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Abhishek

Abhishek Dev  | Answer  |Ask -

Financial Planner - Answered on Aug 05, 2023

Abhishek Dev is the co-founder and CEO of the financial planning company, Epsilon Money Mart.
A management graduate, he has over 21 years of experience in asset and wealth management.
He has been associated with reputed companies like HSBC GAM (India, south east Asia), PGIM, AMC, AMEX Bank, HDFC AMC and UTI in various roles, including leading business management, sales, marketing, product development and as a board member.... more
Chandar Question by Chandar on Jun 05, 2023Hindi
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My name is Chandar Shekhar, I am 39 years old, I need your advice which mutual fund better for me for 10 to 15 years, my investment deposit money every month is Rs. 3000.00 bcz my salary is not much but i adjust for my kids future purpose please advise me. I also have 2 ULIP last 2018 for 2032. Portfolio: 1. HDFC LIFE CLICK 2 INVEST ULIP @ Rs. 1000.00 Every Month. 2. SBI LIFE E WEALTH INSURANCE @ Rs. 1000.00 Every Month.

Ans: Kindly understand no amount is small to start with. But we do suggest that you don't mix insurance with investments. A comprehensive Health insurance coupled with Term Plan is more than enough. As for the mutual fund investments, we suggest you have a Hybrid fund (HDFC Balanced Advantage Fund or ICICI Pru Equity & Debt Fund can be tracked) and a Flexicap fund (Parag Parikh Flexicap Fund offers global diversification). 2 funds are more than enough.
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  |7967 Answers  |Ask -

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

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hi sir i am 41 years old, now i want invest in mutual fund for my retirement and for my two sons one of it is 15 years and second is 10 years old. i can invest 5000 rs per month please suggest me funds that can i invest.
Ans: Given your investment horizon for retirement and your sons' education, you have a long-term horizon which allows you to consider equity-oriented mutual funds for potentially higher returns. Here are some suggestions tailored to your needs:

For Retirement (Long-Term):
Large Cap Funds: These funds invest in well-established companies, offering stability and growth potential. Given your longer investment horizon, consider allocating a portion to large-cap funds to provide stability to your portfolio.
Multi-Cap Funds: These funds offer diversification across market capitalizations and are suitable for long-term wealth creation. They can adapt to different market conditions, providing flexibility to the fund manager.
For Sons' Education (Medium to Long-Term):
Balanced Funds or Hybrid Funds: These funds invest in both equities and debt, offering a balance between growth and stability. They can be suitable for medium to long-term goals like your sons' education.
Children's Gift Funds or Children's Education Funds: Some mutual funds offer specific funds designed for children's future needs, providing a tailored solution for education expenses.
Considering your investment amount and goals, you can consider investing in a combination of the above-mentioned funds to achieve diversification and align with your financial goals. Here's a potential allocation:

Large Cap Funds: 40%
Multi-Cap Funds: 40%
Balanced or Hybrid Funds: 20%
Remember, it's essential to review your investments periodically and adjust your portfolio as needed based on performance, changing financial goals, and market conditions. Consult with a financial advisor to ensure your investment strategy aligns with your financial goals, risk tolerance, and investment horizon.

..Read more

Ramalingam

Ramalingam Kalirajan  |7967 Answers  |Ask -

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

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Hi I am Raju From Hyderabad, Age 31 I want invest 10k in Mutual funds But I Don't know which is best for me I have a child just one year old I will take some risk but need high returns kindly suggest good Mutual funds Thank you
Ans: Tailored Mutual Fund Recommendations for Raju

Understanding Your Financial Goals and Risk Appetite

Raju, it's great to hear that you're planning to invest in mutual funds for your child's future. At 31, with a long investment horizon ahead, you can afford to take some risk in pursuit of potentially higher returns. However, it's crucial to align your investment choices with your financial goals and risk tolerance.

Recommendations Based on Your Profile

Considering your desire for high returns and willingness to take on some risk, here are some mutual fund categories you may consider:

Large Cap Funds: These funds invest in well-established, large companies with stable track records. While they offer relatively lower risk compared to other categories, they still have potential for growth over the long term. Look for funds with a proven history of consistent performance.

