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

Nikunj Saraf  | Answer  |Ask -

Mutual Funds Expert - Answered on May 18, 2023

Nikunj Saraf has more than five years of experience in financial markets and offers advice about mutual funds. He is vice president at Choice Wealth, a financial institution that offers broking, insurance, loans and government advisory services. Saraf, who is a member of the Institute Of Chartered Accountants of India, has a strong base in financial markets and wealth management.... more
Norris Question by Norris on Mar 27, 2023Hindi
Listen
Money

Hi Nikunj, I need to save around 1cr for my 8 year & 4 year child education, can you please suggest some good mutual funds. I can do around 65k per month in SIP.

Ans: Hello Norris. I understand your goal is for child education with the time horizon of minimum 4 years. Taking all factors into consideration, I would suggest you invest approximately 1 L monthly in the Large & Midcap, flexicap, Midcap and small cap categories in order to achieve your goal.
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

Hemant

Hemant Bokil  | Answer  |Ask -

Financial Planner - Answered on Feb 05, 2023

Listen
Ramalingam

Ramalingam Kalirajan  |7122 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 04, 2024

Listen
Money
Dear sir which mutual fund children education suitable my children age 8years and 3years .my age 44.Give some mutual fund name Can i invest 01 years in sip?
Ans: Planning for Bright Futures: Choosing Mutual Funds for Your Children's Education
That's fantastic that you're thinking about your children's education so early! With your 8-year-old and 3-year-old, you have a good amount of time to invest and grow a corpus for their future studies. Let's explore some key points to consider:

Choosing the Right Investment:

Long-Term Goal: Your children's education needs are long term (8-15 years for the elder one and 13-18 years for the younger one).

Investment Horizon: Considering their ages, you have a long investment horizon, which allows for potentially higher growth options.

Actively Managed Funds for Growth:

Given your long-term perspective, actively managed funds can be a good option. Here's why:

Outperform the Market: These funds have fund managers who try to pick promising stocks and beat the market average. This has the potential for higher returns compared to passively managed options.
Matching Time Horizon with Risk:

Aggressive Balanced Actively Managed Funds: For your elder child (8 years old, longer time horizon), consider a more aggressive balanced actively managed fund. This offers a mix of equity and debt, with potentially higher growth but also more risk.

Balanced Actively Managed Funds: For your younger child (3 years old, even longer time horizon), a balanced actively managed fund might be suitable. This offers a good balance between growth and stability.

Remember, I can't recommend specific funds. A Certified Financial Planner (CFP) can suggest specific actively managed funds based on your risk tolerance and investment goals.

A Word on Investment Tenure:

While a 1-year SIP is possible, it's generally not recommended for long-term goals. SIP (Systematic Investment Plan) is a great way to invest regularly for long-term goals. Rupee-cost averaging helps you benefit from market ups and downs. Consider a longer SIP tenure to benefit from compounding (earning interest on your interest).

Benefits of a CFP:

A CFP can create a personalized plan for you. They can:

Analyze Your Risk Tolerance: Are you comfortable with potential market fluctuations? A higher risk tolerance allows for potentially higher returns through aggressive investments.

Recommend Investment Mix: A CFP can suggest a suitable mix of actively managed funds based on your risk tolerance and your children's age-specific needs.

Review and Rebalance: Your financial situation and goals might change over time. A CFP will monitor your progress and adjust your plan as needed.

Additional Considerations:

Review Existing Investments: Do you have any existing investments? A CFP can assess their suitability for your children's education goals.

Government Schemes: Explore government schemes like Sukanya Samriddhi Yojana for your daughter's education (if applicable).

Investing in Your Children's Future:

By starting early and planning strategically, you can ensure your children have the resources they need for a bright future. Actively managed funds within a diversified portfolio can be a powerful tool for growth, but remember, they also carry risk. Consulting a CFP can help you navigate your options and make informed investment decisions for your children's education.

