly towards loan EMIs.
Ensure timely payments to avoid penalties and maintain your credit score.
B. Negotiating Loan Terms

Approach your lender to explore refinancing options for better interest rates.
If possible, restructure the loan to lower monthly EMIs.
C. Avoid Aggressive Prepayment

Prepay only when you have surplus funds beyond emergency reserves.
Maintaining liquidity is crucial to address unexpected expenses.
Building a Secure Financial Base
A. Emergency Fund Creation

Set aside Rs 3 lakh from your savings as an emergency fund.
Keep this fund in a liquid or ultra-safe investment to access it quickly.
B. Children’s Education Planning

Your children, aged 12 and 3, will require significant educational funds.
Start systematic investments now to meet these future needs.
C. Protecting Your Family’s Future

Ensure adequate life and health insurance coverage to protect against uncertainties.
Reassess existing policies to confirm they align with your financial goals.
Expense Management
A. Streamlining Monthly Expenses

Identify and reduce non-essential spending.
Use expense-tracking apps to monitor and control your budget.
B. Prioritising Education Costs

Focus on allocating a portion of income towards your elder child’s school fees.
Plan for higher education expenses well in advance by estimating future costs.
C. Accounting for Inflation

Factor in annual inflation, especially for education and healthcare.
Adjust your savings and investments to account for these rising costs.
Enhancing Investment Strategy
A. Systematic Investment Planning (SIP)

Start SIPs in mutual funds with a balanced mix of equity and debt exposure.
Use regular funds through a Certified Financial Planner (CFP) for expert guidance.
B. Advantages of Regular Funds Over Direct Funds

Direct funds lack the professional advice and market insights provided by CFPs.
Regular funds allow you to focus on long-term goals with less personal effort.
C. Avoid Index Funds for Better Returns

Index funds only replicate market performance without active risk management.
Actively managed funds adapt to market changes, potentially delivering higher returns.
Tax Planning for Maximum Efficiency
A. Utilising Tax Deductions

Maximise deductions under Section 80C by investing in tax-saving instruments.
Consider ELSS funds, which combine tax benefits with wealth creation.
B. Planning Withdrawals for Lower Tax Impact

Withdraw investments strategically to minimise taxable income.
Understand the latest mutual fund tax rules to optimise gains.
C. Investing for Tax Efficiency

Allocate savings in instruments offering tax-free or tax-deferred returns.
Use systematic transfer plans (STPs) to transition funds between debt and equity.
Focusing on Children’s Education
A. Long-Term Education Planning

Begin investing specifically for your children’s higher education.
Use diversified instruments to build a substantial corpus over the years.
B. Setting Milestone-Based Goals

Break down education costs into milestones (e.g., school, college, post-graduation).
Align investment timelines to meet these milestones effectively.
C. Combining Growth and Stability

Choose a balanced investment strategy to ensure growth without excessive risk.
Review your portfolio yearly to align with evolving financial goals.
Planning for Retirement
A. Preserving Your PF for Retirement

Keep PF untouched as your retirement base.
Complement it with long-term investments in growth-oriented funds.
B. Building a Secondary Corpus

Invest systematically in debt and equity funds to create an additional retirement corpus.
Maintain a diversified portfolio to reduce overall risk.
C. Ensuring Financial Independence

Target investments that generate a steady income during retirement.
Reinvest returns to grow your corpus until retirement.
Continuous Monitoring and Professional Guidance
A. Collaborate with a Certified Financial Planner

Work with a CFP to create a tailored financial plan.
Review your progress regularly and adjust as needed.
B. Monitoring Investments

Track the performance of all investments every six months.
Rebalance your portfolio to adapt to changing market conditions.
C. Staying Updated

Stay informed about new financial products and investment opportunities.
Use financial literacy to make better decisions for your family’s future.
Final Insights
You have a strong foundation with your rental income, PF, and savings. By focusing on income enhancement, debt management, and systematic investing, you can secure your family’s future. Plan strategically for your children’s education and retirement, ensuring financial stability. Stay disciplined, adaptable, and focused on long-term goals.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 10, 2025

Asked by Anonymous - May 10, 2025
Money
Hi Sir, I am 42 years old private employee and around 1lakh salary per month. I have 2 kids of 7yrs and 4yrs each. I have savings like in NPS as 11lakhs, PPF as 8lakhs, Sukanya as 2lakhs, 1 term policy and lic policy. Medical insurance is from company and no person health insurance. And I have 72k in MFs till now. I have started it and regretting as I ignore MFs as I don't have much financial knowledge on this. So requesting you to please give a suggestion for my family future needs like education, marriage etc. and importantly pension fund after retirement. Hope you will reply and help me.
Ans: You're doing well so far. You have started important savings and protection steps. You are rightly thinking about your children and retirement. Let’s now look at your full financial picture step by step. This is to guide you in building a solid future for your family.

