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Ramalingam Kalirajan |9126 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on May 09, 2024

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 - Apr 30, 2024Hindi

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I have net earings 40000 per month what should be my ideal stepup SIP amount and target minimum corpus or the time period of 20 years for my two childs education (both below 3 year).. being a aggressive investor currently investing in MIREA ELSS(500), Quant small(1000),Parag Flexi(1000),motilal midcap(500),hdfc BAF(100). And PPF 5000 per year. Please guide.

Ans: As a Certified Financial Planner, I appreciate your proactive approach towards planning for your children's education. With a monthly net earnings of 40,000 rupees and an aggressive investment stance, you're on the right track.
Considering your current investments and financial goals, here's a suggested approach:
1. Review and Adjust Current Investments: Your current portfolio consists of ELSS, small-cap, flexi-cap, mid-cap, and balanced advantage funds, along with PPF contributions. While this reflects an aggressive strategy, it's essential to periodically review the performance of these funds and make adjustments if necessary to ensure they align with your goals.
2. Calculate Required Corpus: Determine the estimated cost of education for both children, factoring in inflation and the type of education you aspire for them. This will help you set a realistic target corpus to aim for.
3. Set Up Step-Up SIPs: Since your children are below 3 years old, you have a relatively long investment horizon of 20 years. A step-up SIP allows you to gradually increase your SIP amount over time, aligning with your increasing income and inflation. Work with a Certified Financial Planner to calculate the ideal step-up SIP amount based on your target corpus and investment horizon.
4. Stay Consistent and Disciplined: Consistency is key to achieving your investment goals. Continue investing regularly and stay disciplined even during market fluctuations. Avoid the temptation to withdraw or stop your SIPs prematurely.
5. Emergency Fund and Contingency Planning: Ensure you have an emergency fund equivalent to at least 6-12 months of living expenses in a liquid and accessible account to cover unexpected expenses. Additionally, consider incorporating contingency planning into your financial strategy to mitigate any unforeseen risks.
6. Regular Reviews: Periodically review your investment portfolio and financial goals with your Certified Financial Planner. Adjust your strategy as needed based on changes in your financial situation, market conditions, and investment objectives.
By following these steps and working closely with a Certified Financial Planner, you can build a robust financial plan to ensure your children's education needs are met without compromising your long-term financial security.

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

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