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Ramalingam

Ramalingam Kalirajan  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 12, 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
Asked by Anonymous - Mar 12, 2024Hindi
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iam holding a health insurance policy from bajaj for 15 lakhs. iam told that one has to disclose ailments if any, while taking policy. i was suffering from high bp when i took policy, but do not remember whether the same had been dic sclosed or not at the time of taking policy. the policy is more than 3 years old, and no claim has been made under this. will in the future my claim for any heart related ailements that i might suffer , gets rejecte by company on grounds that bp was not disclosed while taking policy. 12.03.2024

Ans: It's essential to be transparent about pre-existing conditions like high blood pressure (BP) when applying for a health insurance policy. While I can't provide a definitive answer without reviewing your policy documents and the specific terms and conditions, here's some guidance:

Review Policy Documents: Take some time to carefully review your health insurance policy documents. Look for any clauses related to non-disclosure of pre-existing conditions at the time of policy issuance.

Contact the Insurer: If you're unsure whether you disclosed your high BP when taking the policy, consider reaching out to the insurance company directly. They can provide clarity on the information provided during the application process.

Grace Period: Since your policy is more than 3 years old and you haven't made any claims, it's possible that any non-disclosure issues may be considered lapsed due to the grace period typically provided by insurers.

Future Claims: In the event that you develop heart-related ailments in the future, the insurance company may investigate whether the non-disclosure of high BP was intentional or unintentional. If it's determined that the non-disclosure didn't affect the underwriting decision or the terms of the policy, your claim may still be honored.

Seek Professional Advice: If you're concerned about the potential impact of non-disclosure on future claims, consider consulting with a legal or insurance expert who can provide personalized guidance based on your specific situation and policy terms.

Ultimately, it's crucial to maintain transparency with your insurer and ensure that all relevant information, including pre-existing conditions, is disclosed at the time of policy application to avoid any complications during claim processing.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 11, 2024

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I have bought a Health Insurance for My family 2+1 on Aug 23 with a 25Lacs covering from Reliance General Insurance Co. This Policy is port from Niva Bhupa which i had taken in 2021. I come to know some one from my surrounding is that the Reliance is not settling claims Properly and full. This policy is taken for 2year. Can u Suggest me
Ans: I understand you're concerned about Reliance General settling claims properly. It's good to be aware! Here's how we can approach this:

Claim Settlement Ratio (CSR) Check: Every insurance company has a CSR, a public record showing the percentage of claims they settle. You can check Reliance General's CSR online to see their historical performance.

Policy Review: Review your policy documents carefully. Understand the terms and exclusions related to claim settlements. If something seems unclear, reach out to Reliance General for clarification.

Network Hospitals: Using network hospitals within your policy can streamline the claim settlement process.

Remember, a single experience doesn't represent the entire picture. However, your concern is valid. Let's not worry, we can assess further!

You did well porting your policy! Health insurance is crucial, and you've taken a great step for your family.

Moving forward: If you'd like a more in-depth analysis of your health insurance options, consider consulting a Certified Financial Planner (CFP). They can assess your specific needs and recommend the best plan based on your family's requirements.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 25, 2024

Asked by Anonymous - Jun 15, 2024Hindi
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I am having a health insurance policy of 10 lacs which i ported in the year 2022. After porting, i did not disclose a surgery done on me in 2002 of bile duct reconstruction due to doctor negliegence. Can it lead to claim rejection if the claim is not due to this or should i inform my insurer now for the same. At the moment i am living a healthy life with no medication for that particular issue. Please advice.
Ans: You have a health insurance policy with a coverage of Rs 10 lakhs, which you ported in 2022. However, you did not disclose a bile duct reconstruction surgery done in 2002. Now you’re concerned about claim rejection due to this undisclosed surgery, even if the claim is for an unrelated issue. Let's address your concern comprehensively.

Importance of Disclosure in Health Insurance
Health insurance relies heavily on the principle of utmost good faith. This means both the insurer and the insured must disclose all relevant information truthfully. Non-disclosure of medical history can have serious consequences.