Don't wait! Schedule a consultation with a CFP to get started on your child's education planning journey.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |7122 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 24, 2024

Money
Dear Sir, I'm 39 yrs old and having 1year old boy. My goal is to invent in Mutual funds for my kid education and also for my retirement with moderate risk. I'm planning to do SIP of 80k per month until my 50th year. 1)Would you please suggest me suitable Mutual funds with percentage allocation. 2) Also, suggest me whether I can achieve a corpus of 3crores with this SIP amount.
Ans: You’re 39 years old and want to invest Rs 80,000 per month for both your child’s education and your retirement. Your target is to achieve a corpus of Rs 3 crores by the time you’re 50. You also mentioned having a moderate risk tolerance. These are commendable goals, and it’s clear that you’re planning well ahead for your family’s future.

The timeline for both goals is around 11 years, which gives you enough time to benefit from compounding returns. This time horizon also allows you to take on moderate risk while aiming for growth-oriented investments. Below, I’ll provide a detailed strategy based on your objectives.

Evaluating Your Investment Strategy
You plan to invest Rs 80,000 monthly in SIPs for the next 11 years. This approach is excellent as SIPs offer the benefit of rupee-cost averaging. However, the success of your plan will depend on the type of funds you choose and how well you allocate your portfolio.

With moderate risk, you should aim for a balanced allocation between equity and debt funds to optimize returns while minimizing volatility.

Suggested Allocation Based on Moderate Risk
Given your moderate risk profile, a balanced portfolio is crucial. I recommend splitting your monthly SIP into three main categories: equity, debt, and hybrid funds. Here’s how you can allocate the Rs 80,000:

Equity Funds (50-60%): Around Rs 40,000 to Rs 48,000 per month should go into equity mutual funds. These funds are known to deliver higher returns over the long term but come with short-term volatility. Within equities, diversify across large-cap, mid-cap, and multi-cap funds. Large-cap funds offer more stability, while mid-caps and multi-caps provide growth potential.

Debt Funds (20-30%): Rs 16,000 to Rs 24,000 per month can be invested in debt funds. These provide stability and reduce overall portfolio volatility. Since your goal is long-term, you can choose long-duration debt funds or dynamic bond funds.

Hybrid Funds (10-20%): Rs 8,000 to Rs 16,000 per month can go into hybrid funds, which blend both equity and debt. These funds are suitable for moderate-risk investors, as they provide a balance between growth and stability.

Why Actively Managed Funds are Better than Index Funds
You didn’t mention any preference for index funds, but it’s important to note that for your goal of achieving a corpus of Rs 3 crores, actively managed funds can be a better option.

Active Management: Actively managed funds have the potential to outperform index funds, especially in emerging markets like India. Fund managers use their expertise to adjust the portfolio based on market conditions, aiming for higher returns.

Moderate Risk: Given your moderate risk appetite, actively managed funds are better suited as they offer the flexibility to rebalance between equity and debt, which is not possible with index funds.

Growth Potential: While index funds aim to replicate market performance, actively managed funds can exploit market inefficiencies to generate higher returns.

Direct vs. Regular Funds
You may also come across the option of investing directly in mutual funds, but I recommend sticking with regular funds and investing through a Certified Financial Planner (CFP). Here’s why:

Professional Guidance: A CFP can provide tailored advice based on your financial goals and risk tolerance. They also help you navigate market changes and adjust your portfolio accordingly.

Regular Monitoring: Direct funds require constant attention, whereas regular funds through a CFP offer active management. This reduces the stress of having to monitor your portfolio regularly.

Cost Efficiency: Although direct funds have lower expense ratios, the value added by a CFP in terms of expert advice often outweighs the cost difference.

Can You Achieve Rs 3 Crores by Age 50?
Let’s assess whether your SIP of Rs 80,000 per month can realistically grow to Rs 3 crores in 11 years. While I won’t use exact formulas, we can estimate potential outcomes based on historical market performance and a balanced portfolio.

