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Ramalingam

Ramalingam Kalirajan  |9447 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 21, 2025

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
Asked by Anonymous - Jun 12, 2025Hindi
Money

How to use Rs.35-40lacs in the best possible way ? I donot have a job currently and no investments on my name. Whatever i had in the name of savings in the past.. is all gone. I don't want to get into details but it was used to settle dues of people i loved the most.

Ans: Your situation shows courage and resilience. Having Rs. 35–40 lakh without income or existing investments gives a fresh start. That is truly commendable. Let us use a 360?degree lens and build a plan to restore stability, income, and long?term security. This will be a detailed and systematic roadmap.

Immediate Cash Allocation and Liquidity Plan
Set aside an emergency buffer
Keep Rs.?5–7?lakh in a liquid safety net.
Use a high?liquidity option like a savings account or liquid fund.
This secures unplanned needs and reduces stress now.

Allocate short?term funds
Dedicate Rs.?5?lakh for near?term opportunities or essential spending.
This gives flexibility for job search, skill building, or family needs.

Retain remaining corpus cautiously
The balance of Rs.?23–30?lakh should be used with clarity and stage?wise planning.
Don’t deploy it all in one go or without strategy.

Income Restoration and Career Strategy
Invest in your employability
Use Rs.?1–2?lakh to learn new skills or upgrade certifications.
This enhances job prospects if re?employment is the goal.

Explore part?time or freelance work
Even small monthly income can build confidence and restart cash flow.

Assess self?employment or business start
If you have ideas or passion, use some funds to pilot small ventures.
Keep initial capital under Rs.?5 lakh to test viability.

Leveraging Actively Managed Mutual Funds
Commit to equity mutual fund SIPs
Start monthly SIPs of Rs.?30k–50k in actively managed funds.
These can potentially give good long?term growth.
Index funds just mirror the market. They lack active risk control.
Active funds can manage volatility better for small investors.

Use regular plans via Certified Financial Planner
Regular plan adds value through expert help and goal tracking.
Direct plans lack ongoing guidance and portfolio alignment.

Split investments over time
Do not invest the full amount at once.
Spread investments in tranches (e.g. monthly over 4–5 months).
This approach reduces risk from market timing.

Include hybrid or balanced funds
Add stability with part equity and part debt.
This aids smoother returns and periodic income.

Insurance and Protection
Take health insurance immediately
Get family floater policy with sufficient cover for hospital care.
Personal health needs to be covered before investing heavily.

Obtain term life insurance if dependents exist
A term cover of Rs. 1–2 crore is essential if you have family responsibilities.
Premiums are affordable and peace of mind is invaluable.

Avoid life?investment combo policies
If you have such plans, consider surrendering them.
Use any surrender value to fund mutual funds with expert support.

Debt Liability and Future Borrowing
Avoid new loans until investment discipline is solid
With no current income, minimizing liabilities is prudent.
Prioritize stable cash flow before taking on debt.

Check any existing dues or informal lending
If there are outstanding liabilities, pay them with part of the corpus.
This frees mental and financial stress.

Financial Planning and Goal Setting
Define clear short, medium, and long?term goals
Short: Secure income and health protection
Medium: Build Rs.?1–2?crore corpus in 5–7 years
Long: Achieve financial independence or retirement buffer in 8–10 years

Quantify investment needs for each goal
For example, Rs.?30k monthly SIP for 7 years can accumulate ~Rs.?45–50?lakh.
A combination of SIPs in equity and hybrid funds can reach larger targets.

Track monthly progress with your CFP
Regular reviews ensure you stay on track and adjust to changes.

Risk Management and Asset Allocation
Retain liquidity year?round
Emergency buffer plus part SIP ensures flexibility.

Asset mix recommendation
Start with 60–70% equity and 30–40% hybrid/debt mutual funds.
Adjust based on your risk comfort and time horizon.