Current Financial Overview – Evaluation
Your monthly income is Rs.1 lakh. This gives you decent capacity to plan.

You are 42 now. That gives you around 15 to 18 years for retirement.

You have Rs.11 lakhs in NPS. This is a good start.

PPF of Rs.8 lakhs is useful for long-term needs. Well done.

Sukanya Samriddhi Yojana of Rs.2 lakhs is good for daughters. Keep it up.

You have term insurance. This is a very important safety net.

You have company medical insurance. But you must take personal health cover too.

Rs.72,000 in mutual funds is a good beginning. You should continue.

You have a LIC policy. This is a mix product. We need to check its usefulness.

Children’s Future – Education and Marriage Planning
Your kids are 7 and 4 years old. Their higher education starts in 10-14 years.

For education and marriage, equity mutual funds are best suited.

They can give better growth than PPF, Sukanya, or fixed options.

Continue Sukanya Samriddhi. It is safe and tax-free.

But add mutual funds as major part for education goals.

Use regular plans through MFDs with CFP support. This gives proper guidance.

Avoid direct plans. They miss out expert monitoring and adjustment support.

Direct plans seem cheaper. But lack handholding and ongoing advice.

Choose child-focused mutual fund portfolios with 10+ years view.

Invest monthly through SIPs. This builds wealth slowly and safely.

Target two separate funds: one for elder, one for younger child.

Review goals every year with your CFP and adjust SIPs.

Your Retirement – Pension Planning Steps
NPS of Rs.11 lakhs is a decent beginning. You should continue it.

But don’t depend only on NPS for full retirement.

Add mutual funds as second pillar for retirement.

Invest in balanced and multi-cap equity mutual funds via regular plans.

Regular plans through CFP and MFDs will give review and corrections.

Avoid direct funds. You may miss right fund changes and rebalancing.

Equity funds can help you beat inflation over next 15-20 years.

Don’t invest in annuity plans. They give low income and low flexibility.

Increase your SIP amount every year by 10%-15%.

Consider retirement planning as your most important goal.

Estimate a comfortable monthly need after retirement.

Plan now to reach that amount by 60.

Maintain separate SIPs for children’s education and for your retirement.

Life Insurance – Policy Review and Action
You already have a term insurance. This is perfect. Continue it.

If your term insurance is below Rs.1 crore, increase it now.

Avoid traditional LIC endowment or ULIP policies.

These mix insurance with investment. Gives poor return.

If your LIC is traditional or ULIP, plan to surrender it.

Take surrender value. Invest that amount in mutual funds.

Pure term plans protect your family better than endowment plans.

No need to mix insurance and savings.

Health Insurance – Important Next Step
Company insurance is not enough. Buy personal family health insurance.

After leaving job, company cover may stop. Risk is high without personal cover.

Take a Rs.10 lakh floater plan now for your family.

Add super top-up of Rs.15-20 lakhs later. Premium is low.

This gives peace of mind against big medical bills.

If you delay this, you may get exclusions or waiting period.

Emergency Fund – Safety Cushion Plan
Keep at least 6 months of expenses in savings or liquid mutual fund.

This is your safety net during job loss or medical need.

Use sweep-in FD or liquid funds for better returns.

Don’t touch emergency fund for any investment.

Keep it ready and separate from regular savings.

Mutual Funds – Growth Engine for Long Term Goals
You have Rs.72,000 in mutual funds now. Good first step.

Continue investing monthly through SIPs. Choose regular plans.

Use the help of MFDs and CFPs for fund selection and review.

Avoid index funds. They don’t beat market. No fund manager support.

Actively managed funds perform better with expert fund management.

Also avoid direct funds. You need handholding and goal tracking.

Regular funds cost little more. But give huge benefit of expert advice.

Equity mutual funds should be used for all long-term goals.

For short-term needs, use short duration or hybrid funds.

Review your portfolio yearly. Adjust based on life changes.

PPF, Sukanya and NPS – How to Use Them Properly
PPF is safe and tax-free. Continue till maturity.

Use it as part of your retirement strategy.

Sukanya is good for your daughters. Continue till they reach 21 years.

