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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 11, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Asked by Anonymous - Jul 10, 2025Hindi

Hi, kindly guide I want to invest 10 lakhs but want monthly returns to run my expenses. I work in a school. I am a single parent of a teenage daughter and stay with my mother. I have our own home.

Ans: You’ve taken a thoughtful first step. Managing your money with clarity and responsibility shows deep care for your family.

Let us build a strategy that offers monthly income with capital protection. We will also keep long-term financial stability in mind. The focus will be 360-degree – covering income, safety, tax, and future planning.

Let’s understand this in simple and actionable terms.

? Understanding Your Present Situation

– You work in a school. So your income is steady but may not be very high.
– You are a single parent. So your financial responsibility is solely on you.
– You live with your mother and daughter. So you have three dependents including yourself.
– You own your home. So there is no rent expense. That is a good relief.
– You want monthly returns from Rs 10 lakhs. This is a realistic and careful approach.

Let’s work with this to find the best possible options.

? Assessing the Right Strategy

– You want safety, liquidity and regular income.
– The investment must protect your principal.
– Monthly income should be predictable.
– The funds should not be locked permanently.
– We must think of taxes too.

You must not go for options that take too much risk. You must also avoid locking all money in non-liquid instruments.

? Allocating Rs 10 Lakhs Thoughtfully

Instead of putting full Rs 10 lakhs in one option, split it smartly.

– Keep about Rs 2 lakhs in a savings-linked sweep FD.
– This gives instant liquidity for emergencies.
– Keep around Rs 3 lakhs in a mix of ultra-short and low-duration mutual funds.
– This gives better returns than FDs. Also has liquidity.
– Invest the remaining Rs 5 lakhs in a mix of conservative hybrid mutual funds.
– These give monthly income through SWP.

You can plan a monthly withdrawal from mutual funds through SWP (Systematic Withdrawal Plan). This helps generate monthly cash flow.

? Why Not To Choose Index Funds

You may hear that index funds are simple and low-cost. But in your case, they are not right.

– Index funds do not offer regular income.
– They do not allow active fund manager control.
– In volatile markets, they may go down and give no income.
– You need income and stability, not only low costs.
– Actively managed funds handle market risk better.

That’s why for your case, actively managed hybrid funds are more suitable.

? Importance of Choosing Regular Plans with Expert Support

Direct mutual funds look low-cost, but have hidden issues.

– You may not get regular review or hand-holding.
– Wrong fund selection may lead to poor returns.
– Regular plans through an experienced MFD with CFP qualification offer better guidance.
– They help you plan monthly income, taxation and risk control.

In your stage of life, advice is more important than saving small costs.

? Why Monthly Income Through Mutual Fund SWP Works Best

SWP gives fixed monthly payout from mutual funds.

– It gives predictable cash flow to cover expenses.
– The money stays invested and earns returns.
– Taxation is better than FD or pension products.
– You can stop or adjust the SWP anytime.
– You get flexibility and control.

You can plan to withdraw around Rs 8,000–10,000 monthly depending on your actual expenses.

? Avoiding Insurance-Investment Mix Products

If you have ULIP or traditional investment policies, then they must be reviewed.

– These give low returns.
– The lock-in is long.
– They do not give good monthly cash flow.

If you hold any of these, consider surrendering them. Reinvest the proceeds in mutual funds. This will make your income plan better.

? Keeping a Safety Buffer for Your Daughter’s Needs

You are a parent. Your daughter’s future is a top priority.

– You must set aside some money for education.
– You must also start a small SIP for her higher studies.
– Even Rs 2,000 per month can help long-term.
– Do not use all money for current income. Keep a portion for the future.

A Certified Financial Planner can help you do this balance right.

? What Not To Do

– Do not put all Rs 10 lakhs in a single FD.
– Do not go for high-yield risky options.
– Do not fall for Ponzi or unregulated monthly income schemes.
– Do not lock money in traditional policies or annuities.
– Do not depend on only school salary. Build parallel income.

Caution will protect your hard-earned savings.

? Managing Income Tax on Withdrawals

Mutual fund withdrawals are taxed based on how long you stay invested.

– If you sell equity mutual funds within one year, tax is 20%.
– If you hold for more than one year, tax is 12.5% on gains above Rs 1.25 lakh per year.
– Debt fund income is taxed as per your slab rate.

A Certified Financial Planner will help plan SWP smartly to reduce tax.

? Reviewing the Plan Regularly

Life changes. Your expenses may grow. Income needs will shift.

– Review your investment every 6 months.
– Adjust SWP if needed.
– Rebalance mutual fund mix.
– Watch cash flows and tax effects.
– Re-plan as your daughter grows or your job changes.

Reviewing gives long-term stability.

? Steps You Can Take Immediately

– Open a joint investment account (in your name) with mother or daughter as nominee.
– Park Rs 2 lakhs in sweep FD for emergency.
– Start liquid and ultra-short mutual fund investments for Rs 3 lakhs.
– Start conservative hybrid fund with Rs 5 lakhs and activate SWP.
– Ensure you have a basic health insurance for yourself and family.

These steps will help you act without delay.

? Finally

You are in a responsible role. You are managing your family’s financial life alone. That takes strength.

You must not take high risk. But you must also not keep all funds idle.

By mixing safety, income and limited risk – you will meet your goals. Monthly income will come. Capital will be safe. Family needs will be managed.

This is a smart, caring and future-ready approach.

If you ever feel unsure, get guidance from a Certified Financial Planner. This will give you full confidence and clarity.

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

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