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Omkeshwar

Omkeshwar Singh  | Answer  |Ask -

Head, Rank MF - Answered on Jan 04, 2021

Mutual Fund Expert... more
Rama Question by Rama on Jan 04, 2021Hindi
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MF GURUJI PRANAM!

INVESTMENT AMOUNT: 50 LAKHS

FAMILY MEMBERS: 4 ADULTS + 1 CHILD

REQUIREMENT: 50,000 P.M. FOR FAMILY MAINTENANCE  + 10% CAPITAL APPRECIATION

PLEASE ADVISE ON INVESTMENT.

Ans: If your age is UNDER 50 then these funds can be considered -- Rs 12.5 lakh each with SWP of Rs 12500 from each fund;

  1. EDELWEISS BALANCED ADVANTAGE FUND - GROWTH
  2. CANARA ROBECO EQUITY HYBRID FUND - GROWTH
  3. UNION BALANCED ADVANTAGE FUND - GROWTH
  4. TATA BALANCED ADVANTAGE FUND - GROWTH

If your age is OVER 50 then these funds can be considered -- Rs 12.5 lakh each with SWP of Rs 12500 from each:

  1. EDELWEISS BALANCED ADVANTAGE FUND - GROWTH
  2. Hdfc Banking And Psu Debt Fund - Growth Option
  3. UNION BALANCED ADVANTAGE FUND - GROWTH
  4. Idfc Government Securities Fund- Investment Plan--growth
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8342 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 08, 2024

Asked by Anonymous - Apr 08, 2024Hindi
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Dear Sir, My inhand salary is approx 1 Lac per month. My wife's salary in hand is 60k per month. We have a kid of 1 year now. Our goal is to create a corpus amount of 4Crores for Childs education and well being. Current investments are 1. Equities-20 Lacs, Mutual Funds Quant, parikh, sbi, 5 Lacs total. Ppf 10 Lacs, Nps 2 Lacs, My requirements are 1. Need amount of 4 Cr at 2040 2. Currently I need best Term plan to invest in with cover of 3Cr 3. Need to know best health insurance for any medical emergency with family cover of 25Lacs. 4. Need to Buy a Home of 1.5 Cr 2bhk for which I will be going for Home loan of minimum 60Lacs. 5. Risk appetite medium to high
Ans: Given your financial goals and risk appetite, here are some recommendations:

Investments:

Continue investing in equity through mutual funds for long-term wealth creation.
Consider increasing your equity exposure gradually, given your high risk tolerance.
Regularly review and rebalance your investment portfolio to ensure alignment with your goals and risk tolerance.
Term Insurance:

Look for reputable insurance providers offering term plans with coverage of at least 3 Crores.
Compare premiums, features, and claim settlement ratios before making a decision.
Consider opting for a policy with a rider for critical illness coverage for added protection.
Health Insurance:

Choose a comprehensive family health insurance plan with a coverage of 25 Lakhs.
Look for plans that offer coverage for hospitalization, pre-existing conditions, day care procedures, and maternity benefits.
Consider factors such as network hospitals, claim settlement process, and premium affordability.
Home Purchase:

Since you plan to buy a home worth 1.5 Crores and avail a home loan, ensure that the EMIs are comfortably manageable within your monthly budget.
Compare home loan offers from various banks and financial institutions to get the best interest rates and terms.
Factor in additional costs such as registration fees, stamp duty, and maintenance expenses while budgeting for the purchase.
Financial Planning:

Consult with a certified financial planner to create a comprehensive financial plan tailored to your specific goals, risk tolerance, and financial situation.
Regularly review your financial plan and make adjustments as needed based on changes in your circumstances or market conditions.
By implementing these strategies and regularly monitoring your progress, you can work towards achieving your financial goals while managing risk effectively.

