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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Dec 20, 2019

Mutual Fund Expert... more
Amit Question by Amit on Dec 20, 2019Hindi
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I want to know that I am investing Rs 12000 on monthly basis as SIP in following funds: I am investing in them for more than 2 years and Rs 3000 each. Kindly let me know whether these are good funds for investment for long-term basis (15+ years) or should I change it to other plan? My age is 41 years. Waiting for your valuable feedback. 

Name of the Fund Category RankMF Star Rating
HDFC Top 100 Fund (Direct) Equity - Large Cap Fund 4
ABSL Frontline Equity (Direct) Equity - Large Cap Fund 4
ABSL Midcap (Direct) Equity - Midcap Fund 2
ABSL Tax Relief 96 (Direct) Equity - ELSS 4

Ans:

Midcaps: Suitable options considering quality and value for money are:

  • Motilal Oswal Midcap 30
  • DSP Midcap
  • Kotak Emerging Equity Fund

Large Caps: 

  • LIC MF Large Cap Fund – Growth
  • Mirae Asset Large Cap Fund - Growth 

ELSS: Motilal Oswal Long Term Equity Fund

Focused:

  • Axis Focused 25
  • DSP Focused Fund

Multicaps: Suitable options considering quality and value for money are:

  • Motilal Oswal multicap 35
  • Axis Mutlicap
  • Parag Parikh Long Term Equity Fund
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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Milind

Milind Vadjikar  |1225 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Sep 12, 2024

Asked by Anonymous - Sep 10, 2024Hindi
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Money
Hello sir , I am 40 years old , I have below investment. No EMI No Loan. FD - 60 lacs. Mediclaim - 10 lacs ( 20K per year) NPS - 50K Per year ( Since last 5 years) PPF - 150K Per Year ( Since Last 5 years) I am investing in below mutual funds through SIP. ( 32K Total) - Since last 3 Years ICICI balanced Advantage 2K HDFC Balanced Advantage 3K Tata Midcap and Largecap 3K Nippon India Small Cap 2K Motilal Midcap 2K ICICI Prudential Commodities 5K Quant Small Cap 5K HDFC Top 100 5K Parag Parikh Flexi 5K Is it good funds for long terms ( Horizon of 8/10 years) ? My income is arround 1.80 lac monthly , no home loan and emi. Shall I increase my SIP and my concern is 60 lacs is in FD ..Please suggest.
Ans: First and foremost enhance your healthcare cover upto 50 L - 1 Cr since healthcare costs are rising rapidly and as you grow older you may have more risks on the health front.

You have 32K SIP spread across 9 schemes which I would recommend to rationalise as follows:
HDFC BAF: 5K
MOSL Mid Cap:6K
Nippon S Cap: 6K
HDFC Top 100:7.5K
PPFAS F Cap: 7.5K

I recommend you to triple your SIP by multiplying above break-up by 3 so your monthly SIP will be 96 K. The 3 yr 32 K sip(previous @10%)+ 10 yr 96 K sip(13%considered) will yield a corpus of 2.5 Cr+ at the end of 10 years from now

Also if you invest 60 L in a conservative hybrid debt fund or a value based BAF for 10 years it will grow into 1.56 Cr (10% return considered)

So your Total corpus after 10 years will be 2.5+1.56= 4.06 Cr

An SWP of 6% will lead to monthly payout of 2L per month(pre-tax)

Make sure to transfer your gains from equity funds to debt fund as you reach closer to your target timeframe to safeguard your gains against volatility.

Enhance NPS contributions also to 1.5 L per year, if possible.

NPS & PPF corpus will yield you the delta to beat inflation.

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing

You may follow us on X at @mars_invest for updates

..Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 13, 2024

Asked by Anonymous - Sep 12, 2024Hindi
Money
Hello sir , I am 40 years old , I have below investment. No EMI No Loan. FD - 60 lacs. Mediclaim - 10 lacs ( 20K per year) NPS - 50K Per year ( Since last 5 years) PPF - 150K Per Year ( Since Last 5 years) I am investing in below mutual funds through SIP. ( 32K Total) - Since last 3 Years ICICI balanced Advantage 2K HDFC Balanced Advantage 3K Tata Midcap and Largecap 3K Nippon India Small Cap 2K Motilal Midcap 2K ICICI Prudential Commodities 5K Quant Small Cap 5K HDFC Top 100 5K Parag Parikh Flexi 5K Is it good funds for long terms ( Horizon of 8/10 years) ? My income is arround 1.80 lac monthly , no home loan and emi. Shall I increase my SIP and my concern is 60 lacs is in FD ..Please suggest.
Ans: Assessment of Current Investments
Your financial discipline is impressive. You’ve built a diversified investment portfolio with no loans or EMIs, which is a great advantage. Your investments in fixed deposits (FDs), PPF, NPS, and mutual funds through SIPs demonstrate a thoughtful approach to wealth building.

However, it’s important to review the effectiveness of these investments, especially for long-term goals. Let’s break down the strengths and areas for improvement.

Fixed Deposit (FD) - Rs 60 Lakhs

FDs are safe, but their returns can be lower than inflation over the long term. This reduces the purchasing power of your money. Given the low interest rates compared to inflation, it might not be ideal to keep such a large portion in FDs for a long time.

Consider shifting part of this amount to higher-return investments. A mix of debt and equity mutual funds can offer better growth with moderate risk. This will ensure that your corpus grows and does not lose value.

Mediclaim - Rs 10 Lakhs

Your health insurance coverage is essential, but Rs 10 lakhs might be insufficient in today's medical inflation. Since you are 40 years old, increasing your coverage to around Rs 20-25 lakhs would be wise. You can also look into super top-up policies for additional coverage at lower premiums.

Keep your premium manageable while ensuring you have enough coverage for any emergency.

NPS - Rs 50K Per Year

The National Pension System (NPS) is a good option for retirement savings. It offers tax benefits and helps create a retirement corpus. However, keep in mind that NPS has limited liquidity and locks in the money till retirement.

Continue with your current contribution, but it’s important to also have other flexible investments for retirement, which can be accessed before the NPS maturity if needed.

PPF - Rs 1.5 Lakhs Per Year

Your consistent contribution to PPF is excellent. PPF offers tax-free returns and acts as a solid long-term debt instrument. However, it has a 15-year lock-in period, and the returns are limited, which might not be sufficient to beat inflation in the long run.

Continue investing in PPF, but consider balancing it with equity-based investments for better overall growth.

SIPs in Mutual Funds
Your SIP investments show good diversification, with exposure to large-cap, mid-cap, small-cap, and flexi-cap funds. However, let's assess whether the fund selection aligns with your long-term goals.

Balanced Advantage Funds (BAFs)

BAFs are designed to manage market volatility by dynamically adjusting between equity and debt. Your allocation in these funds is good for managing risk, but the return potential might be lower compared to pure equity funds over the long term.

You may want to review your allocation here and consider increasing exposure to pure equity funds for better growth.

Midcap and Smallcap Funds

You have a healthy exposure to midcap and smallcap funds. These funds have the potential for high growth but come with higher volatility. Given your 8-10 year horizon, this allocation is suitable, as the long-term potential of mid and small-cap companies can help you achieve substantial gains.

Ensure you monitor these funds regularly, as they require careful attention to market cycles. If you can handle some risk, this allocation can continue to serve you well.

Commodities Fund

Your exposure to a commodities fund is unique. While commodities can provide diversification, they are often volatile and may not deliver consistent returns in the long term. Consider reducing exposure to this fund and reallocating it to equity or hybrid funds with better long-term growth potential.

Top 100 Large Cap Fund

Large-cap funds are stable and provide steady returns, making them a good choice for a conservative portion of your portfolio. Your investment here is well-placed for long-term wealth creation, as large-cap companies are usually more stable and less volatile.

Flexi Cap Fund

Your investment in a flexi-cap fund is an excellent choice. These funds offer flexibility to invest across market capitalizations, which helps in capturing opportunities across different market segments. Flexi-cap funds can provide good long-term growth due to their dynamic nature.

Recommendations for Future SIPs
Increase Your SIP Gradually

Since your income is Rs 1.8 lakh per month, and you’re already investing Rs 32,000 in SIPs, you have room to increase your SIP contributions. Increasing your SIPs by Rs 10,000 per month could help you build a stronger corpus over time.

You could distribute the increased SIP amount among equity funds, focusing on large-cap or flexi-cap funds for better risk-adjusted returns.

Shift FD Amount Gradually

You can consider gradually reducing your Rs 60 lakh FD and allocating part of it into mutual funds. A combination of debt and equity funds would provide better returns while managing risk.

For example, you could shift Rs 20 lakh from FD into a combination of balanced hybrid funds and debt funds. This would offer a balance between safety and growth.

Health Insurance Enhancement

Increase your health insurance coverage to at least Rs 20-25 lakhs. Super top-up plans can be a cost-effective way to enhance your coverage without significantly increasing premiums.

Diversification Across Asset Classes

While your portfolio is diversified, it can benefit from more balanced exposure between debt and equity. Consider introducing hybrid funds or balanced advantage funds to provide a cushion against market volatility.

Reevaluate Commodities Fund

Commodities tend to be more volatile and may not perform as well over the long term compared to equity funds. You might want to shift this allocation to equity-focused funds for better growth prospects.

Long-Term Strategy and Final Insights
You are already on the right path with your investments. The key is to refine your portfolio for better long-term growth and inflation-beating returns. Some key takeaways:

FD Allocation: Gradually reduce your Rs 60 lakh FD holding. Allocate a portion to debt mutual funds for better returns and liquidity.

Health Insurance: Increase your health coverage to Rs 20-25 lakhs.

Increase SIPs: Consider increasing your SIP contribution from Rs 32,000 to Rs 40,000, focusing more on large-cap and flexi-cap funds.

NPS: Continue contributing to NPS, but balance your retirement planning with more liquid investments.

Balanced Advantage Funds: While these provide stability, the growth potential is limited. Consider reallocating part of this investment into equity funds for long-term growth.

Commodities Fund: Reevaluate this fund as commodities can be highly volatile. Shifting this to equity-focused funds may give better returns over 8-10 years.

Flexi-Cap and Midcap: These funds are ideal for long-term wealth creation, so maintaining and slightly increasing your allocation can provide growth.

Regular Reviews: Monitor your portfolio regularly and make adjustments based on performance and market conditions.

Finally, your financial foundation is strong. With a few adjustments, you can further strengthen your long-term wealth creation strategy. Stay focused on your goals, and consider increasing your SIPs as your income grows. Your current path is promising, and with these improvements, you will be well-positioned to meet your financial goals.

