Seeking Advice: Is a Reverse Mortgage the Right Choice for Me?

Ans: Hello;

It is nice to know that you have good health care cover for yourself and family.

But you must also have adequate term life insurance atleast till the age of 60.

Life is full of uncertainties and hence to ensure financial security for your dependents, in case of any unforeseen event, life insurance is highly desirable.

Cheapest life insurance in India is the one offered by Indian Post Deptt. Also known as Postal Life Insurance.

Ofcourse it's not available for all and max cover is 50 L, but you may check eligibility by visiting nearest post office.

If you are eligible then you may supplement it with another term life cover of 1.5 Cr.

I have live example in front of me where a hale and hearty young person(32 years) postponed buying life insurance and suddenly he expired in a freak swimming accident.

Now his young son and wife are literally on the road.

Don't look at premium as a cost rather an investment to protect your family in unfortunate circumstances.

Best wishes;

Ans: Not sure why you are being advised pp after 90 min.
The timing of pp is two hours after the first bite of breakfast.

A good control mean, PP in range of 70 to 180 mg%. However, more around 100 to 140 mg%. The HbA1c should be below 7% Specially those whoa re above 65 years of age and preferably below 6.5% for a tighter control if person is younger than 65 years.

These days, more individualised approach is followed for these parameters for effective control.

Dr Chandrakant Lahariya
Centre for Health: The Specialty Practice,
New Delhi

Ans: If your Hba1c even after three or more medicines is more than 8.5, it would be a good idea to consult a physician and get started on Insulin.

Insulin is safe and effective and can help in reducing sugar levels quickly. It should be done with lifestyle modifications including weight reduction, physical activity and dietary modifications.

Dr Chandrakant Lahariya
Centre for Health: The Specialty Practice,
New Delhi

Ans: The blood sugar levels and how tight control should be done is also influenced by age.
Her fasting blood sugar levels are acceptable. Post meal (2 hrs after the meal) can be in range of 70 to 180 mg%. Therefore, she is doing largely fine on that also. You can reduce post meal sugar level by some dietary modifications and cutting down on sugary and carbohydrate meals. Also, adding salads and fibers would also help.
It would be helpful to get to know her HbA1c levels so, I would get a sense of her overall sugar control.

Dr Chandrakant Lahariya
Centre for Health: The Specialty Practice,
New Delhi

Ans: The medicines you are referring to are in group of Gliflozins (SGLT-2 inhibitors). These medicines are very effective and pass the sugar through urine. Anyone on these medicines should drink a lot of water. Yes, you can drink a lot of water in the night or any time.

Not the less water. If you are feeling thirsty, drink water. anytime.
Urine test once in a year is okay.

Ans: At the age of 40, you are in a great position to start planning for your financial future. Achieving Rs 5 crore in 20 years is definitely possible with disciplined investments. To achieve this goal, investing through SIPs (Systematic Investment Plans) in equity mutual funds can be your best option. Let’s dive into how much you need to invest and how to plan it right.

How Much Should You Invest?
To accumulate Rs 5 crore in 20 years, you need to invest regularly in equity mutual funds. Over long periods, these funds tend to offer higher returns, typically around 10-12% annually.

If we assume a return of 12% per year, you might need to invest around Rs 50,000 per month in SIPs to reach your goal of Rs 5 crore in 20 years.

Now, Rs 50,000 may seem high, but remember, you can start smaller and gradually increase your SIPs. Let’s look at how this can be done.

Start Small, Increase Over Time
If you cannot invest Rs 50,000 right away, don’t worry. You can start with a smaller amount, like Rs 20,000 or Rs 30,000 per month. Then, increase your SIPs every year by a certain percentage, like 10%. This approach is called SIP Top-up, and it allows you to invest more as your income grows. By doing this, you’ll eventually reach the required monthly investment over time.

Why Choose Actively Managed Mutual Funds?
You might wonder, “Why should I choose actively managed funds over index funds or direct mutual funds?”