Equity Funds: Historically, equity mutual funds in India have delivered returns ranging from 10-12% annually. Given your moderate risk profile, you can expect an average return of around 10% from the equity portion of your portfolio.

Debt Funds: Debt funds typically offer more conservative returns, around 6-8% per year. However, they stabilize your portfolio and reduce overall risk.

Hybrid Funds: Hybrid funds, with their blend of equity and debt, may offer returns in the range of 8-9%.

With an estimated average portfolio return of around 9%, your SIP of Rs 80,000 per month over 11 years could potentially help you reach or exceed your Rs 3 crore goal. However, keep in mind that market conditions and fund performance can fluctuate.

Adjusting for Inflation
While Rs 3 crores seems like a solid goal today, inflation could erode its purchasing power in the future. The cost of education and retirement expenses will likely increase over time. Therefore, it’s essential to periodically review your financial plan and adjust your SIP amounts or goals based on inflation and life changes.

Tracking and Monitoring Your Investments
To ensure that you remain on track to achieve your Rs 3 crore target, regular monitoring is essential. Here are some steps to help:

Annual Review: Conduct a yearly review of your portfolio to ensure it aligns with your goals. If the market performs exceptionally well, consider increasing your SIP amount to capitalize on growth.

Rebalancing: As you get closer to your goal, you may want to reduce exposure to high-risk assets like equities and increase allocation to safer debt instruments.

Certified Financial Planner (CFP) Support: Working with a CFP will help you make informed decisions and keep your investments aligned with your changing needs.

Additional Considerations for Your Child’s Education
Since one of your goals is your child’s education, I recommend setting aside a portion of your corpus specifically for that purpose. This way, you won’t have to dip into your retirement savings.

Targeted Education Fund: You can create a separate investment plan dedicated to your child’s education. Start by estimating the future cost of education and allocating a specific portion of your Rs 80,000 SIP towards this goal.

Diversified Approach: A balanced mix of equity, debt, and hybrid funds will still apply, but you may want to lean more towards stability as your child grows older.

Final Insights
Your approach to investing Rs 80,000 per month in SIPs for 11 years is well-structured and shows your commitment to securing a financial future for both your child’s education and your retirement. By choosing a balanced portfolio of equity, debt, and hybrid funds, you can achieve moderate risk and still aim for strong growth.

You’re on the right path to potentially achieving your Rs 3 crore goal, especially with a focus on actively managed funds. Regular monitoring and adjustments, along with the guidance of a Certified Financial Planner, will further increase your chances of success.

Best Regards,
K. Ramalingam, MBA, CFP

Chief Financial Planner

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

..Read more

Latest Questions
Nayagam P

Nayagam P P  |3921 Answers  |Ask -

Career Counsellor - Answered on Nov 25, 2024

Asked by Anonymous - Nov 25, 2024Hindi
Career
My daughter is in 10 th class Maharashtra board She wants to do carrier in mathematics or economics what are the ways for further education
Ans: Your daughter is interested in pursuing a career in Mathematics or Economics, which offer exciting opportunities and a variety of educational pathways. She can choose from the Science Stream (Mathematics Focus) or the Commerce Stream (Economics Focus), depending on her interests and aptitude.

An option for her is to choose Science with Mathematics in 11th and 12th grade, which will provide a strong foundation in math. After completing 12th Science with Mathematics, she can pursue a Bachelor's Degree in Mathematics, such as B.Sc. in Mathematics, B.Tech or B.E. (Engineering), or a B.Tech in Computer Science, Information Technology, or Electronics.

Postgraduate courses in Mathematics can lead to M.Sc. in Mathematics or Applied Mathematics, or M.Tech in Data Science or Computer Science. Other career paths in Mathematics include Actuarial Science, Data Science/Analytics, and pure mathematics/research.