Impact of Non-Disclosure
Claim Rejection: Insurers can reject claims if they find out that significant medical history was not disclosed. This applies even if the claim is not related to the undisclosed condition.
Policy Cancellation: In some cases, the insurer may cancel the policy altogether upon discovering non-disclosure.
Legal Issues: Non-disclosure can lead to legal complications where the insured may face difficulties in proving their claim.
Assessing Your Specific Situation
Your surgery was in 2002, and you are currently healthy with no ongoing medication related to that issue. Given this, let’s analyze your situation.

Time Factor
The surgery happened over 20 years ago, and you have been living a healthy life since then. This long duration might make it less impactful, but it’s still a significant medical event that should have been disclosed.
Porting Health Insurance
When porting a health insurance policy, the new insurer evaluates your health risk based on the information provided. Non-disclosure of a major surgery might influence their decision on claims and policy terms.
Steps to Take Now
Inform Your Insurer
Contact Your Insurer: It's advisable to inform your insurer about the surgery. Explain the situation honestly, including that the surgery happened in 2002 and you have had no related health issues since.
Provide Medical Records: If possible, provide medical records or a letter from your doctor confirming that you have fully recovered and have no ongoing health issues related to the surgery.
Benefits of Informing Your Insurer
Transparency: Being transparent can build trust with your insurer and prevent future complications.
Reduced Risk of Claim Rejection: Disclosing now can reduce the risk of future claim rejections due to non-disclosure.
Policy Review: The insurer might review your policy terms, but it’s better to face this now rather than during a claim.
Possible Outcomes
Policy Continuation: The insurer may continue your policy without any changes if they consider the surgery as not impacting your current health risk.
Policy Amendment: The insurer might amend the policy terms, such as excluding the surgery-related condition from coverage.
Premium Adjustment: In some cases, there might be an adjustment in the premium based on the newly disclosed information.
Importance of Maintaining Adequate Health Insurance
Reviewing Coverage
Ensure that your health insurance coverage is adequate for your current needs. A family floater policy of Rs 10 lakhs might be sufficient now, but review it periodically to keep up with rising medical costs.
Considering Top-Up Plans
If needed, consider top-up or super top-up health insurance plans to enhance your coverage at a lower additional premium. These plans provide additional coverage after your base policy limit is exhausted.
Staying Informed and Proactive
Regular Policy Review
Review your health insurance policy annually. Ensure all details are accurate and up-to-date. Discuss any changes in your health status with your insurer.
Keeping Medical Records
Maintain a file of all your medical records. This helps in providing accurate information to your insurer and simplifies the claims process.
Understanding Policy Terms
Thoroughly understand the terms and conditions of your health insurance policy. Know what is covered, what is excluded, and the process for making a claim.
Final Insights
Transparency with your insurer is crucial for ensuring your health insurance policy serves its purpose effectively. Informing your insurer about your past surgery, even if it was 20 years ago, will help in maintaining a trustworthy relationship and avoiding potential claim rejections.

With a comprehensive approach to managing your health insurance, including regular reviews and staying informed about your policy, you can ensure you and your family are adequately protected.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Asked by Anonymous - Jul 20, 2024Hindi
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Hi, I am 31 years old. I am planning to retire at the age between 45 to 48. I want to generate wealth of at least 10Cr by the time I retire. As of today, I have MF corpus of 28L(17.5L/10.4L) with monthly SIPs of 42500. Current ongoing SIPs in 1. Quant Active Fund - 5k 2. Axis Midcap Fund - 5k 3. Mirae Asset ELSS - 5k 4. SBI Small Cap - 5k 5. Nippon India US Equity Opp. Fund - 2.5k 6. DSP ELSS Tax Saver - 1k 7. Mirae Asset Large & Mid Cap - 5k 8. Nippon India Small Cap - 5k 9. Quant Mid Cap - 3k 10. Quant Small Cap - 3k 11. Quant Flexi Cap - 3k There are 3 Stopped SIPs 1. Axis Bluechip Fund - 1.5L Invested / 2.07L valuation 2. Nippon India ELSS Tax Saver - 94k invested / 2.06L valuation 3. Aditya Birla SL ELSS Tax Saver - 94k invested / 1.64L Valuation Please suggest if I need to change my strategy in investing MF with above ongoing and stopped SIPs. Also, on top of MF investment, I have, PF corpus 11.5L with expected 8% YoY contribution. NPS corpus 11L with expected 8% YoY contribution. 30L in FDs with 9% compounding interest rate and treating same as emergency fund. 6.25L in stocks. Investing in individual stocks and via smallcase baskets(Enery, Banking and Metal Tracker) with 20-25k on quartely basis. PPF corpus of approx. 5L with 5k per month contribution with 9 years remaining. HDFC SL ProGrowth Plus with Sum Assured 12L with pending 8 premius of 60k per year. Me and my wife don't have any term or health insurance. Both of us are relying on corporate health insurance for family. I have home loan of 1.2Cr with EMI of 80k which is a biggest chunk of in hand salary. Household and personal expenses are around 20k per month. So, looking at above details how should I plan my financials for kid's(no kid yet) education/marriage and post retirement life ?
Ans: Your Current Financial Situation
Let’s review your current situation. You have a diverse portfolio with SIPs, mutual funds, stocks, FDs, and more.

