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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Dec 09, 2021

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Anirudh Question by Anirudh on Dec 09, 2021Hindi
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I have invested in following MFs for the last six months. The details are as follows:

  1. Canara Robeco Mutual Fund (monthly SIP, Rs 5,000)
  2. Parag Parikh Flexi Cap Fund (monthly SIP, Rs 5,000)

Kindly advise if these funds are good for the long term, around 12 to 15 years horizon.

Kindly suggest other funds too.

Ans: Please continue.

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  |5185 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 24, 2024

Asked by Anonymous - Jul 14, 2024Hindi
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Lumpsum investment pls advise good funds Sip investment which good funds Tax savind mutual.fund which is good fund Pls advice am 50yrs pf age want the fund giv g gopd returns in 5 to 8 yrs
Ans: Investing a lumpsum amount requires careful planning. Given your age and goals, it's important to balance risk and return. Here are some recommendations:

Diversified Equity Funds:

These funds invest in a mix of large, mid, and small-cap stocks.
They offer potential for high returns.
Suitable for a 5-8 year investment horizon.
Actively Managed Funds:

Actively managed funds aim to outperform the market.
Professional fund managers select stocks based on research.
They can provide better returns than index funds.
Debt Funds:

For lower risk, consider debt funds.
These invest in fixed-income securities.
Suitable for short to medium-term goals.
SIP Investment
Systematic Investment Plans (SIPs) help in disciplined investing. They also benefit from rupee cost averaging. Here are some options for SIP investments:

Large Cap Funds:

Invest in large, stable companies.
Lower risk compared to mid and small-cap funds.
Suitable for consistent growth.
Mid Cap Funds:

Invest in mid-sized companies.
Potential for higher growth than large-cap funds.
Suitable for medium to high-risk investors.
Small Cap Funds:

Invest in small companies with high growth potential.
Higher risk but can offer significant returns.
Suitable for long-term goals and risk-tolerant investors.
Tax-Saving Mutual Funds
Tax-saving mutual funds, also known as ELSS, provide tax benefits under Section 80C. They have a lock-in period of 3 years. Here are some benefits:

Equity-Linked Savings Schemes (ELSS):
Offer tax deductions up to Rs 1.5 lakh.
Invest in equity markets for potential high returns.
Shortest lock-in period among tax-saving options.
Investment Strategy
To achieve good returns in 5-8 years, consider the following strategy:

Diversification:

Spread investments across equity, debt, and tax-saving funds.
This reduces risk and maximizes returns.
Professional Guidance:

Invest through a Certified Financial Planner (CFP).
Regular funds through an MFD with CFP credentials offer support and professional advice.
Disadvantages of Index Funds
Index funds track a specific market index. However, they have some disadvantages:

No Active Management:

They replicate the index and cannot outperform it.
They miss out on potential gains from market inefficiencies.
Market Risk:

They are subject to overall market risk.
They do not protect against downturns in the index.
Benefits of Actively Managed Funds
Actively managed funds have several advantages:

Professional Management:

Experienced fund managers make investment decisions.
They can identify and exploit market opportunities.
Potential for Higher Returns:

Actively managed funds aim to outperform the market.
They can adjust their portfolios based on market conditions.
Final Insights
Investing at 50 requires a balanced approach. Focus on diversifying across equity, debt, and tax-saving funds. Use SIPs for disciplined investing and consider actively managed funds for potential higher returns. Avoid direct investments and index funds due to their limitations. Seek guidance from a Certified Financial Planner to tailor your investments to your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5185 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 24, 2024

Asked by Anonymous - Jul 23, 2024Hindi
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Hai sir I am working in The Singareni Collieries Company Limited My gross salary 65000 Net salary 45000/- In that 25500 are regular chit which at end in 05.02.2025 I had two kids and age is one month both. How to slip the income and start investment in sip and mutual fund. The income should get at the age 20 of my children for education
Ans: Assessing Your Current Financial Situation
You have a gross salary of Rs 65,000. Your net salary is Rs 45,000. You have two young children, aged one month each. Rs 25,500 is tied up in a regular chit, maturing on 05.02.2025.

