Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Ramalingam

Ramalingam Kalirajan  |7612 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 30, 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
Sanjeev Question by Sanjeev on Sep 26, 2023Hindi
Listen
Money

Hello Sir This Sanjeev Kumar, From Himachal Pradesh. Below are my Investments. Sir I would like to known that Is my portfolio good enough to get better return. I want to accumulate 20 to 30 lakhs in next 10 to 12 years from below investment. Also suggest me that whether, below MF are good enough, or reshuffling is required. 1. Aditya Birla Sun life Multi Cap Fund-regular growth --- Rs 1000/- 2. Invesco India Flexi Cap Fund-regular plan growth ---- Rs 1000/- 3. Invesco Multicap fund-Regular growth --- Rs 1000/- 4. Kotak Emerging Equity fund growth ---- Rs 1000/- 5. Kotak tax saver fund growth (ELSS) ---Rs 500 /- 6. Kotak multi cap fund --------- Rs 1000/- 7. Union long term equity fund growth regular plan ----- Rs 1500/- 8. Nippon India Flexi cap fund ----------- Rs 1000/- 9. LIC ------------------ 51000 /- (Annually). 10. PPF -------------- 1.5 lac (Annually, Since 2015). 11. NPS ------------ 50000 /- (Annually).

Ans: Hello Sanjeev,

Your investment portfolio appears to be diversified with a mix of mutual funds, insurance, and other instruments. Diversification is key to managing risk and potentially achieving better returns over the long term. However, it's essential to periodically review and rebalance your portfolio to ensure it aligns with your financial goals and risk tolerance.

Consider assessing the performance of each mutual fund regularly and comparing it with benchmark indices and peer funds. If any fund consistently underperforms or if your investment goals change, you may consider reshuffling your investments.

Additionally, continue contributing to instruments like PPF and NPS, as they offer tax benefits and long-term wealth accumulation opportunities. Remember, investing is a journey, and staying disciplined while focusing on your goals will increase your chances of achieving financial success.
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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |7612 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 2024

Asked by Anonymous - Apr 13, 2024Hindi
Listen
Money
My age is 32 and I earn 40,000 PM. I invest 11400/ month in MF. My investments are 2000 in UTI index equity fund, 2000 in Parag Parikh Flexi Fund, 2000 Quant Midcap Fund, 1500 Tata Small Cap fund, 1500 Nippon small cap fund, 1200 in Quant flexi cap, and 1200 in Axis Small cap. I have also invested a lump sum of 60,000 in Quant Infrastructure fund. Kindly advise if my portfolio is okay
Ans: Evaluating Your Mutual Fund Portfolio
At 32, investing in mutual funds with a disciplined approach is a commendable step towards building wealth for the future. Let's evaluate your current portfolio to ensure it aligns with your financial goals and risk tolerance.

Portfolio Composition
UTI Index Equity Fund:

Provides exposure to a diversified portfolio of large-cap stocks, tracking the performance of the underlying index. Offers stability and long-term growth potential.
Parag Parikh Flexi Fund:

A well-managed fund with a flexible investment approach across equity and debt securities. Known for its focus on quality stocks and global diversification.
Quant Midcap Fund:

Invests primarily in mid-cap companies with growth potential. Offers the opportunity for higher returns but comes with higher volatility.
Tata Small Cap Fund and Nippon Small Cap Fund:

Small-cap funds focus on companies with small market capitalization, offering high growth potential. However, they are more volatile and suitable for investors with a higher risk appetite.
Quant Flexi Cap and Axis Small Cap Fund:

Flexi-cap and small-cap funds provide flexibility to invest across market capitalizations. Ensure you're comfortable with the risk associated with small-cap investments.
Quant Infrastructure Fund (Lump Sum):

Infrastructure funds invest in companies involved in infrastructure development, such as construction, energy, and transportation. Consider the long-term prospects of the infrastructure sector and the fund's performance.
Assessing Portfolio Diversification
Your portfolio includes a mix of large-cap, mid-cap, and small-cap funds, offering diversification across market capitalizations. However, it's essential to review the overlap between funds to avoid concentration risk and ensure adequate diversification.