NPS is useful for building retirement money. Continue your contributions.

But NPS has lock-in. So don’t make it your only retirement tool.

Mix it with equity mutual funds to create balance.

Review asset allocation with a certified planner every year.

Tax Planning – Smart Use of Instruments
Use Section 80C fully with PPF, Sukanya, Term Insurance, ELSS.

ELSS mutual funds give tax benefit and growth potential.

Don’t put too much in low-yield tax-saving policies.

Use HRA and NPS also for tax savings if available.

Equity mutual funds: LTCG above Rs.1.25 lakh is taxed at 12.5%.

STCG is taxed at 20%. So, hold equity funds for more than 1 year.

Debt mutual fund gains are taxed as per income slab. Plan accordingly.

Action Plan – What You Can Do Next
List your goals: retirement, kids’ education, their marriage.

Estimate time left for each goal.

Assign investments to each goal. PPF, NPS, Sukanya for retirement and kids.

Start or increase SIPs in regular equity mutual funds.

Take personal health insurance without delay.

Check and surrender LIC if it is traditional or ULIP.

Build an emergency fund equal to 6 months of salary.

Increase your term insurance if less than Rs.1 crore.

Review all investments yearly with a certified financial planner.

Finally – Insights to Keep in Mind
You are doing many right things. Just needs better alignment.

Don’t feel regret about delay. You are now taking steps forward.

Invest in mutual funds regularly with expert guidance.

Avoid direct and index funds. Go with regular plans via CFPs.

Plan each goal separately. Don’t mix children and retirement funds.

Protect your family with term insurance and health cover.

Stay consistent with SIPs. Wealth builds over time.

Review once a year. Track goals and adjust your plan.

Always take advice from certified financial planners.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 10, 2025

Money
I am 31 years, unmarried bachelor and lead celibacy. I have investment in equity mutual fund growth option cost of which is 20 lacs now valued at 45 lacs. I don't require this for next 30 years and reserve it for my retirement. Do I need to save now for retirement, or can I spend 99% of my current earning as I have a retirement corpus of Rs.45 lacs at current value. I have life cover of 1.5 cr and for health Rs.40 lacs and comfortably earning from MNC for my survival, healthy with no bad habits and lead a disciplined and minimalist life style. Please guide me do I need more retirement corpus, or the accumulated Corpus is enough for retirement. If so how much more corpus do i need?
Ans: You have shown excellent discipline. At age 31, you already have Rs.45 lacs in equity mutual funds. That’s a rare position to be in.

You lead a minimalist life. You are healthy. You don’t have dependents. You are earning well. You are living with purpose and clarity.

Still, retirement planning is not only about a lump sum today. It also needs a 360-degree analysis.

Let us now evaluate in detail if this Rs.45 lacs is enough for your retirement.

We will assess from lifestyle, inflation, investment risk, tax rules, personal values, and health perspective.

We will also answer your main question: Can you spend 99% of your earnings now?

Retirement Planning Is Not Only About Current Corpus
Rs.45 lacs looks large now. But you are 31. Retirement is 29 years away.

A rupee today won’t have the same value 30 years later.

With inflation, prices can rise 5x or even more by then.

Your current Rs.45 lacs may not buy much in 2054.

So it is not enough to just grow. It must grow faster than inflation.

What If You Don’t Add Any More Investment?
If you don’t invest any more for retirement now, your Rs.45 lacs must grow for 30 years.

Let us assess few key points:

If the investment is fully in equity, volatility is high.

Long-term returns can be rewarding, but not always predictable.

Also, equity mutual funds attract capital gains tax.

New rule: LTCG above Rs.1.25 lakh taxed at 12.5%.

This will reduce the final retirement corpus.

So you cannot assume all returns will be tax-free.

Impact of Inflation on Lifestyle
You are minimalist today. But that may not be the case at 60.

Even basic costs like food, rent, medicine, utilities will go up.

At 6% inflation, Rs.25,000 monthly expenses today may become Rs.1.5 lacs after 30 years.

Medical inflation is higher. You may need Rs.5 lacs per year for healthcare alone at retirement.

So the same Rs.45 lacs will lose value every year.

What If You Live Longer?
Longevity is increasing in India. You may live till 90 or 95.

That means 30 years working and 30+ years retired.

So retirement may last longer than your working life.

Your money has to work for you after 60.

Even a Rs.3 crore corpus at retirement may fall short if not planned properly.

Health Cover and Life Cover Are Good
Rs.1.5 crore term insurance is good.

