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Ramalingam

Ramalingam Kalirajan  |9403 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 01, 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
Jagannath Question by Jagannath on Jul 01, 2024Hindi
Money

Hi sir I am a retired person aging 65 getting a pension of 55 k. I don't have retired money which I spent on my son and daughters. I can invest 25k per month. Please advise me to build a reasonable capital within 15 years

Ans: It’s wonderful that you’re thinking about building a reasonable capital at this stage. At 65, and receiving a pension of Rs. 55,000, you have a solid base. Being able to invest Rs. 25,000 per month is commendable. Let's explore how mutual funds can help you grow your wealth over the next 15 years.

Understanding Your Financial Situation
You’ve done a lot for your children, and that’s truly commendable. Now, it’s time to focus on securing your financial future. With your monthly pension and the ability to invest Rs. 25,000 per month, you’re in a good position to build a substantial corpus.

The Power of Mutual Funds
Mutual funds are an excellent way to grow your money. They offer diversification, professional management, and flexibility, making them a suitable option for your needs.

Benefits of Investing in Mutual Funds
1. Diversification

Mutual funds spread your investments across different assets. This reduces risk as it’s unlikely all assets will perform poorly simultaneously.

2. Professional Management

Expert fund managers handle mutual funds. They use their knowledge and experience to make informed investment decisions.

3. Flexibility

There are various types of mutual funds to suit different goals. Whether you seek growth, income, or capital preservation, there’s a fund for you.

4. Liquidity

Mutual funds are easy to buy and sell. You can access your money when needed, providing flexibility and security.

Types of Mutual Funds
1. Equity Funds

These invest in stocks. They offer high returns but come with higher risk. Suitable for long-term growth if you can tolerate market fluctuations.

2. Debt Funds

These invest in bonds and other fixed-income securities. They provide regular income with lower risk, ideal for conservative investors.

3. Hybrid Funds

These invest in a mix of equity and debt. They balance risk and return, making them suitable for moderate risk-takers.

Building a Balanced Portfolio
A balanced portfolio is crucial to manage risk and ensure steady growth. Here’s a suggested approach:

1. Core Portfolio with Debt Funds

Allocate a significant portion to debt funds. They provide stability and regular income, reducing overall portfolio risk.

2. Growth Portfolio with Equity Funds

Invest a portion in equity funds for potential high returns. This helps in growing your wealth over time.

3. Balanced Portfolio with Hybrid Funds

Include hybrid funds to balance risk and return. They offer growth with some level of safety.

Systematic Investment Plan (SIP)
Investing through a Systematic Investment Plan (SIP) is an effective way to build wealth over time. Here’s why:

1. Regular Investments

SIP ensures regular investments. It helps in averaging out market fluctuations, reducing the impact of volatility.

2. Discipline

SIP instills financial discipline. You invest a fixed amount regularly, which helps in building a substantial corpus over time.

3. Flexibility

SIP offers flexibility. You can start with a small amount and increase it as your financial situation improves.

Evaluating Your Risk Tolerance
At 65, it’s important to assess your risk tolerance. Here’s how different risk profiles align with mutual fund investments:

1. Conservative Investor

If you prefer low risk, focus on debt funds. They provide steady income with lower risk, ensuring capital preservation.

2. Balanced Investor

If you can tolerate moderate risk, hybrid funds are suitable. They balance growth and income, offering a mix of safety and returns.

3. Aggressive Investor

If you have a higher risk tolerance, consider equity funds. They offer substantial growth but come with higher risk.

Regular Monitoring and Review
Investing is not a one-time activity. Regular monitoring and periodic reviews are essential to ensure your investments are on track.

1. Performance Review

Track the performance of your funds regularly. Ensure they are meeting your expectations and financial goals.

2. Rebalancing

Rebalance your portfolio periodically. Adjust the allocation between equity and debt based on market conditions and your goals.

3. Stay Updated

Stay informed about market trends and economic changes. This helps in making informed decisions.