Portfolio Review and Optimization
Risk Assessment:

Evaluate your risk tolerance and investment horizon to determine if the current allocation aligns with your financial goals.
Performance Review:

Monitor the performance of individual funds and compare them against their benchmarks and peer group. Consider making adjustments if any funds consistently underperform.
Asset Allocation:

Ensure your asset allocation is balanced and in line with your risk profile. Consider rebalancing if necessary to maintain the desired mix of equity and debt investments.
Professional Advice:

Consider consulting with a Certified Financial Planner to review your portfolio and receive personalized recommendations based on your financial situation and goals.
Conclusion
Your mutual fund portfolio shows a diversified mix of investments across market capitalizations and sectors. Regularly review and assess your portfolio's performance to ensure it remains aligned with your financial objectives. Remember, investing is a long-term journey, and periodic adjustments may be necessary to navigate market fluctuations and achieve your wealth accumulation goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7612 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 09, 2024

Listen
Money
Hi Experts! I am 36 years old, married 1 year ago. I have Rs.223000 invested in Mutual Fund. Per Month 10k in Parag Parikh Flexi Cap Fund, Rs.1250 in DSP ELSS Tax Saver Fund Direct Growth, Rs.1000 in Kotak ELSS Tax Saver Fund Direct Growth, PGIM India Tax Saver Fund Direct Growth, Rs.2000 in Nippon India Small Cap Fund Direct Growth, Rs.2000 in Quant Multi Asset Fund Direct Growth and Rs.2000 in ICICI Prudential BHARAT 22 FDF Direct Growth. Apart from this I pay Rs.10k/month in PPF and 1.5 lac/year in SBI Life Insurance. Please let me know if this is a good portfolio or should I modify anything in this. What kind of Future return I will be expecting here with this portfolio.
Ans: Congratulations on your recent marriage and your proactive approach towards financial planning. It's evident that you're committed to securing your financial future.

Your investment portfolio reflects a diversified approach, which is a positive sign. Diversification helps spread risk and can enhance long-term returns. Let's delve into your portfolio to assess its effectiveness and potential for future returns.

Investing in Parag Parikh Flexi Cap Fund offers exposure to a diversified portfolio across various sectors and market capitalizations. This fund's flexible investment strategy allows it to capitalize on emerging opportunities, potentially leading to attractive returns over time.

ELSS Tax Saver Funds like DSP and Kotak offer tax benefits under Section 80C of the Income Tax Act while providing exposure to equities. These funds have a lock-in period of three years, aligning with your long-term investment horizon.

Nippon India Small Cap Fund and Quant Multi Asset Fund offer exposure to smaller companies and multiple asset classes, respectively. Small-cap funds have the potential for higher growth but come with increased volatility. Ensure they align with your risk tolerance.

ICICI Prudential BHARAT 22 FDF provides exposure to a diversified basket of public sector enterprises and select private sector companies. This fund can add stability to your portfolio while offering growth potential.

Your investments in PPF and SBI Life Insurance contribute to your overall financial security and tax planning. PPF offers stable returns with tax benefits, while life insurance provides protection for your family's future financial needs.

Considering your age and investment horizon, this portfolio has the potential to generate attractive returns over the long term. However, periodically review and rebalance your portfolio to ensure alignment with your financial goals and risk tolerance.

For a more comprehensive analysis and personalized advice, consider consulting a Certified Financial Planner who can tailor recommendations to your specific needs and objectives.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