Actively managed mutual funds are managed by professional fund managers who constantly monitor and adjust the fund’s portfolio. This allows them to perform better in volatile markets. Index funds, while cheaper, do not have this flexibility, which could limit your returns in the long run.

Investing through a Certified Financial Planner who can guide you with regular funds is also a safer option than going for direct mutual funds. The expertise of a CFP ensures your portfolio is well-diversified, managed effectively, and aligned with your financial goals.

Avoiding Direct Funds
Direct mutual funds may seem appealing due to lower costs, but they lack professional guidance. Without a CFP or professional manager, you might miss crucial market signals or fail to rebalance your portfolio at the right time. Investing in regular funds with the help of a Certified Financial Planner ensures that your investments are optimally managed.

Diversify Your Investments
While equity mutual funds should form the majority of your portfolio for growth, it’s essential to diversify your investments across different categories. This could include:

Equity Mutual Funds for long-term growth.

Debt Funds for stability and to reduce risk as you approach your target.

This diversification will protect your investments from market volatility and give you a more balanced portfolio.

Tax Implications of Mutual Funds
Understanding the tax rules is crucial to managing your investments efficiently.

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%.

Debt Mutual Funds: Both LTCG and STCG are taxed as per your income tax slab.

Knowing these tax rates can help you plan your withdrawals and avoid unnecessary tax burdens.

Key Points to Stay Focused On
Discipline: Make sure to invest every month without skipping your SIPs. Over time, your money will grow, and even small amounts will compound into a larger corpus.

Don’t Panic: Markets can be volatile. However, do not panic and withdraw during market corrections. Stay invested for the full 20 years to reap the benefits of compounding.

Review Regularly: Meet with your Certified Financial Planner at least once a year to review your portfolio. This ensures you stay on track and make adjustments as needed.

Final Insights
At the age of 40, investing Rs 50,000 per month in equity mutual funds through SIPs can help you accumulate Rs 5 crore in 20 years. If this amount seems high initially, start smaller and increase your SIPs each year. Avoid index funds and direct mutual funds to ensure you get the best professional advice and fund management.

Focus on disciplined investing, avoid panic during market fluctuations, and diversify your portfolio for stability.

Best Regards,

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

Ans: You have two daughters, aged 8 and 6, and you want to ensure their future, especially for their education and marriage. Your goal is to accumulate Rs 5 to 6 crore over the next 15 to 20 years through Systematic Investment Plans (SIP). This is a thoughtful and commendable goal, as it reflects your long-term commitment to your daughters' well-being.

Here’s how you can approach this goal in a well-structured, smart, and manageable way.

Understand the Power of SIP
SIP is a powerful and disciplined way to invest. It allows you to invest a fixed amount regularly, providing the benefit of rupee cost averaging and compounding over time. By starting early, you give your investments more time to grow, which works well for your 15 to 20-year horizon.

But remember, achieving a target of Rs 5 to 6 crore will require careful planning, consistent investment, and patience. It’s not just about how much you invest but also where you invest.

Step 1: Split Your Goals – Education & Marriage
It’s best to divide your overall goal into two parts:

Education (10 to 12 years away): Start saving now, so you have a good corpus ready when your daughters are around 18 years old.

Marriage (15 to 20 years away): You have a slightly longer horizon for this, so investments here can be more aggressive.

By splitting the goals, you can allocate your SIPs accordingly. This strategy will allow you to track your progress better and rebalance if needed.

Step 2: Choose the Right Type of Funds
To maximize your chances of reaching Rs 5 to 6 crore, it’s essential to select the right types of funds. Let’s break it down:

1. Equity Mutual Funds (For Long-Term Growth)
Equity funds have historically outperformed other asset classes over the long term. Since your investment horizon is 15 to 20 years, you can afford to take a higher risk for higher returns. Actively managed equity funds, especially in categories like large-cap, flexi-cap, and mid-cap funds, can help you grow your wealth significantly.

Why not Index Funds? While index funds are low-cost, they tend to give average market returns. Actively managed funds, with the right management, can deliver better returns. A Certified Financial Planner can guide you in selecting funds managed by experienced professionals, which can help in outperforming the market over time.