Understanding Financial Goals
Your main goal is to save for your children’s education. You want the income to be available when they turn 20.

Income Splitting and Investment Strategy
To achieve your goal, a systematic investment approach is crucial. Consider splitting your income as follows:

Essential Expenses: Allocate funds for household and daily expenses.

Emergency Fund: Keep aside money for emergencies, about 3-6 months of expenses.

Investment in SIP: Start a SIP (Systematic Investment Plan) in mutual funds for long-term growth.

Benefits of SIP in Mutual Funds
SIP allows you to invest a fixed amount regularly. It helps in rupee cost averaging and compounding.

Disciplined Savings: SIP ensures regular savings without market timing worries.

Long-Term Growth: Equity mutual funds can offer higher returns over a long period.

Flexibility: SIPs can be started with a small amount and increased over time.

Choosing the Right Mutual Funds
Invest in actively managed funds through a Certified Financial Planner (CFP). Actively managed funds have professionals making investment decisions.

Active Management: Professionals actively manage the funds, aiming for better returns.

Research and Analysis: Fund managers conduct thorough research before making investments.

Performance Tracking: Regularly track the performance and make necessary adjustments.

Steps to Start SIP and Mutual Fund Investments
Here’s a step-by-step guide to start investing:

Assess Monthly Savings: After essential expenses and emergency fund, assess how much you can invest.

Select Funds: Choose a mix of equity and debt funds for a balanced portfolio.

Start SIP: Initiate SIP with the chosen mutual funds.

Review and Adjust: Periodically review your investments and adjust if needed.

Planning for Long-Term Goals
Your children’s education is a long-term goal. Starting early gives you the advantage of compounding.

Start Early: Begin investments as early as possible for better growth.

Regular Contributions: Ensure regular contributions to the SIP.

Review Goals: Review your financial goals periodically and adjust investments accordingly.

Evaluating Investment Options
While choosing funds, consider factors such as:

Fund Performance: Look at the past performance of the funds.

Fund Manager: Consider the experience and track record of the fund manager.

Expense Ratio: Lower expense ratios can lead to better net returns.

Final Insights
To achieve your goal, start investing in SIPs and mutual funds. Ensure regular contributions and periodic reviews. 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  |5185 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 24, 2024

Asked by Anonymous - Jul 07, 2024Hindi
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Dear sir, My husband retaired from tyre factory He earned 1 Lack permonthly. We spend money for children education and we bought one house. Now my husband pension just 4000 and my salary 50k only. My two son are studying. How i will manage current economic situation. After retairement at the age what job he can do? Please give suggestion.
Ans: Current Financial Situation Analysis
Let's assess your current financial situation and explore potential solutions to manage it better.

Income Sources:

Your husband's pension: Rs 4,000
Your salary: Rs 50,000
Major Expenses:

Children's education
Household expenses
Housing costs
It seems that your combined income is Rs 54,000 per month. However, managing with this amount, given your expenses, is challenging.

Immediate Financial Management Steps
Budgeting:

Create a detailed budget. Include all expenses: education, groceries, utilities, and housing.
Track spending and identify areas to cut costs.
Emergency Fund:

Maintain an emergency fund. It should cover at least 3-6 months of expenses.
If you don’t have one, start building it slowly by saving a small amount each month.
Debt Management:

Prioritize paying off high-interest debts first.
Avoid taking on new debt if possible.
Increasing Income
Part-Time Jobs:

Your husband can explore part-time or freelance work. Options include consulting, tutoring, or clerical work.
Websites like Freelancer, Upwork, or local classifieds can offer opportunities.
Skill Development:

Invest in courses or training programs to enhance skills.
This can open up new job opportunities with better pay.
Utilize Assets:

If you have assets like property or gold, consider renting out space or selling non-essential items.
Education Planning
Scholarships and Grants:

Look for scholarships and grants for your children’s education. Many organizations offer financial aid based on merit or need.
Research online or consult school advisors for available options.
Education Loans:

Consider taking education loans if necessary. Choose options with favorable interest rates and repayment terms.
Investment Strategy
Mutual Funds:

Invest in mutual funds through a Certified Financial Planner. They provide professional management and diversify risk.
Opt for regular funds rather than direct funds. Regular funds offer professional advice and support from a CFP.
Avoid Real Estate Investment:

Given your current financial situation, avoid investing in real estate. It requires significant capital and is not liquid.
Actively Managed Funds:

Prefer actively managed funds over index funds. Actively managed funds have the potential for higher returns as they are professionally managed to outperform the market.
Long-Term Planning
Retirement Planning:

Ensure you are saving for retirement. Invest in options like PPF or NPS.
Consult a Certified Financial Planner to create a retirement plan tailored to your needs.
Insurance:

Ensure you have adequate life and health insurance coverage.
It protects against unforeseen circumstances and reduces financial burden during emergencies.
Final Insights
Managing your current economic situation requires careful planning and disciplined financial management.

Focus on budgeting, increasing income, and making informed investment choices. Seek scholarships for education and invest in mutual funds with professional guidance.

Your husband can explore part-time job opportunities to supplement the household income.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |5185 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 24, 2024

Asked by Anonymous - Jul 04, 2024Hindi
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Dear sir, I am a railway employee, I am covered under NPS Scheme, can I also open a vpf and PPF account simultaneously with my nps savings?
Ans: Assessing the Possibility of Multiple Savings Schemes
You are covered under the NPS Scheme. It's great to see you considering other savings options. Yes, you can open both a VPF and a PPF account simultaneously with your NPS savings.

Benefits of Opening a VPF Account
The Voluntary Provident Fund (VPF) is a good option. It offers the same interest rate as the EPF. Contributions are voluntary, and you can choose how much to invest.

Tax Benefits: Contributions to VPF are eligible for tax deduction under Section 80C.

Risk-Free Returns: The returns are guaranteed and risk-free.

Long-Term Savings: Helps in building a substantial corpus over time.

Benefits of Opening a PPF Account
The Public Provident Fund (PPF) is another excellent option. It is backed by the government, ensuring safety and stable returns.

Tax Benefits: Contributions to PPF are eligible for tax deduction under Section 80C.

Tax-Free Interest: The interest earned is tax-free.

Long-Term Investment: It has a lock-in period of 15 years, encouraging long-term savings.

Combining NPS with VPF and PPF
Combining NPS, VPF, and PPF can provide a balanced portfolio. Each scheme has its unique benefits. Together, they can help you achieve financial stability and security.

Diversification: Spreading your investments across these schemes reduces risk.

Tax Efficiency: Maximizes your tax benefits under different sections of the Income Tax Act.

Stable Returns: Ensures a mix of market-linked and fixed returns.

Professional Insight on Investment Strategy
It is prudent to diversify your investments. Each of these schemes offers different benefits and serves different financial goals.

Risk Management: NPS provides market-linked returns which can be volatile. VPF and PPF provide stability.

Flexibility: NPS allows partial withdrawals for specific needs. PPF has a lock-in but can be partially withdrawn after 7 years. VPF can be withdrawn under certain conditions.

Retirement Planning: These schemes together can create a substantial retirement corpus.

Additional Considerations
While these schemes offer many benefits, consider your financial goals. Assess your risk appetite and investment horizon.

Regular Monitoring: Keep track of your investments. Adjust them based on your financial goals and market conditions.

Consult a CFP: For a personalized plan, consult a Certified Financial Planner. They can help tailor an investment strategy to meet your specific needs.

Final Insights
Balancing NPS, VPF, and PPF can be a smart move. It provides a diversified portfolio with tax benefits, stability, and growth potential. Regularly review and adjust your investments to ensure they align with your financial goals.

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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