..Read more

Latest Questions
Patrick

Patrick Dsouza  |942 Answers  |Ask -

CAT, XAT, CMAT, CET Expert - Answered on Jan 23, 2025

Listen
Career
While writing this message, I am very shameful and guilty ???? about my marks to share with you sir.my Cat score 50%ile Xat: 35%ile Snap:40%ile Nmat:198 marks ???????????????????? I am Requesting ????????????????????????you an advice sir! I graduated in 2024 May in b.com! These exams were my first attempt. Now I am 22yrs old. At Present I am not doing any job, didn't have any course. at home there is a lot of pressure to join any b school. With these scores I don't get any colleges . I want to do an MBA in best b school. Sir how was SDA Bocconi? Will get I get with my nmat score? Should I apply for it?Sir with lot of pressure I am requesting you to give me a guidance ???????? will I join any b-school? If yes Name some best colleges with my scores? (Or) I am fresher will I search and do a job along with cat 2025 prep? Sir by seeing these scores :( If I prepare for cat this year will I crack? I want to give cat this year with very efficient and indepth practice by seeing these scores. Sir I am thinking that I want to give CUET PG to get best university seat to do an MBA like in BHU,JNU...so that I can prepare for cat 2025. How will be the career from doing MBA from Central universities.is there any problem doing MBA along with cat precisely? Is this good thing.? Or will I change my plan? If I prepare for this year. What about GAP year? How should I cover this Sir?? this is very important question. Pls sir ???????? i need suppport from you! As I discussed with my family about job. We have a small Tea business. I will help my parents and study. Present At home family condition is bad(parents health). we have a Brother,He is our family well wisher, behalf of his guidance i started to prepare for this exam and scored very bad. Now he is saying to prepare again for this year with lot of commitment and hard work. But He and my family is saying Not to do Job, work at Tea business and prepare for this year very hardly. Is this good decision.? Will it cover GAP year like doing family business? Thank you ???????? sir
Ans: SDA Bocconi may not accept 198 nmat score, but they have their own test if you want to try. With 198 NMAT, can try for IBS (ICFAI) and other colleges that accept the scores. Can also write ATMA, and MAT that will be held in Feb March so that you have more options to apply to. About repeating a year you can decide once this years cycle for admission is complete.

...Read more

Ramalingam

Ramalingam Kalirajan  |7612 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 23, 2025

Listen
Money
I will retire from PSU next month. I live in Delhi NCR and will receive a corpus worth Rs 1.5 crore. However, the company will provide only Rs 3,000 per month in pension. I have not built a house and intend to live on rent in a 3 BHK in Delhi. My monthly expenses on food and conveyance are below Rs 15,000 per month, with Rs 10,000 earmarked for philanthropy. My son is studying PG in a government college with Rs 8,000 per month expenses. I do not have any loans or marriage liability. I seek decent earnings from investments. Please advise me on how to invest to receive monthly Rs 1-1.2 lakh per month. Also, what should I do with the corpus from NPS? Suggest investment avenues for my situation.
Ans: You are retiring soon with a corpus of Rs. 1.5 crore. Living in Delhi NCR on rent will require strategic financial planning. Your monthly expenses of Rs. 36,000 (rent, food, conveyance, philanthropy, and your son's expenses) need Rs. 1-1.2 lakh monthly income for comfort and contingencies. A structured investment plan will ensure steady income and preserve your corpus.

Let’s explore how to manage your investments to meet your needs.

Allocation of Retirement Corpus
Your corpus should be diversified into equity, debt, and liquid instruments. This ensures stable returns, growth, and liquidity. A mix of growth and income-focused investments is essential.

Emergency Fund
Set aside Rs. 10-12 lakh for emergencies.

Park this in liquid funds or a high-interest savings account.

This fund will provide immediate access to money when needed.

Monthly Income Plan
To achieve Rs. 1-1.2 lakh per month, invest across growth and income-oriented instruments.

Allocate 60% to fixed-income instruments for stability.

Allocate 30% to equity mutual funds for long-term growth.

Allocate 10% to liquid funds for short-term needs.

Fixed-Income Instruments
Invest in senior citizen savings schemes for assured returns.

Use corporate deposits or bonds for additional fixed returns.

Ladder your investments in fixed deposits for liquidity.

Debt mutual funds can also provide stable income with better tax efficiency.

Equity Investments
Invest in actively managed mutual funds for wealth growth.

Choose balanced advantage or hybrid funds to reduce risk.

Allocate some amount to large-cap and flexi-cap funds.

Avoid overexposure to high-risk funds like small-caps.

Liquid and Short-Term Instruments
Park Rs. 15-20 lakh in liquid or ultra-short-term funds.

These funds are ideal for monthly withdrawals and short-term needs.

Withdraw only what is required to avoid depleting the principal amount.

Managing NPS Corpus
Your NPS corpus will partially need annuitisation.

Use the 60% withdrawable amount for investment as per the above plan.

Invest 40% in an annuity as per NPS rules for stable monthly income.

Choose the annuity plan offering the best return and lowest charges.

Tax Planning
Efficient tax planning will maximise your post-tax income.

Income from senior citizen savings schemes and fixed deposits is taxable.

Debt fund gains are taxed as per your income slab.

Equity fund LTCG above Rs. 1.25 lakh is taxed at 12.5%.

Use Section 80C for additional savings by investing in tax-saving instruments.

Additional Considerations
Rental Expense
Rent will form a significant part of your monthly expenses.