In Economics, she can pursue Commerce with Economics in 11th and 12th grade, followed by a Bachelor's Degree in Economics, a Master of Arts in Economics, or a Master of Science in Economics. Specialized courses in Economics include Econometrics, Public Policy, Finance, and International Organizations/NGOs.

Joint careers in Mathematics and Economics can be pursued through integrated programs like B.A./B.Sc. in Mathematics and Economics, or Actuarial Science/Financial Mathematics. Entrance exams and competitive exams may be required for each path.

Pursuing Mathematics through the Science stream is an excellent path for your daughter, while Economics through the Commerce stream is ideal for those interested in understanding economies and global trends. All the BEST for Your Daughter's Prosperous Future.

To know more on ‘ Careers | Education | Jobs’, ask / follow Us here in RediffGURUS.

...Read more

Ramalingam

Ramalingam Kalirajan  |7122 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 25, 2024

Asked by Anonymous - Nov 22, 2024Hindi
Money
I am 32 years of age I have a corpus of 40 lakhs including mutual funds,stocks,pf,insurance.I invest 65000 in sip every month with 84% in equity, 6% in hybrid and 10% in debt funds as of now with 58% in large cap,27% in mid cap and 15 % in small cap with an xirr of 17.2%. how much will my corpus grow in next 20-30 years ?
Ans: Your financial journey so far is impressive. At 32 years, a corpus of Rs. 40 lakhs reflects good planning. Your SIP of Rs. 65,000 per month and asset allocation indicate strong discipline and understanding of investments.

Your current XIRR of 17.2% is exceptional, suggesting an effective fund selection. Maintaining this momentum will help you build substantial wealth.

Growth Potential Over the Next 20-30 Years
Power of Compounding

Compounding over 20-30 years can multiply wealth significantly.
Your disciplined SIP approach amplifies this effect.
Corpus Growth Projections

If your XIRR sustains near 17%, your corpus can grow exponentially.
Over 20 years, it may cross Rs. 10-12 crores.
In 30 years, this could grow beyond Rs. 30-40 crores.
Consideration for Realistic Returns

Sustaining 17% XIRR may be optimistic in the long term.
A realistic expectation of 12-15% still ensures significant growth.
Factors Influencing Your Future Corpus
Market Volatility

Equity-heavy portfolios are prone to short-term fluctuations.
Maintain your long-term perspective to overcome these.
Asset Allocation Discipline

Your 84% equity allocation is ideal for long-term goals.
Rebalance annually to maintain this allocation.
Economic Growth and Inflation

India's economic growth supports equity performance.
High inflation demands better returns to preserve purchasing power.
SIP Increments

Increasing SIP annually can enhance corpus growth.
A 10% increment every year could add several crores.
Importance of Diversification
Large, Mid, and Small-Cap Allocation

Your 58% large-cap, 27% mid-cap, and 15% small-cap allocation is balanced.
This mix ensures stability and growth potential.
Hybrid and Debt Funds Role

Your 10% debt allocation cushions against market volatility.
Hybrid funds offer consistent returns with lower risk.
Tax Efficiency in Long-Term Investments
Equity Fund Taxation

Long-term capital gains above Rs. 1.25 lakh are taxed at 12.5%.
Factor this in when planning withdrawals.
Debt Fund Taxation

Gains are taxed as per your income slab.
Plan asset allocation changes with tax efficiency in mind.
Enhancing Your Strategy
Emergency Fund

Maintain 6-12 months of expenses in liquid or ultra-short-term funds.
Insurance Review

Ensure adequate term insurance and health insurance coverage.
Goal-Based Investing

Align specific investments to defined goals like retirement or children's education.
Periodic Review

Review fund performance and portfolio allocation annually.
Replace underperforming funds if needed.
Final Insights
Your current portfolio and discipline promise exceptional long-term results. Continue SIPs, periodically increase investments, and review portfolio performance. A realistic approach with a focus on equity can help you achieve remarkable financial milestones over 20-30 years.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7122 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 25, 2024