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

..Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

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

Money
Hello sir , I am 40 years old , I have below investment. No EMI No Loan. FD - 60 lacs. Mediclaim - 15 lacs ( 20K per year) NPS - 50K Per year ( Since last 5 years) PPF - 150K Per Year ( Since Last 5 years) I am investing in below mutual funds through SIP. ( 32K Total) - Since last 3 Years ICICI balanced Advantage 2K HDFC Balanced Advantage 3K Tata Midcap and Largecap 3K Nippon India Small Cap 2K Motilal Midcap 2K ICICI Prudential Commodities 5K Quant Small Cap 5K HDFC Top 100 5K Parag Parikh Flexi 5K Is it good funds for long terms ( Horizon of 8/10 years) ? My income is arround 1.80 lac monthly , no home loan and emi. Shall I increase my SIP and my concern is 60 lacs is in FD ..Please suggest.
Ans: You have built a strong investment foundation, which is commendable. Here’s a detailed assessment of your current investments and strategies for the future.

1. Current Financial Situation

Monthly Income: Rs 1.80 lac
No EMI or Loans: This situation gives you a financial advantage.
Your financial discipline is evident through your savings and investments. This stability allows you to take calculated risks.

2. Investment Breakdown

Fixed Deposits (FD): Rs 60 lac

FDs provide safety but low returns.
Current interest rates may not beat inflation.
Mediclaim: Rs 15 lac (Premium: Rs 20,000/year)

Health insurance is crucial for financial security.
Ensure coverage is adequate as you age.
National Pension System (NPS): Rs 50,000/year

Good for retirement savings with tax benefits.
Ensure you know about the exit rules.
Public Provident Fund (PPF): Rs 1.5 lac/year

PPF is a safe investment with decent returns.

It helps in long-term savings and tax planning.

3. Mutual Fund SIP Investments

You are investing Rs 32,000 through SIPs in various funds. Here’s a brief look at the types:

Balanced Advantage Funds:

These funds balance equity and debt.
They adjust allocation based on market conditions.
Midcap and Largecap Funds:

Midcaps can provide higher growth potential.
Largecaps offer stability and lower volatility.
Small Cap Funds:

Higher risk with potential for greater returns.
Suitable for a long-term horizon.
Commodity Funds:

These are good during inflationary periods.
Be cautious, as they can be volatile.
Flexi-cap Funds:

Flexibility in investing across market caps.
Potential for strong long-term growth.
Overall, your choices reflect a diversified approach. This diversification can help manage risk while aiming for growth.

4. Long-Term Investment Horizon

Your investment horizon of 8 to 10 years is positive. Long-term investments can weather market fluctuations.

Market Volatility:

Historically, equities outperform in the long run.
Staying invested can yield significant returns.
Inflation Impact:

Equity mutual funds can help beat inflation.

FDs may not provide enough growth over time.

5. Increasing Your SIP

Given your stable income and lack of liabilities, consider increasing your SIP.

Extra Savings:

You can allocate more to mutual funds.
A higher SIP can lead to a larger corpus.
Inflation Hedge:

Increasing SIPs can help counter inflation.
Regular investments in equities can boost wealth.
Financial Goals:

Align your investments with future goals.

Think about retirement, children’s education, and other aspirations.

6. Concern About Fixed Deposits

Your Rs 60 lac in FDs is concerning for several reasons:

Low Returns:

Current FD rates are generally low.
Returns may not keep pace with inflation.
Opportunity Cost:

Money in FDs could generate better returns elsewhere.

Consider reallocating some funds to equity or balanced funds.

7. Suggested Investment Strategy

Here’s a 360-degree approach to enhance your investment strategy:

Reallocate Fixed Deposits:

Consider moving a portion to mutual funds.
This can provide better growth potential.
Increase SIP Amount:

Gradually raise your SIP from Rs 32,000 to Rs 50,000 or more.
This increase can significantly impact your long-term wealth.
Monitor and Adjust:

Regularly review your portfolio.
Adjust based on market conditions and personal goals.
Diversification:

Keep diversifying among sectors and funds.
Avoid putting all funds in one type of investment.
Emergency Fund:

Maintain a fund for unexpected expenses.

Ideally, this should cover 6-12 months of living expenses.

8. Tax Implications on Mutual Funds

Be aware of the tax implications when selling your mutual fund investments:

Equity Mutual Funds:

Long-term capital gains (LTCG) above Rs 1.25 lac are taxed at 12.5%.
Short-term capital gains (STCG) are taxed at 20%.
Debt Mutual Funds:

LTCG and STCG are taxed per your income tax slab.
Understand these rules to maximize returns and minimize tax liabilities.

Final Insights

Your current investment strategy shows a good mix. However, the heavy reliance on fixed deposits limits growth.

Consider increasing your SIP and reallocating some of your FD money to mutual funds. This strategy can help you achieve better long-term returns.

Stay informed about your investments and keep an eye on market trends. Regular reviews are essential for a successful investment journey.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 04, 2024

Money
Hello sir , I am 40 years old , I have below investment. No EMI No Loan. FD - 60 lacs. Mediclaim - 15 lacs ( 20K per year) NPS - 50K Per year ( Since last 5 years) PPF - 150K Per Year ( Since Last 5 years) I am investing in below mutual funds through SIP. ( 32K Total) - Since last 3 Years ICICI balanced Advantage 2K HDFC Balanced Advantage 3K Tata Midcap and Largecap 3K Nippon India Small Cap 2K Motilal Midcap 2K ICICI Prudential Commodities 5K Quant Small Cap 5K HDFC Top 100 5K Parag Parikh Flexi 5K Is it good funds for long terms ( Horizon of 8/10 years) ? My income is arround 1.80 lac monthly , no home loan and emi. Shall I increase my SIP and my concern is 60 lacs is in FD ..Please suggest.
Ans: Your financial journey appears strong, with a clear focus on a balanced investment approach. Here’s a comprehensive review of your investments and a few suggestions on how you can further enhance your portfolio.

FD Investment: Evaluating Returns and Diversification
Having Rs. 60 lakh in fixed deposits ensures liquidity and safety, which is beneficial for short-term needs. However, FDs offer limited growth potential due to moderate interest rates, which are typically lower than inflation over the long term. This could affect your purchasing power in the future.

Consider diversifying a portion of the FD funds into options with better long-term returns, such as debt mutual funds or balanced funds. These alternatives can provide capital protection with a slightly higher growth potential than FDs. Debt mutual funds can be more tax-efficient than FDs, especially over extended investment periods.

Mediclaim Coverage: Ensuring Comprehensive Health Protection
Your existing health insurance coverage of Rs. 15 lakh is a good start. With rising healthcare costs, especially during retirement, this might need a boost over time.

If you haven't considered it already, a top-up or super-top-up health policy could be beneficial. It can increase your coverage at a minimal cost, providing greater security against medical emergencies.

National Pension System (NPS): Steady Retirement Planning
Contributing Rs. 50,000 yearly to NPS is a wise move as it provides additional tax benefits and builds a retirement corpus. The lock-in until retirement ensures disciplined savings.

Given your age, consider reviewing your NPS asset allocation between equity, corporate debt, and government bonds. This can help you maintain a balance between growth and stability, especially as retirement nears. Additionally, the NPS tier I account provides tax benefits that can complement your other investments.

Public Provident Fund (PPF): Reliable Long-Term Growth
Your PPF contributions of Rs. 1.5 lakh annually over the past five years are commendable. PPF is one of the most secure investment options for long-term goals due to its tax-free returns and government backing.

Continue with these contributions. PPF works well as a wealth-building tool, especially when held to maturity (15 years), as it compounds tax-free. This aligns well with your retirement planning.

Mutual Fund Portfolio: Assessing Fund Choices and SIPs
You have a well-structured mutual fund portfolio, investing Rs. 32,000 monthly. The diversity in fund types indicates a strong approach to long-term growth, but a few adjustments can maximize returns and stability.

Reviewing Balanced and Hybrid Funds
You’re investing in both ICICI and HDFC Balanced Advantage funds. These hybrid funds are useful for moderating risk, offering a blend of equity and debt.

For an 8-10 year horizon, balanced funds provide stability and moderate growth, which aligns well with your goals. However, ensure that these funds consistently meet your return expectations compared to other funds in the hybrid category.

Small and Midcap Funds: Assessing Growth Potential
Small and midcap funds in your portfolio, such as Quant Small Cap and Motilal Midcap, offer growth but come with higher volatility. Over 8-10 years, these funds can potentially yield high returns, given India’s growth story.

Review the performance of small-cap and midcap funds periodically. It’s beneficial to continue with small cap funds if your risk tolerance allows. Small caps can deliver excellent returns but require patience as they go through market cycles.

Sectoral and Thematic Funds: Weighing Commodities Exposure
Sector-specific funds, like the ICICI Prudential Commodities fund, can add concentrated exposure. These funds can generate strong returns in favorable conditions but may underperform in other periods.

Keep a close eye on the performance and market conditions. If you feel the commodities sector may underperform or add unnecessary risk, you might consider rebalancing this amount to more diversified funds.

Large Cap and Flexi Cap Funds: Ensuring Stability and Flexibility
Investments in HDFC Top 100 and Parag Parikh Flexi Cap provide stability and diversification. These funds cover top-performing large-cap companies and offer flexibility in market exposure.

Continue with these funds, as they create a stable foundation within your equity portfolio. Large-cap and flexi-cap funds offer better risk-adjusted returns, especially over long periods.

Consider Increasing SIPs for Accelerated Wealth Growth
With a monthly income of Rs. 1.80 lakh and no debt, your capacity to invest further is strong. Increasing your SIPs by even Rs. 5,000–10,000 monthly can significantly boost your corpus over the next 8-10 years.

You could allocate additional SIPs toward existing diversified funds or explore other categories like balanced advantage funds, which blend risk management with growth.

Taxation Strategy: Optimizing Post-Tax Returns
Equity Mutual Funds: For equity funds, long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%. If you redeem any funds, consider staggering withdrawals over different financial years to minimize tax impact. Short-term capital gains are taxed at 20%, so holding investments for the long term is more tax-efficient.

Debt and Hybrid Mutual Funds: If you move any funds from FDs to debt mutual funds, be mindful that both long-term and short-term capital gains from debt funds are taxed based on your income tax slab. However, debt funds may still offer better tax-adjusted returns compared to FDs, especially over longer periods.

