Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Samraat

Samraat Jadhav  |2098 Answers  |Ask -

Stock Market Expert - Answered on May 08, 2023

Samraat Jadhav is the founder of Prosperity Wealth Adviser.
He is a SEBI-registered investment and research analyst and has over 18 years of experience in managing high-end portfolios.
A management graduate from XLRI-Jamshedpur, Jadhav specialises in portfolio management, investment banking, financial planning, derivatives, equities and capital markets.... more
Sudhir Question by Sudhir on May 08, 2023Hindi
Listen
Money

Good morning Sir. I have 40 shares of Voltas @919/-Should I sell or hold?

Ans: hold for a target of 900 as heat wave will have a good set of numbers for this quarter.

Disclaimer: Investments in securities are subject to market RISKS. Read all the related documents carefully before investing. The securities quoted are for illustration only and are not recommendatory. Registration granted by SEBI, membership of BASL and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
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.
Money

You may like to see similar questions and answers below

Vivek

Vivek Shah  | Answer  |Ask -

Financial Planner - Answered on Jun 19, 2023

Money
I have 40 shares of Voltas@919/- now it is 780/-should I hold or exit?
Ans: Voltas Limited was incorporated on 6th September, 1954 under TATA Group. The Company is jointly promoted by Switzerland's Volkart Brothers and India's Tata Sons Pvt Ltd. It has established itself as the undeniable leader in Cooling Products, and No. 1 Room Air Conditioner brand, in India. It is also a project specialist and provider of engineering solutions. Its wide range of offerings in the Unitary Product segment includes Room Air Conditioners, Air Coolers, Water Dispensers, Water Coolers, Commercial Refrigeration and Commercial Air-conditioning products. It is a provider of Engineering Solutions to diversified range of industries in areas of Heating, Ventilation and Air Conditioning, Refrigeration, Electro-mechanical projects, Electrification, Textile Machinery, Mining and Construction equipment, Water Management & Treatment, Cold Chain solutions, and Indoor Air Quality Management.

Voltas' operations have been organized into three independent business-specific clusters viz. Electro-Mechanical Projects & Services, Engineering Products & Services and Unitary Cooling Products. It has manufacturing units located at Pantnagar, Uttarakhand and Waghodia, Gujarat. It has presence at eight major International Locations: Dubai, Abu Dhabi, Qatar, Sultanate of Oman, Kingdom of Saudi Arabia, Mozambique, Bahrain and Republic of Singapore.

For the manufacture of machine tools, the company promoted Scottish Indian Machine Tools Ltd during the year 1963 in collaboration with Scottish Machine Tool Corporation of Glasgow. During the year 1964, the company made a collaboration agreement with Eaton Yale and Towns, U.S.A., for the manufacture of Yale forklift trucks. Also in the same year, Voltas had joined the Mine Safety Appliances Co., U.S.A., and Associated Battery Makers (Eastern) Ltd., Calcutta in the promotion of Mine Safety Appliances Ltd., Calcutta, a joint venture for the manufacture of miners' electric safety cap lamps and other types of safety and protective equipment, appliances, detection and measuring devices. A new division, the Agro-Industrial Products Division was added in the year 1966. With effect from 1st July of the year 1979, Tata-Merlin & Gerin Ltd (TMG) and the National Electrical Industries Ltd (NEI) were amalgamated with the company. Voltas had entered into an agreement with May & Christe of West Germany in the year 1982 for the manufacture of dry type transformers of cast-resin design. The machine tool division of the company made an agreement with Fanuc of Japan in the year 1988 for the technical collaboration to produce CNC drilling centres.

With effect from 1st March of the year 1989, Volrho Ltd was amalgamated with the company as per the order of BIFR. The machine tools division of the company had introduced Fanuc CNC drilling centres in the period of 1990. During the year 1991, the appliances business division of the company had launched the ductable split air-conditioner, specifically needed for shops, showrooms and general office areas. Also in the same year, an agreement was signed for updating technology and for the manufacture of new models of P&H hydraulic cranes. During the year 1992, the company restructured its operations into product group I comprising refrigerators, pharmaceuticals and consumer products and beverages while product group I (A) include textile machinery. Product group II consisted of machine tools, materials handling facility, industrial machinery, air-conditioning pumps and projects. Group III comprised of chemicals plant, chemicals division and agro-industrial products. The cooling appliances business of the company had launched four new products in the year 1993 viz., water coolers filled with purifiers ductable and slim-line 3 tonne air-conditioners, ceiling mounted split in 1.5 and 3 tonne capacities and 2 tonne room split units. Also in the same year, the pharmaceutical and consumer products division was closed and had also withdrawn from the beverages business. In the year 1994, Voltas had introduced 250 L refrigerator in the market under the home appliances division.

Voltas bagged Good Corporate Citizen Award in the year 1995 and also the company had introduced `Soft Look' models of refrigerator in 165 L. & 200 L segments. Pumps and projected business division of the company had successfully developed, manufactured and commissioned the largest sizes of horizontal and vertical pumps in its range during the year of 1996. Voltas had entered into a lease rental agreement with SIPL for lease of factory premises of WNC in the year 1997 for a period of 18 months for a total consideration of Rs 10.250 million and also in the same year, the company had finalised yet another contract as original equipment manufacturer (OEM) with one of the white goods majors, LG Electronics, to manufacture and supply direct cool refrigerators. The Company had commissioned Dadra plant in the year 1998 and in end of the same year 1998, Voltas won two of the world's biggest orders in the mining sector from Coal India Ltd (CIL), such as Rs 9180 million 2 shovels (P&H) and 160 dump trucks (Unit Rig).