..Read more

Ramalingam

Ramalingam Kalirajan  |8342 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 14, 2024

Money
Dear Sir, I aman Army Veteran of 64 years snd wife aged 61. I have a monthly pension of Rs 1,8lakh pm. I have following investments. FDs 1.2 Cr @ 8pc SCSS 30 lakh @7.8pc Gold ETF 6 lakh PPF Rs 22 lakh. Rs12500 pm. Maturing in Mar 28. Equity Rs 1.5 cr. Investment through self study. MF HDFC multy cap Rs 29 lakh. Monthly contribution Rs 10K. MIRAE ASSETS Emerging Blue Chip Rs 23 Lakh. Monthly contribution Rs 12500 pm ICICI Pru bluechip Pru blue chip Rs 33 lakh. Monthly contribution Rs 50K Bandhan Multi Cap Rs 23 lakh. Monthly contribution Rs 15K. Frankin Temp Rs 1.2 lakh. No monthly contribution All MF direct schemes. I have a house to live. Choldren Son 34 married and settled. Daughter 28. Working good package. Responsibilty. Only daughter marriage House Hold expenditure Rs 50K. Covere for medical by ECHS. I have only one goal to leave a corpus of Rs20Cr or more for my children in the next 15 years. Please advise any changes in the investment. Thank you Jasbir Singh
Ans: Dear Mr. Jasbir Singh,

First, I must commend you for your disciplined approach to financial planning and your desire to secure a substantial corpus for your children. At 64 years old, with a stable pension of Rs. 1.8 lakh per month and various well-placed investments, you are in a strong financial position. Your investments are diversified across fixed deposits (FDs), Senior Citizens' Savings Scheme (SCSS), gold ETFs, Public Provident Fund (PPF), equities, and mutual funds.

Your primary goal is to leave a corpus of Rs. 20 crore or more for your children in the next 15 years. With your current financial standing, you have laid a solid foundation to achieve this.

Evaluating Your Existing Portfolio
1. Fixed Deposits (FDs)

You have Rs. 1.2 crore in FDs earning 8% interest. This provides stable, risk-free returns and liquidity, which is essential for your age. However, FDs generally offer lower returns compared to other investment options. Given your long-term horizon, consider the opportunity cost of keeping a large portion of your portfolio in FDs.
2. Senior Citizens’ Savings Scheme (SCSS)

SCSS is a safe investment with a reasonable interest rate of 7.8%, offering quarterly interest payouts. This is a good option for generating regular income, especially given the tax benefits. Keep this investment as it aligns with your risk profile and cash flow needs.
3. Gold ETFs

You have Rs. 6 lakh in gold ETFs, which provide a hedge against inflation and economic uncertainties. This is a good long-term investment, but the returns are generally moderate. Since your portfolio is diversified, maintaining this small allocation to gold is beneficial.
4. Public Provident Fund (PPF)

Your PPF investment of Rs. 22 lakh, with a monthly contribution of Rs. 12,500, will mature in March 2028. PPF is a safe and tax-efficient investment, and you should continue it as part of your retirement planning. Given the current interest rates, PPF offers attractive long-term returns.
5. Equities

You have Rs. 1.5 crore in equities, which you manage through self-study. Equities are vital for long-term growth, and your involvement shows that you are well-versed in market dynamics. However, regular portfolio review and rebalancing are crucial to mitigate risks.
6. Mutual Funds

Your mutual fund portfolio is diversified across different funds, with a significant investment in large-cap and multi-cap funds. The monthly SIP contributions demonstrate a disciplined investment approach.
Suggested Adjustments to Achieve Your Goal
1. Rebalance Your Portfolio

Increase Equity Exposure: Considering your long-term goal of Rs. 20 crore, increasing your equity exposure could enhance your portfolio’s growth potential. You might consider reallocating some funds from FDs to equities or equity mutual funds, as they typically offer higher returns over the long term.

Diversify Equity Investments: While you have a strong base in large-cap and multi-cap funds, consider adding mid-cap and small-cap funds for potentially higher returns, though they come with increased risk.

Monitor and Rebalance Regularly: Review your portfolio at least annually to ensure it remains aligned with your goals. Adjust your asset allocation based on market conditions and your risk tolerance.