Final Insights
Your current investment strategy is strong, diversified, and largely aligned with long-term growth goals. With no loans or liabilities, you’re well-positioned to make additional investments. Here are key takeaways for further growth:

Diversify Your FD Holdings: Move a portion of FDs to debt mutual funds for better tax efficiency and returns over time.

Increase SIP Contributions: Consider gradually increasing your SIP contributions to maximize the growth potential of your portfolio.

Periodic Review: Regularly review the performance of sectoral and small-cap funds to ensure they align with your financial goals.

Boost Health Coverage: Consider a top-up health insurance plan for additional coverage at a reasonable cost.

By consistently evaluating and adjusting, you’re set to achieve a well-rounded, growth-focused portfolio with minimized risk exposure.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Money
Sir, I am 56 year old, Govt Servant, want to take VRS. I have my own house and only son is working in TCS. I will get 48000 as monthly pension and 90L as retirement benefit. Please tell me is this enough to survive and how to safely grow my corpus. I have a 10L health insurance for family.
Ans: At 56, planning a voluntary retirement is a bold yet thoughtful move. Your situation shows financial discipline, which is deeply appreciated. You already have a home, pension, insurance cover, and a financially independent son. Let’s now look at how to manage and grow your Rs.90 lakh corpus wisely.

Assessing Monthly Cash Flow and Basic Expenses
You will get Rs.48,000 monthly as pension.

Your living expenses must stay within this pension.

If you need more, only then use your retirement corpus.

Try not to touch the corpus for regular monthly spending.

This way, your Rs.90 lakh will grow and last longer.

Track monthly budget: food, bills, healthcare, travel, personal needs.

Avoid supporting grown-up children financially now.

Emergency Corpus – Always Keep Ready Funds
First, keep Rs.3 to Rs.5 lakh aside for emergencies.

Use savings account or liquid mutual fund for this.

This will help with sudden hospital, family, or repair expenses.

Don’t keep all Rs.90 lakh invested in long-term products.

Emergency corpus brings peace of mind.

Goal Mapping – Define Purpose for Your Money
Decide your goals clearly. Short-term and long-term.

Short-term: home repairs, travel, health expenses.

Long-term: medical needs, gifting to son, lifestyle upgrades.

Every rupee should have a purpose.

This stops unwanted withdrawals and keeps money organised.

Ideal Allocation Strategy – Mix of Growth and Safety
You should not keep Rs.90 lakh in one place.

Split it smartly across different options.

Consider 3 categories: safe, moderate, and growth-oriented.

Suggested example split:

30% in low-risk options (for safety)

40% in moderate products (for balance)

30% in growth instruments (for long-term growth)

Your Certified Financial Planner (CFP) can adjust this after understanding full picture.

Don’t Use Fixed Deposits Only – Too Low Return
FDs are safe but give low post-tax returns.

FD interest is taxed as per your income slab.

Keeping all Rs.90 lakh in FDs is not smart.

Inflation will eat away the real value of returns.

Only use FDs for short-term needs, not full retirement planning.

Debt Mutual Funds – For Stability and Better Returns
These are good for 2 to 5-year goals.

They are better than FDs in taxation and flexibility.

Choose only regular plans through a Certified Financial Planner.

Regular mode offers expert help, rebalancing, and personalised support.

Direct funds may look cheaper, but they lack personalised guidance.

Wrong selection can lead to capital loss and stress.

Taxation depends on your income slab for these funds.

Equity Mutual Funds – Only for Long-Term Corpus Growth
You may live for 25-30 more years. So, growth is needed.

Keep some money in equity mutual funds for long-term.

Ideal for 7+ year goals like gifting, legacy planning, etc.

Equity funds can beat inflation and build wealth over time.

Use regular plans with a CFP's help for the right scheme.

Don’t choose index funds. They just copy the market.

Index funds don’t manage risk actively in a down market.

Active funds try to beat the market with research and strategy.

Professional fund managers guide these funds during volatility.

Over time, they perform better than passive funds in most cases.

Monthly Withdrawal Plan – Use SWP, Not Lumpsum
For extra monthly needs, use SWP from mutual funds.

SWP means Systematic Withdrawal Plan.

You get fixed monthly money while the rest continues to grow.

This is better than FD interest or account withdrawals.

Discuss SWP setup with your Certified Financial Planner.

It gives you regular income and protects your capital longer.

Medical Expenses – Prepare for Inflation in Health Costs
You already have Rs.10 lakh family health insurance. That’s good.

Check if it covers post-retirement illnesses and cashless hospitals.

Health costs rise every year. So you must also keep money for this.

Use part of your debt fund allocation for health-related savings.

Keep your health insurance policy active without break.

If possible, consider a super top-up policy.

This gives you higher cover at lower cost.

Avoid Mixing Insurance with Investment
Don’t buy ULIPs, endowment, or money-back policies now.

They give poor returns and high charges.

If you already have such plans, consider surrendering.

Reinvest that money in mutual funds with CFP guidance.

Insurance is not an investment product.

You only need term cover if dependents exist.

Else, don’t buy new life insurance policies at this age.

Avoid Fancy or Risky Products
Don’t go for PMS, crypto, forex or company FDs.

Also avoid bonds from unknown firms or friends’ business ideas.

Stick to time-tested, regulated products.

Don’t get tempted by high return promises.

If it sounds too good, it may not be safe.

Stay with products that your Certified Financial Planner supports.

Make Your Will – Plan for Family Security
Your son is settled, but legal clarity is important.

Make a proper will. Register it if needed.

Mention all investments and your wishes clearly.

Keep your son informed, but maintain financial independence.

A will avoids confusion and family conflict later.

Track and Review Investments Regularly
Once invested, review your portfolio every 6 months.

Markets change. So your plan must adapt too.

Your Certified Financial Planner can help adjust strategy.

Rebalancing keeps your growth and safety in balance.

Stay involved in your own financial planning.

Stay Disciplined – No Emotional Withdrawals
Avoid spending from corpus for lifestyle upgrades.

Don’t use this money for buying property or gifting big.

Your main goal now is peace, health, and independence.

Don’t let peer pressure or relatives influence your financial choices.

Don’t Do It Alone – Work with a Certified Financial Planner
A CFP will help structure your plan for every life stage.

They also guide behaviour, taxes, and fund choice.

A Certified Financial Planner can personalise your plan.

Regular reviews ensure your strategy stays correct.

You get peace and clarity about your financial journey.

Finally
Your financial base is strong. Rs.90 lakh is a solid retirement corpus.

Rs.48,000 monthly pension takes care of basic living.

With smart investing, you can live stress-free for many years.

Always mix growth with safety. Don't over-risk or over-protect.

Get professional help to protect your future.

You’ve done well so far. With discipline, it will only get better.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Asked by Anonymous - Apr 22, 2025
Money
66 old retiree for SWP for 50 lakhs for 15 years. Please suggest hiwbit works
Ans: You are 66 now. Your earning phase is over. Your investing phase continues.

You must now shift to income generation. That is the priority.

You need monthly income from your investments. That’s where SWP helps.

SWP gives regular money like pension. But with flexibility and better tax benefit.

You have Rs. 50 lakhs corpus. That’s a good amount to begin.

You want it to last 15 years. That’s possible with the right strategy.

SWP gives both safety and growth if planned well. Let us understand this deeply.

What is SWP – Simply Explained

SWP means Systematic Withdrawal Plan. You invest lump sum in a mutual fund.

Then you set a fixed amount to be withdrawn monthly or quarterly.

That amount comes to your bank account like pension or salary.

You can decide the amount and date of withdrawal. It is fully flexible.

The fund continues to grow in the background. Only part of it is withdrawn.

This is better than keeping money in savings or FDs. It earns more.

How Does It Work in Real Life?

You invest Rs. 50 lakhs in suitable mutual funds.

Let us assume monthly withdrawal of Rs. 30,000 as an example.

Every month, this amount comes to your account.

The remaining corpus stays invested and earns returns.

If your fund earns more than withdrawal, your money grows.

If your fund earns less, your capital starts reducing.

The goal is to make your money last full 15 years or more.

That is possible with good fund selection and right withdrawal rate.

Which Mutual Fund Categories Suit Retirees for SWP?

SWP should not be done from aggressive equity funds. Risk is high.

Use conservative hybrid funds or balanced advantage funds.

You can also mix with multi-asset funds and large cap funds.

Avoid small cap, sector funds, and thematic funds.

Safety and stability are more important now than chasing high returns.

A good mix of equity and debt ensures corpus survival.

Gold exposure (via multi-asset fund) gives inflation protection.

Withdrawal Strategy: How Much Is Safe?

From Rs. 50 lakhs, you can safely withdraw Rs. 25,000 to Rs. 30,000 monthly.

That is 6% to 7% annually. It is a sustainable range.

Your fund must earn at least 8% to 9% to preserve capital.

Some years will earn more. Others will earn less.

The idea is to average over time. That gives longevity.

Do annual review with a Certified Financial Planner. Adjust as needed.

Realistic Monthly Withdrawal Table (Assumption Based)

Rs. 50 lakhs invested, withdrawing Rs. 30,000 per month for 15 years:

Total withdrawn over 15 years = Rs. 54 lakhs

Even after 15 years, some corpus may remain if returns stay above 8%.

If markets perform well, you may have Rs. 15–20 lakhs left.

That residual can support your medical or emergency needs after 80.

But don’t start with higher withdrawals. That may finish funds early.

You can increase withdrawal by 3% annually to beat inflation.

Why SWP Is Better Than FD or Savings Account

FD interest is fixed. But inflation eats into returns.

FD interest is fully taxable. That reduces your income.

SWP offers tax-efficiency and potential growth.

SWP is more flexible. You can increase or stop anytime.

You earn higher post-tax return in SWP than FD.

Mutual funds are more efficient in compounding and tax management.

Tax Benefits of SWP (Post 2024 Rules)

Mutual fund withdrawal is partly principal and partly gain.

Only gain portion is taxed. Principal is not taxed.

Long-term capital gains (above Rs. 1.25 lakhs annually) taxed at 12.5%.

Short-term capital gains taxed at 20%.

So your total tax outgo is less than FD interest.

FD interest taxed as per slab. That hurts senior citizens more.

Why You Should Not Invest in Annuity Plans

Annuity gives fixed return. But rates are low – 5% to 6%.

Annuity income is fully taxable. No capital left for heirs.

Once you buy annuity, it is locked. No flexibility.

You cannot change or stop later. No liquidity.

SWP gives more return, more flexibility, and more control.