Mid Cap Funds: Mid-cap companies have the potential for rapid growth, offering higher returns compared to large caps but with increased volatility. Given your risk appetite, allocating a portion of your investment to mid-cap funds can be beneficial for potential wealth creation.

Multi-Cap Funds: These funds invest across companies of various market capitalizations, offering diversification and flexibility. They can adapt to changing market conditions and capitalize on opportunities across different sectors.

Balanced Funds: If you prefer a balanced approach with exposure to both equity and debt, balanced funds can be a suitable option. These funds invest in a mix of stocks and bonds, offering potentially higher returns than pure debt funds with relatively lower volatility.

Final Advice

Before making any investment decisions, it's essential to conduct thorough research and consult with a Certified Financial Planner (CFP) who can provide personalized advice based on your financial situation, goals, and risk tolerance. Additionally, consider investing through a Systematic Investment Plan (SIP) to benefit from rupee cost averaging and mitigate market volatility.

Remember, investing is a long-term commitment, and staying disciplined during market fluctuations is key to achieving your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7967 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 21, 2024

Asked by Anonymous - May 20, 2024Hindi
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Hi sir, I am 39 year old. Invested in stocks upto 1 lakh.Invested in gold for 2lakhs. Invested in ppf upto 13 lakhs and continuing it, investing in SSY upto 1lakhs from 2019 for girl child.Invested in NPS upto 1 lakh. Having term insurance for 2cr paying 3800rs per month. Having endowment policy for next 21 years. Having medical insurance upto 30 lakh sum assured having premium about 70k per year for myself, dependant and a kid. Having medical insurance sum assured upto 5 lakh each for parents having premium of 42k per year. Having a car loan of 20lakhs for next 4 years, having a personal loan of upto 4 lakhs and will end up in December. Planning for retirement corpus of 5 cr in next 15 years, and planning for child higher education for 12 years with 2 cr and marriage in next 20 years for another 2cr. Planning to buy plot in 3 years worth 75 lakhs, Which mutual fund needs to be considered to achieve these goal?
Ans: Crafting a Mutual Fund Strategy for Your Financial Goals
It's commendable that you're actively planning for your financial future. Let's outline a strategic approach using mutual funds to achieve your goals.

Assessing Financial Goals
Retirement Corpus
Your target retirement corpus of 5 crores in 15 years requires a disciplined investment strategy with a focus on long-term wealth creation.

Child's Higher Education and Marriage
For your child's education and marriage, aiming for a combined corpus of 4 crores over the next 12 and 20 years, respectively, necessitates a balanced investment approach.

Plot Purchase
Planning to buy a plot worth 75 lakhs in 3 years requires short to medium-term investment options with capital appreciation potential.

Mutual Fund Selection Criteria
Goal Horizon
Align mutual fund selections with the time horizon of each financial goal, focusing on funds with proven track records of consistent returns over the required investment duration.

Risk Appetite
Consider your risk tolerance and opt for a diversified mix of mutual funds spanning various asset classes to mitigate risk while aiming for optimal returns.

Tax Efficiency
Select mutual funds that offer tax efficiency, such as equity-linked saving schemes (ELSS), to leverage tax benefits while investing for long-term goals.

Recommended Mutual Fund Categories
Equity Mutual Funds
Allocate a significant portion of your investment towards equity mutual funds for long-term wealth accumulation, considering the growth potential of equities over time.

Debt Mutual Funds
Include debt mutual funds in your portfolio for stability and capital preservation, especially for short to medium-term goals like the plot purchase.

Hybrid Mutual Funds
Explore hybrid mutual funds, which offer a balanced mix of equity and debt exposure, suitable for investors seeking moderate risk with potentially higher returns.

Final Thoughts
Regular Portfolio Review
Periodically review your mutual fund portfolio to ensure it remains aligned with your financial goals and risk tolerance, making adjustments as necessary.

Professional Guidance
Consider consulting with a Certified Financial Planner to tailor your mutual fund investment strategy according to your unique financial circumstances and objectives.