During the year 2000, L. G. Electronics India and Voltas had entered into a tie-up for the 12,00,000 direct-cool refrigerators from the latter for the next three years. Voltas had entered into road construction equipment during the year 2001 under the engineering products and services segments. Also in the same year of 2001, the company had re launched air conditioners under the brand name `Verdant', a premium model targeted at the retail segment. During the year 2002, Voltas made a Joint Venture agreement with Sermo Montaigu, France for perfect moulds. Voltas entered into a distribution tie-up with the 62 million euro Italian air-conditioning major Uniflair in the year 2004, which specialises in the design, production and supply of precision air conditioning and cooling solutions for telecom and internet applications. Also in the same year, made tie-up with RBS Home Appliances Ltd for the use of 640 service centres that Voltas had across the country for after sales service. Simtools Ltd became a wholly owned subsidiary of the company from 27th August of the year 2005. The Company had launched new range of water dispensers in the saem year of 2005.

Voltas had entered into the water treatment business, had undertaken a project at Salt Lake City in Kolkata during the year 2007. The Company had launched a whole new range of Room ACs for the premium and luxury segments in March of the year 2008. Voltas had purchased 13,821,000 equity shares of Rs 10 each of Universal Comfort Products (P) (UCPL) in June of the year 2008, a 50:50 joint venture company between Voltas and Fedders International Air-conditioning (P) (FIACPL). As at August 2008, the company entered into a definitive agreement to acquire majority stake in Rohini Industrial Electricals (RIE), a Mumbai-based company engaged in undertaking large turnkey electrical and instrumentation projects for industrial and commercial sectors.

On 3 March 2009, Voltas announced that its textile machinery division has entered into an alliance with M/s Thies of Germany to offer enhanced value to customers, and support the growth of Indian textiles to the extent that it matches its potential, by selling and servicing of Thies products in India. The alliance will tap into the market potential of the processing segments, which offer unique opportunities for India to augment its share in the international textiles trade.

On 29 May 2009, Voltas announced that its electro-mechanical business has secured two orders worth Rs300 crore for electro-mechanical projects for the most prestigious and noteworthy `new generation' airports in India, namely Kolkata's Netaji Subhas Chandra Bose International (NSCBI) airport, and Chennai International airport.

On 19 March 2011, Voltas and the KION Group agreed to establish a joint venture in India for the development, manufacture, marketing, and servicing of forklift trucks and warehousing equipment. Voltas's material handling operations will be integrated into a new joint venture (JV) company, where the KION Group will hold a majority share. The JV company will be named Voltas Materials Handling (VMH). As the KION Group's sixth brand, Voltas will be used by VMH to focus on the Indian market with a product range that includes diesel/LPG and electric trucks with load capacities of 1.5 to 16 tons. VMH will have twenty-five branches and dealerships all over India.

On 28 February 2014, Voltas Limited and Dow Chemical Pacific (Singapore) Pte. Ltd., a member of the Dow Group Companies (Dow Group), agreed to establish a joint venture company in India to tap the growing Water and Waste Water treatment market in the country. The proposed new company - Voltas Water Solutions Private Limited - will be an equal partnership joint venture. The company will market and distribute standard packaged Water Treatment Systems and Waste Water Treatment Systems of capacity up to 20 m 3/hour, to residential and commercial complexes and light industrial markets in the Indian subcontinent. The entity's operations would include designing, procuring, testing, marketing, selling and servicing of such standard water treatment systems and waste water treatment systems.

On 28 August 2014, ELGi Equipments Limited, Asia's largest manufacturer of air compressors with innovative and technologically superior compressed air systems, entered into a strategic partnership with Voltas Limited for selling ELGi air compressors and accessories to the textile industry. Voltas is India's leading solutions provider for the textile industry, offering world-class products meeting diverse customer needs. Voltas has a pan-India presence through its network of 16 branches and over 300 textile engineers.

On 5 May 2015, Voltas announced its foray into air coolers business with the launch of fresh-air coolers under the Voltas brand. The new range comes with attractive features such as exclusive honeycomb cooling pads, carbonised dust filters and powerful air throw.

On 27 March 2017, Voltas Limited announced that it has fortified its leadership position in the cooling category by crossing 1.5 million units in the year 2016-17.

On 23 May 2017, Voltas Limited and Ardutch B.V. (a subsidiary of Arcelik A.S.; part of the Koc Group - Turkey's largest industrial and services group) agreed to establish a Joint Venture Company (JVC) in India, to enter the consumer durables market in the country.

On 2 February 2018, Voltas Limited launched India's first Window Air Conditioner with DC Inverter technology. It works on a unique Steady Cool Inverter compressor, which is a variable speed compressor, providing steady cooling and steady savings. With this launch, Voltas has strengthened its commitment of continuously bringing latest technology in the Indian market.