Investments
Mutual Fund Corpus: Rs 28 lakhs
Monthly SIPs: Rs 42,500
Provident Fund: Rs 11.5 lakhs
NPS: Rs 11 lakhs
Fixed Deposits: Rs 30 lakhs
Stocks: Rs 6.25 lakhs
PPF: Rs 5 lakhs
HDFC SL ProGrowth Plus: Sum Assured Rs 12 lakhs
Liabilities
Home Loan: Rs 1.2 crores with an EMI of Rs 80,000 per month
Expenses: Rs 20,000 per month
Insurance
Corporate Health Insurance: Only relying on this for health coverage
Investment Strategy Evaluation
You have a robust and diversified investment strategy. Let’s refine it further.

Mutual Funds
You have a wide variety of mutual funds, including equity, ELSS, and international funds.

Active vs. Stopped SIPs
Active SIPs: Quant Active Fund, Axis Midcap Fund, Mirae Asset ELSS, SBI Small Cap, Nippon India US Equity Opp. Fund, DSP ELSS Tax Saver, Mirae Asset Large & Mid Cap, Nippon India Small Cap, Quant Mid Cap, Quant Small Cap, Quant Flexi Cap

Stopped SIPs: Axis Bluechip Fund, Nippon India ELSS Tax Saver, Aditya Birla SL ELSS Tax Saver

Recommendations for Mutual Funds
Consolidation: Reduce the number of funds. This simplifies management and avoids overlap.

Focus on Performance: Keep funds with consistent performance.

Direct vs. Regular Funds
Disadvantages of Direct Funds: Lack professional guidance. Regular funds offer better management through a Certified Financial Planner (CFP).
Additional Investment Suggestions
Debt Instruments
PPF and NPS: Continue contributions. They offer stability and tax benefits.
Stocks and Smallcases
Stock Investments: Keep investing quarterly. Diversify across sectors for balanced growth.
Fixed Deposits
Emergency Fund: Maintain Rs 30 lakhs in FDs. Ensure easy access for emergencies.
Insurance Needs
Health Insurance
Individual Health Insurance: Get a separate health insurance plan. Corporate plans may not be sufficient.
Term Insurance
Life Cover: Get a term insurance plan for adequate life cover. This secures your family’s future.
Loan Management
Home Loan
Prepayment: Consider prepaying the home loan with surplus funds. This reduces interest burden and tenure.
Child’s Education and Marriage Planning
Systematic Investments
SIPs for Education: Start SIPs dedicated to your future child's education. Aim for growth-oriented funds.

Marriage Fund: Similarly, allocate funds for marriage expenses.

Sukanya Samriddhi Yojana
For Girl Child: If you have a girl child, consider investing in Sukanya Samriddhi Yojana for her future.
Retirement Planning
Retirement Corpus
Target: Aim for a retirement corpus of Rs 10 crores by age 45-48.
Strategy
Increase SIPs Annually: Increase your SIPs by 15% every year. This leverages compounding effectively.

Balanced Portfolio: Maintain a balanced portfolio with equity, debt, and other instruments.