Money
Hi my name is Mani and aged 36 i am drawing a monthly salary of 3.5lakhs. Below are my investments. I want to achieve around 10Cr by 50. Current MF potfolio:50L Shares/ETF: 10L PF: 39L US ESOP: 1.2 Crore Monthly SIP: 1.65Lkhs 2 houses: 95L & 60L I can invest upto 2.5-3lakhs montly. Closed all my loans.
Ans: Your current investments reflect excellent financial discipline and planning. With your income and ability to invest Rs 2.5-3 lakhs monthly, you are in a strong position to achieve your target of Rs 10 crore by 50. However, optimising your portfolio is crucial for achieving this milestone efficiently. Here's an in-depth assessment and strategy to guide you.

Assessment of Current Investments
Mutual Fund Portfolio: Rs 50 Lakh
This portfolio forms a significant part of your wealth.
Equity mutual funds can offer long-term growth.
Regular reviews and diversification will enhance returns.
Shares and ETFs: Rs 10 Lakh
Direct equity and ETFs require active monitoring.
ETFs have limitations, like tracking errors and passive management.
Disadvantages of ETFs:

Lack of flexibility to outperform benchmarks.
Returns are limited to market indices, missing active management benefits.
Provident Fund: Rs 39 Lakh
PF is a safe, tax-efficient retirement tool.
Growth is limited compared to equity investments.
US ESOP: Rs 1.2 Crore
ESOPs provide substantial value, but currency and company risks exist.
Diversification is essential to reduce concentrated risk.
Monthly SIPs: Rs 1.65 Lakh
A high monthly SIP reflects your commitment to wealth creation.
Fund selection and risk balance will determine growth.
Real Estate: Rs 95 Lakh and Rs 60 Lakh
While real estate offers stability, liquidity issues can be a challenge.
Rental income should align with market returns to remain beneficial.
Strategy to Achieve Rs 10 Crore by 50
1. Optimise Mutual Fund Investments
Increase allocation to actively managed equity funds.
Diversify into large-cap, mid-cap, and hybrid funds for balanced growth.
Review the portfolio with a Certified Financial Planner every year.
2. Enhance Monthly SIP Contributions
Increase SIPs to Rs 2.5-3 lakh, matching your investment capacity.
Prioritise equity mutual funds for better compounding over 14 years.
Allocate a small portion to debt funds for stability.
3. Reevaluate Direct Equity and ETFs
Limit ETFs due to their passive nature and tracking errors.
Focus on direct equity only if you have time for active monitoring.
Otherwise, shift to professionally managed equity funds.
4. Diversify US ESOP Holdings
Reduce dependency on your company’s ESOPs.
Gradually liquidate and reinvest in Indian equity and international mutual funds.
Diversification will safeguard against market volatility and currency risks.
5. Leverage Provident Fund Efficiently
PF will act as a stable component of your retirement corpus.
Do not withdraw unless essential.
6. Address Real Estate Investments
Analyse the rental yield and growth potential of your properties.
If returns are below expectations, consider selling one property.
Reinvest proceeds in mutual funds for higher returns and liquidity.
Tax Efficiency and New Rules
Equity Mutual Funds
Long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%.
Short-term capital gains (STCG) are taxed at 20%.
Plan withdrawals strategically to reduce tax liability.
Debt Funds
Gains are taxed as per your income slab.
Use systematic withdrawal plans for efficient taxation.
ESOPs and Real Estate
ESOPs will attract capital gains tax upon sale.
Real estate gains are taxed under capital gains rules.
Invest gains from property sales into mutual funds to save on taxes.
Additional Recommendations
1. Adequate Life and Health Insurance
Ensure you have term insurance covering at least 10 times your annual income.
Maintain comprehensive health insurance for your family.
2. Emergency Fund
Keep six months’ expenses in a liquid fund or savings account.
This ensures liquidity during unforeseen circumstances.
3. Monitor and Rebalance Portfolio
Regularly review asset allocation with a Certified Financial Planner.
Adjust based on market conditions and financial milestones.
Final Insights
You are on the right track with your disciplined investing approach. To ensure you reach Rs 10 crore by 50, optimise your investments, enhance tax efficiency, and diversify risks. Focus on actively managed funds, reduce dependence on real estate, and leverage your high savings potential. Regular monitoring and strategic decisions will make your goal achievable.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7122 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 25, 2024