Consider negotiating or selecting a reasonably priced 3 BHK within your budget.

Philanthropy
Allocate Rs. 10,000 monthly for philanthropy as planned.

Ensure your primary financial goals are not compromised.

Son's Education
Continue to allocate Rs. 8,000 monthly for your son’s education.

Plan for any additional educational needs over the next few years.

Monitoring and Adjustments
Review your investments every 6 months.

Adjust allocations based on market performance and changing needs.

Reinvest surplus income to grow your corpus further.

Finally
You have a solid foundation for retirement with Rs. 1.5 crore corpus. By diversifying investments and planning withdrawals, you can comfortably meet your monthly needs. Periodic reviews will ensure your financial plan stays on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7612 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 23, 2025

Listen
Money
Hello Sir, Please review my portfolio: 1. jm aggressive hybrid fund - 1000 2. ICICI Prudential Bluechip Fund - 4000 3. Parag Parikh Flexi Cap Fund - 4000 4. Nippon India small cap - 4000 5. Bandhan Small Cap Fund - 2000 6. Motilal oswal Midcap fund - 2000 7. Bandhan Nifty Alpha Low Volatility 30 Index - 1000 Time Horizon is more than 15 years. I am planning to increase my SIP from 18000 per month to 60000 per month.
Ans: Your portfolio is well-structured and diversified across various mutual fund categories. You have selected a mix of equity, hybrid, and small-cap funds, reflecting a balanced approach. However, there is room for optimisation to align with your increased SIP and long-term horizon of over 15 years. Let’s review each component and suggest improvements.

Analysis of Existing Funds
JM Aggressive Hybrid Fund – Rs. 1,000
Aggressive hybrid funds are suitable for moderate risk-takers.

This fund allocates around 65-80% to equity and the rest to debt.

Evaluate its historical performance compared to peers.

Consider continuing only if it has consistently outperformed similar funds.

ICICI Prudential Bluechip Fund – Rs. 4,000
Large-cap funds are ideal for stability and consistent returns.

This fund invests in established companies with strong fundamentals.

Retain this fund as it provides a solid foundation to your portfolio.

Parag Parikh Flexi Cap Fund – Rs. 4,000
A flexi-cap fund offers diversification across market capitalisations.

This fund’s global exposure adds a unique advantage.

Retain this fund for its flexibility and global equity component.

Nippon India Small Cap Fund – Rs. 4,000
Small-cap funds offer high growth potential but come with higher risks.

Retain this fund, considering your long-term horizon.

Avoid over-allocation to small caps to reduce volatility.

Bandhan Small Cap Fund – Rs. 2,000
Another small-cap fund increases concentration in this category.

Review its performance and consider merging with Nippon India Small Cap Fund.

Motilal Oswal Midcap Fund – Rs. 2,000
Mid-cap funds balance growth and risk well over the long term.

Retain this fund to maintain exposure to mid-sized companies.

Evaluate its performance against peers periodically.

Bandhan Nifty Alpha Low Volatility 30 Index – Rs. 1,000
Index funds are cost-efficient but lack active management benefits.

Low-volatility indices may not outperform actively managed funds in the long run.

Consider replacing this with an actively managed fund for better returns.

Portfolio Recommendations
Consolidation of Funds
Reduce the number of small-cap funds by merging Bandhan Small Cap into Nippon India Small Cap.

Replace the Bandhan Nifty Alpha Low Volatility Index fund with an actively managed multicap or flexicap fund.

Increasing SIP Amounts
With an increased SIP of Rs. 60,000, focus on reallocating funds wisely.

Allocate 40% to large-cap and flexi-cap funds for stability and growth.

Allocate 30% to mid-cap funds for higher growth potential.

Allocate 20% to small-cap funds to leverage long-term growth.

Allocate 10% to hybrid or debt funds for stability and risk mitigation.

Suggested Allocation Plan
ICICI Prudential Bluechip Fund: Increase SIP to Rs. 12,000 for stability.

Parag Parikh Flexi Cap Fund: Increase SIP to Rs. 12,000 for diversification.

Motilal Oswal Midcap Fund: Increase SIP to Rs. 10,000 for mid-cap exposure.

Nippon India Small Cap Fund: Increase SIP to Rs. 8,000 for small-cap growth.

JM Aggressive Hybrid Fund: Increase SIP to Rs. 6,000 for moderate risk exposure.