Professional Management
Certified Financial Planner: Work with a CFP for personalized advice. They help manage and optimize your investments.
Final Insights
You have a strong investment base. Simplify your mutual fund portfolio and focus on high-performing funds. Get adequate health and life insurance. Prepay your home loan to reduce the burden. Plan systematically for your child's education and marriage. Work with a Certified Financial Planner to achieve your retirement goal of Rs 10 crores.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Asked by Anonymous - Jul 19, 2024Hindi
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I want to seek your advise on PMS for me. I have retired last year and have received a corpus of 1 cr. I have investments in FD, PPF, mutual Fund, Senior citizen scheme, mutual funds and SIP. Please advise if PMS is good for me as I want to generate more money for my son’s future.
Ans: It’s great that you are thinking about your son’s future. You have already diversified your investments well. This is commendable.

Overview of Portfolio Management Services (PMS)
PMS involves professional management of investments. It offers tailored investment strategies. Let's explore whether it suits your needs.

Benefits of PMS
Professional Management: Managed by expert portfolio managers.

Customised Strategies: Tailored to individual goals and risk tolerance.

Active Management: Regular adjustments based on market conditions.

Potential for Higher Returns: Aims to outperform standard investments.

Drawbacks of PMS
High Fees: Management fees can be substantial.

Minimum Investment: Usually requires a large initial investment.

Market Risk: Investments are subject to market volatility.

Lack of Liquidity: It may have lock-in periods or exit loads.

Evaluating PMS for Your Needs
You have a significant corpus of Rs. 1 crore. Let's evaluate if PMS aligns with your goals.

Professional Management: PMS offers expert handling. This might appeal to you.

Customisation: Your specific needs for your son's future can be addressed.

Active Management: Ensures your portfolio is aligned with market changes.

Comparing PMS with Mutual Funds
Mutual funds are also professionally managed. Let’s compare both options.

Advantages of Mutual Funds
Diversification: Spreads risk across many investments.

Lower Costs: Generally lower fees than PMS.

Liquidity: Easier to buy and sell units.

Simplicity: Easier to understand and manage.

Disadvantages of PMS
High Costs: Higher fees can eat into returns.

Complexity: Requires understanding of various strategies.

Risk: Higher risk due to concentrated investments.

Recommendation
Considering your current investments, PMS might offer higher returns. However, it also comes with higher risks and costs.

Benefits of Continuing with Mutual Funds and SIPs
Diversification: Reduces risk.

Cost-Effective: Lower fees compared to PMS.

Ease of Management: Simpler to handle.

Drawbacks of PMS
High Fees: Can reduce net returns.

Market Volatility: Subject to high market risks.

Final Insights
Given your diversified portfolio, sticking with mutual funds and SIPs is advisable. They offer professional management with lower costs and risks.

You can consult with a Certified Financial Planner (CFP) to review your portfolio. This will ensure it aligns with your goals for your son's future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

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I am 45 yr. Old house wife. Wish to gain knowledge about NPS(National Pension Scheme) in detail. Can i open it by my own? If yes what is the procedure? Can a person have more then 2 Nps a/c.? A detailed insight needed.
Ans: The National Pension Scheme (NPS) is a government-sponsored retirement savings scheme. It is designed to provide financial security during retirement. NPS offers a mix of equity, fixed income instruments, corporate bonds, and government securities. Here’s a detailed insight into NPS:

Eligibility and Account Opening
Who Can Open an NPS Account?

Any Indian citizen aged between 18 and 70 years can open an NPS account. This includes both salaried individuals and self-employed professionals.
Types of NPS Accounts

Tier I Account: This is the primary retirement account. It is mandatory and offers tax benefits.

Tier II Account: This is a voluntary savings account. It allows withdrawals at any time but does not offer tax benefits.

Procedure to Open an NPS Account
Online Method

Visit the official NPS website or a Point of Presence (PoP) online portal.

Complete the registration form with your personal details.

Upload required documents like PAN, Aadhaar, and a photograph.

Make an initial contribution of at least Rs. 500.

Offline Method

Visit the nearest PoP, typically a bank branch.

Fill out the NPS registration form.