Why Not Index Funds or ETFs for SWP

Index funds are passive. They cannot manage market downsides.

No human intelligence to shift sectors or reduce exposure.

In a bad year, index may fall 20% or more. No protection.

SWP from index fund in a bad year reduces corpus quickly.

Active funds managed by experts adjust exposure. That reduces damage.

That is why actively managed funds are better for SWP.

Avoid Direct Funds – Use Regular Funds with CFP Monitoring

Direct funds save cost. But you miss expert advice.

You must do your own rebalancing and tax planning.

Retirees need handholding. Mistakes can be costly.

A Certified Financial Planner does fund selection, portfolio review, rebalancing, and planning.

Regular plans give you that support. That is very valuable now.

The extra expense is small. But the guidance is lifelong.

Common Mistakes Retirees Make with SWP

Starting with high withdrawal like Rs. 50,000 per month. That is unsustainable.

Choosing high-risk funds for SWP. That increases capital loss.

Not doing yearly review with CFP. That leads to blind investing.

Pausing or redeeming funds during market dip. That damages recovery.

Not adjusting for inflation annually. That reduces real income.

Investing in ULIPs or endowments. That locks money unnecessarily.

Smart SWP Practices for Long-Term Sustainability

Withdraw 6% or less of corpus annually.

Increase withdrawal 3% every year to beat inflation.

Use two or three fund categories. Not just one.

Keep some money in liquid fund for 6 months income buffer.

Rebalance every year based on market and life needs.

Review with Certified Financial Planner annually. Adjust strategy when needed.

Can You Leave Money for Spouse or Children?

Yes. If planned well, your corpus may not exhaust fully.

You may have Rs. 10–20 lakhs left after 15 years.

That becomes part of your estate. Your spouse can continue SWP.

Or your children can use it for their needs.

Keep nominations updated. Maintain clear records of all folios.

What Happens If You Live Beyond 81?

15-year SWP plan must consider longevity risk.

Medical science is improving. People now live till 90.

So you must plan to extend income even after 81.

Keep some backup corpus or insurance maturity for those years.

Or reduce withdrawal slightly in initial years to extend tenure.

Medical Expenses – How to Plan

Keep a separate Rs. 10–15 lakhs in FD or liquid funds for medical.

Don’t use SWP corpus for health emergency.

Keep health insurance renewed till age 80+.

Opt for higher cover through super top-up plan. Premium is low.

This preserves SWP for income. Insurance takes care of hospital bills.

Final Insights

At 66, SWP is your best tool for regular income.

It gives control, flexibility, and tax efficiency.

A well-planned Rs. 50 lakhs corpus can support you for 15+ years.

Withdraw wisely. Don’t be greedy. Stick to 6–7% annually.

Use hybrid and multi-asset funds. Not pure equity. Not real estate.

Don’t touch annuity, direct funds, or index funds.

Monitor annually with a Certified Financial Planner.

You will enjoy peace of mind, freedom, and financial dignity in retirement.

And if you live beyond 81, you’ll still have financial support.

SWP works like a calm river. Slowly flowing, yet giving life every day.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Asked by Anonymous - Apr 19, 2025
Money
I am looking for personal finance advice. I am a working processional (private company) based out of Bangalore and 40 years old. I am married (wife at 34 years) with a kid of 6 years. I also have parents, father at 70 years and mother at 65 years. So total members in my family is 5. I am planning to work in Bangalore for maximum 3 more years and will relocate to Kolkata, and try to find out a less stressful job for myself. Overall, the total liquid asset we have is 5 cr INR. Father gets pension 40,000 INR per month. Apart from these 2, we don't have any other asset. We have floating health insurance of 13 Lakhs, which covers all 5 of us. After I relocate to Kolkata, how should we plan to invest 5 Cr to ensure we have a moderate lifestyle, can cover my sons higher education, and occasional domestic vacation? Note: After relocating to Kolkata, I am my wife both will look for some work, to cover our monthly expenses, but until that happens, we need to plan everything with our existing assets. Looking for expert opinion please. Thanks in advance.
Ans: You are in a very strong position. You have built Rs. 5 crore in liquid assets. Your future goals are realistic and balanced. Let us work through your plan step by step with full clarity.

Below is a 360-degree approach to help you.

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Assessing Current Financial Strength

Your liquidity of Rs. 5 crore is a big strength.

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No current liability or loan gives you full control.

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You already have a health cover for all five family members. That is very important.

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Your father’s pension of Rs. 40,000 monthly adds stability to the family income.

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Your willingness to relocate and reduce stress is a healthy lifestyle decision.

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Your child is 6 years old. You have 10 to 12 years to plan for higher education.

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You and your wife are open to earning again later. This gives extra cushion.

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Let us now look at how to deploy this Rs. 5 crore smartly.

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Breakdown of Your Corpus for Better Control

Always divide corpus into different buckets based on purpose and timeline.

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Each bucket should have its own investment strategy.

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It will help you avoid panic during emergencies or market volatility.

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Let us define these buckets for you:

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1. Emergency Bucket

This bucket is for all unforeseen expenses.

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Keep 6–12 months of expenses in this.

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Include money for any sudden medical, repair, or temporary job loss.

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Use bank FD, sweep-in FD, or liquid mutual funds for this.

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Target: Rs. 20 to 25 lakhs

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2. Income Support Bucket (Post-Relocation)

Once you move to Kolkata, income may stop for some time.

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You will need to draw from this to manage expenses.

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Keep at least 2–3 years’ worth of expenses here.

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Choose low-risk and tax-efficient options like arbitrage funds or ultra short-term funds.

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Do not use equity or stocks for this bucket.

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Target: Rs. 40 to 50 lakhs

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3. Education Goal Bucket

Your child’s college education will need funds after 10 to 12 years.

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This can be partly in India or abroad, based on your goals.

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Equity mutual funds are best for long-term education goals.

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Invest using SIP or staggered lumpsum over 2 years.

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You can take slightly higher risk here to beat inflation.

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Target: Rs. 1 to 1.25 crore

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4. Lifestyle Bucket

This is to maintain your moderate lifestyle and travel plans.

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You want occasional domestic holidays and comfort.

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You can use a mix of hybrid mutual funds and a Systematic Withdrawal Plan (SWP) from balanced funds.

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You may also use part of this for big ticket spends like appliances or short family trips.

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Target: Rs. 75 lakhs to Rs. 1 crore

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5. Long-Term Wealth Bucket

This is your main wealth-building and retirement support engine.

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Your corpus has to grow to protect your future.

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Use well-chosen actively managed equity mutual funds.

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Avoid direct stocks unless you track them deeply.

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Do not invest in index funds. They give average return, not smart return.

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Active funds have expert fund managers. They beat the market over time.

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Regular mutual funds through a Certified Financial Planner will help you plan properly.

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You get guidance, rebalancing, and emotional discipline.

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Direct funds look cheaper but offer no support.

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You must pay attention to suitability, not only costs.

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Target: Rs. 1.75 crore to Rs. 2 crore

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Surrender of LIC or ULIP (If Any)

If you hold LIC endowment or ULIP policies, review them.

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Most of these give low returns and poor liquidity.

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Consider surrendering and reinvesting in mutual funds.

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A Certified Financial Planner can assess this carefully.

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This step may boost your wealth by better compounding.

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Health Insurance Planning

You already have a Rs. 13 lakh family floater.

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Confirm if it has separate or shared room limits.

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Check if parents have individual coverage or not.

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You may add super top-up if required.

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Medical inflation is high. Review policy every 2–3 years.

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Term Life Insurance (If Any)

If you are the only earning member, keep term insurance.

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Amount should cover your child’s needs and wife’s future.

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If not already taken, do it before quitting the job.

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Premium is low if taken early and healthy.

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Tax Planning After Relocation

Once income drops or stops, your tax bracket will reduce.

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You can use this to book long-term capital gains below limit.

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Plan your withdrawals to stay in lower tax bracket.

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Mutual funds help you do tax-efficient withdrawals.

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Post-Relocation Income Search

You plan to take a lighter job later. Keep that flexibility.

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Choose work that allows good balance and adds purpose.

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Your wife can also pick flexible part-time or remote roles.

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Even Rs. 40,000 to Rs. 60,000 per month from each of you helps.

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That will reduce stress on your corpus.

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Keep your emergency bucket untouched during this phase.

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Estate Planning

You have parents and a child to think about.

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Write a simple will to define all asset sharing.

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Keep nominations updated in mutual funds and FDs.

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This will help your family in case of any emergency.

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Do not delay this step. It is important.

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Regular Review and Rebalancing

Your investment plan should be reviewed every year.

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If goals change, your plan must adapt.

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Markets go up and down. That’s normal.

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Do not panic. Stick to your buckets and goals.

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A Certified Financial Planner can guide your review.

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You get mental peace by following a set structure.

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Final Insights

You have done well to save Rs. 5 crore by age 40.

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This can support your family for years if used wisely.

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Divide your corpus by purpose. Don’t mix goals and timeframes.

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Do not lock funds in physical assets again.

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Real estate is hard to exit. Keep focus on liquidity and growth.

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Avoid index funds. Choose active funds with expert guidance.

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Use mutual fund SIPs and staggered investments for better risk control.

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Keep wife involved in all planning. It helps in family clarity.

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Stick to a 360-degree plan. Avoid reacting to news or friends’ advice.

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This approach will protect your lifestyle and child’s future.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Money
i have to buy a flat in mumbai in a year's time an di have a down payment . for short term where can i invest till we select the flat. also one of my relatives suggested you shouldrather stay on rent and put corpus in SWPasmumbai rents are v high. we dont own any house currently me and my old mother
Ans: You are planning to buy a house in Mumbai. You also have the down payment ready. Your timeline is around one year. You are also open to staying in a rented house. You are rightly exploring both buying and renting. This shows good financial thinking. Let us now explore both options from a 360-degree perspective.

We will go step by step to analyse each part of your situation.

First, let us understand your short-term need
You have a down payment amount ready. This money is needed within a year. So, capital protection becomes very important.

Your priority is to avoid risk. Returns are not your main goal here.

You should not invest in equity or equity mutual funds. These can be volatile in the short term.

Even debt mutual funds with long durations may not be ideal. They carry interest rate risks.

So, the best short-term options for you are:

Ultra Short Duration Mutual Funds (through MFD with CFP)
These have low interest rate risk. They aim to give better returns than savings accounts.
These are better than FDs in terms of taxation for short-term.