New Flexi-Cap/Hybrid Fund: Add Rs. 12,000 SIP for broader diversification.

Tax Implications
Equity Mutual Funds: LTCG above Rs. 1.25 lakh is taxed at 12.5%.

Debt Mutual Funds: Gains are taxed as per your income slab.

Plan redemptions strategically to minimise tax liability.

Monitoring and Rebalancing
Review your portfolio at least once a year.

Check fund performance and make adjustments if needed.

Maintain a balanced allocation based on changing market conditions.

Emergency Fund and Liquidity
Ensure a contingency fund of at least 6 months’ expenses.

Retain this amount in liquid funds or FDs for immediate access.

Final Insights
Your current portfolio is strong but needs some restructuring. Focus on stability, growth, and risk diversification. Your increased SIP will enhance wealth creation significantly over 15 years. Regular monitoring with a Certified Financial Planner will keep your investments aligned with goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7612 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 23, 2025

Asked by Anonymous - Jan 22, 2025Hindi
Money
I am 40 year old have 1 daughter aged 8 years current monthly expenses 60 thousand. I have 30 lakh in PF, 25 lakh in stocks, 40 lakh in fd,50 lakh cash, 35 lakh gold, own apartment no loan, 4 crore in real-estate. Please suggest what should I do if I want to retire in the next 2 years.
Ans: You are in an excellent financial position with diverse investments and no liabilities. Your assets, including real estate, provide a strong foundation for early retirement. Let’s review your financials and create a plan to achieve financial independence and maintain a comfortable lifestyle post-retirement.

Existing Financial Resources
Provident Fund (PF): Rs. 30 lakhs – A stable, low-risk investment.

Stocks: Rs. 25 lakhs – Offers growth potential but comes with market risks.

Fixed Deposits (FD): Rs. 40 lakhs – A safe but low-yielding investment.

Cash: Rs. 50 lakhs – Ensures liquidity but does not generate returns.

Gold: Rs. 35 lakhs – A hedge against inflation but low on income generation.

Real Estate: Rs. 4 crore – Significant wealth but lacks liquidity unless rented or sold.

Own Apartment: Debt-free asset ensuring housing security.

Monthly Expense Assessment
Your current monthly expenses are Rs. 60,000.

Adjust this amount for inflation (assume 6-7% annually) to estimate future needs.

In two years, your monthly expenses will rise to approximately Rs. 68,000-70,000.

Retirement Goals
Your goals should include:

Securing a steady income for life.

Funding your daughter’s higher education and marriage.

Managing inflation and healthcare costs.

Preserving your wealth and passing it to the next generation.

Asset Allocation Strategy
Provident Fund
Keep the PF corpus as is until retirement.

Post-retirement, use this for regular withdrawals to supplement income.

Consider transferring part of the amount to a safe debt mutual fund for better liquidity.

Stocks
Diversify your stock portfolio into equity mutual funds.

Actively managed funds can offer professional management and better long-term returns.

Avoid holding only direct stocks as they are riskier.

Fixed Deposits
Reduce the allocation to fixed deposits as they generate low post-tax returns.

Reallocate funds to debt mutual funds for higher returns with moderate risk.

Retain Rs. 10-15 lakhs in FDs for emergency use.

Cash
Keep Rs. 10-15 lakhs as a contingency fund.

Invest the remaining Rs. 35-40 lakhs in hybrid mutual funds.

This will provide a balance of growth and stability.

Gold
Retain gold primarily as a wealth preservation tool.

Avoid increasing your allocation to gold as it does not generate income.

Real Estate
Explore renting out one of your real estate properties to generate monthly rental income.

Avoid depending entirely on real estate as it lacks liquidity.

Consider selling underperforming real estate and investing proceeds in mutual funds.

Retirement Income Plan
Systematic Withdrawal
Post-retirement, use systematic withdrawal plans (SWPs) from mutual funds for monthly income.

SWPs can generate tax-efficient regular cash flows.

Supplement SWPs with PF withdrawals as needed.

Rental Income
Rental income from real estate can form a stable part of your retirement income.

Estimate a conservative rental yield of 2-3% annually on property value.

Gold Monetisation
Use gold monetisation schemes to earn interest on idle gold.

Avoid selling gold unless absolutely necessary.

Daughter’s Education and Marriage
Start a dedicated corpus for your daughter’s education and marriage.

