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Ramalingam

Ramalingam Kalirajan  |959 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 15, 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 15, 2024Hindi
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I will retire in 3 years with a pension of 1L. I want to set up 2 SWPs with one 1Cr, 50L in each to support my son throughout his life. He is an art critic and may not be getting regular income. Can I have HDFC BAF and SBI long term equity fund ?

Ans: The funds you've chosen, HDFC Balanced Advantage Fund (HDFC BAF) and SBI Long Term Equity Fund, can be a good starting point for your son's situation, but there are a few things to consider:

Diversification within your chosen options:

Both HDFC BAF and SBI Long Term Equity Fund invest in equities, though HDFC BAF also has a debt component. This means they are both susceptible to stock market fluctuations. While SBI Long Term Equity Fund aims for long-term growth, there can still be volatility in the short term.
Considering your son's situation:

Art critic income: Since your son's income may be irregular, having some stability in the SWP (Systematic Withdrawal Plan) could be beneficial. HDFC BAF with its debt component might offer a more stable withdrawal compared to SBI Long Term Equity Fund which is purely equity based.
Alternatives for diversification:

Debt funds: To provide more stability, consider adding a debt fund to the mix. This would lower the overall risk profile of the portfolio.
Hybrid funds: You could explore other balanced advantage funds or aggressive hybrid funds that offer a mix of equity and debt with a growth bias.
Here's a recommendation to consider:

1 SWP from HDFC BAF: This can provide some stability with the debt component.
1 SWP from a Debt Fund: This would provide a more regular income stream. You can choose a short or medium-term debt fund based on your son's risk appetite and how soon he might need the money.
Remember:

This is a general recommendation, and it's always best to consult a financial advisor for personalized advice considering your son's risk tolerance, financial goals, and investment timeline.
An advisor can help you with the asset allocation between the chosen funds and tailor the SWP amounts based on your son's needs.
Here are some resources that can help you do further research:

Balanced Advantage Funds: https://www.etmoney.com/mutual-funds/hybrid/dynamic-asset-allocation/74
Debt Funds: https://www.investopedia.com/terms/d/debtfund.asp
SWP in Mutual Funds: https://www.investopedia.com/articles/retirement/09/systematic-withdrawal-plan-work-for-you.asp
Asked on - Apr 15, 2024 | Answered on Apr 15, 2024
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Thank you so much for the reply and the concern. In addition HDFC BAF, can i choose ICICI prudential equity and debt fund or a pure debt fund ?
Ans: While I can't provide specific investment advice, I can offer some general guidance and resources to help you make informed decisions.

Here's why it's not advisable to recommend specific schemes in an online forum:

Individual circumstances: Your investment goals, risk tolerance, and financial situation all influence suitable investment choices. What works for one person might not be ideal for you.
Scheme details: Mutual fund schemes can change their investment strategies over time. Up-to-date information is crucial for informed decisions, and some details might not be readily available in a forum setting.
What can I do to help?

Consider your investment goals: Are you looking for capital appreciation (growth), regular income (debt funds), or a balance of both (hybrid funds)?
Assess your risk tolerance: How much fluctuation in your investment value are you comfortable with? Equity funds tend to be more volatile than debt funds.
Research potential mutual funds: Look at the fund's fact sheet, investment objective, expense ratio, past performance (remember past performance is not a guarantee of future results), and the reputation of the fund house.
Consult an AMFI regn Mutual Fund Distributor. They can consider your specific needs and recommend suitable investment options based on your risk profile and goals.

By following these steps, you'll be well on your way to making informed investment decisions based on your own needs and circumstances.
Asked on - Apr 16, 2024 | Answered on Apr 16, 2024
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Thank you so much
Ans: Welcome :)
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  |959 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 29, 2024

Asked by Anonymous - Apr 29, 2024Hindi
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I retired earlier now at 53. Invested 7L in ELSS and using 60L on short term equity trading (with monthly average gain 2L) and having own apartment home worth 40L. Having dependent widowed mother, wife with 13 yrs old daughter. Intended to raise daughter as doctor. Please suggest better investment options.
Ans: Congratulations on your early retirement! It sounds like you've made some good initial decisions, but there's definitely room for improvement to secure your family's future, especially considering your dependents. Here's how you can optimize your investments:

Reduce Risk in Short-Term Equity Trading:

While a ?2 lakh monthly gain from short-term trading sounds impressive, it's a very risky strategy. The market can be volatile, and these gains may not be sustainable. Consider allocating a much smaller portion (maybe 10-20%) to short-term trading and focus on more stable options for the majority of your investable assets (?60 lakh currently in trading).
Focus on Long-Term Growth and Stability:

Increase Investment in ELSS: ?7 lakh is a good start, but for your daughter's education and your retirement needs, you'll likely need a much larger corpus. Consider increasing your SIP amount in ELSS or similar diversified equity mutual funds with a long-term horizon (10+ years).
Explore Debt Options for Regular Income:

You mentioned having a dependent mother and daughter's education to plan for. Consider investing a portion (maybe 20-30%) of your investable amount in safer debt options like Public Provident Fund (PPF), Senior Citizen Savings Scheme (SCSS) for your mother (if she's above 60), or fixed deposits to generate a regular income stream.
Plan for Daughter's Education:

Doctorate studies can be expensive. Start an SIP in a dedicated child education plan or invest in aggressive equity funds specifically for this goal. Talk to a Certfied Financial Planner for personalized recommendations based on the estimated cost of medical education.
Utilize Your Apartment:

While your apartment fulfills your housing needs, consider if it could generate additional income. Explore options like renting a room if feasible.
Seek Professional Guidance:

Given your multiple financial goals and risk tolerance, consulting a Certified Financial Planner (CFP) can be highly beneficial. They can create a personalized investment plan considering your risk appetite, time horizon, and financial goals.
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Ramalingam

Ramalingam Kalirajan  |959 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 29, 2024

Asked by Anonymous - Apr 29, 2024Hindi
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Dear Sir My age is 34 yrs. I have working alredy 10 yrs and my average total income till date 40L minimum. Still I did not save 1rs till now. Request you please advice how to start savings also make future retirement plan. My expected retirement age is 55yrs.
Ans: It's never too late to start saving for retirement, and kudos to you for taking this important step at 34! Here's how to get on track:

1. Assess your situation:

Track your expenses: For a month, track where your money goes. This will help identify areas to cut back and free up savings.
Emergency fund: Aim for 3-6 months of living expenses in an easily accessible savings account for emergencies.
2. Start saving:

Automated savings: Set up a Systematic Investment Plan (SIP) in a mutual fund. Start small, even with ?1,000 per month, and gradually increase as you get comfortable.
3. Retirement plan:

Employer benefits: Check if your employer offers a retirement plan like a Provident Fund (PF). Contribute the maximum allowed for tax benefits and long-term savings.
Individual options: Explore options like National Pension System (NPS) or Equity Linked Savings Schemes (ELSS) for long-term growth. Talk to a Registered Investment Advisor (RIA) for personalized advice based on your risk tolerance and goals.
Here's a breakdown based on your income:

You mentioned an average annual income of ?40 lakhs. Aim to save at least 10-15% of your income, which translates to ?4,000-?6,000 per month.
Remember: Consistency is key! Starting early, even with a small amount, allows time for your savings to grow through the power of compounding. Don't be discouraged if you can't save a lot initially. Every little bit counts!
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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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