On 23 June 2018, Voltas' joint venture with Ardutch B.V. (a subsidiary of Arcelik A.S.; part of the Koc Group - Turkey's largest industrial and services group) Voltbek Home Appliances Private Limited laid ground to start construction of its first manufacturing facility, spread over 60 acres, in Sanand, an upcoming industrial hub in Gujarat. This facility will be manufacturing Home Appliances that include refrigerators and washing machines. Voltbek will leverage Arcelik's global expertise in setting up large, modern, state-of-the-art manufacturing unit, quality and R&D labs and International benchmarking processes and Voltas's strong brand presence, and country wide sales and distribution network.

On 9 October 2018, Voltas announced the launch of Smart ACs that can be controlled using simple voice commands with Amazon Alexa. This new range including the Voltas Inverter Split AC and Voltas Split AC is available exclusively on Amazon India website.

In FY18-19, the Company launched a wide range of white goods products under the Voltas Beko brand. It launched five new SKUs of Front Load Washing Machines with AutoDose Technology (first in the Industry), 12 SKUs of Top Load Washing Machines with Dual Power Rain and a
Table Top Dishwasher suited for Indian kitchens.

During 2018-19, the Company participated in Tata Innovista with company innovations being assessed by panel of Subject Matter Experts from within and outside the Tata Group. It has set up a manufacturing plant for higher tonnage cooling products such as VRF (Variable Refrigerant Flow) products and Chillers in Waghodia, Gujarat. It acquired land admeasuring 65 acres approx. near Tirupati for manufacture and assembly of air conditioners and other related cooling products.

In 2019-20, Company launched two greenfield manufacturing plants for its Commercial Products Business and Home Appliances
(Voltas Beko) business. The Commercial Products facility was launched in Waghodia, Gujarat. Equipped with technologically advanced R&D
and testing facilities, the factory has been instrumental in introducing differentiated and competitive products in the market. It launched innovative UV products and solutions to help stop the spread of the coronavirus. In collaboration with Arçelik, it commissioned a manufacturing facility in Sanand, Gujarat, to boost the production and capture a larger market share in the white goods segment.

In FY'21, the Company launched 46 SKUs of Fresh Air Coolers under various sub-categories such as Personal, Window, Tower and Desert Air Coolers. It also strengthened its overall portfolio by introducing 43 SKUs of Commercial Refrigeration products, including Convertible Freezer, Freezer on Wheel and Curved Glass Freezer. It launched 18 SKUs of Water Dispensers and 28 SKUs of Water Coolers. The Company strengthened the electrical business with its credentials in solar EPC business with Azure Power and S.B. Energy, Rajasthan orders. Further, it
bagged most orders under the MEP business from the healthcare and building segments. It also supported construction and upgradation of COVID-19 medical facilities at various locations across India through MEP project services during the pandemic. It commissioned two sewage treatment plants for the water business in Patna at Beur (43 MLD) and Karmalichak (37 MLD), as part of the Namami Gange
Mission, inaugurated by Prime Minister Narendra Modi on 15 September, 2020. The Company additionally implemented some key initiatives, including Digital Project Monitoring, Vendor Portal, Monitoring of Sites through web cameras for safety and centralised bidding and estimation for risk mitigation. It streamlined the focus towards gaining profitable orders in healthcare, data centres, water treatment & supply, sub-stations, State Discoms and solar EPC segments.

In FY'22, the Company launched PureAir 6 Stage Adjustable Inverter AC, India's first AC with HEPA Filter technology. It strengthened product offerings under commercial refrigerators by launching 60 SKUs. It launched 32 SKUs under Maha-adjustable inverter air conditioners. It received license from Bureau of Indian Standards (BIS) for Air Cooled Ducted and Packaged Air Conditioner. It commissioned project Gandhinagar Railway and Urban Development Corporation Ltd (GARUD) in Gandhinagar, Gujarat, inaugurated by Hon'ble Prime Minister, Mr. Narendra Modi, It commissioned one project of 300 MW AC & 225 MW DC under Solar EPC for Azure Power and second project for SB Energy, later renamed as Adani, for 71 MW AC & 104 MWp DC. It gained tier 1 status in Solar EPC business. Besides these, it launched 74 new SKUs in 2021-22 to further strengthen product portfolio and new products with new and upgraded technologies under all categories.`

Revenues grew by 11.8% YoY; Reported loss of Rs1.1bn: Sales grew 11.8% YoY to ~Rs20.1bn, led by growth in UCP (11.2% YoY) and EMPS (17.1% YoY). EPS business revenue declined by 5.4% YoY. Gross margin declined by 290bps YoY to 24.1%. EBITDA declined 50.9% YoY to Rs764mn, while EBITDA margins contracted by 490bps YoY to 3.8%. In terms of segmental EBIT margin, UCP segment margin came at 7.4% (-190bps YoY) whereas EMPS reported loss of Rs461mn. PBT declined by 47.7% YoY to Rs895mn. Adj. PAT declined 71.9% YoY
to Rs270mn. Voltas reported net loss of Rs1.1bn due to provision of Rs1.4bn on account of cancellation of overseas contract by main contractor and encashment of bank guarantee.