Arbitrage Mutual Funds (through MFD with CFP)
They are treated like equity funds. So, they enjoy better taxation if held over 1 year.
These are good for someone like you who has a 9–12-month window.

Bank Fixed Deposits or Sweep-in Accounts
These are simple and safe. Liquidity is also available.
Returns may be lower than other options. Taxation is based on your slab.

Short Term Debt Mutual Funds (through MFD with CFP)
Only if your horizon is close to 12 months.
These can offer slightly better returns but do carry minimal risks.

Evaluate your renting vs. buying decision
You are staying with your elderly mother. You don’t own any house. You are considering whether to buy or rent.

This is a very common dilemma in cities like Mumbai. Let us understand it in depth.

Buying a house
Security of staying
Once bought, the home gives a sense of stability. Especially with an ageing parent.

No landlord pressure
You are not dependent on others for renewals or eviction.

Asset creation
You build an asset. Though not liquid, it can support retirement indirectly.

EMIs can replace rent
If your EMI is close to what you would have paid as rent, it makes sense.

Emotional satisfaction
You get peace of mind from owning your own house.

Renting a house
Flexibility
You can move easily if needed. You are not tied to one location.

Low maintenance worry
You are not responsible for repairs and society charges in most cases.

Lump sum can be invested
You can keep the home-buying amount invested and generate monthly income from SWP.

No property taxes or registration costs
You avoid stamp duty, registration, property tax, and society formation costs.

Access to better locations
Renting may help you live in a better locality, which you may not afford to buy.

Let us now understand the financial angle in depth
Rent in Mumbai is definitely high. But property prices are even higher. Let us look at numbers.

Assume you want to buy a flat worth Rs. 1.5 crore. Your down payment is Rs. 50 lakh.

That means you may take a loan of Rs. 1 crore. EMI on Rs. 1 crore loan for 20 years may be around Rs. 90,000–1,00,000.

Also, you will need to spend Rs. 10–15 lakh more for stamp duty, interiors, and society formation.

You are locking a large part of your money into a single illiquid asset.

On the other hand, if you stay on rent, you may pay Rs. 50,000 to Rs. 70,000 monthly.

You still keep your Rs. 65 lakh–70 lakh corpus. This corpus can be put in SWP for regular monthly withdrawals.

That way, the return from the investment will help cover the rent.

For example: If you invest Rs. 70 lakh in a balanced advantage or equity savings fund (via MFD with CFP),

You can use SWP to withdraw around Rs. 35,000–45,000 monthly for many years.

The remaining rent can be adjusted from your income.

Other financial factors to consider
Liquidity
Keeping money in mutual funds (via MFD with CFP) is flexible.

Buying a home blocks funds for long.

Goal alignment
You are not buying the house for investment. You are buying to live.

That is okay. But don’t stretch finances beyond comfort.

Future responsibilities
Your elderly mother may need medical support. That needs liquidity.

A house cannot be sold quickly to meet emergencies.

Maintenance and society charges
In own house, you must handle repairs, taxes, and regular upkeep.

These hidden costs are often ignored but add up every year.

Exit cost
If you later need to sell the house, there is capital gains tax, stamp duty loss, brokerage.

Renting gives an easier exit.

Emotional and lifestyle factors
Elderly comfort
Your mother may prefer owning a house. That offers peace and identity.

Status and pride
Some people feel fulfilled by owning a home. It may matter socially or emotionally.

Stability vs. Freedom
Ownership gives control. Renting gives freedom. You must weigh your lifestyle choice.

Suggested Plan of Action (Step-by-step)
Step 1
Keep the down payment money in low-risk mutual funds (via MFD with CFP).
Use arbitrage, short duration, or ultra-short duration funds.

Step 2
Take 12–15 months to explore good property deals. Don’t hurry.

Step 3
Keep evaluating rent vs. buy during this time. Track rental rates in areas you prefer.

Step 4
If your monthly income is stable and sufficient, and you find a good property, buy it.

Step 5
If you are unsure, stay on rent for 2–3 years. See if you like that life.

Step 6
Keep your corpus invested in mutual funds via MFD with CFP for monthly SWP.

Review this setup once every 6–12 months.

Disadvantages of Buying Without Clarity
You may choose a wrong location or property under pressure.

Your EMIs may impact your other goals like retirement or healthcare.

Lack of liquidity may hurt in future emergencies.

You may end up compromising on lifestyle for EMI.

Returns from property are not as good after including costs and taxes.

Benefits of SWP Option Through Regular Mutual Funds
Money stays liquid and accessible.

Can create monthly cash flows like pension.

Taxation is better. LTCG is taxed only above Rs. 1.25 lakh at 12.5%.

Capital can still grow slowly even while withdrawing.

You can adjust withdrawal based on inflation and needs.

Better flexibility than FD or annuity options.

Disadvantages of Index Funds (if you are considering them)
Index funds just copy the index. No attempt to beat the market.

They fall fully in market corrections.

No fund manager to reduce loss or capture opportunities.

You may not get good diversification.

Not suitable for creating alpha.

Active funds managed by professionals give better long-term value.

Direct vs. Regular Mutual Funds – A Caution
If you are investing directly in mutual funds without guidance, it is risky.

You may not do proper fund selection or rebalancing.

Market timing mistakes may happen.

A regular plan through an MFD with CFP brings full-service support.

They help align funds with goals. Also, offer discipline and review.

This cost is small but value is big.

What you can discuss with a Certified Financial Planner
Should you buy or rent based on your full financial picture?

How to optimise down payment parking in safe assets?

How to use SWP for rental support if you decide to rent?

What is your long-term plan after 10–15 years?

How to adjust future medical or retirement needs with home decision?

What insurance, Will, and nomination steps you should take with an ageing parent?

Finally
You have thought well about this home decision. That’s a great start.

Home buying is a big emotional and financial step. It must not be rushed.

You are free to choose based on comfort, not pressure.

In today’s market, renting is not a bad option.

You can always buy later when clarity is higher.

Use this 1 year to explore both options with full understanding.

Keep your money safe and liquid till then.

Don’t forget to reassess your financial goals in the meantime.

Working with a Certified Financial Planner can guide you across all angles.

Whether you rent or buy, what matters is peace and long-term stability.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Money
I am 43 Y Male, I want to invest 1000 Rs each thru SIP in Small Cap, Mid Cap, Flexi Cap & Multi Asset Fund. How much approximate value of my SIP investments will be after 20 years?
Ans: You are 43 years old now. That’s a great age to invest more seriously.

You still have 20 working years. That gives good time for wealth building.

You want to invest Rs. 1,000 each in four fund types. That’s Rs. 4,000 monthly.

You’ve selected Small Cap, Mid Cap, Flexi Cap, and Multi Asset. Well chosen.

This approach gives you diversification, growth, and balance. Smart allocation.

SIP is the best strategy for regular investing. It adds discipline to wealth creation.

What Happens If You Stay Invested for 20 Years?

That is a long enough time. It helps reduce equity risk.

Over 20 years, compounding works strongly in your favour.

Market ups and downs will happen. But staying invested beats market timing.

Discipline gives better results than guesswork. SIP supports long-term commitment.

A Rs. 4,000 monthly SIP for 20 years becomes powerful due to compounding.

Each fund type has a different potential. Let us assess that.

Small Cap Fund – Aggressive but Long-Term Winner

This is the highest risk, highest return category.

Suitable only for long timeframes like yours. Not for short-term investors.

In some years, it can fall a lot. In others, it may rise strongly.

Over 20 years, it has historically delivered better returns than large caps.

Your Rs. 1,000 monthly SIP can grow well if markets behave positively.

But you must be patient. No panic during market corrections.

Withdraw only after your full goal is achieved. That’s the key discipline.

Mid Cap Fund – Balanced Growth with Some Risk

Mid cap is less risky than small cap. But higher return than large cap.

It gives a balance between safety and return. Good choice for 20 years.

Mid caps can perform very well in economic upcycles.

In bad cycles, they fall less than small caps. That’s the advantage.

Your Rs. 1,000 SIP here may build a strong mid-size corpus.

It will provide good capital appreciation if you stay the full term.

Flexi Cap Fund – Very Versatile and Reliable

This is a flexible category. Fund manager can invest across all market caps.

So, they can move between large, mid, and small cap depending on opportunity.

This gives adaptability in different market conditions.

When large caps are doing well, fund will go there. Same with small caps.

This brings risk management built inside the strategy.

Rs. 1,000 monthly SIP here adds stability and growth potential.

Multi Asset Fund – Balance and Cushioning Effect

This invests across equity, debt, and gold. Very good for safety and stability.

In volatile markets, gold and debt reduce overall fall.

Equity gives long-term growth. Debt gives consistency. Gold gives hedge.

This fund type protects your corpus during crashes.

Rs. 1,000 here gives a good cushion against extreme volatility.

Over 20 years, it may give slightly lower return. But much better peace of mind.

Estimated Value After 20 Years

If all four funds perform as expected, your total SIP of Rs. 4,000 per month…

…may grow to Rs. 45 lakhs to Rs. 65 lakhs after 20 years.

This is not a promise. It is a realistic expectation.

Actual amount will depend on market cycles, economy, and fund performance.

But if you stay invested, stay disciplined, and do not pause SIPs…

…you will definitely build long-term wealth.

Benefits of Investing via SIP in These Fund Categories

You spread risk across categories. That reduces impact of one underperformer.

You gain from multiple asset classes — equity, debt, gold. That is diversification.

You do rupee cost averaging. So, you buy more when prices fall.

You develop strong investment habits.

SIP auto-debits create savings discipline. That is very powerful over long term.

You don’t have to time markets. Timing doesn't work for most people anyway.

Important Reminders on Taxation

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

Short-term gains are taxed at 20%.

Debt portion in multi-asset fund is taxed as per your slab.

But taxation happens only when you redeem. SIP itself is not taxed.

So hold for long term to reduce tax impact and maximise compounding.

What You Should Avoid Doing

Don’t stop SIPs just because market is down. That’s the worst time to stop.

Don’t redeem in panic. Don’t withdraw for small needs.

Don’t try to guess market highs or lows. That doesn’t work.

Don’t mix insurance with investment. Never invest in ULIP or endowment.

Don’t use direct funds if you are not an expert. You may make costly mistakes.

Disadvantages of Direct Funds vs Regular Funds Through CFP with MFD Support

Direct funds may have lower expense ratio. But there is no advisory support.

You must do your own research, monitoring, rebalancing, and tax planning.

If you don’t track regularly, your portfolio may become unbalanced.

Most people don’t know when to switch or how to review.