Submit KYC documents (PAN, Aadhaar, etc.).

Make the initial contribution at the PoP counter.

Can a Person Have More Than One NPS Account?
Single NPS Account Policy

An individual can only have one NPS account. Multiple accounts are not allowed under the scheme.
Investment Options and Fund Management
Active Choice

You select the allocation among equities, corporate bonds, and government securities.
Auto Choice

The allocation is automatically managed based on your age.
Tax Benefits and Withdrawals
Tax Benefits

Contributions up to Rs. 1.5 lakhs are eligible for tax deduction under Section 80C.

An additional Rs. 50,000 deduction is available under Section 80CCD (1B).

Withdrawals

Up to 60% of the corpus can be withdrawn tax-free at retirement.

The remaining 40% must be used to purchase an annuity, providing regular pension.

How to Maximize Benefits from NPS
Regular Contributions

Make regular contributions to grow your retirement corpus.

Increase your contributions whenever possible to benefit from compounding.

Monitor Performance

Regularly review the performance of your NPS investments.

Switch between fund managers if required to optimize returns.

Additional Tips
Combine with Other Investments

Use NPS alongside other investment options like mutual funds and PPF for a balanced retirement portfolio.
Consult a Certified Financial Planner

A Certified Financial Planner can help you optimize your investment strategy and maximize benefits.
Final Insights
NPS is a robust retirement savings option offering tax benefits and diversified investments. Opening an account is simple, and you can manage it online or offline. Remember, you can only have one NPS account. Regular contributions and monitoring are key to maximizing your retirement corpus. Consider combining NPS with other investments for a balanced approach. Consulting a Certified Financial Planner can provide personalized guidance and ensure you make the most of your NPS investments.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Asked by Anonymous - Jul 19, 2024Hindi
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I am 37 years old and have a kid 4 5 months old ..I want to invest 2.5 laksh lump sum for a long time period of 25-30 years..which investment instrument should I opt for ..what will be the returns depending on the instrument you suggest ...
Ans: You want to invest Rs 2.5 lakhs lump sum for 25-30 years. Here's a detailed analysis of suitable investment instruments:

Equity Mutual Funds
Potential Returns:

Equity mutual funds can provide high returns.
Historically, they offer 12-15% annual returns over the long term.
Benefits:

Diversification across various sectors.
Professional fund management.
Flexibility to switch between funds.
Risks:

Market volatility can impact short-term performance.
Requires a long-term horizon to mitigate risks.
Public Provident Fund (PPF)
Potential Returns:

PPF offers 7-8% annual returns.
Returns are compounded annually.
Benefits:

Government-backed and risk-free.
Tax benefits under Section 80C.
Long lock-in period aligns with your investment horizon.
Risks:

Lower returns compared to equity mutual funds.
Limited liquidity due to a 15-year lock-in period.
National Pension System (NPS)
Potential Returns:

NPS offers 8-10% annual returns.
Combines equity, corporate bonds, and government securities.
Benefits:

Tax benefits under Section 80C and Section 80CCD(1B).
Flexibility to choose asset allocation.
Low management fees.
Risks:

Returns depend on market performance.
Partial withdrawal restrictions until retirement.
Sovereign Gold Bonds (SGB)
Potential Returns:

SGBs offer 2.5% annual interest plus capital gains linked to gold prices.
Historically, gold has provided 8-10% annual returns.
Benefits:

Government-backed with no storage issues.
Tax benefits if held till maturity.
Hedge against inflation and currency risks.
Risks:

Gold prices can be volatile.
Long tenure of 8 years may not align perfectly with your horizon.
Unit Linked Insurance Plan (ULIP)
Potential Returns:

ULIPs can offer 8-10% annual returns.
Combines investment with insurance.
Benefits:

Dual benefit of investment and insurance.
Tax benefits under Section 80C.
Flexibility in switching between equity, debt, and balanced funds.
Risks:

High charges in initial years.
Returns depend on fund performance and market conditions.
Final Insights
For a long-term horizon, equity mutual funds are the best option. They offer high returns and professional management. Diversify your investments for risk management. Regularly review and adjust your portfolio with a Certified Financial Planner.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Asked by Anonymous - Jul 19, 2024Hindi
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I am 59 years old working in an NGO. Is there any investment scheme where I can invest risk free for maximum for 2 years. I can invest up to Rs20k per month.
Ans: Understanding Your Financial Situation
Age: 59 years old
Employment: Working in an NGO
Investment Capacity: Rs 20,000 per month
Investment Horizon: Maximum 2 years
Risk Appetite: Risk-free investments
Investment Options
Public Provident Fund (PPF)

PPF is a safe option.
Offers stable and tax-free returns.
Lock-in period is 15 years but partial withdrawal is allowed after 5 years.
Fixed Deposits (FD)

Fixed deposits offer guaranteed returns.
Choose a bank with high interest rates.
FD tenures can be selected as per your needs.
Recurring Deposits (RD)

RDs allow monthly investments.
They provide fixed returns.
Tenures are flexible, matching your 2-year horizon.
Debt Mutual Funds

Debt funds invest in government and corporate bonds.
They offer stable returns with low risk.
Suitable for short-term investments.
Analysis of Options
Safety and Security

PPF and FDs are government-backed.
They ensure capital protection.
Liquidity

FDs and RDs offer better liquidity.
PPF has limited withdrawal options.
Returns

Debt funds might offer higher returns.
FDs and RDs have predictable returns.
Benefits of Regular Funds Over Direct Funds
Expert Management

Regular funds are managed by professionals.
They ensure better risk management.
Convenience

Investing through Certified Financial Planners offers ease.
They provide regular updates and advice.
Disadvantages of Index Funds
Limited Flexibility

Index funds track market indices.
They lack active management.
Lower Returns

Actively managed funds can outperform index funds.
They can adapt to market changes.
Recommendations
Diversify Your Investments

Invest in a mix of FDs, RDs, and debt funds.
This ensures stability and optimal returns.
Consult a Certified Financial Planner

A CFP can guide you to the best options.
They offer personalized advice based on your goals.
Monitor Your Investments

Regularly review your investment portfolio.
Ensure it aligns with your short-term needs.
Final Insights
Focus on risk-free and stable returns.
Choose a mix of FDs, RDs, and debt funds.
Avoid high-risk options like equity or index funds.
Consulting a CFP ensures professional advice.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Asked by Anonymous - Jul 18, 2024Hindi
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I am 27 years old, And making 175000 in hand(minus PF Tax etc) I have a house loan of 80L with monthly Emi of 70k and Personal loan with monthly Emi of 17.5k totalling to approx 88k. I have bought a house which is giving me 22k in rent every month and my monthly expenses comes out to 25-30k every month. I have a PF of 8L accumulated with 23k going into that every month. And just now started SiP of 25k every month and 15k RD. I need a plan of investment to make a corpus of 10CR in 18years and eyeing to clear my house loan in 8 years so I can be without debt. Personal loan i will clear within 6 months. Could someone help as to what should be my plan to invest and debt management?
Ans: Current Financial Overview

You are 27 years old with an in-hand salary of Rs. 1,75,000 per month. Your financial commitments and investments are as follows:

House Loan: Rs. 80 lakhs with a monthly EMI of Rs. 70,000
Personal Loan: Rs. 17.5k monthly EMI
Rental Income: Rs. 22,000 per month
Monthly Expenses: Rs. 25,000 - 30,000
Provident Fund (PF): Rs. 8 lakhs accumulated with Rs. 23,000 contributed monthly
SIP: Rs. 25,000 per month
Recurring Deposit (RD): Rs. 15,000 per month
You aim to clear your house loan in 8 years, clear your personal loan in 6 months, and create a corpus of Rs. 10 crores in 18 years.