CONCALL TAKEAWAYS:
1)VOLT’s inverter category increased its contribution to 82%, mainly with tactical pricing and improved features,
2)Management expects good demand in Q4FY23, with softening of rural inflation and buying across sales
channels on forecast of hot weather,
3)Commercial refrigerators continued growth momentum, mainly from OEM and retail chain,
4) Market share for Air Cooler was 9.2% with new SKUs and targeted distribution,
5)The carry forward order book for domestic projects stood at Rs45.4bn related to Water, HVAC, Rural Electrification and Urban Infrastructure,
6)One-off losses in EMPS related delayed collection in Q2FY23/Q3FY23 for two overseas projects, out of which one is halfway in timeline and another one almost completed,
7) EPS segment continued its healthy traction with delivery of textile machinery and focus on after sales service, 8)Voltbek brand has sold over 3mn units since its launch, while demand for appliances was muted in Q3FY23 resulting in volume drop. It is expected to pick up with introduction of new SKUs.

If you are a long term investor then do hold Voltas but for short term period the price will have fluctuation due to market condition and valuation.

Disclaimer: Information provided is only for educational purpose. Please consult your investment adviosor before making any investment decisions

..Read more

Latest Questions
Anu

Anu Krishna  |1329 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 26, 2024

Asked by Anonymous - Nov 15, 2024Hindi
Listen
Relationship
Hi. How to be more respectful towards to MIL and FIL. ??? They dont like me as a DIL bcz they feel that I am trying to steal their son which is absolutely wrong. I tried to improve my relation with them but with the passage of time , its getting worst. My husband is on their side too. I have a baby girl and they threaten me to send me to my hometown with my child if I speak againt any type of dicrimination happening with me. My MIL believes in keeping Nirjala fast, eating after husband, eating left over food. I dont feel good with them so I spend time alone whenever they are home but they dont like my behaviour of getting my own time. Whenver i talk with them, they just humiliate me and my family.
Ans: Dear Anonymous,
Do you all live together? If YES, maybe it's time to actually live separately where there is a healthy space between both families. This may not go well with a lot of families where joint family system have ruled for a long time BUT what's the point spoiling relationships and living under one roof. Of course, your husband also needs to be in alignment with this thought.
If not and this is not going to be possible, then do approach your side of the family to intervene...now, either things may get set right OR things may get worse. It's sad that your husband is unable to see your side of things.
One things I want to ask: What makes them feel that you are trying to steal their son? Is it some behavior of yours that they are misreading? Then it's possible to set things right if this can be identified...

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

Ramalingam

Ramalingam Kalirajan  |7159 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 26, 2024

Asked by Anonymous - Nov 21, 2024Hindi
Listen
Money
Hello, I need some opinions/advice/guidance in the following matter. I am 68 yrs old and I have invested 40Lakh in various equities & 50Lalk in Equity based M/F’s since last 14 years. Current market value is around 1.8crore & 1.6crore respectively & it may grow by 20% CAGR as per my assumption in the next 7 years and total market value may hit around 10crore mark. I have a land property valued 3crore where I am planning to build a 5 floor residential apartment on it. For this I need a fund around 2crores for construction & I am planning to raise funds from overdraft loans against my Equity shares & M/F at the rate 10.35%.approx . I do not have any other source to raise the required funds as I am retired now and I do not have any other liabilities. I am planning SWP of 10lacs every year to repay interest on OD. I wish that I would be able to pay off any loans and OD WITHOUT having to sell any apartment/unit. Will this be possible? Is there any other way? Thanks
Ans: Your efforts in building a substantial equity and mutual fund portfolio are commendable. Planning the construction of a residential apartment is an ambitious goal. Let us evaluate your plan step by step and explore alternatives.

Financial Overview
Equity Investments: Current market value of Rs 1.8 crore.
Equity Mutual Funds: Current market value of Rs 1.6 crore.
Expected Growth: Assuming 20% CAGR over 7 years, the portfolio may grow significantly.
Land Value: Rs 3 crore.
Construction Funding Needed: Rs 2 crore.
Plan for Funds: Overdraft loan against equities and mutual funds at 10.35%.
Assessment of Overdraft Loan Plan
Advantages
No Asset Liquidation: You retain ownership of your investments, benefiting from potential growth.
Flexible Repayment: Overdraft loans allow partial repayments, easing financial pressure.
Concerns
High Interest Rate: 10.35% on Rs 2 crore results in an annual interest of Rs 20.7 lakh.
Repayment through SWP: An annual SWP of Rs 10 lakh may not fully cover the interest.
Market Volatility: Fluctuations in market value could affect the collateral margin.
Risk of Insufficient Growth
If investments fail to achieve 20% CAGR, loan repayment may become challenging.
Exploring Alternatives
1. Partial Liquidation of Investments
Sell a Portion of Portfolio: Liquidating Rs 1 crore from your equity portfolio can reduce loan dependency.
Benefits: Lower loan amount decreases interest burden significantly.
2. Phased Construction
Stagger Construction Phases: Build the apartment in phases, reducing immediate fund requirements.
Benefits: Spreads out financial pressure and allows cash inflows from initial unit sales or rent.
3. Explore Joint Venture Options
Partner with a Developer: Share the construction cost and revenue with a reputed builder.
Benefits: Reduces upfront financial strain while retaining ownership of some units.
4. Leasing Out Units Post-Construction
Generate Rental Income: Post-construction, lease out units for regular cash flow.
Benefits: Supports loan repayment without liquidating the portfolio.
Revised Strategy for Loan Repayment
Systematic Withdrawal Plan (SWP)
Increase SWP Amount: Consider an SWP of Rs 15-20 lakh annually instead of Rs 10 lakh.
Combine with Partial Liquidation: Use SWP and proceeds from partial liquidation for interest repayment.
Mitigate Loan Risk
Prepay Loan with Surplus Income: Allocate any excess cash flows or savings to reduce loan tenure.
Reassess Growth Assumptions: Lower expected CAGR to 12-15% for a conservative approach.
Tax Implications
Equity Gains Tax: Long-term capital gains above Rs 1.25 lakh are taxed at 12.5%.
Plan Withdrawals Efficiently: Use tax-efficient strategies to minimise outgo.
Final Insights
Your plan to raise funds through an overdraft loan is viable but carries risks. Combining this with a partial liquidation of investments or phased construction can reduce stress. Joint ventures or rental income from units could provide additional financial stability. Consult a Certified Financial Planner to design a comprehensive strategy and avoid over-leveraging.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7159 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 26, 2024