Review midway through the plan
At 3?year marks, adjust allocation based on performance and life changes.

Tax Planning for Wealth Efficiency
Understand capital gains tax
Equity funds: Gains above Rs. 1.25 lakh taxed at 12.5%.
Debt funds: Gains taxed as per income slab.
Plan redemptions and SIPs to manage this tax impact.

Use tax benefits in NPS or other retirement schemes
If your income taxes apply later, these can help reduce tax burden.

Professional Guidance and Accountability
Work consistently with a Certified Financial Planner
CFP helps with portfolio alignment, goal adjustment, and tracking.
Regular check?ins strengthen discipline and clarity.

Avoid making investing decisions alone
Mistimed entry or panic selling hurt returns. CFP support helps avoid this.

Psychological and Behavioural Planning
Accept this is a fresh phase
You overcame past difficulties. That shows strength.
Treat this corpus as an opportunity, not a chance for revenge spending.

Build positive money habits daily
Track expenses, stay within budget, pay SIPs promptly.
Small habits lead to big financial health.

Guard against impulsive spending
With Rs. 35–40 lakh ready, temptation may arise.
Have clear purpose and break funds into buckets.

Step?by?Step Investment Roadmap
Allocate Rs.?5–7?lakh to liquid buffer

Invest Rs.?1.5–2?lakh in career upgrade or skill

Start equity SIPs of Rs.?30–40k monthly

Add Rs.?10k–15k monthly in hybrid fund SIP

Secure health and term insurance covers

Review and top?up investment allocations every 6 months

Consider starting part?time income streams or micro venture

Accumulate Rs.?1–2?crore corpus in 5–7 years

Reassess goals and move towards financial independence

This roadmap gives structure, flexibility, and control.

Final Insights
You have exhibited immense strength in restarting. Now you can rebuild with purpose. Use part funds for security and growth. Build new income streams. Invest in actively managed funds via Certified Financial Planner. Avoid index funds and direct plans lacking expert support. Keep liquidity intact. Start simple SIPs. Protect yourself with insurance. Track goals and habits. This can restore not just money, but confidence and freedom.

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  |9447 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 30, 2024

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I have 40 lakh for life. No job no business but 40 lakh INR. What should I do with it if my monthly expenses are 15k.
Ans: With 40 lakhs and monthly expenses of 15k, you have a considerable sum to work with for your future financial security. Here's a suggested plan:

Emergency Fund: Allocate a portion of your funds, say around 6-12 months' worth of expenses (90k to 1.8 lakhs), into an emergency fund. This will serve as a safety net for unexpected expenses or emergencies.
Investment for Regular Income: Consider investing a portion of your funds in fixed income instruments like fixed deposits (FDs), debt mutual funds, or government schemes like Senior Citizen Saving Scheme (SCSS) or Post Office Monthly Income Scheme (POMIS). These can provide you with regular income to cover your monthly expenses.
Investment for Growth: Allocate the remaining amount into investment options that offer growth potential over the long term. You can consider diversified equity mutual funds, index funds, or a mix of equity and debt funds based on your risk tolerance and investment horizon.
Budgeting and Financial Planning: Create a budget to track your expenses and ensure you're living within your means. Consider consulting with a financial planner to create a comprehensive financial plan tailored to your goals and risk profile.
Health Insurance: Invest in a comprehensive health insurance plan to cover medical expenses and protect your savings from unexpected healthcare costs.
Continuous Learning and Skill Development: Since you're not employed or running a business, consider investing in yourself through continuous learning and skill development. This can enhance your employability or open up opportunities for freelance work or entrepreneurship in the future.
Remember, investing is a personal journey, and it's essential to align your investment decisions with your financial goals, risk tolerance, and time horizon. Regularly review and adjust your financial plan as needed to stay on track towards achieving your objectives.