2. Optimize Your Tax Efficiency

Maximize Tax Benefits: Continue maximizing tax-saving opportunities through your PPF and SCSS investments. Consider tax-efficient mutual funds under the long-term capital gains tax regime, especially for equity investments held for over a year.

Minimize Tax Liabilities: Given your high pension, you might be in a higher tax bracket. Efficient tax planning, including timing the sale of investments to optimize tax impact, is crucial.

3. Estate Planning and Wealth Transfer

Create a Will: Ensure you have a clear and legally sound will in place to avoid any legal complications for your heirs. Specify how your assets should be distributed among your children.

Trust Planning: Consider setting up a trust if you want to manage the distribution of your wealth after your demise. This can provide more control over how and when your children receive the inheritance.

Nomination and Documentation: Ensure that all your investments have proper nominations. Keep your financial documents and information organized and accessible to your family.

4. Increase SIP Contributions

Gradually Increase SIPs: As your pension and existing investments provide stability, consider gradually increasing your SIP contributions. This will help you take advantage of the power of compounding over the next 15 years.

Focus on Growth-Oriented Funds: Since you are aiming for a Rs. 20 crore corpus, growth-oriented mutual funds with a good track record should be your focus. Regularly review the performance of your current SIPs and adjust if necessary.

5. Review Your Risk Tolerance

Risk Assessment: As you age, your risk tolerance may decrease. Periodically assess your risk tolerance and adjust your equity exposure accordingly. A balanced approach that considers both growth and preservation of capital is essential.

Health Coverage: Although you are covered by ECHS, consider having additional health insurance to cover any unexpected medical expenses not covered under ECHS. This will protect your corpus from being depleted due to medical emergencies.

Final Insights
You are in a commendable financial position with a clear vision for your family's future. By making strategic adjustments to your portfolio, optimizing tax efficiency, and ensuring proper estate planning, you are well on your way to achieving your goal of leaving a substantial corpus for your children.

Keep in mind the importance of regular portfolio reviews and adjustments. The financial landscape can change, and staying informed will help you navigate your investment journey successfully.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8342 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 23, 2024

Asked by Anonymous - Aug 23, 2024Hindi
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Hi... I m 54 and having no job for last couple of yrs...my wife (47) and son (27) both hv been working and making appx 1.30L/pm, we have our own house in Surat and recently purchased a plot @63 L at Indore MP, In the next 5-6 years, we have to get our son married and clear the bank loan (49 lakh)...how will we plan our investment for that...now we are investing Rs 11500 per month in MF and there is an investment of 4L in stock mkt also..... we need apx 60 to 70 lakh
Ans: You are 54 years old and have been without a job for a couple of years. Your wife (47) and son (27) both work, earning a combined monthly income of Rs 1.30 lakhs. You own a house in Surat and recently purchased a plot in Indore for Rs 63 lakhs. You have a bank loan of Rs 49 lakhs to clear and are investing Rs 11,500 per month in mutual funds. Additionally, you have Rs 4 lakhs invested in the stock market. You need to accumulate Rs 60 to 70 lakhs over the next 5-6 years for your son’s marriage and to clear the loan.

Key Financial Goals
Loan Repayment: Clearing the Rs 49 lakh loan.

Son's Marriage: Planning for a fund of Rs 60-70 lakhs in the next 5-6 years.

Evaluating Your Current Investments
Mutual Fund SIPs: Rs 11,500 per month is a good start, but considering your goals, you might need to increase this amount over time.

Stock Market Investments: Your Rs 4 lakhs in the stock market can be a good growth avenue, but it's essential to balance the risk.

Recommendations for Future Investments
1. Increase Mutual Fund SIPs
Consider increasing your SIPs gradually to match your income growth. This will help you accumulate more wealth over time.

Focus on a mix of large-cap and actively managed funds. They can offer stability and better returns over the long term.

Avoid direct funds and opt for regular funds through an MFD with CFP credentials for better guidance and support.

Monitor the performance of your funds regularly and adjust your investments if needed.