Asked by Anonymous - Nov 20, 2024Hindi
Listen
Money
I’m a 20yr old student , currently doing internship and getting stipend of 30k, going to get package of 10LPA in 6 months. I want to save money and also get atleast minimal returns. I’ve very less idea about share market also. How can I save money and create a plan for me to save max and also get maximum returns.
Ans: You are at an ideal stage to start building wealth. Your internship stipend and future salary provide a strong foundation. With structured planning, you can save and earn better returns while managing risks. Let’s create a simple, actionable strategy for you.

Setting Clear Financial Goals
Short-Term Goals (1–3 Years):
Emergency fund, higher studies, or any immediate personal goals.

Medium-Term Goals (3–5 Years):
Buying a vehicle, planning vacations, or career enhancement expenses.

Long-Term Goals (5+ Years):
Buying a home, retirement savings, or wealth creation.

Creating an Emergency Fund
Importance of Emergency Fund:
Build a fund equal to 6 months' expenses. It provides financial stability during unexpected situations.

Where to Invest:
Use a mix of liquid mutual funds and high-interest savings accounts for easy access.

Budgeting Your Income
Stipend Allocation Plan:
Save at least 40–50% of your Rs 30,000 stipend. The rest can cover expenses and small indulgences.

Future Salary Planning:
After getting the Rs 10 LPA package, aim to save 30–40% monthly.

Investing in Mutual Funds for Returns
Equity Mutual Funds for Growth:
Equity funds are ideal for long-term wealth creation. Actively managed funds offer better growth than index funds due to expert management.

Systematic Investment Plan (SIP):
Start SIPs to invest consistently. Begin with Rs 5,000–10,000 based on affordability.

Avoid Direct Funds:
Regular plans with a Certified Financial Planner provide better guidance and monitoring.

Tax-Saving Investments
Utilise Section 80C:
Invest up to Rs 1.5 lakh annually in tax-saving instruments like ELSS mutual funds.

Consider NPS for Retirement:
NPS offers tax benefits under Section 80CCD. It also builds retirement wealth gradually.

Staying Cautious with Stocks
Learn Before Investing in Shares:
Direct stock market investing requires knowledge. Avoid risky investments until you gain expertise.

Start Small with Blue-Chip Companies:
If you wish to explore stocks, invest small amounts in reliable, large-cap companies.

Exploring Debt Instruments
Invest in Debt Mutual Funds:
Debt funds offer stability and are tax-efficient for your income bracket.

Avoid Over-Reliance on Fixed Deposits:
Fixed deposits provide safety but offer lower returns compared to mutual funds.

Managing Risks
Insurance for Protection:
Get health insurance for yourself. It ensures financial stability during medical emergencies.

Avoid ULIPs or Endowment Policies:
These provide low returns compared to mutual funds. Focus on term insurance when needed.

Tax Planning with New Income
Understand Tax Slabs:
With a Rs 10 LPA salary, you will fall in the 20–30% tax bracket.

Plan for Deductions:
Use Section 80C, 80D (health insurance), and other exemptions to minimise taxable income.

Steps to Monitor and Adjust
Review Portfolio Regularly:
Evaluate your investments every 6 months. Adjust as per market conditions and goals.

Increase SIP Amount Gradually:
As your income grows, increase your SIP contributions to grow wealth faster.

Final Insights
Starting early gives you a significant advantage in wealth creation. Focus on disciplined saving and investing with a mix of equity and debt funds. Avoid unnecessary risks and prioritise financial security through insurance and emergency funds. Monitor and adjust your portfolio regularly to stay aligned with your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7159 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 26, 2024

Asked by Anonymous - Nov 19, 2024Hindi
Money
Hi Sir, I earn around 80K per month and 40k expense. I have two sons studying in grade 5 and 10. I'm 38years and a (divorcee)single mom. I would like to save for kids higher studies immediately and save for retirement by 50. Could you advice a financial plan.
Ans: At 38, as a single mother earning Rs. 80,000 monthly with Rs. 40,000 expenses, you have commendable financial discipline. With two sons in grades 5 and 10, planning for their education and your retirement requires structured financial strategies. Let us address your concerns with detailed planning.