..Read more

Ramalingam

Ramalingam Kalirajan  |9447 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 10, 2024

Asked by Anonymous - May 10, 2024Hindi
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I have Rs 1lac as savings with me. How do I invest it?
Ans: Investing your savings wisely is crucial for your financial future. With Rs 1 lac, there are various options to consider. Let's assess them:

Firstly, consider your goals. Are you saving for short-term needs or long-term goals like retirement? This will guide your investment choices.

For short-term goals, consider low-risk options like fixed deposits or debt mutual funds. These offer stability and liquidity, ensuring your money is safe and accessible when needed.

For long-term goals, like retirement, you can explore equity mutual funds. They offer the potential for higher returns over the long term, albeit with more volatility. As a Certified Financial Planner, I can guide you in selecting funds aligned with your risk tolerance and goals.

Avoid real estate as it requires substantial capital and has liquidity issues. Additionally, steer clear of index funds, which may not suit your investment preferences.

Regular funds through a Mutual Fund Distributor offer personalized advice and ongoing support, unlike direct funds. This ensures your investments are managed efficiently and adapted to changing market conditions.

Remember, diversification is key to mitigate risks. Spread your investment across different asset classes like equity, debt, and gold to balance risk and returns.

Lastly, stay informed and review your investments regularly to make necessary adjustments.

Investing wisely now can pave the way for a financially secure future. Best of luck on your investment journey!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9447 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 02, 2025

Asked by Anonymous - May 28, 2025Hindi
Money
Dear Sir, My name is Arun, am an NRI age 46, and due to current situation my contract is not renewing by end of this year November. I have 1 CR bank deposit and approx 20 Lakhs in MF as savings and no liability in India and am planning to be with family for a while with the current savings.. My monthly expense estimate approx 50000-60000 Rs. Kindly advise me how to get this amount for life time and some earning or investment with this savings
Ans: You have taken good care of your savings. That is appreciated.

Let us now work towards building a plan that can support your lifelong expenses and growth.

I will guide you with a detailed 360-degree plan based on your current financial reality.

Let us go step by step.

Understanding Your Financial Position
You are 46 years old and an NRI planning to return to India this year.

You hold Rs. 1 crore in bank deposits. That is a good safety buffer.

You also have Rs. 20 lakhs in mutual funds. This adds growth potential.

Your monthly family expense is between Rs. 50,000 and Rs. 60,000.

You have no liabilities. That gives you freedom and control.

Your job contract is not renewing. So, active income will stop soon.

You want to generate income from your savings for a lifetime.

This is a reasonable expectation. With a thoughtful strategy, it is possible.

Key Financial Goals to Cover
Ensure monthly cash flow of at least Rs. 60,000 for lifetime.

Avoid touching your principal for the first few years.

Protect your corpus from inflation and emergencies.

Grow part of your savings to build long-term capital.

Keep investments tax-efficient under new mutual fund tax rules.

Maintain flexibility and liquidity in case of future needs.

We now structure your money accordingly.

Review of Current Assets and Deployment Plan
Let us divide your Rs. 1.20 crore corpus across three financial buckets.

This makes your money stable, growing, and accessible.

Bucket 1: Emergency + Regular Income
(Recommended: Rs. 40 lakhs)

This will cover your expenses for next 6-7 years.

Keep 6-12 months' expenses in a liquid or ultra-short-term fund.

Rest can be parked in conservative hybrid funds with monthly SWP.

Use Systematic Withdrawal Plan (SWP) to get Rs. 60,000 per month.

Avoid bank FD for income. FD interest is fully taxable. Mutual fund SWP is more tax-friendly.

Under new rules, equity mutual fund LTCG above Rs. 1.25 lakhs is taxed at 12.5%.

STCG on equity mutual funds is taxed at 20%. So plan redemptions carefully.

Debt mutual funds follow your income tax slab for both LTCG and STCG.

Choose conservative hybrid or balanced advantage category for this bucket.

Monthly SWP from regular funds through a Certified Financial Planner will be more stable.