2. Rebalance Your Stock Market Portfolio
Assess your stock market investments. Given your time horizon, ensure you are not overexposed to high-risk stocks.

Consider diversifying your portfolio by adding more stable, blue-chip companies that offer consistent returns.

Regularly review your portfolio to ensure it aligns with your risk tolerance and financial goals.

3. Loan Repayment Strategy
Prioritise paying off the Rs 49 lakh loan. The interest you pay on the loan might exceed what you earn from investments.

Consider using a portion of your stock market or other liquid investments to pay off a chunk of the loan.

This will reduce your financial burden and free up more cash flow for future investments.

4. Prepare for Son's Marriage
Start a separate investment plan specifically for your son's marriage. Consider a balanced mutual fund that offers a mix of equity and debt.

Regularly increase the amount you set aside for this goal to ensure you reach your target of Rs 60-70 lakhs in the next 5-6 years.

Ensure you keep this fund accessible and relatively liquid as you approach the time of need.

Additional Considerations
1. Emergency Fund
Maintain a robust emergency fund covering at least 6 months of your family’s expenses. This fund should be in a liquid asset, such as a savings account or liquid mutual fund.
2. Health and Life Insurance
Ensure your family is adequately covered by health insurance, considering the rising healthcare costs.

Review your life insurance policies to ensure they provide sufficient coverage, particularly if you are the primary financial provider.

3. Retirement Planning
Although your immediate focus is on your son's marriage and loan repayment, do not neglect your retirement planning.

Ensure that you continue to build a retirement corpus that will sustain your lifestyle in your later years.

Consider shifting some of your equity investments to safer options as you approach retirement age.

Final Insights
Balancing your financial goals, such as loan repayment and your son's marriage, requires a well-thought-out strategy. Increasing your SIPs, strategically paying off your loan, and carefully planning your investments will help you achieve your goals within the next 5-6 years. Ensure you have sufficient insurance coverage and continue building your retirement fund.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8342 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 13, 2025

Asked by Anonymous - May 13, 2025
Money
Greetings!!!! I am 43 years Old, I had started 10k per month TATA AIA SIP in previous year for total 7years Plan. I want to education plan for my 1 kid who is 6 years old now. Please advice and guide me about more investments plan, as i am still confused about future growth and any plan for my wife age 38years.
Ans: You're at a critical financial stage. Planning for your child’s education and securing your family’s future are both top priorities. You've already started a ULIP, which is a start. But let’s take a deeper 360-degree view of your situation.

Below is a detailed plan, broken into simple sections for better clarity.



Assessment of Your Current ULIP Investment

You're investing Rs. 10,000 per month in a 7-year ULIP.



ULIPs mix insurance with investment. That reduces the growth power of your money.



Charges like premium allocation, fund management, and mortality charges reduce returns.



Your actual invested amount is much lower in the first few years.



ULIPs have limited flexibility in fund switching and partial withdrawal rules.



Maturity benefits are taxed if the annual premium exceeds Rs. 2.5 lakh. Be cautious of this.



A ULIP is not ideal for education goals or long-term wealth building.



As a Certified Financial Planner, I suggest surrendering this policy and moving funds to mutual funds.



You can continue till 5 years to avoid surrender charges if already started.



But do not renew after the 7-year term. Don't increase contributions in this ULIP.



Planning for Your Child’s Higher Education

Your child is 6 years old. You have around 11-12 years.



College education in India or abroad can cost Rs. 30–60 lakhs or more.



Instead of ULIPs, invest in diversified mutual funds. This will give better inflation-adjusted returns.



Use a mix of large cap, flexi cap and small cap mutual funds.



Start SIPs in these funds with a long-term horizon of 10-12 years.



You may also consider goal-based child education funds that are actively managed.



Don't invest in direct funds. They look cheaper, but don’t offer guidance.



Always invest through a Certified Financial Planner via a regular plan.



Your investment will stay aligned with your goal as the planner will guide with rebalancing.