Current Cash Flow Analysis

Income: Rs. 80,000
Expenses: Rs. 40,000
You save Rs. 40,000 monthly, which can be allocated effectively. The focus will be on balancing immediate and long-term financial goals.

Key Financial Goals

Saving for your sons' higher education (in the next 3 to 7 years).
Building a retirement corpus for financial independence by age 50.
Step 1: Allocate for Higher Education

Higher education is an urgent priority. Here’s how you can start preparing:

Dedicated Education Fund

Open a separate investment for your sons' education.
Use a combination of balanced mutual funds and fixed deposits.
Balanced mutual funds offer moderate risk and steady growth.
Estimate Education Costs

Calculate expected expenses for each child’s education.
Plan for both domestic and international options to remain flexible.
Invest Regularly

Start SIPs of Rs. 25,000 per month for their education fund.
Increase contributions by 5% annually if possible.
Step 2: Build Your Emergency Fund

An emergency fund is essential for financial security:

Set aside six months' worth of expenses, around Rs. 2.4 lakh.
Use liquid mutual funds for easy access and better returns than savings accounts.
Allocate Rs. 5,000 monthly until you build this fund.
Step 3: Plan for Retirement

You aim to retire by 50. Start building your retirement corpus now.

Monthly Retirement Contribution

Dedicate Rs. 10,000 monthly to a retirement-focused mutual fund.
Choose funds that align with your risk profile and investment horizon.
Increase Contributions Gradually

As your income grows, increase your contributions to Rs. 15,000 or more.
Regular reviews will ensure you stay on track.
Tax Benefits

Use NPS for additional tax benefits and disciplined retirement savings.
It offers a balance of equity and debt exposure.
Step 4: Insurance and Risk Management

Insurance is vital for protecting your family and assets:

Health Insurance

Ensure you have adequate health insurance for yourself and your sons.
Aim for a cover of at least Rs. 10 lakh to handle medical emergencies.
Term Life Insurance

A term policy should cover at least Rs. 1 crore.
This will secure your sons' future in case of unforeseen circumstances.
Step 5: Optimize Existing Expenses

Your monthly expenses are Rs. 40,000. To improve savings:

Track Spending

Analyse discretionary expenses like dining out, shopping, or subscriptions.
Reduce unnecessary spending by 10%-15%.
Prioritise Essentials

Focus on education, healthcare, and necessary household expenses.
Step 6: Create an Investment Plan

Investing is crucial for achieving your goals efficiently:

Diversify Investments

Use a mix of equity, debt, and hybrid mutual funds for balanced growth.
Avoid direct funds; instead, invest through a certified financial planner for professional guidance.
Avoid Index Funds

Actively managed funds outperform index funds in volatile markets.
They offer flexibility and better potential returns with skilled management.
Review Regularly

Review your investments every six months.
Shift from equity-heavy funds to safer debt funds as goals approach.
Step 7: Focus on Education Goals for Sons

Your elder son will need funds sooner than your younger one.

Stagger Fund Allocation

Allocate more for the elder son’s education immediately.
Continue contributions for the younger son’s fund with a longer horizon.
Utilise Scholarships

Encourage your sons to apply for scholarships to reduce financial strain.
Step 8: Long-Term Strategy for Financial Growth

A strategic approach will ensure steady financial growth:

Increase Income

Explore freelancing, consulting, or other income sources to supplement savings.
Utilize skills or hobbies to generate additional income.
Avoid Loans

Minimise debt by avoiding unnecessary loans or credit card usage.
Focus on clearing existing liabilities promptly.
Step 9: Tax Planning

Efficient tax planning increases disposable income:

Utilise Deductions

Maximise benefits under Section 80C, 80D, and other applicable sections.
Include NPS contributions for additional deductions under Section 80CCD.
Invest Smartly

Choose tax-efficient instruments like ELSS for dual benefits of savings and tax deductions.
Finally

Your disciplined approach provides a strong foundation. Focus on immediate education needs while building a robust retirement plan. Regularly review and adjust your plan with professional guidance to achieve your goals smoothly.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7159 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 26, 2024

Money
Dear sir I am a single parent of a girl child age 14 yrs.My parents stay with me . My earning is 160000 per month wherein I have a home loan emi of 75000 and 30000 i deposit in sip, 10000 towards lic, 15000 towards home expenses. But I am left with no liquid cash in month end . How can I increase my savings in this salary as I am very worried about my future
Ans: At 38, as a single mother earning Rs. 80,000 monthly with Rs. 40,000 expenses, you have commendable financial discipline. With two sons in grades 5 and 10, planning for their education and your retirement requires structured financial strategies. Let us address your concerns with detailed planning.

Current Cash Flow Analysis

Income: Rs. 80,000
Expenses: Rs. 40,000
You save Rs. 40,000 monthly, which can be allocated effectively. The focus will be on balancing immediate and long-term financial goals.