Avoid direct plans. Regular plans through MFDs linked to CFPs offer handholding, tracking, and customisation.

Bucket 2: Medium-Term Growth
(Recommended: Rs. 40 lakhs)

Invest in actively managed mutual funds.

Mix of multi-cap, flexi-cap, and mid-cap categories preferred.

No need to invest in index funds. Index funds have limitations.

Index funds do not have downside protection or stock selection ability.

Actively managed funds beat benchmarks in most years with proper selection.

Choose funds with style diversification — value, quality, and momentum.

This bucket will grow your capital for next 10-12 years.

Withdraw from this only after Bucket 1 is used up.

Rebalance once every two years based on performance and inflation.

Stay invested in regular plans. Regular plans give access to a Certified Financial Planner.

CFP helps to monitor, switch funds if needed, and maintain long-term discipline.

You do not have to track market every month. Your planner will do that.

Bucket 3: Long-Term Growth and Legacy
(Recommended: Rs. 40 lakhs)

Invest this part for 15+ years horizon.

Include aggressive hybrid, focused equity, and selected mid-cap funds.

This part will support future large expenses or healthcare needs.

Also can be used to support children’s future or create legacy for family.

Keep tax-efficient and flexible. Avoid insurance-cum-investment products.

ULIPs, LIC investment plans, and guaranteed returns schemes are not suitable.

If you ever hold such plans, surrender and reinvest in mutual funds.

This part should not be touched till at least age 65.

Review and adjust based on inflation and family needs every 3 years.

Income Strategy from the Corpus
Your need is Rs. 60,000 monthly i.e. around Rs. 7.2 lakhs yearly.

You can withdraw this through monthly SWP from Bucket 1.

Assume Bucket 1 lasts for 6-7 years comfortably.

After that, switch to Bucket 2 for another 8-10 years.

Then use Bucket 3 if required, after 65.

Your capital will keep growing in Buckets 2 and 3.

So your total corpus can stay above Rs. 1 crore for long years.

Inflation impact will be handled through fund growth.

Tax will be minimum due to SWP method and holding periods.

You can also consider senior citizen schemes post age 60, if interest improves.

Why Not Index Funds or Direct Plans?
Index funds copy market. No expert is managing the selection.

In falling markets, they fall without protection.

Direct plans save some expense ratio. But they do not offer advice.

You must do research, tracking, and rebalancing yourself.

Many people lose money due to wrong timing in direct plans.

Regular plans give you support of a Certified Financial Planner.

CFP watches your money and gives timely suggestions.

In retirement phase, this personalised help is very important.

Avoid Real Estate or Annuity Investments
Real estate is not liquid. Maintenance and resale are not easy.

You already have a land worth Rs. 18 lakhs. That is sufficient exposure.

Do not buy house for investment unless for staying purpose.

Annuities give fixed returns. But they lack growth and are not tax efficient.

Once you invest in annuity, you cannot change the decision later.

Your present corpus can serve you better through mutual fund SWPs.

Other Considerations
Take a personal health insurance outside your company coverage.

Job-based medical stops when you leave the job.

A Rs. 10-15 lakh family floater is suggested at your age.

You already have no loans. That’s a great advantage.

Your monthly spending is moderate. It can be comfortably funded from your savings.

Avoid taking money from Bucket 2 and 3 for small expenses.

Do not mix emergency funds with long-term funds.

Create a separate file or account for each bucket.

Keep nomination and family access ready for all investments.

Finally
Your savings of Rs. 1.20 crore can take care of your monthly needs.

With proper structure, you can manage both income and growth.

Keep your focus on asset allocation and disciplined withdrawal.

Stay invested only through regular plans, supported by Certified Financial Planner.

Avoid direct plans, index funds, or fixed-return products.

Review your plan every 2 years or on any big life event.

With this strategy, you can enjoy peace, flexibility, and financial independence.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

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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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