Invest Rs. 20-25 lakhs in a mix of equity and balanced mutual funds.

Ensure investments align with her educational milestones.

Review this corpus periodically to ensure it meets future needs.

Inflation Management
Inflation will erode the value of your corpus over time.

Maintain a 60:40 allocation between equity and debt to beat inflation.

Equity exposure will provide growth, while debt ensures stability.

Healthcare and Insurance
Ensure you have adequate health insurance for yourself and your family.

Opt for a sum assured of at least Rs. 25-30 lakhs.

Consider adding a super top-up plan for additional coverage.

If you do not have term insurance, consider a policy until your daughter becomes independent.

Tax-Efficient Planning
Equity mutual funds offer long-term tax benefits. Gains above Rs. 1.25 lakh are taxed at 12.5%.

Debt fund gains are taxed as per your income tax slab. Plan withdrawals carefully to reduce tax impact.

Rental income is taxable. Use deductions like property tax and maintenance costs to lower taxable income.

Investment Rebalancing
Regularly review and rebalance your portfolio.

Reduce exposure to high-risk assets as you near retirement.

Increase debt and hybrid fund allocations for stability.

Final Insights
You have a strong financial foundation to retire early. Focus on liquidity, steady income, and inflation protection. A mix of rental income, SWPs, and PF withdrawals will ensure a secure retirement. Periodic reviews with a Certified Financial Planner will keep your plan on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7612 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 23, 2025

Asked by Anonymous - Jan 22, 2025Hindi
Money
Hi i am 28, my would be husband is 29. I earn around 1.5lakhs post tax and he around 1.78 lakhs post tax. And we both receive lumpsum variable yearly bonus (min 2 lakhs combined)We both pay individual rent of 24000 (mumbai). I have an sip of 30000( steping up to 45000 from feb). I have 10 lakhs in fd, 5 lakhsin liquid around 4.8 lakhs in mf, some nominal amount in pf and around 1.5 lakhs in shares. We both want to get married (partly funded by parents) and buy a house and car .we dont have to support our parents financially by gods grace. We have fixed monthly expense of around 20k combined (including eating out /entertaiment). No emi or loans. Sir, could you kindly guide us to help plan for an achieveable budget for home and car. Thank you
Ans: You and your fiancé are in a great position financially. Both have stable incomes and no liabilities. This gives you the flexibility to plan for your future goals effectively. Let’s break down your financial situation and develop a plan for the wedding, home, and car.

Current Income and Expenses
Your combined monthly income is Rs. 3.28 lakhs.

Fixed expenses, including rent, amount to Rs. 72,000 (24,000 each in rent + Rs. 20,000 combined expenses).

This leaves a surplus of Rs. 2.56 lakhs monthly, excluding annual bonuses.

Assets and Investments
Your assets include Rs. 10 lakhs in FDs, Rs. 5 lakhs in liquid funds, Rs. 4.8 lakhs in mutual funds, and Rs. 1.5 lakhs in shares.

Combined, these total Rs. 21.3 lakhs in liquid and semi-liquid investments.

Your SIP of Rs. 30,000 per month (stepping up to Rs. 45,000) is a disciplined approach.

Nominal PF balances will grow over time with compounding.

Financial Goals
Your key goals are:

Planning a wedding.

Buying a house in Mumbai.

Purchasing a car.

We’ll address these goals systematically.

Wedding Budget
If parents are partly funding the wedding, your share can be Rs. 10-12 lakhs.

Use Rs. 5 lakhs from your liquid funds and Rs. 5 lakhs from FDs.

Avoid breaking mutual funds as they are growth-oriented investments.

Ensure to save some emergency funds (at least 6 months’ expenses) after the wedding.

Buying a House
Assessing Your Budget
Mumbai real estate is expensive. For a modest 2 BHK, expect Rs. 1.5-2 crores.

You’ll need a 20% down payment of Rs. 30-40 lakhs.

Your combined bonuses and savings can contribute to this goal over the next 3-4 years.

Avoid using your entire savings for the down payment.

Home Loan Planning
With a combined income of Rs. 3.28 lakhs, you can afford a home loan EMI of Rs. 80,000-1 lakh.

For a 20-year loan, this can support a loan amount of Rs. 1.2-1.4 crores.

Opt for a joint loan to maximise the loan amount and tax benefits.