Rs.40 lacs health cover is excellent. Keep renewing it.

But insurance is not a substitute for retirement planning.

Also, insurance does not build wealth.

You Have Time on Your Side
You are 31. That gives you 30 years to grow your corpus.

That is your biggest strength.

Small, consistent investing now can multiply your corpus over 30 years.

Even Rs.10,000 per month extra can change your future.

Can You Spend 99% of Earnings?
It is not wise to spend 99% of earnings even with Rs.45 lacs corpus.

It makes your life dependent on just one investment.

Also, it leaves no buffer for job loss, health crisis, or early retirement.

Spending most of your income will reduce your financial freedom later.

Risks of Not Saving Enough
Future jobs may not pay this well.

You may face burnout or wish to retire early.

Markets may not perform as expected.

Emergencies may force early withdrawal.

Expenses can rise unexpectedly.

What Should Be the Ideal Retirement Corpus?
There is no fixed number. It depends on your lifestyle.

Still, we can estimate based on some broad assumptions:

A basic retirement needs at least Rs.4 to 5 crores at age 60.

A comfortable life with travel, hobbies, and good healthcare needs Rs.6 to 8 crores.

A rich life with freedom and legacy needs Rs.10 crores or more.

You may not need all of it. But you must aim higher and stay flexible.

How Much More Corpus You Need?
You already have Rs.45 lacs.

Assuming 10% annual return, and no withdrawal for 30 years:

Your current Rs.45 lacs can become Rs.8 crores in 30 years.

But tax and inflation will reduce its value.

After adjusting, this may be worth only Rs.3 to 4 crores in real terms.

So yes, you are on the right path. But you are not done yet.

Should You Stop Saving Now?
No. Stopping now is not safe.

You should continue to invest at least 20% to 30% of income.

You don’t need to be aggressive.

But you must not stop completely.

Advantages of Continuing SIPs in Actively Managed Mutual Funds
Actively managed funds are more responsive to market changes.

They are driven by research and fund manager insights.

They can beat inflation better than passive options.

They help create real wealth over time.

You can invest through mutual fund distributor with CFP. That gives expert help.

Disadvantages of Direct Mutual Fund Investing
Direct funds seem cheaper. But they miss the human touch.

No professional reviews. No behavioural guidance.

You may exit in panic or enter at wrong time.

Mistakes in direct investing are costly.

Regular funds via a Certified Financial Planner offer support, reviews, and strategy.

Financial Planning Is Not Just About Corpus
Financial planning is lifelong.

You need a written retirement plan.

Include health, taxes, estate, and liquidity in that plan.

Set goals every 5 years and review progress.

Don’t think of corpus only. Think of financial independence.

Your Current Strengths
Strong investment of Rs.45 lacs

No dependents or liabilities

High income and low expenses

Health insurance and term cover

Discipline and minimalism

What You Can Do Now
Continue SIPs in actively managed funds via expert help

Review portfolio yearly with a Certified Financial Planner

Create a written retirement plan

Don’t touch your Rs.45 lacs till 60

Save 30% of income. Enjoy 70%.

Finally
You are doing well. You already have Rs.45 lacs at age 31. That shows foresight.

But retirement is not a fixed-point goal. It is a moving target with inflation and uncertainty.

You must not stop saving. Keep adding regularly. Small steps now can lead to a rich future.

Aim to build a Rs.6 to 8 crore corpus. That gives you safety, comfort, and peace.

Spending 99% now is risky. Don’t do that. Instead, reward yourself within limits. But keep investing for freedom.

Discipline today gives freedom tomorrow.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |8330 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 10, 2025

Asked by Anonymous - May 09, 2025
Money
Sir, we had a dispute in our ancestral property we approached the court and the verdict said we are entitled to a portion of the property The dispute was the land was sold without our knowledge etc., after getting the verdict we got patta, registration in our name. Now we are planning to sell the land, a lawyer said get a ratification deed, I don't know what it is and also weather it is needed or not. The lawyer called us and said the the other party who has purchased the land illegally is not agreeing to sign and is asking money to settle the matter as he has purchased the land. Even after receiving court orders this kind of dodging is happening. The amount of money he is asking is senseless, even if I sell the land I wouldn't get that much amount, I am unable to put in writing many other problems kindly advise what next steps to take. also let me know what are all the documents to have as a owner. Thank you
Ans: You have taken rightful steps. Court verdict is in your favour. That shows your legal ground is strong.