Key Financial Goals

Saving for your sons' higher education (in the next 3 to 7 years).
Building a retirement corpus for financial independence by age 50.
Step 1: Allocate for Higher Education

Higher education is an urgent priority. Here’s how you can start preparing:

Dedicated Education Fund

Open a separate investment for your sons' education.
Use a combination of balanced mutual funds and fixed deposits.
Balanced mutual funds offer moderate risk and steady growth.
Estimate Education Costs

Calculate expected expenses for each child’s education.
Plan for both domestic and international options to remain flexible.
Invest Regularly

Start SIPs of Rs. 25,000 per month for their education fund.
Increase contributions by 5% annually if possible.
Step 2: Build Your Emergency Fund

An emergency fund is essential for financial security:

Set aside six months' worth of expenses, around Rs. 2.4 lakh.
Use liquid mutual funds for easy access and better returns than savings accounts.
Allocate Rs. 5,000 monthly until you build this fund.
Step 3: Plan for Retirement

You aim to retire by 50. Start building your retirement corpus now.

Monthly Retirement Contribution

Dedicate Rs. 10,000 monthly to a retirement-focused mutual fund.
Choose funds that align with your risk profile and investment horizon.
Increase Contributions Gradually

As your income grows, increase your contributions to Rs. 15,000 or more.
Regular reviews will ensure you stay on track.
Tax Benefits

Use NPS for additional tax benefits and disciplined retirement savings.
It offers a balance of equity and debt exposure.
Step 4: Insurance and Risk Management

Insurance is vital for protecting your family and assets:

Health Insurance

Ensure you have adequate health insurance for yourself and your sons.
Aim for a cover of at least Rs. 10 lakh to handle medical emergencies.
Term Life Insurance

A term policy should cover at least Rs. 1 crore.
This will secure your sons' future in case of unforeseen circumstances.
Step 5: Optimize Existing Expenses

Your monthly expenses are Rs. 40,000. To improve savings:

Track Spending

Analyse discretionary expenses like dining out, shopping, or subscriptions.
Reduce unnecessary spending by 10%-15%.
Prioritise Essentials

Focus on education, healthcare, and necessary household expenses.
Step 6: Create an Investment Plan

Investing is crucial for achieving your goals efficiently:

Diversify Investments

Use a mix of equity, debt, and hybrid mutual funds for balanced growth.
Avoid direct funds; instead, invest through a certified financial planner for professional guidance.
Avoid Index Funds

Actively managed funds outperform index funds in volatile markets.
They offer flexibility and better potential returns with skilled management.
Review Regularly

Review your investments every six months.
Shift from equity-heavy funds to safer debt funds as goals approach.
Step 7: Focus on Education Goals for Sons

Your elder son will need funds sooner than your younger one.

Stagger Fund Allocation

Allocate more for the elder son’s education immediately.
Continue contributions for the younger son’s fund with a longer horizon.
Utilise Scholarships

Encourage your sons to apply for scholarships to reduce financial strain.
Step 8: Long-Term Strategy for Financial Growth

A strategic approach will ensure steady financial growth:

Increase Income

Explore freelancing, consulting, or other income sources to supplement savings.
Utilize skills or hobbies to generate additional income.
Avoid Loans

Minimise debt by avoiding unnecessary loans or credit card usage.
Focus on clearing existing liabilities promptly.
Step 9: Tax Planning

Efficient tax planning increases disposable income:

Utilise Deductions

Maximise benefits under Section 80C, 80D, and other applicable sections.
Include NPS contributions for additional deductions under Section 80CCD.
Invest Smartly

Choose tax-efficient instruments like ELSS for dual benefits of savings and tax deductions.
Finally

Your disciplined approach provides a strong foundation. Focus on immediate education needs while building a robust retirement plan. Regularly review and adjust your plan with professional guidance to achieve your goals smoothly.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7159 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 26, 2024

Asked by Anonymous - Nov 16, 2024Hindi
Listen
Money
Hello Sir, I am fresher I started my career with a salary of 3 Lac per annum. My monthly expenses is ?15K . Can you please give me some financial advice for future.
Ans: Starting your career is a milestone, and managing finances wisely is essential. You’ve done well to think about financial planning early. Let’s outline how to create a strong financial foundation with your current income.

Assessing Your Financial Situation
Salary: Rs 3 lakhs annually, or Rs 25,000 per month.

Expenses: Rs 15,000 monthly, leaving Rs 10,000 for savings and investments.

No Financial Liabilities: This gives you the freedom to focus on building wealth.

Key Financial Priorities
1. Build an Emergency Fund
Reserve for Unexpected Expenses: Save at least 6 months of expenses (around Rs 90,000).

Where to Park It: Keep it in a high-interest savings account or a liquid mutual fund.

Start Small: Save Rs 2,000 monthly until the fund is complete.

2. Protect Your Health
Health Insurance is Critical: Purchase a basic health insurance plan with adequate coverage.

Start with Affordable Premiums: A basic policy will safeguard against unexpected medical costs.

Include Parents: If you support your parents, consider family floater insurance.

3. Set Financial Goals
Short-Term Goals: Plan for travel, gadgets, or courses within 1-3 years.

Medium-Term Goals: Build funds for a vehicle or higher education within 3-7 years.

Long-Term Goals: Plan for wealth creation and retirement over 10+ years.

4. Start Investing Early
Utilise the Power of Compounding: Starting now will maximise your returns over time.

Mutual Fund SIPs: Begin with Rs 3,000-5,000 in equity mutual funds through SIPs.