Use a dedicated SIP only for child’s education goal. Don’t merge it with retirement planning.



Suggested Action Plan for Child’s Education

Shift future contributions from ULIP to SIPs in active funds.



Start with Rs. 20,000 per month SIP only for education.



Review this SIP every year and increase it by 10%-15% annually.



Add lump sums like bonuses or yearly increments into the same goal fund.



In the last 2 years before the education goal, shift to debt funds slowly.



This will protect your accumulated amount from equity volatility.



Investment Plan for Your Wife (Age 38)

She has a long horizon. She can invest for both retirement and her independent needs.



Open a separate mutual fund folio in her name.



Start SIPs in flexi cap, large & midcap, and hybrid funds in regular plans.



You can start with Rs. 10,000 per month and increase gradually.



You may also use her PPF account for additional tax-free corpus.



Avoid investing in gold, insurance policies, or real estate for her.



Ensure she has her own health insurance and a term insurance if she’s working.



If she’s not working, then create an emergency fund in her name.



That gives her independence and safety if she needs cash.



Family Protection with Insurance

You did not mention your term cover. You must have it if not already.



Ideal cover should be 15–20 times your yearly income.



ULIPs or LIC endowment policies should not be considered for protection.



Avoid investment-linked insurance plans. Keep insurance and investment separate.



Review your existing insurance covers. Add riders like critical illness and accident if needed.



Tax Efficient Planning

Use Section 80C wisely. Don’t just rely on ULIP or LIC plans.



Max out PPF, ELSS mutual funds, and children tuition for tax saving.



Invest in actively managed ELSS funds for better returns than ULIPs.



Avoid index funds for tax planning. They may underperform in volatile markets.



Debt funds are taxed as per slab now. Use carefully if short horizon.



Track capital gains if you sell mutual funds. Use new tax rules for equity funds:



  - LTCG above Rs. 1.25 lakh taxed at 12.5%

  

  - STCG taxed at 20%



Plan redemptions well in advance to manage taxes efficiently.



Retirement Planning (For You and Wife)

Start a separate SIP for your retirement corpus. Do not merge with other goals.



You have 17 years for retirement. That’s good for wealth accumulation.



Invest in a mix of actively managed flexi-cap and large-cap funds.



Add hybrid funds to reduce volatility as you near retirement.



Continue EPF, and increase VPF if possible. It is tax-free and safe.



Don't consider NPS if liquidity is important. Maturity rules are rigid.



Use mutual funds with regular advice to stay on track till age 60.



Exit ULIPs and Poor Insurance Products

You mentioned TATA AIA ULIP. Continue for 5 years to avoid penalty.



After that, exit and move funds to SIP in mutual funds.



If you or wife have LIC endowment, Jeevan Saral, or ULIPs, surrender them.



Reinvest maturity amount into SIPs in regular mutual fund plans.



Do not fall for insurance agents who pitch plans as tax saving or guaranteed.



Emergency Fund and Liquidity

Keep at least 6 months of family expenses in a liquid mutual fund.



Don’t use your SIP or education fund as emergency source.



You may open a separate savings bank linked sweep account for this.



This fund will help if there is any job loss, health issue, or urgent need.



What Not to Do

Don’t invest in new ULIPs or insurance-linked plans.



Avoid direct mutual fund investments. You won’t get guided rebalancing.



Do not use your child’s education fund for house down payment.



Don’t pick index funds. They underperform in sideways or bear markets.



Don’t buy land or gold as an investment for your goals.



Final Insights

You are at a very strategic life stage. You have time and income strength.



ULIPs will not help you grow wealth. Shift to goal-based mutual fund SIPs.



Separate goals: child education, your retirement, wife’s security, and emergencies.



Invest only through a Certified Financial Planner for customised long-term support.



Review all goals every year. Increase SIPs with income.



Protect family with pure term insurance and health insurance.



Focus on building wealth in regular mutual funds, not through insurance products.



Real financial freedom comes when goals are funded without stress.



You have a clear head start. Use it with discipline and right guidance.



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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