But still, the other party is asking for money. That too, an unfair amount. You also mentioned a lawyer suggested getting a ratification deed. Let us try to understand the full situation and assess all possible options. We will also cover what documents are needed to prove your ownership.

This reply gives you a 360-degree view. It will help you make a sound and confident decision.

Understanding Your Current Legal Standing
You said the land was sold without your knowledge. That makes the original sale illegal. The court has agreed with you. That is a key win for you.

You now have patta and registration in your name. These are strong documents. They show you have legal title.

Based on this, you are now the legal owner. That means you have the full right to sell the land. But the buyer must also be confident. So legal clarity is very important.

What Is a Ratification Deed?
A ratification deed is a It confirms a past act done without proper authority. The current party gives approval to that act.

In your case, it seems the buyer who bought the land earlier is being asked to “ratify” that sale. That is, to agree that you are the rightful owner now.

This is not a mandatory document by law. But it is sometimes used to make the title stronger. Some buyers or their banks ask for it.

However, since the court has already ruled in your favour, you may not legally need it. You already have the stronger claim.

Why Is the Buyer Still Causing Issues?
The person who bought the land earlier might feel he lost money. He may think the sale to him was legal. But since the court disagreed, he now holds no right.

His demand for money is unjust. It is a pressure tactic. He is trying to recover his loss by troubling you.

You are not legally required to pay him. He has no power to stop your sale.

Assessing Options Now
You can now evaluate your next steps from three angles – legal, practical, and financial.

Legal Options
Talk to your lawyer again. Ask: is a ratification deed mandatory in your case?

Get a written legal opinion. This should clearly mention your rights and position.

File a complaint if the other party is threatening you or asking money.

Send a legal notice through your lawyer to that person. Mention that he has no right now.

Practical Options
Try selling to a buyer who trusts the court order. Show them all documents.

Explain clearly that title is clean. Show the judgment, patta, and registration.

Use a reputed real estate lawyer for the sale. That gives buyers more confidence.

Financial Assessment
Do not agree to pay huge amounts. It may cause loss for you.

If needed, consider a small settlement. But only after full legal review. And only if it makes the sale smooth and quick.

Ask yourself: Even if I settle, will the person agree to give in writing? If not, don’t pay.

Must-Have Documents to Sell the Land
As a rightful owner, you must hold the following papers:

Patta in your name (this is land ownership proof)

Registered sale deed or title deed (issued after the court judgment)

Copy of the court verdict

Encumbrance Certificate (EC) (shows your name as the current legal holder)

Legal heir certificate, if you inherited the land

Property tax receipts in your name

Aadhar and PAN card copies

Suggested Steps to Make Sale Smooth
Get a detailed Title Certificate from a lawyer. It should mention the court case and outcome.

Keep a summary note ready. It should explain how you became owner.

Ensure name match across all your documents.

Keep a certified copy of court order with you at all times.

Use a reputed property consultant or broker only if needed. Prefer buyers who are local and familiar with such cases.

Emotional and Mental Pressure
You also mentioned you are facing many other issues. That is understandable. Land disputes take a heavy toll on health and peace of mind.

Please do not worry. You already have legal strength.

You have cleared a big milestone by getting the court’s support.

Don’t allow fear or threats to stop you.

Stay strong. Keep family informed. Talk regularly with your lawyer.

How Certified Financial Planner Can Help
A Certified Financial Planner (CFP) can guide you better with your sale proceeds.

If you plan to sell, prepare a written cash flow plan.

Think about your family’s short-term and long-term needs.

Keep emergency funds aside. Don’t invest all money at once.

Mutual funds managed by professional advisors can be considered. They offer long-term wealth building.

What Not To Do
Do not deal in cash. Always use cheque or bank transfer.

Do not sign any paper without lawyer check.

Do not get emotionally disturbed by their false threats.

Do not delay your next steps due to confusion or fear.

Finally
You have shown good courage. You followed the legal process. You now own the land as per law.

The other party is only trying to misuse your fear. Do not fall for it.

If the buyer still refuses to cooperate, avoid them. Choose another buyer.

If a ratification deed is insisted by your new buyer, ask your lawyer: Is it really needed?

If not needed, move ahead without it.

If needed, try again to convince the other person. If they demand unreasonable money, don’t agree.

Let your lawyer send notice. You can also explore police help if needed.

Always work with proper documents. Keep everything in writing.

Keep calm and move forward. With legal support and proper documents, you will win.

If you need help with managing the money after sale, we can help with a long-term financial plan.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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