Benefits of Investing Through a CFP
1. Personalized Advice

A Certified Financial Planner (CFP) provides tailored advice based on your financial situation and goals. They help in choosing the right funds and strategies.

2. Ongoing Support

A CFP offers continuous support and advice. They help in monitoring your portfolio and making necessary adjustments.

3. Peace of Mind

With a CFP, you can be assured that your investments are in expert hands. This gives you peace of mind and reduces stress.

Disadvantages of Index Funds and Direct Funds
1. Index Funds

Index funds replicate the performance of a market index. They offer lower returns compared to actively managed funds. They lack flexibility in managing market changes.

2. Direct Funds

Direct funds bypass intermediaries but lack professional guidance. Without expert advice, you might miss out on optimal investment strategies.

Actively Managed Funds Through MFD with CFP
Actively managed funds aim to outperform the market. Fund managers make strategic decisions to maximize returns. Investing through an MFD with CFP credentials ensures you get professional advice and support.

Creating a Retirement Corpus
Building a retirement corpus is crucial. Here’s a simple approach:

1. Define Your Goals

Determine how much you need for retirement. Consider your lifestyle, healthcare, and other expenses.

2. Choose the Right Funds

Based on your risk tolerance, choose a mix of equity, debt, and hybrid funds. A CFP can help in selecting the right ones.

3. Systematic Investment Plan (SIP)

Investing through SIPs ensures regular investments. It helps in averaging out market fluctuations and building a corpus over time.

Emergency Fund
Having an emergency fund is essential. It provides a financial cushion during unexpected events.

1. Debt Funds for Emergency Fund

Debt funds are ideal for an emergency fund. They provide liquidity and stability. You can access your money quickly when needed.

2. Regular Contributions

Contribute regularly to your emergency fund. Ensure it covers at least 6-12 months of your living expenses.

Tax Planning
Mutual funds can also help in tax planning. Here’s how:

1. Tax Saving Funds

Invest in tax-saving funds to avail benefits under Section 80C. They help in reducing your taxable income.

2. Capital Gains

Understand the tax implications of capital gains. Long-term and short-term gains are taxed differently.

3. Dividends

Dividends from mutual funds are taxable. Plan your investments considering the tax implications.

Estate Planning
Planning for the future is important. Ensure your investments are aligned with your estate planning goals.

1. Nomination

Nominate beneficiaries for your mutual funds. This ensures your loved ones receive the benefits smoothly.

2. Will

Include your mutual fund investments in your will. This ensures your assets are distributed as per your wishes.

Final Insights
Investing in mutual funds is a smart way to secure your financial future. They offer diversification, professional management, and flexibility. At 65, focusing on a balanced portfolio is crucial.

Choose funds based on your risk tolerance and financial goals. Regularly monitor and review your investments. A Certified Financial Planner can guide you through the process and provide personalized advice.

Remember, the key to successful investing is staying informed and making informed decisions. Best of luck with your investment journey!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
Asked on - Jul 01, 2024 | Answered on Jul 01, 2024
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Sir thank you for your prompt unbiased reply
Ans: You're welcome! If you have any more questions or need further assistance, feel free to ask. Best wishes on your financial journey!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
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  |9403 Answers  |Ask -

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

Asked by Anonymous - Feb 28, 2024Hindi
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Money
Hi ..I am 34 year old married..my monthly income is 80k now as I am in government service. I have invested already 2lakh in equity fund and sip of 2k in canara robocop bluechip MF..how to have a capital of atleast 5 CR when I will b 50
Ans: It's great that you're thinking about your financial future at such a young age. Building a corpus of 5 Crores by the time you turn 50 is an ambitious but achievable goal with careful planning and disciplined investing. Here's a plan to help you reach your target:

Increase Investment Amount: Since you're already investing in equity funds and SIPs, consider increasing your investment amount gradually as your income grows. Aim to maximize your contributions towards long-term wealth creation.
Diversify Your Portfolio: While equity funds offer the potential for high returns, diversifying your portfolio across different asset classes can help manage risk. Consider allocating a portion of your investments to debt funds, real estate, and other avenues based on your risk tolerance and financial goals.
Review and Rebalance: Regularly review your investment portfolio and rebalance it as needed to ensure it remains aligned with your financial objectives. Monitor the performance of your funds and make adjustments based on market conditions and changes in your personal circumstances.
Explore Other Investment Opportunities: Look for additional avenues to grow your wealth, such as investing in tax-saving instruments like ELSS funds, PPF, or NPS. These options offer tax benefits along with the potential for long-term capital appreciation.
Seek Professional Guidance: Consider consulting with a Certified Financial Planner who can provide personalized advice tailored to your specific financial situation and goals. They can help you create a comprehensive financial plan and guide you towards achieving your target of 5 Crores by the age of 50.
Remember, achieving your financial goals requires discipline, patience, and a long-term perspective. Stay focused on your objectives, and with the right investment strategy, you can work towards building a substantial corpus for your future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9403 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 21, 2025

Asked by Anonymous - Jun 01, 2025Hindi
Money
I have 15 lakhs in cash and 20 in PPF , 10 in NPS and around MF of 5 Lacs and house worth 1.6 cr, how to build a retirement fund of 5 cr in next 5-7 yrs, what should I do
Ans: You are clearly thinking ahead and showing strong intent. You have Rs 15 lakhs in cash, Rs 20 lakhs in PPF, Rs 10 lakhs in NPS, Rs 5 lakhs in mutual funds, and a house worth Rs 1.6 crore. You now want to build a retirement fund of Rs 5 crore in the next 5–7 years.

That goal is ambitious. But not impossible.

Let’s now design a practical 360-degree plan to move forward.

Current Financial Snapshot

Before creating the strategy, let us assess your financial position.

Rs 15 lakhs in cash (probably in savings or FD)

Rs 20 lakhs in PPF (locked, safe, but low-return)

Rs 10 lakhs in NPS (locked till 60, some equity exposure)

Rs 5 lakhs in mutual funds (can grow well if used properly)

House worth Rs 1.6 crore (not to be counted for retirement corpus)

Your total assets: Rs 50 lakhs (excluding house).

Your liquid or near-liquid assets: Rs 35 lakhs (cash + MF + part of PPF).

You now want to grow this to Rs 5 crore in 5–7 years.

That needs structured growth, discipline, and right allocation.

Cash Holding – Needs Immediate Optimisation

Holding Rs 15 lakhs in cash brings no growth.

Even fixed deposit gives only 6–7% return.

Post-tax, the return is even lower.

Inflation eats away real value.

So, do not keep more than Rs 2–3 lakhs in savings or FD.

That should act as emergency buffer.

Rest of the cash—nearly Rs 12–13 lakhs—must be deployed.

Idle cash is a lost opportunity.

Let’s redirect this smartly into mutual funds and short-duration investments.

PPF – Safe but Not Growth-Oriented

Your PPF is already at Rs 20 lakhs.

This will grow slowly at around 7–7.5% yearly.

It is safe but not enough for retirement.

It is also illiquid till 15 years.

So do not depend heavily on PPF for reaching Rs 5 crore goal.

Let it continue as safety capital.

But growth must come from elsewhere.

NPS – Locked and Less Flexible

NPS of Rs 10 lakhs will help after age 60.

You cannot withdraw fully at retirement.

Only 60% can be withdrawn; 40% goes to annuity.

So this cannot fully support retirement planning.

Also, NPS has equity capping limits.

It will never grow like mutual funds.

Treat it like secondary retirement support.

Not your main retirement asset.

Mutual Fund Corpus – Needs Serious Expansion

Currently, you have Rs 5 lakhs in mutual funds.

This is your only flexible and high-growth tool.

To build Rs 5 crore in 5–7 years, you must:

Grow this corpus

Add monthly SIPs

Reinvest surplus into mutual funds

Equity mutual funds give inflation-beating returns.