Regular funds via CFP provide handholding, reviews, and strategic adjustments.

You get personalised service. That helps avoid emotional decisions.

For a small cost, you get big value in returns, strategy, and peace of mind.

Why You Should Not Invest in Index Funds

Index funds only copy the index. No active management.

They cannot avoid bad companies or sectors. That affects returns.

In falling markets, index also falls. No protective action.

Index funds cannot beat the market. Actively managed funds can.

You have selected growth-oriented categories. Active fund is better for that.

Certified Financial Planners can guide you to the best active fund strategies.

Simple But Smart Investment Practices to Follow

Stay invested for full 20 years. Don't break compounding midway.

Increase SIP when income rises. That gives exponential growth.

Review portfolio once a year with a Certified Financial Planner.

Switch from underperforming funds only after 3 years, not before.

Keep emergency funds in FD or liquid funds. Don’t touch SIP funds.

Never borrow to invest. Invest only from monthly savings.

Align this SIP with your long-term goal. It gives purpose and clarity.

Write down your goals. Monitor them every year. Adjust strategy if needed.

Finally

You are starting SIP at 43. That is still early enough to build wealth.

You are choosing aggressive and balanced fund types. That is a good mix.

A 20-year time frame gives strong compounding benefit.

Your expected return may not be fixed, but direction will be upward.

With discipline, your Rs. 4,000 monthly can become a strong financial asset.

Avoid real estate, ULIPs, endowments, direct funds, and index funds.

Stick to regular mutual funds through MFD with CFP monitoring.

Follow yearly reviews. Stay focused. Don’t react emotionally.

Do not miss even one SIP. Every rupee counts in the long run.

Be patient. Be consistent. The results will surprise you in 2045.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Money
Hello Sir, I have a query regarding which is right approach of mentioned two options -I want generate quarterly payout of 15k from a lumpsum investment of 5.5 lac. This is for paying school fees. I'm confused if to invest this lumpsum in a Balanced advanced fund and set up an SWP of 15k quarterly (OR) to put it in a non-cumulative FD that pays out quarterly interest. I'm okay to stay invested for 6 years. Although FD provides the capital preservation but lags in capital appreciation where as BAF has the risk but with time horizon of 6 years, it shall mitigate risk & most importantly returns will still be favourable due to equity component as kicker in BAF Mf's. Your thoughts please... Thank you
Ans: You wish to get Rs. 15,000 quarterly payout for your child’s school fees.

You have Rs. 5.5 lakhs in lump sum.

You are considering two options — quarterly payout through SWP in a Balanced Advantage Fund or a non-cumulative Fixed Deposit.

Your investment horizon is 6 years. That gives decent time.

You want capital safety but also better growth. Well analysed thinking from your side.

You are open to taking some risk, which is important for longer-term results.

Let Us Assess the Fixed Deposit Option

FD gives assured interest. That’s good for guaranteed cash flows.

There is no risk of capital loss if held to maturity. That gives peace of mind.

The interest payout every quarter is fixed. You can plan expenses well.

But returns are low after tax. Especially if you are in a high tax bracket.

FD interest is fully taxable as per your slab. That’s a key drawback.

FD returns are flat. So, over 6 years, your capital will not grow.

Inflation reduces real return. That erodes value of money slowly.

You are only withdrawing interest. So, principal stays idle without growing.

Even reinvested interest would earn low return. No scope for capital appreciation.

Now Let Us Evaluate Balanced Advantage Mutual Fund with SWP

These funds shift between equity and debt. They try to reduce downside in markets.

They offer better long-term returns than FD due to equity exposure.

They suit 5–7 year timeframes if you can hold through market cycles.

You can set up SWP of Rs. 15,000 every 3 months. That’s Rs. 60,000 annually.

Over 6 years, you may withdraw Rs. 3.6 lakhs. And capital can still grow.

If fund returns stay healthy, you may have more than Rs. 5.5 lakhs after 6 years.

Tax is lower on capital gains. LTCG up to Rs. 1.25 lakhs per year is tax-free.

Gains above that are taxed at 12.5%, which is much better than FD tax.

SWP is treated as capital redemption. So, only gains part gets taxed.

Therefore, this method gives tax-efficient income. That improves your post-tax return.

Let Us Compare Both Head-To-Head

FD: Low return, high tax, stable income, no capital growth.

BAF+SWP: Moderate return, lower tax, variable income, capital appreciation possible.

FD may be safer. But too safe may not meet your long-term needs.

BAF is not risk-free. But 6 years gives enough time for risk to reduce.

With discipline and patience, BAF can deliver better results than FD.

Fixed Deposit income will stay flat. But school fees will rise over time.

BAF capital may grow, allowing higher SWP in future. That helps in rising fees.

So, with proper SWP planning, you get both income and capital protection.

How to Make SWP Work Better for You

Choose dividend re-investment option, and use only SWP for income.

Withdraw only 3-4% of corpus per year to avoid depleting it.

Review performance every year with your Certified Financial Planner.

Reinvest part of gains back into same fund. That helps compound returns.

Keep emergency funds separately in FD or liquid fund. Do not disturb this corpus.

Important Risk Factors to Remember

Mutual fund returns are not guaranteed. Markets fluctuate.

There may be periods of poor returns. But recovery happens in long term.

You should be emotionally ready to handle short-term volatility.

Equity portion can sometimes fall. But long-term trend is upward.

Choose a regular plan and route it through MFD with CFP support.

Avoid direct plans. They do not give ongoing guidance or active monitoring.

Why You Should Avoid Direct Mutual Funds

Direct funds offer no advisor support. You must do everything yourself.

That includes selection, portfolio review, tax planning, rebalancing.

Many investors end up with wrong choices due to lack of guidance.

Certified Financial Planners bring strategy, experience, and discipline.

Regular plans have a small cost. But they offer lifelong handholding.

For goals like school fees, peace of mind matters more than 0.5% savings.

Emotional support during market falls is also priceless.

Final Insights

You are thinking long term. That is the right mindset.

You want regular income and capital growth. BAF+SWP is better suited.

FD may feel safe. But inflation and taxes make it less efficient.

With 6-year view, Balanced Advantage Fund gives more growth chance.

Do SWP carefully. Avoid high withdrawals in early years.

Review with your Certified Financial Planner every year. Make changes if needed.

Stay invested. Be patient. Do not panic in market dips.

Protect your child’s education fund with a right mix of strategy and guidance.

Keep emotions aside. Let long-term thinking guide you.

Use fund growth smartly. Withdraw only what is needed. Let rest grow.

A hybrid plan like BAF offers flexibility and balance. That suits your goal well.

Continue school fee payments through SWP. Watch your capital grow slowly.

After 6 years, you may have money left over, not just spent. That is success.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Asked by Anonymous - May 04, 2025
Money
I am 23 years old and recently I got a 1 lakh rupees from my parents and I wanna invest it somewhere for a good return rather than spending it or just saving it . What can I do ? I welcome all suggestions.
Ans: Great to know you're thinking smart at 23. Getting Rs.1 lakh and wanting to invest it wisely is a mature step. Let’s look at how to make this money grow with a full 360-degree view. You are young. You have time on your side. That’s your biggest strength.

We will explore different choices that can help your money grow well. We’ll also see the risks, the returns, the tax part and the logic behind each one. Let’s go step-by-step.

Emergency Fund – First Step Before Any Investment
Before investing, keep some money aside for emergencies.

Keep around Rs.10,000 to Rs.20,000 in a savings account or liquid mutual fund.

This gives quick access if anything urgent happens. No need to break your investment.

It gives mental peace and financial safety.

You don’t want to touch your main investment for sudden expenses.

Set Clear Goals – Define Your Investment Purpose
Know why you want to invest this money.

Is it for 2 years, 5 years, or 10 years?

Is it for travel, studies, or just long-term wealth?

Your investment time and goal decide your product choice.

Without a goal, you may exit early and miss the returns.

Mutual Funds – Smart for First-Time Investors
Mutual funds are well-managed by expert fund managers.

You can start small. You don’t need to know stock markets.

You get diversification. Your Rs.1 lakh is split across companies.

Mutual funds are flexible and have good liquidity.

You can withdraw when you want, unlike fixed deposits with lock-ins.

Choose regular mutual funds via a Certified Financial Planner (CFP).

Regular plans offer hand-holding, portfolio rebalancing, and proper advice.

Direct mutual funds don’t give access to professional help.

You may pick wrong funds and stay stuck.

Investing without CFP’s help may cost you more in the long run.

Good advice leads to better behaviour, better decisions, and better outcomes.

Equity Mutual Funds – For Long-Term Growth
If your goal is more than 5 years away, equity funds are good.

Equity funds invest in stocks through expert managers.

Your money may grow faster, but it can also fluctuate short-term.

For 7-10 years, equity funds offer higher wealth creation potential.

With time, market ups and downs become less risky.

Use SIP (Systematic Investment Plan) if adding monthly later.

Lumpsum also works well if you invest through a CFP-guided strategy.

Avoid index funds. They copy the market passively.

Index funds don’t manage risks in market crashes.

Actively managed funds try to beat the market and reduce losses.

Good active funds adjust to changing market conditions.

Debt Mutual Funds – Safer, Lower Returns Than Equity
If your goal is 2 to 3 years away, go for debt mutual funds.

They are more stable but give lesser returns than equity.

Invest through regular mode and get guidance from a CFP.

CFPs track interest rate changes and recommend the right debt fund.

Direct funds may look cheaper but can lead to wrong fund selection.

Regular funds give access to disciplined advice and review support.

Don’t mix short-term goals with long-term products.

Gold – Not for Growth, Only for Goal-Based Saving
Avoid gold for investment unless you need it for jewellery.

Gold gives very low return over time.

It’s not ideal for building wealth.

Gold can be part of asset allocation, but not more than 5-10%.

Public Provident Fund (PPF) – Safe for 15-Year Goals
If you want safety and tax-saving, PPF is a good option.

Lock-in is 15 years. So, not for short-term goals.

Gives tax-free interest. Good for building long-term corpus.

Invest a part here only if you don’t need liquidity.

Can invest up to Rs.1.5 lakh per year.

Fixed Deposits – Low Return, Use for Short-Term Safety
Only use FDs if your goal is in the next 1 year.

FD interest is taxable as per your tax slab.

Returns are lower than debt mutual funds in most cases.

FDs lock your money, and breaking them has penalties.

Avoid Insurance-Linked Products for Investment
Don’t mix insurance and investment.