Debt Management

Clear Personal Loan First

Focus on clearing the personal loan within the next 6 months.
This will free up Rs. 17,500 per month.
Accelerate House Loan Repayment

After clearing the personal loan, use the freed-up amount to prepay the house loan.
Allocate any bonuses or extra income towards the house loan.
Investment Strategy

Increase SIP Contributions

Post personal loan clearance, increase your SIP contributions.
Diversify across large-cap, mid-cap, and multi-cap funds for balanced growth.
Recurring Deposit (RD) Strategy

Once the RD matures, consider redirecting the amount to mutual funds.
This will provide higher returns compared to RDs.
Public Provident Fund (PPF)

Continue contributing to PPF for tax-free returns.
It provides long-term stability and security.
National Pension System (NPS)

Consider increasing your contributions to NPS.
It offers tax benefits and a regular pension post-retirement.
Equity Investments

Gradually increase your equity investments.
Equities can provide high returns over the long term, helping you achieve your financial goals.
Debt Funds

Invest in debt funds for stability and regular income.
They are less volatile than equities and provide a steady return.
Savings and Emergency Fund

Maintain an Emergency Fund

Keep an emergency fund of 6-12 months of expenses.
This provides a safety net for unexpected situations.
Provident Fund and Long-term Savings

Continue PF Contributions

PF is a stable and secure investment for retirement.
Ensure regular contributions for long-term benefits.
Achieving Rs. 10 Crore Goal

Increase Monthly Investments

After clearing the personal loan, redirect the amount to investments.
Increase your monthly SIP contributions to Rs. 50,000 or more.
Regular Review and Rebalancing

Review your portfolio regularly with a Certified Financial Planner.
Rebalance to ensure alignment with your financial goals and market conditions.
Final Insights

Your current strategy is a good start. Focus on clearing your debts first. Then, increase your investments in SIPs and diversify your portfolio. Regularly review your investments with a Certified Financial Planner. This balanced approach will help you achieve your goal of Rs. 10 crores in 18 years.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Asked by Anonymous - Jul 18, 2024Hindi
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I am 57 year old and would retire at the age of 60.. I have two residential properties worth Rs 2.00 crore. I have loan liability of Rs 6.00 lacs.. I would get a monthly penesion of Rs 65000.00 after retirement. I will also get a terminal benefits of Rs 1.30 crores at the time of tetirement..I will also get insurance maturities valued Rs 25.00 lacs at the time of retirement.. Kindly advise me to how to invest my tetirement benefits
Ans: Planning your investments at 60 is crucial for a comfortable retirement. Let’s analyze your situation and suggest a strategy.

Current Financial Situation
Age: 57 years

Retirement Age: 60 years

Properties: Two residential properties worth Rs 2 crores

Loan Liability: Rs 6 lakhs

Pension: Rs 65,000 per month post-retirement

Terminal Benefits: Rs 1.3 crores at retirement

Insurance Maturities: Rs 25 lakhs at retirement

Goals and Considerations
Clear Loan: Pay off the Rs 6 lakh loan.

Steady Income: Ensure a steady income post-retirement.

Wealth Preservation: Preserve and grow wealth to beat inflation.

Emergency Fund: Maintain a fund for emergencies.

Steps to Invest Retirement Benefits
1. Clear Outstanding Loan
Loan Repayment: Use Rs 6 lakhs from terminal benefits to clear the loan. This ensures a debt-free retirement.
2. Emergency Fund
Build Fund: Set aside Rs 10 lakhs for emergencies. Keep it in liquid funds for easy access.
3. Regular Income from Investments
Monthly Income Needs: Supplement your pension to maintain lifestyle. Invest in instruments providing regular income.

Debt Funds: Invest in debt mutual funds for stability and regular returns. They are less risky and provide consistent income.

Senior Citizen Savings Scheme (SCSS): Invest in SCSS. It offers high interest and regular payouts.

Monthly Income Plans (MIPs): Consider MIPs for regular income. They provide a mix of debt and equity exposure.

4. Long-term Growth
Equity Mutual Funds: Invest a portion in equity mutual funds for growth. They offer higher returns to combat inflation.

Balanced Funds: Choose balanced funds mixing equity and debt. They balance risk and return effectively.

5. Professional Management
Actively Managed Funds: Choose actively managed funds. Fund managers aim to outperform the market.

Avoid Index Funds: Index funds lack professional management and have lower returns. Actively managed funds can adjust to market conditions for better performance.

6. Avoid Direct Funds
Disadvantages: Direct funds lack advisory services. Managing them requires effort and knowledge.

Regular Funds: Invest through a Certified Financial Planner (CFP). They provide valuable advice and manage investments efficiently.