You can expect better growth compared to FD, PPF, or NPS.

But do not choose direct plans or index funds.

Avoid Direct Plans – Choose Regular Plans with CFP Support

Direct plans may seem cheaper.

But they offer no human support or guidance.

No one will tell you when to rebalance or switch.

If markets fall, you may panic and exit.

Wrong timing can wipe out gains.

With regular plans via MFD with CFP, you get:

Personalised portfolio

Review every 6 months

Goal alignment

Behavioural guidance in volatile times

That matters more than small cost difference.

Index Funds Are Not Suitable for You

You are chasing a Rs 5 crore goal.

That needs better-than-average growth.

Index funds only copy the market.

They give average returns.

No flexibility, no downside protection.

If market falls 30%, index fund also falls 30%.

At your stage, you cannot afford full risk exposure.

Actively managed funds can:

Exit weak stocks early

Move into strong sectors

Give better risk-adjusted returns

So avoid index funds completely.

They don’t suit aggressive goal planning like yours.

Your House – Emotional Value, Not Retirement Tool

You own a house worth Rs 1.6 crore.

But don’t count this for your retirement target.

This is a lifestyle asset.

It gives no income unless sold or rented.

And you do not want to sell your house in retirement.

So let it remain outside the plan.

Do not plan retirement based on real estate returns.

Roadmap to Reach Rs 5 Crore in 5–7 Years

You want to grow Rs 50 lakhs to Rs 5 crore.

That is 10 times growth.

It is possible, but only with:

Monthly investments

Active portfolio management

Risk-calibrated asset allocation

Here’s what to do:

Deploy Rs 12 lakhs cash into equity mutual funds immediately

Start monthly SIP of at least Rs 75,000

Every year, increase SIP by 10–15%

Avoid long lock-ins and tax-inefficient plans

Do annual rebalancing with Certified Financial Planner help

If your income supports it, even Rs 1 lakh SIP is suitable.

High savings rate in early years builds strong base.

The magic of compounding works only if you stay invested.

Create Three Investment Buckets

To reduce risk and increase control, divide money into three parts:

1. Short-Term (0–2 years):

Goal: Emergency, liquidity

Use: Liquid or ultra-short-term debt mutual funds

Don’t use FD, it locks your money

2. Medium-Term (3–5 years):

Goal: Child education, big expenses

Use: Balanced advantage or hybrid equity funds

Offers stability with moderate equity exposure

3. Long-Term (5–7 years and beyond):

Goal: Retirement corpus

Use: Flexi-cap and large-cap equity mutual funds

These will build your Rs 5 crore target

Stay invested throughout this phase.

Withdraw only after retirement.

Avoid High-Lock Products Like ULIP, Insurance Plans

Avoid any plan which mixes insurance and investment.

Such products include:

ULIP

Money-back plans

Endowment plans

They give low return and long lock-in.

They eat up your liquidity and flexibility.

If you hold any such policy now, review the surrender option.

If eligible, surrender it and redirect to mutual funds.

Buy a separate term insurance for protection.

It gives high cover at low cost.

Investments should only be for growth, not insurance.

Tax Planning Must Support Growth

Use tax benefits smartly:

PPF already covers Sec 80C

ELSS mutual fund can be used for additional 80C benefit

NPS covers extra Rs 50,000 under Sec 80CCD

Medical insurance gives 80D benefit

Use tax-saving investments that also grow well.

ELSS mutual funds are flexible and high-growth.

Avoid locking too much in PPF or NPS beyond what’s needed.

What to Review Every Year

Set a yearly review date.

Check the following:

Portfolio growth – Are funds growing as per goal?

SIP increase – Can you increase contribution?

Fund performance – Any fund lagging behind?

Goal alignment – Still on track for Rs 5 crore?

Asset allocation – Any rebalancing needed?

Reviewing gives control and peace.

Do this with your Certified Financial Planner every year.