ULIPs or endowment plans give low returns and high charges.

If you hold any such product already, assess and consider surrender.

Reinvest that amount in mutual funds with help of a CFP.

Keep insurance and investment separate.

Buy term insurance for protection only.

Tax Planning – Know How Your Investment Is Taxed
Equity mutual funds:

If held > 1 year: Gain above Rs.1.25 lakh taxed at 12.5%.

If sold < 1 year: Gain taxed at 20%.

Debt mutual funds:

Taxed as per your income tax slab.

PPF: No tax on interest or maturity.

FD interest: Fully taxable.

Planning tax early helps you avoid surprises later.

Start SIP Later – Make Investing a Habit
After investing Rs.1 lakh now, begin monthly SIP.

Even Rs.1,000 SIP is good to start.

It builds habit, discipline, and long-term wealth.

SIP helps average out market ups and downs.

Automate SIP with guidance from your CFP.

Asset Allocation – Balance Between Risk and Safety
Don’t put all Rs.1 lakh in one fund.

Allocate between equity and debt based on your goal.

If goal is far, 80% equity and 20% debt is fine.

If goal is near, keep more in debt or liquid funds.

Your CFP can design this based on your comfort.

Avoid Fancy Products – Stay Simple
Don’t fall for NFOs, exotic bonds, or stock tips.

Avoid crypto, forex or other risky trends.

Stick to mutual funds with history and logic.

Simplicity works best for new investors.

Keep Track of Your Investments – Review Regularly
Once invested, don’t ignore your portfolio.

Review every 6 to 12 months.

Don’t react to every market fall or news.

Your CFP will guide when to rebalance.

Stay focused on your goal, not market noise.

Educate Yourself Slowly – But Stay Guided
Read small articles. Watch videos by trusted professionals.

Avoid information overload.

Too many opinions confuse more than help.

Trust your CFP and have regular meetings.

Build a Relationship with a Certified Financial Planner
A good CFP gives you goal planning, not just fund advice.

They align your investments with your life plans.

You get behavioural coaching during ups and downs.

They ensure your investment plan stays on track.

Finally
You’ve made a smart choice by not spending this Rs.1 lakh.

Investing early gives you more time to grow your wealth.

Don’t chase high returns. Choose right habits and stay patient.

Keep your investing simple, regular, and goal-based.

Use professional support to avoid costly mistakes.

Investing with discipline works better than any fancy product.

At 23, time is your biggest power. Make it your best friend.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Asked by Anonymous - May 03, 2025
Money
Hi.. My age is 41. My take home salary is Rs. 142000. I have 13 lacs in SIP every month Rs. 12000. In stocks 7 lacs and FD 4 lacs. My first home has 27 lacs home loan at 27,500 EMI Valuation is around 60 lacs. I have booked 2nd home which is in under Constuction whose EMI is 32,000/- and it will increase gradually property value 90 lacs and still have paid 44 lacs. I have one fathers property which valuation is 40 lacs. Should i sell that close one of my home loan. I want to be loan free in next 5 yrs. Plss advice
Ans: At 41, you are in a good position.

You already have multiple assets.
You also have a stable income and investments.

Let us now assess your financial life in full.
We will plan a clear and practical 360-degree solution.

This answer will help you be debt-free in 5 years.
It will also improve your long-term wealth creation.

Let us go step by step.

Understand Your Current Financial Position
Your take-home salary is Rs. 1,42,000 monthly.

SIP is Rs. 12,000 per month. That is a good habit.

Stocks holding is Rs. 7 lakhs.

Fixed deposit is Rs. 4 lakhs.

First home loan is Rs. 27 lakhs. EMI is Rs. 27,500.

House value is around Rs. 60 lakhs.

Second home is under construction. EMI is Rs. 32,000 now.

Value of second property is Rs. 90 lakhs.

You have already paid Rs. 44 lakhs.

Father’s property worth Rs. 40 lakhs is also available.

Your goal is to close all loans in 5 years.

Strengths in Your Financial Profile
You are investing monthly in mutual funds.

You are not fully dependent on real estate.

You have equity and FD in portfolio.

Your income supports your current EMI payments.

You have clear goal to be debt-free.

You have an asset (father’s property) available to use.

Areas That Need Better Attention
Too much money is stuck in real estate.

Two properties with two loans increases your risk.

Property value appreciation is slow.

Rental yield is also very low in most cities.

Your EMI outgo is around Rs. 59,500 monthly.

That is about 42% of your take-home pay.

This may reduce flexibility in future.

Also limits your monthly SIP potential.

Let Us First Analyse the Home Loans
First loan is Rs. 27 lakhs at EMI Rs. 27,500.

Second loan EMI is Rs. 32,000 now, may increase later.

EMI may go up after full disbursement.

That means future pressure on your cash flow.

Total home loan EMI may cross Rs. 65,000 monthly.

If interest rates go up, EMI pressure will grow more.

Should You Sell the Father’s Property?
Let us analyse that in detail.

Property value is Rs. 40 lakhs.

No rental or income is being generated from it.

It is idle and blocking financial growth.

Selling can release funds to reduce loan burden.

Emotionally, it may be hard.

But financially, it is the better decision.

Home loan interest is 8–9% or more.

FD or real estate gives lesser return than that.

By closing loan, you save high interest.

It improves monthly cash flow immediately.

You can then use surplus for investment and goal planning.

So yes, it is wise to sell that property now.

Which Loan to Close with the Sale?
This is a key decision.

Let us compare both home loans.

First loan balance is Rs. 27 lakhs.

House is completed and may give rent.

Second home is under construction.

EMI will rise further as disbursement happens.

You have already paid Rs. 44 lakhs in second home.

Closing second loan may not be practical now.

So best option is to close the first loan.

You remove full EMI of Rs. 27,500.

That gives instant relief in monthly budget.

You reduce risk and get ownership clarity.

What to Do With the EMI Savings?
This step is most important.
You must plan what to do after loan is closed.

Monthly EMI saved = Rs. 27,500.

Use this amount to increase SIP.

Don’t spend this saving casually.

You already have Rs. 12,000 SIP.

Increase total SIP to Rs. 35,000 or more.

This will grow wealth over next 10–15 years.

Use regular plans via Certified Financial Planner.

Avoid direct funds.

Direct funds give no personalised review.

CFP will help rebalance and tax plan too.

About the Second Property Under Construction
You have already paid Rs. 44 lakhs.

Try to avoid additional loans if possible.

Fund balance payment from SIP, stocks, or bonus.

Don’t take personal loans to complete this.

After construction, you may get rent or use it.

Even after full loan disbursement, keep EMI under 30% of income.

If EMI crosses 40%, reduce SIP or sell unused stocks.

Don’t let your cash flow get too tight.

Review Your Equity and FD Position
Stocks worth Rs. 7 lakhs.

FD is Rs. 4 lakhs.

Maintain FD for emergency only.

Don’t break FD unless urgent.

Stocks may be kept for long term.

If some stocks are not performing, shift to equity mutual funds.

Equity funds are managed better by professionals.

Avoid investing directly without research.

Always link investments to clear goals.

Avoid Common Mistakes in This Phase
Don’t buy more real estate now.

You already hold two properties.

Avoid buying land or plots again.

Don’t reduce SIP to manage EMIs.

That will affect long term goals.

Avoid switching to direct mutual funds.

Regular route gives better support with CFP.

Don’t expect property price to double in 5 years.

Real estate growth is slow now in many places.

Don’t delay gold or insurance planning.

Insurance and Emergency Coverage
You should have term insurance equal to 10–15 times annual income.

Health insurance for you and family is also needed.

Keep emergency fund equal to 6 months expenses.

Don’t mix insurance and investment.

Don’t invest in ULIPs or traditional plans.

If you hold any LIC endowment or ULIP, surrender after lock-in.

Reinvest that amount in mutual funds.

Smart Goals to Achieve in Next 5 Years
Let us fix simple and smart goals for you.

Be debt-free in 5 years. Close first loan now.

Complete payment for second property safely.

Increase SIP to at least Rs. 35,000 monthly.

Build emergency fund of Rs. 4–5 lakhs.

Get term insurance and health cover.

Create investment plan for retirement.

Review asset allocation every year.

Meet Certified Financial Planner yearly.

Build liquid portfolio along with real estate.

Final Insights
You have a strong income and asset base.

But your EMI load is growing fast.

It is better to simplify and reduce loans.

Sell father’s property now and close the first loan.

Use EMI savings to increase SIP and grow wealth.

Don’t add more to real estate.

Stay focused on long-term goals like retirement.

Use regular mutual fund route with CFP support.

Avoid direct funds as they give no advice or review.

Keep FD only for emergency.

Build balance between real estate, equity, and liquidity.

Make your money work harder, not just lie in property.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Money
Hello Sir , I have a monthly expenditure of 1 Lakh right now. Have 2 kids of 8 years and 5 years. Present investment 44 Lakh in Mutual funds, 14 lakh in stocks, PF 50 Lakh ( Adding 10 K extra employee contribution per month ) , SSY 1 11 Lakh, SSY 2 16 Lakh. I am doing SIP of 85 K per month, NPS ( 1LAKH at present) 9 K per month. SSY 1 and SSY 2 1.5 Lakh each yearly. My age is 41 and want to retire by 50. How much money do it need to live the same life style ? and will I be able to achieve by these investments?
Ans: You have a clear goal to retire by 50.

You also want to maintain your current lifestyle.

That is a strong clarity, which is the first step for good planning.

Now let us go step by step to assess your plan.

We will evaluate your current setup, goals, gaps and action points.

This will help you plan your retirement confidently.

Let us begin.

Understanding Your Monthly Expenses and Retirement Age
Your monthly expenses are Rs. 1 lakh now.

This means you spend Rs. 12 lakh in a year.

You plan to retire in 9 years from now.

After that, you will depend fully on your investments.

If expenses grow with inflation, they will double in around 10-12 years.

So, your post-retirement lifestyle will cost more than today.

This rising cost needs to be planned in advance.

Also, retirement will last for 35 to 40 years after age 50.

Hence, you need a big enough retirement corpus.

This corpus must grow, give monthly income, and last lifelong.

Current Investment Summary and Contribution Assessment
Let’s now understand your current assets and contributions.

Mutual Funds: Rs. 44 lakh

Stocks: Rs. 14 lakh

Provident Fund (PF): Rs. 50 lakh + Rs. 10,000 added monthly

Sukanya Samriddhi Yojana (SSY 1): Rs. 11 lakh

SSY 2: Rs. 16 lakh

SIP in Mutual Funds: Rs. 85,000 per month

NPS: Rs. 1 lakh current value + Rs. 9,000 added monthly

SSY Annual: Rs. 1.5 lakh for each child, total Rs. 3 lakh per year

This is a very disciplined and forward-looking approach.