Asked by Anonymous - Nov 22, 2024Hindi
Money
Hello Ramalingam Ji, I am 44 years old, working in IT and live in Bengaluru. I am unmarried at this moment. I live in a rented house. Here are my investments breakups - 1.45 Cr in Equity Shares, 5 Lakhs in MF, 27 Lakhs in PPF, 20 Lakhs in EPF, 7 Lakhs in NPS, and 14 Lakhs in FD as an Emergency Fund. I have a health insurance of 30L apart from the office provided one. My monthly in hand salary about 2.2 Lakhs. And my monthly expenses including rent, insurances, sports/gym subscription, food and others comes about 75 - 80 Thousands a month. I invest 1.1 Lakhs in equity shares, 18 Thousands in RDs to meet my certain onetime expenditures in a years such as insurances, internet payments etc. I do not have any loans. How do you think I should go about so I could purchase a house/flat as well as have enough investments using which I could live comfortably. I also want to know if at all possible to retire by 50 or 55 years? will it even makes sense purchasing a house/flat since I have no one after me. Thanking you in advanced.
Ans: You are in a strong financial position. You have diverse investments and stable income. Your disciplined approach reflects a clear financial vision.

This response provides detailed insights into buying a house, early retirement, and optimising your investments.

Understanding Your Current Financial Health
1. Investments and Emergency Funds

Rs 1.45 crore in equity is a significant achievement.

Your Rs 14 lakh emergency fund is well-planned. It ensures liquidity during emergencies.

 

2. Monthly Income and Expenses

You save and invest a substantial portion of your Rs 2.2 lakh monthly salary.

Expenses are well-balanced, leaving you with Rs 1.1 lakh for investments.

 

3. Health Insurance Coverage

You have Rs 30 lakh health insurance, which safeguards against medical emergencies.

Office-provided insurance adds additional security.

House Purchase Consideration
1. Evaluate the Need for a House

A house is not necessary unless it enhances your quality of life.

With no dependents, consider renting for flexibility.

 

2. Financial Implications of Buying a House

Buying a house requires a long-term financial commitment.

EMIs will reduce your ability to save and invest aggressively.

 

3. Alternative Options

Continue renting if the cost is reasonable and suits your lifestyle.

Investing the funds earmarked for a house can yield better returns over time.

Early Retirement by 50 or 55
1. Analyse Monthly Expenses Post-Retirement

Estimate future monthly expenses, considering inflation.

Rs 75,000 today could become Rs 1.5 lakh in 15 years.

 

2. Calculate the Required Corpus

To withdraw Rs 1.5 lakh monthly, you need Rs 4.5 crore.

This corpus ensures financial independence throughout retirement.

 

3. Utilise Current Investments for Growth

Your investments in equity, MF, PPF, EPF, and NPS must compound consistently.

Diversify your portfolio to balance growth and stability.

Investment Optimisation
1. Focus on Equity Mutual Funds

Increase your MF investments for long-term growth.

Actively managed funds offer higher returns compared to index funds.

 

2. Avoid Direct Mutual Funds

Direct funds lack professional guidance and may lead to errors.

Regular funds through a Certified Financial Planner ensure optimised returns.

 

3. Maximise NPS Contributions

NPS provides additional tax benefits under Section 80CCD(1B).

It supports your retirement corpus with equity exposure and lower risk.

 

4. Reassess Fixed Deposits

Rs 14 lakh in FDs offers safety but lower returns.

Shift a portion to debt funds or balanced funds for better inflation protection.