Building the Down Payment
Increase your SIPs from Rs. 45,000 to Rs. 60,000 after marriage.

Allocate Rs. 25,000-30,000 of your monthly surplus to a conservative hybrid fund or liquid funds.

This can accumulate Rs. 12-15 lakhs in 3-4 years.

Combine this with bonuses and existing FDs to reach the Rs. 30-40 lakhs needed.

Buying a Car
Budget and Timeline
Aim for a mid-range car costing Rs. 10-12 lakhs.

Avoid purchasing immediately after the wedding to manage cash flow.

Save Rs. 3-4 lakhs over 12-18 months for the down payment.

Finance the rest with an affordable EMI of Rs. 10,000-15,000.

Emergency Fund
Post-wedding, maintain at least Rs. 6-8 lakhs in liquid funds for emergencies.

This will cover 6-8 months of expenses and unforeseen costs.

Tax Efficiency
Your SIP investments in equity mutual funds will grow tax-efficiently.

Long-term gains above Rs. 1.25 lakhs are taxed at 12.5%.

Short-term gains are taxed at 20%. Plan withdrawals accordingly to minimise taxes.

Use joint home loan benefits to reduce taxable income.

Investment Strategy
SIP Growth
Stepping up SIPs to Rs. 45,000 and eventually Rs. 60,000 will accelerate wealth creation.

Allocate SIPs to a mix of large-cap, flexicap, and mid-cap funds.

Avoid thematic or sectoral funds for long-term goals.

Avoid Index Funds
Index funds lack flexibility to outperform during volatile markets.

Actively managed funds offer better growth through expert stock selection.

Rebalancing Portfolio
After the wedding, rebalance your portfolio.

Retain 70-80% in equity and 20-30% in debt for long-term growth and stability.

Include a conservative hybrid fund to diversify investments.

Insurance Coverage
Post-marriage, ensure you and your fiancé have adequate life and health insurance.

Opt for term insurance covering 10-12 times your annual income.

Enhance health insurance to Rs. 10-15 lakhs for comprehensive coverage.

Final Insights
You are well-positioned to achieve your goals. With proper planning, you can balance your wedding, home, and car expenses. Stay disciplined in savings and avoid impulsive spending. Regularly review your financial plan with a Certified Financial Planner.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7612 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 23, 2025

Listen
Money
Sir, I am 37. I have been investing ?22000/month in various sip which includes 7000 in small cap funds, 4000 in mid cap funds, 1000 in index funds, 3000 in thematic funds(1000 each in infra, commodities and technology) and remaining in multicap and flexicap funds. Please tell me if the allocation is good and what can I expect on a 15 year time horizon.
Ans: Your disciplined SIP investment of Rs. 22,000 per month is commendable. Below is an analysis of your portfolio:

Small-Cap Funds
Allocating Rs. 7,000 (31.8% of your total SIP) to small-cap funds shows a focus on high growth potential.

Small-cap funds offer strong long-term returns but come with high volatility.

Consider limiting small-cap exposure to 25% for better risk management.

This adjustment can reduce stress during market downturns.

Mid-Cap Funds
Rs. 4,000 (18.2%) invested in mid-cap funds is a balanced choice.

Mid-cap funds provide a mix of stability and growth.

Retain this allocation as it complements the small-cap funds well.

Thematic Funds
Rs. 3,000 (13.6%) allocated to infra, commodities, and technology is sector-focused.

Thematic funds can be rewarding but depend heavily on market cycles.

Limit thematic exposure to 10% of your portfolio.

Use the extra allocation for diversified or multicap funds for better stability.

Index Funds
Rs. 1,000 (4.5%) in index funds may not maximise your potential returns.

Index funds passively track the market but lack flexibility to outperform it.

Actively managed funds can generate higher returns through expert stock selection.

Shift this allocation to actively managed flexicap or large-cap funds.

Multicap and Flexicap Funds
Rs. 7,000 (31.8%) in multicap and flexicap funds ensures broad diversification.

These funds spread investments across large, mid, and small-cap stocks.

Retain this allocation as it balances the portfolio risk effectively.

Tax Considerations
Long-term equity mutual fund gains above Rs. 1.25 lakh are taxed at 12.5%.

Short-term equity gains are taxed at 20%.

Consider rebalancing based on tax-efficiency and annual gains.

Expected Returns
Equity funds can offer 12-15% annual returns over a 15-year horizon.