7. Health Insurance
Adequate Cover: Ensure you have adequate health insurance. Medical emergencies can drain savings quickly.
8. Regular Review
Monitor Investments: Regularly review and rebalance your portfolio. Adjust investments based on performance and life changes.
Investment Allocation
Debt Funds and SCSS: Allocate Rs 60 lakhs. Ensure regular and stable income.

Equity Mutual Funds: Allocate Rs 40 lakhs. Aim for long-term growth.

Balanced Funds: Allocate Rs 20 lakhs. Balance risk and return.

Emergency Fund: Rs 10 lakhs in liquid funds.

Health Insurance: Review and enhance if needed.

Final Insights
Clear your loan to ensure a debt-free retirement. Build an emergency fund and invest in a mix of debt, equity, and balanced funds. Avoid index and direct funds; choose regular funds with professional management. Regularly review and adjust your investments. Consult a Certified Financial Planner for personalized advice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5291 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 25, 2024

Asked by Anonymous - Jul 25, 2024Hindi
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Hello .... I am RV - 54 years old male from a tier 3 city ( capital of a State ). I am a partner in my family owned partnership business. My wife is a home maker ( 44 years ) and a son ( M.Tech ) in Europe - looking for job. I have my own house, vehicle etc., and I have no debt. Since year 2006, I have been investing in MF through SIP & STP through a personally known Manager of an AMC. I have a Family Floater Health Insurance Policy of 10L with Top Up of additional 10L. I have a Term Plan of 25L. I wish to retire w.e.f 01.04.2025. I have a corpus of 2.25 cr. I wish to have an income ( interest / profit ) of 2L per month net of income tax for next 50 years. To achieve the goal, I seek your expert guidance keeping in view that my investment of 2.25 cr remains safe and grows as well over next 50 years. I would be extremely grateful for your detailed response.
Ans: Financial Assessment
You have a well-established foundation with a corpus of Rs 2.25 crores, no debt, and a good insurance cover. Your goal of generating Rs 2 lakhs per month net of taxes for the next 50 years is ambitious but achievable with careful planning.

Investment Portfolio Review
1. Mutual Funds (MF):

You have been investing in MFs through SIP and STP, which is a good strategy.
Actively managed funds can provide better returns than index funds.
Ensure diversification across equity, debt, and hybrid funds.
2. Health and Term Insurance:

Your family floater health insurance of Rs 10L with a Rs 10L top-up is adequate.
Your term plan of Rs 25L is essential for protecting your family.
3. Diversification:

Diversification reduces risk. Spread investments across different asset classes.
Income Generation Strategy
1. Systematic Withdrawal Plan (SWP):

SWPs in mutual funds can provide regular income.
Invest in a mix of equity and debt funds to balance risk and returns.
2. Balanced Allocation:

Allocate funds across equity (40%), debt (40%), and other assets (20%).
Equity for growth, debt for stability, and other assets for diversification.
3. Monthly Income Plans (MIP):

MIPs in mutual funds can provide regular monthly income.
Choose funds with a good track record.
Risk Management
1. Regular Monitoring:

Review your portfolio regularly.
Adjust based on market conditions and personal needs.
2. Professional Guidance:

Seek advice from a Certified Financial Planner (CFP).
Regular reviews with your CFP will ensure your plan stays on track.
Tax Planning
1. Tax-efficient Investments:

Invest in tax-efficient instruments like ELSS for equity exposure.
Use tax benefits under Section 80C.
2. Regular Review:

Regularly review your tax-saving investments.
Adjust based on changes in tax laws.
Long-term Growth
1. Reinvestment:

Reinvest returns for compounded growth.
Use SIPs and STPs to maintain discipline.
2. Diversified Portfolio:

Maintain a diversified portfolio to mitigate risks.
Include a mix of large-cap, mid-cap, and small-cap funds.
Final Insights
Your financial plan is on a solid footing. With a corpus of Rs 2.25 crores, careful investment in mutual funds, and regular monitoring, you can achieve your goal of Rs 2 lakhs per month. Ensure you diversify your investments and seek professional guidance.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

...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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