Emergency Fund and Risk Management
1. Maintain Adequate Liquidity

Keep six months' expenses in liquid investments like FDs or short-term funds.

This ensures quick access to funds during emergencies.

 

2. Evaluate Insurance Adequacy

Your current health cover of Rs 30 lakh is sufficient.

Ensure critical illness or personal accident cover if not already included.

Retirement Income Planning
1. Generate Passive Income

Explore dividend-paying funds for steady income during retirement.

Consider systematic withdrawal plans (SWPs) post-retirement for tax efficiency.

 

2. Ladder Your Investments

Align investments to meet milestones like early retirement and healthcare needs.

Staggered withdrawals reduce risks during market downturns.

Tax Planning
1. Optimise Tax Benefits

Maximise contributions to tax-saving instruments like PPF and NPS.

Consider tax-efficient mutual fund categories to reduce liability.

 

2. Understand Capital Gains Taxation

Equity mutual funds' LTCG above Rs 1.25 lakh is taxed at 12.5%.

Short-term gains attract 20% tax, so plan redemptions wisely.

Final Insights
Early retirement and comfortable living are achievable for you. Focus on growing your corpus with equity and balanced investments. Renting a house is practical if buying doesn't align with your goals. Work with a Certified Financial Planner to optimise your investments and ensure a secure financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |7122 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 25, 2024

Listen
Money
Hello Sir, I want to invest 5k per month in mutuals fund. Am targeting 15acs in next 16years. Can you pls suggest me good fund?
Ans: Investing Rs. 5,000 per month for 16 years to achieve Rs. 15 lakhs is a commendable goal. A systematic investment plan (SIP) in mutual funds can help achieve this. Your focus should be on selecting funds that align with your risk appetite and long-term horizon.

Understanding Your Target
Your target is Rs. 15 lakhs in 16 years.
This requires consistent returns from equity mutual funds.
Equity funds are ideal for long-term goals due to their growth potential.
Investment Strategy
Focus on Equity-Dominated Funds

Equity funds have the potential for higher long-term growth.
Diversify across large-cap, flexi-cap, and mid-cap funds.
Actively Managed Funds Preferred

Actively managed funds outperform index funds over long durations.
A good fund manager can provide better returns than passive funds.
Avoid Direct Funds

Investing through a Certified Financial Planner ensures professional advice.
Regular funds with guidance offer better portfolio tracking and rebalancing.
Monitor and Review Regularly

Review your investments yearly to stay aligned with your goal.
Make changes based on performance and market conditions.
Suggested Fund Categories
Large-Cap Funds

These funds provide stability and moderate growth.
They invest in well-established companies with strong performance records.
Flexi-Cap Funds

These funds invest across large, mid, and small-cap companies.
They offer flexibility and diversification.
Mid-Cap Funds

Mid-cap funds offer higher growth potential but come with moderate risk.
Suitable for long-term wealth creation.
Hybrid Funds

These funds balance equity and debt exposure.
They provide moderate risk with consistent returns.
Tax Considerations
Equity Fund Taxation

Long-term capital gains above Rs. 1.25 lakh are taxed at 12.5%.
Short-term capital gains are taxed at 20%.
Tax-Efficient Withdrawals

Plan withdrawals strategically to minimise tax liability.
Hold funds for the long term to benefit from favourable tax rates.
Other Recommendations
Build an Emergency Fund

Set aside at least six months’ expenses in a liquid fund.
This provides financial security during emergencies.
Stay Invested for the Entire Duration

Equity investments need time to grow and overcome volatility.
Avoid premature withdrawals to maximise returns.
Disciplined Investing

Continue SIPs without interruption to achieve your goal.
Market fluctuations should not deter your commitment.
Final Insights
With disciplined investing and the right fund selection, achieving Rs. 15 lakhs in 16 years is possible. Focus on equity funds for long-term growth and consult a Certified Financial Planner for professional 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.

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