Avoid Mistakes That Can Delay Growth

To stay on track, avoid these:

Investing only in FD and PPF

Trusting random advice or YouTube tips

Using direct mutual funds without review

Falling for index fund hype

Mixing insurance and investment

Using child education policies with low returns

Skipping portfolio reviews

One mistake now can set you back 2 years.

So stay alert and disciplined.

How to Get Started Immediately

Here's a 30-day checklist:

Deploy Rs 12 lakhs idle cash into mutual funds

Split across equity and hybrid funds smartly

Start monthly SIP of Rs 75,000 or more

Buy a term insurance of Rs 1 crore cover

Create Rs 2 lakh emergency fund in liquid fund

Set up a portfolio review calendar with your CFP

Exit low-return, high-lock products if any

Avoid distractions or “get rich quick” advice

This keeps your momentum strong.

Finally

You are already ahead of many people at 35–40 age.

You have cash. You are not stuck in debt. You are future focused.

Now just use your money wisely.

Make equity mutual funds your growth engine.

Use regular plans through a CFP-guided MFD.

Avoid wrong products. Avoid passive funds.

Build your Rs 5 crore corpus with strategy, not luck.

You have 7 years. That’s enough.

If your savings and plan stay disciplined, your goal is very possible.

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

..Read more

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Career Counsellor - Answered on Jul 04, 2025

Asked by Anonymous - Jul 03, 2025Hindi
Nayagam P

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Career Counsellor - Answered on Jul 04, 2025

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Dear Sir, My son has secured a seat in CSE at PES University, RR Campus, Bengaluru based on his JEE PES ranking. His JEE Main rank is 39,257, and he has also been allotted AI & DS at IIIT Dharwad and IIIT Kalyani in the first three rounds of counselling. As per last year's CSAB data, he is likely to get CSE, AI & DS, or ECE in IIITs such as Dharwad, Raichur, Kottayam, Nagpur, and Bhubaneswar in the upcoming rounds. We are seeking your guidance on which would be the better option for him. If he opts for an IIIT, which one among these within his expected range would you recommend as the best choice?
Ans: Prashant Sir, PES University’s Ring Road Campus CSE program is NBA- and NAAC-accredited, taught by PhD-qualified faculty, and supported by advanced computing, AI/ML, and networking labs. It recorded an 82.97% placement rate in 2023 with a median package of ?8 LPA and an average of ?8 LPA–?12 LPA, engaging 350+ recruiters including Microsoft, Amazon, Google, Cisco, and Cisco. Among IIITs in your son’s rank range, IIIT Nagpur leads with an 88.5% placement rate, average package ?13.11 LPA, median ?11 LPA, and participation from 200+ recruiters like Adobe and Accenture. IIIT Kalyani follows with an 89.33% placement rate and average package ?10.72 LPA. IIIT Dharwad has a 66%–78% placement rate, average ?10 LPA, and strong industry tie-ups via its Career Guidance Cell. IIIT Kottayam achieved an 83% placement rate in 2024, average ?12.66 LPA with 86 recruiters including Bosch and Infosys. IIIT Bhubaneswar reports a 79% placement rate, CSE average package ?9 LPA and median ?10 LPA across 42 recruiters like Amazon and Capgemini. IIIT Raichur’s emerging 68.8% placement rate with average ?18 LPA and median ?15 LPA positions it as a growing option. All IIITs are Institutes of National Importance, offering robust labs, research centers, student clubs, and industry internships under PPP models.

Final Recommendation: Select IIIT Nagpur CSE for its superior 88.5% placement rate, ?13.11 LPA average package, and diversified recruiter pool. Next, consider IIIT Kalyani CSE & DS for its 89.33% placements and solid PPP backing. Third is IIIT Dharwad CSE, offering a balanced ?10 LPA average, followed by IIIT Kottayam AI & DS for ?12.66 LPA average. Choose PES University CSE only if private-university infrastructure and near-100% placements outweigh the specialized focus of IIITs; IIIT Bhubaneswar CSE and IIIT Raichur CSE serve as reliable backups. All the BEST for the Admission & a Prosperous Future!

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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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