By strategically allocating your investments across equity, debt, and hybrid mutual funds, you can work towards achieving your financial goals efficiently.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |7967 Answers  |Ask -

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

Asked by Anonymous - Feb 15, 2025Hindi
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We are a family of three (me + my parents). I am 30 and have no plans on getting married. Will explore spirituality and try to be a social worker after working for 2-3 more years. We have a corpus of Rs. 1.1 cr invested in FDs. The interest generated (Rs. 8,00,000 p.a.) is withdrawn monthly and used for daily expenses. Please tell me - 1. How long can my corpus last if we keep withdrawing the same amount each year? 2. Is there a need to add more money in corpus? 3. How will inflation hurt and play a role?
Ans: Your situation is well-structured, and your financial discipline is impressive. Let’s break down your concerns step by step.

1. How Long Will the Corpus Last?
You have Rs 1.1 crore in fixed deposits (FDs).

Your annual withdrawal is Rs 8 lakh, covering living expenses.

The duration your corpus lasts depends on the FD interest rate and inflation.

If the interest earned matches your withdrawals, the corpus remains intact.

But if expenses rise due to inflation, the corpus may start depleting.

If inflation is higher than your FD interest rate, the corpus will shrink faster.

Over time, this gap can significantly reduce your savings.

Without additional earnings or reinvestment, depletion becomes inevitable.

A detailed cash flow analysis is necessary for exact projections.

2. Is There a Need to Add More Money?
Your current strategy works well for now.

But inflation will increase expenses each year.

FD interest rates may also decline in the future.

A 25-year time frame requires careful planning.

If expenses rise but income stays the same, your corpus may not last.

Having an extra financial buffer is always good.

You may need to add funds over time to sustain withdrawals.

Consider a mix of investment options for better returns.

Balancing risk and stability is key for long-term security.

3. The Role of Inflation
Inflation reduces the value of money over time.

What costs Rs 50,000 today may cost Rs 1 lakh in 15-20 years.

If expenses double, your withdrawals must also double.

But your FDs may not generate enough interest to support this.

Over time, the real value of your corpus declines.

This means either increasing your corpus or reducing expenses.

Investing in assets that beat inflation can help.

A financial plan with regular reviews is necessary.

4. Fixed Deposits – Strengths and Weaknesses
FDs offer stability and guaranteed returns.

But they may not keep up with inflation in the long run.

Tax on FD interest further reduces net earnings.

Interest rates fluctuate and may decline in the future.

Over-reliance on FDs can erode wealth over time.

A diversified investment plan is essential.

5. Alternative Investment Strategies
You can explore better investment options alongside FDs.

Actively managed mutual funds have the potential for higher returns.

Debt mutual funds offer stability with tax efficiency.

Some portion in balanced hybrid funds can manage risk well.

Conservative investment in gold can hedge against inflation.

Having multiple sources of income is always better.

Choosing the right mix of investments is crucial.

6. Steps to Strengthen Financial Security
Review expenses and identify areas for cost-cutting.

Maintain an emergency fund for unexpected needs.

Consider reinvesting some interest earnings to grow the corpus.

Diversify investments instead of relying only on FDs.

Keep track of inflation and adjust withdrawals if needed.

Reassess the financial plan every year.

7. Impact of Taxes on Your Income
FD interest is fully taxable as per your income slab.

High taxation reduces the effective return on FDs.

Some alternative investments offer better tax efficiency.

Choosing tax-efficient options helps preserve more wealth.

8. Planning for Spiritual and Social Work Phase
After 2-3 years of work, your income may stop.

Your corpus must fully support expenses post-retirement.

Ensuring a steady income source is essential.

Passive income streams like dividend-yielding investments can help.

Reducing lifestyle costs can make funds last longer.

Proper financial discipline is crucial for long-term sustainability.

9. Final Insights
Your financial setup is strong, but long-term risks exist.

Inflation, tax impact, and lower FD rates can hurt corpus longevity.

A well-diversified portfolio will offer better security.

Regular financial reviews help in adjusting to changing needs.

Adding funds to your corpus ensures stability for the future.

Prudent planning today ensures a worry-free tomorrow.

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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