You are managing a wide basket of assets.

Now we will assess each one for suitability and effectiveness.

Evaluation of Sukanya Samriddhi Yojana (SSY)
SSY is good for your daughters’ education or marriage.

It gives fixed returns and tax benefits.

It is locked till they turn 21 or marry after 18.

So, this money is not for your retirement.

Keep contributing as planned, since it’s for them.

But do not depend on SSY for your retirement.

Assessment of Provident Fund (PF)
PF is a strong, safe long-term tool.

It also gets tax-free interest.

Your contribution is healthy, and returns are stable.

But PF alone won’t be enough for post-retirement lifestyle.

Interest rates may reduce over time.

Inflation eats into the real value.

Continue contributing, but treat it as support income.

Review of NPS Account
NPS offers good tax savings.

It helps in long-term wealth creation.

But after 60, you can only withdraw 60% freely.

The rest must go into pension, which has restrictions.

NPS returns are market-linked, but with low flexibility.

Keep it for diversification, not main retirement funding.

Evaluation of Direct Stock Investments
You have Rs. 14 lakh in stocks.

Stocks are risky and volatile.

Managing stock portfolio needs time and expertise.

Avoid using stock returns for retirement expenses.

If confident, keep it to a small percentage only.

You can consider shifting some stock amount to mutual funds.

Assessment of Mutual Fund Investments
Your mutual fund investment is Rs. 44 lakh now.

You are adding Rs. 85,000 through SIP every month.

This is your strongest and most important wealth builder.

Mutual funds are flexible, diversified, and inflation-beating.

You must choose actively managed mutual funds through an MFD.

Avoid index funds as they give average returns only.

Index funds follow the market, so no active opportunity use.

Also avoid direct mutual funds if you are not a professional.

Direct funds do not provide advice or review support.

You can make costly mistakes without CFP or MFD guidance.

Go only with regular funds through a Certified Financial Planner.

They help in rebalancing, goal mapping, and fund selection.

This will increase the success of your retirement plan.

Lifestyle Expectation and Retirement Corpus Need
You spend Rs. 1 lakh a month today.

By age 50, your expenses may become Rs. 1.7 lakh monthly.

After 10 years of retirement, that could go to Rs. 3 lakh monthly.

So you need a retirement corpus that can handle these needs.

It should give monthly income and still grow.

It should last till age 90 or 95.

For that, you will need a corpus of at least Rs. 5 to 6 crore.

This estimate considers inflation, returns, and longevity.

Are You on Track to Reach Retirement Goal?
Let’s now assess your future corpus based on present efforts.

You already have around Rs. 1.35 crore in different assets.

You are investing about Rs. 1.2 lakh monthly (SIP, PF, NPS, SSY).

You have 9 years to grow these assets.

If you continue with same discipline, your corpus may cross Rs. 5 crore.

However, only mutual funds and part of PF should be used for retirement.

SSY and part of PF are for children or other fixed uses.

Your mutual fund SIP will play the most important role.

Ensure regular review and rebalancing with a CFP.

Keep increasing your SIP by 5% to 10% yearly.

You can stop NPS after retirement age of 50, as it matures at 60.

Do not depend on NPS pension fully post-retirement.

Stock investments can be reviewed and partly shifted to funds.

Investment Strategy to Reach Retirement Goal
Use goal-based investment for each need: Retirement, Kids’ Education, and Emergency.

Retirement goal must be your top priority now.

Divide your corpus as per time horizon.

Invest long-term money in equity mutual funds.

Use balanced or hybrid mutual funds near retirement.

Avoid investing in annuities. They have low returns and less flexibility.

Keep 2 years of expenses in liquid or low-risk funds post-retirement.

Start a Systematic Withdrawal Plan (SWP) after retirement.

This gives regular income with tax efficiency.

SWP from mutual funds beats bank interest or pension plans.

Review all investments once every year with a CFP.

Children’s Future Planning
You are saving Rs. 3 lakh every year in SSY.

This is a great decision for their future.

Also consider child-specific mutual funds for flexibility.

Their higher education needs will begin in 10 to 12 years.

SSY matures after 21 years of age.

Plan mutual funds to fill the gap for education if needed.

Do not stop SSY. Continue it till maturity.

Avoid touching retirement money for kids’ education.

Emergency Planning and Insurance Check
You must create an emergency fund.

Keep at least 6 months’ expense in liquid fund.

That is Rs. 6 lakh in your case.

Do not touch this for investments or expenses.

You have Rs. 10 lakh health insurance.

This is good. But check if it covers all family members fully.

Also keep a term insurance policy for your life.

This protects your family in case something happens to you.

Debt Management and Loans
You did not mention any home loan or other loans.

This is a positive situation.

No loan burden means better cash flow for investment.

Avoid taking personal loans or education loans in future.

Plan all big expenses in advance and use goal-based investment.

Finally
You are already doing very well with your savings.

Your SIP, PF and SSY contributions are focused and regular.

Your awareness about retirement at age 50 is strong.

To reach your goal confidently, increase SIP every year.

Avoid index funds and direct mutual funds. Stick to regular active funds.

Keep reviewing the portfolio once a year with a CFP.

Do not depend on NPS or stocks for post-retirement income.

Build your corpus mainly through mutual funds.

Start SWP once you retire, and use low-risk funds for liquidity.

You can live your current lifestyle post-retirement with this disciplined approach.

Just stay consistent and review regularly.

This plan gives you a strong chance of financial independence by age 50.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8430 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Asked by Anonymous - Apr 17, 2025
Money
Where I can Invest my real gold
Ans: You have asked a very useful and timely question.
Holding real gold is common in Indian households.

But keeping it idle brings no return.
Let us assess all options in a simple and detailed way.

This will help you take smart, practical steps with your gold.
We will also keep the answer 360-degree and long-term focused.

First, Understand the Problem with Idle Gold
Gold in physical form earns no return.

It lies in locker without giving income.

Also, it has storage cost and theft risk.

Selling physical gold can be emotionally hard.

Purity and resale rate is always a concern.

Long holding may not match inflation fully.

Idle gold is like unused cash.

You can convert gold into better financial assets.

Best Options to Use Real Gold Smartly
Now let us look at your best investment options.
These options are useful for long term and wealth creation.

You can choose based on your goal and comfort.

1. Gold Monetisation Scheme (GMS) by Banks
You can deposit your gold in this scheme.

It is launched and backed by Government of India.

You earn annual interest on your gold.

Minimum quantity is 10 grams of gold.

The interest is paid in rupees, not gold.

You get safety and some regular return.

You must submit gold in raw form or jewellery.

Old or broken jewellery is also accepted.

Tenure can be short, medium, or long.

This is best for gold that you do not plan to wear.

2. Sovereign Gold Bonds (SGBs)
This is issued by Reserve Bank of India.

You buy gold in digital form, not physical.

You get 2.5% yearly interest in cash.

Value of bond rises as gold price rises.

Tenure is 8 years, but you can exit early.

Interest is taxable, but capital gains are tax-free if held till maturity.

You don’t need to store gold physically.

No making charges or purity concerns.

This is best option if you plan to hold for long term.

You can buy through your bank or Demat account.

3. Sell Physical Gold and Invest in Mutual Funds
If gold is idle and you don’t need it, consider selling.

Use proceeds to invest in mutual funds.

Mutual funds can create better long-term wealth.

You already hold mutual funds, so you understand them.

Equity mutual funds can grow higher than gold.

Over 10+ years, equity outperforms gold in most cases.

This step reduces clutter and grows your wealth.

Selling gold may attract capital gains tax.

But wealth creation will be stronger over time.

Avoid These Options
Do not buy more physical gold for investing.

It gives emotional comfort but not strong returns.

Avoid digital gold on wallets. They are not regulated.

Don’t lock gold in chit funds or unregulated schemes.

These carry high risk and no protection.

What You Can Do Practically Now
Let us simplify steps for you to act.

Make a list of all your physical gold.

Divide into “jewellery for use” and “idle investment gold”.

Keep jewellery you use occasionally.

Don’t count that as investment.

Identify gold that is old, unused or broken.

Consider depositing that under Gold Monetisation Scheme.

You will earn interest without risk.

If you are open to investing, sell some idle gold.

Use that amount in equity mutual funds.

Start with lump sum and add monthly SIP.

Keep goal-based time frame in mind.

Invest through regular plans via Certified Financial Planner.

Avoid direct mutual funds.

Direct funds give no support or review.

A Certified Financial Planner helps with portfolio guidance.

They balance returns, tax and risk properly.

Regular funds with guidance help you grow wealth safely.

LIC Policies and Idle Gold Together
You also mentioned LIC earlier in your question.

It is important to address that too.

LIC traditional plans and ULIPs offer very low returns.

Returns are even lower than inflation.

It is better to surrender after lock-in period.

Use proceeds to invest in mutual funds.

Along with idle gold, this gives fresh investment capital.

This strategy gives better growth and tax efficiency.

Tax Impact When You Sell Gold
When you sell gold, you may face capital gains tax.

If held for more than 3 years, LTCG applies.

Tax is 20% with indexation benefit.

If held less than 3 years, it is added to your income.

Taxed as per your slab.

Still, shifting to mutual funds may give better net benefit.

Don’t delay this decision due to tax fear.

How to Build a Smart Gold Investment Plan
Use this approach to handle gold like a financial asset.

Keep some gold for personal and family use.

Don’t treat it as investment.

Convert idle gold into productive financial tools.

Use Gold Monetisation Scheme for long term safety.

Use Sovereign Gold Bonds for regular income.

Use sale proceeds for SIP in equity mutual funds.

Link investments to goals like child education or retirement.

Stay invested for 10–15 years or more.

Review portfolio yearly with a Certified Financial Planner.

Build emergency fund and insurance separately.

Avoid taking personal loans backed by gold.

Never use gold for short term trading or speculation.

Final Insights
You have done well to hold gold over the years.

But now is the time to shift to better options.

Don’t let idle gold reduce your wealth creation speed.

Use a mix of monetisation and reinvestment options.

Stay invested in mutual funds through regular route.

Avoid direct funds and get help from Certified Financial Planner.

This approach will give you better returns, better liquidity, and peace of mind.

Gold is useful. But using it wisely makes you financially strong.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

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

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