Active Fund Selection: Choose funds managed by professionals for consistent growth.

5. Manage Taxes Smartly
Section 80C Deductions: Invest in PPF, ELSS, or term insurance to save on taxes.

File Returns Promptly: Keep track of Form 16 and file your income tax returns on time.

Avoid Complex Instruments: Start with simple, tax-saving tools that suit your needs.

6. Avoid Common Financial Pitfalls
Control Lifestyle Inflation: Avoid unnecessary expenses as your income grows.

Limit Credit Card Usage: Pay bills on time to avoid debt traps.

Stay Away from Guaranteed Returns Plans: These often provide low returns and lack flexibility.

7. Develop Financial Discipline
50-30-20 Rule: Allocate 50% for needs, 30% for wants, and 20% for savings.

Track Expenses: Use apps or spreadsheets to monitor spending habits.

Increase Savings with Increments: Save a higher portion of future salary hikes.

8. Plan for Retirement
Start with NPS or PPF: Small contributions today will grow significantly over time.

Invest in Equity for Long-Term: Equities outperform other asset classes in the long run.

Avoid Annuities: They have low returns and limited flexibility.

Steps for Immediate Action
Open a health insurance policy immediately.

Start an SIP in equity mutual funds with Rs 3,000-5,000 monthly.

Begin creating an emergency fund by saving Rs 2,000 monthly.

Allocate Rs 10,000 annually to a tax-saving instrument like ELSS or PPF.

Use salary increments to increase investments systematically.

Final Insights
Starting early puts you at a great advantage. Your disciplined savings and wise investment decisions will create wealth over time. Stick to your goals, review your progress annually, and adjust as needed. Work with a Certified Financial Planner for personalised advice as your income and goals grow.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7159 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 26, 2024

Listen
Money
I, a senior citizen, would like your suggestion for investing a retirement corpus, with a moderate risk appetite. I have already made some investments in Equity, MFs, FDs, Senior Citizen Saving Schemes & Post Office Schemes.
Ans: You have already diversified your investments wisely across equity, mutual funds, FDs, senior citizen savings schemes, and post office schemes. This indicates a well-thought-out approach. As a senior citizen, your focus should now shift to maintaining stability, generating consistent income, and growing your corpus within a moderate risk appetite.

Key Investment Objectives for Senior Citizens
Capital Preservation:
Safeguard your retirement corpus against unnecessary risks.

Regular Income:
Ensure stable and predictable income to meet monthly expenses.

Moderate Growth:
Invest a portion in moderate-risk instruments for inflation-beating returns.

Liquidity:
Keep funds accessible for emergencies or unforeseen expenses.

Strategies for Allocating Your Retirement Corpus
Emergency Fund:
Set aside at least 12 months of living expenses in liquid investments. Use options like liquid mutual funds or high-interest savings accounts.

Equity Allocation for Growth:
Retain a portion in equity funds for long-term growth. Opt for actively managed funds over index funds. Actively managed funds offer better potential returns, guided by experienced fund managers.

Debt Mutual Funds for Stability:
Debt funds provide stability and moderate growth. These are tax-efficient compared to FDs for investors in higher tax brackets.

Senior Citizen Savings Schemes:
Continue contributing to senior citizen savings schemes. They offer guaranteed returns and safety.

Monthly Income Plans (MIPs):
MIPs in mutual funds offer regular payouts and moderate growth. These are ideal for generating supplementary income.

Reviewing Your Mutual Fund Investments
Avoiding Over-Diversification:
If you hold too many mutual funds, it can dilute returns. Focus on 3-5 well-performing funds.

Invest Through Regular Plans:
Avoid direct mutual funds. Regular plans via MFDs guided by a Certified Financial Planner offer better advice and monitoring.

Evaluating FDs and Post Office Investments
Fixed Deposits (FDs):
FDs are safe but may not beat inflation. Use them only for short-term needs.

Post Office Schemes:
These offer reliable returns. Consider their lock-in periods before increasing your investments.

Ensuring Tax Efficiency
Mutual Fund Taxation:
Equity funds have LTCG above Rs 1.25 lakh taxed at 12.5%. Debt funds are taxed as per your income tax slab. Factor this into your withdrawal strategy.

Maximise Section 80C Deductions:
Continue using investments like senior citizen schemes to avail of 80C tax benefits.

Additional Considerations for Risk Management
Insurance Coverage:
Ensure you have adequate health insurance. Medical emergencies can strain your finances.

Avoid Investment-Linked Insurance Policies:
If you hold LIC or ULIP policies, evaluate their returns. Surrender underperforming ones and reinvest in mutual funds for better growth.

Avoid High-Risk Investments:
Steer clear of speculative instruments like high-risk equities or unregulated products.

Regular Monitoring and Reviews
Review your portfolio every 6-12 months. This ensures your investments align with your financial goals.

Rebalance the portfolio as required. For instance, shift equity gains into safer instruments during market highs.

Work with a Certified Financial Planner to receive expert advice tailored to your needs.

Final Insights
Your retirement corpus is a key resource for financial independence. A balanced strategy with moderate risk will secure regular income and inflation-beating growth. Diversify, review, and optimise your investments regularly for financial well-being.

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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x