With disciplined SIPs, your corpus could grow 4-6 times over this period.

Market fluctuations will occur, but patience and consistency are key.

Recommendations
Portfolio Rebalancing: Reduce small-cap and thematic exposure to optimise risk.

Avoid Index Funds: Actively managed funds provide higher growth potential.

Increase Diversification: Focus on multicap and flexicap funds for broad exposure.

Stay Disciplined: Continue SIPs during market corrections to benefit from rupee cost averaging.

Professional Advice: Consult a Certified Financial Planner for personalised guidance.

Disadvantages of Direct Funds
Direct funds lack access to personalised advice and expert monitoring.

Investing via a Certified Financial Planner ensures professional management of your portfolio.

Regular funds through an MFD with CFP credentials offer better support for goal-based planning.

Final Insights
Your portfolio reflects good planning and commitment. A few adjustments will enhance returns and reduce risk. Focus on long-term goals and review performance periodically with professional guidance.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7612 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 23, 2025

Listen
Money
Sir, I am 37. I have been investing ?22000/month in various sip which includes 7000 in small cap funds, 4000 in mid cap funds, 1000 in index funds, 3000 in thematic funds(1000 each in infra, commodities and technology) and remaining in multicap and flexicap funds. Please tell me if the allocation is good and what can I expect on a 15 year time horizon.
Ans: Your monthly SIP investment of Rs. 22,000 is well-structured across multiple categories. This diversification reflects thoughtfulness in building a balanced portfolio. Below is an analysis of each allocation with suggestions for improvement:

Small-Cap Funds
Small-cap funds are highly volatile but deliver superior long-term returns. Your Rs. 7,000 allocation is reasonable at 31.8% of your SIP.

However, overexposure can increase portfolio risk. Consider capping small-cap allocation to 25% of your total SIP.

Small-cap funds require patience and discipline, especially during market downturns.

Mid-Cap Funds
Allocating Rs. 4,000 to mid-cap funds (18.2% of SIP) balances risk and return.

Mid-caps offer growth potential, bridging the gap between large caps and small caps.

Retain this allocation as mid-caps perform well over long horizons like 15 years.

Thematic Funds
Thematic investments in infra, commodities, and technology at Rs. 3,000 (13.6%) are niche choices.

Thematic funds depend heavily on sector performance and market cycles.

Limit thematic exposure to 10% of your total SIP to avoid concentration risk.

Consider reallocating a part of this to diversified equity funds for stability.

Index Funds
Your allocation of Rs. 1,000 (4.5%) to index funds has limited value.

Index funds simply replicate indices and lack potential to outperform markets.

Actively managed funds, handled by professional fund managers, may deliver better returns.

Redirect this amount to actively managed flexicap or large-cap funds for superior growth potential.

Multicap and Flexicap Funds
The remaining Rs. 7,000 (31.8%) allocation to multicap and flexicap funds ensures diversification.

These funds provide exposure to all market caps, balancing risk and returns.

Continue with this allocation as it complements your other investments.

Tax Implications
Equity fund gains above Rs. 1.25 lakh are taxed at 12.5% under the new rules.

Monitor your gains annually to manage taxes efficiently.

Debt funds are taxed based on your income tax slab. Consider this for future rebalancing.

Expected Returns over 15 Years
Equity funds can deliver 12-15% annual returns over a 15-year horizon.

Your portfolio could potentially grow 4-6 times, depending on market conditions.

Consistent SIPs and market discipline will help you reach this target.

Suggestions for Improvement
Portfolio Rebalancing: Reduce small-cap and thematic exposure to manage risk. Reallocate to multicap and flexicap funds.

Avoid Index Funds: Actively managed funds can generate higher returns with professional management.

Stay Disciplined: Continue investing during market corrections for long-term wealth creation.

Review Annually: Evaluate fund performance and make changes if needed.

Professional Guidance: Investing via a Certified Financial Planner ensures expert advice and portfolio monitoring.

Insights on Regular Funds
Direct funds lack the benefit of professional advice and continuous monitoring.

Investing in regular funds through a CFP offers goal-based planning and expert guidance.

This approach minimizes emotional decision-making and enhances long-term returns.

Final Insights
Your SIP strategy reflects commendable discipline and foresight. With minor adjustments, you can optimize returns and manage risks effectively. Long-term consistency and professional advice will ensure financial success.

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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x