2. Balanced Advantage Funds (For Balanced Approach)
You can also include balanced advantage funds. These funds shift between equity and debt based on market conditions, ensuring a more balanced approach. They reduce the risk in times of market volatility and provide steady returns.

This is a great choice to have in your portfolio for your daughters' education, as the goal is relatively nearer compared to marriage.

3. Debt Funds (For Stability Closer to Goal)
As you approach your goal, say in the last 5 years before you need the money, it’s a good idea to shift some portion of your investments into debt funds. These funds offer stability and protect your corpus from market downturns.

You can start with a small portion in debt funds and increase it gradually as you get closer to the time when you need the money.

Step 3: Plan the SIP Amount
To reach Rs 5 to 6 crore in 15 to 20 years, you will need to invest a significant amount each month. The actual amount will depend on the returns you get from your investments, but a Certified Financial Planner can help you estimate this based on your risk profile and target amount.

You can start with an amount that’s comfortable for you and increase it gradually every year. For example, a 10% step-up in your SIP each year can make a big difference to the final amount. The earlier you start, the smaller the monthly investment required.

Step 4: Diversify Smartly
It’s essential to diversify your investments across different fund categories and asset classes. This reduces the overall risk and ensures that if one part of the market is down, the others can balance it out.

Diversify across sectors (e.g., banking, technology, pharma) within your equity funds to capture growth from different parts of the economy.

Diversify across fund managers to avoid over-dependence on one strategy or style of investing.

Diversification can help you achieve your goal without exposing your investments to unnecessary risk.

Step 5: Use Regular Funds with Professional Guidance
While direct funds seem attractive due to lower costs, investing through a Certified Financial Planner (CFP) using regular funds ensures you get the right guidance. A CFP can:

Help you select funds tailored to your specific goals.

Offer advice on market conditions and whether you need to make adjustments.

Provide periodic reviews of your portfolio and rebalance it when needed.

The extra cost of regular funds is justified by the personalized advice and expertise you get, ensuring you stay on track to meet your financial goals.

Step 6: Monitor and Review Regularly
Once you start your SIPs, you should not simply forget about them. Review your portfolio at least once a year with your Certified Financial Planner. This helps ensure that:

Your investments are performing as expected.

Any changes in your life or financial situation are accounted for.

You are on track to meet your goals, or you need to make adjustments.

Remember, the market will have ups and downs, but staying focused on your long-term goals is key.

Tax Implications
As you invest in mutual funds, it’s important to be aware of the tax implications.

For equity mutual funds, long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%, while short-term capital gains (STCG) are taxed at 20%.

For debt mutual funds, both LTCG and STCG are taxed as per your income tax slab. This means you’ll need to plan your withdrawals carefully to minimize tax liabilities.

Final Insights
You’ve taken a significant step by planning for your daughters’ future. With a well-structured investment plan, you can meet your goal of Rs 5 to 6 crore over the next 15 to 20 years. Here’s a quick recap of what to do:

Split your goals into education and marriage for better tracking.

Choose a mix of equity, balanced, and debt funds for diversification.

Start SIPs with an amount you can manage, and increase it yearly.

Work with a Certified Financial Planner to ensure you stay on track.

Review your portfolio regularly and be aware of tax implications.

By following this plan, you’ll be in a strong position to provide for your daughters’ education and marriage, while also growing your wealth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

Ans: Let's break down how a 31-year-old with a monthly salary of Rs 40,000 can accumulate Rs 2 crore in 15 years using SIPs (Systematic Investment Plans). We’ll focus on achieving your goal in a simple, clear way, with practical advice.

Understanding Your Financial Goal
Your goal is to accumulate Rs 2 crore in 15 years. This is ambitious but achievable. The key is to regularly invest in the right instruments. SIPs are an excellent tool to build wealth over time.

At your current age of 31, you have the advantage of a long investment horizon. This allows you to benefit from compounding, where your returns generate further returns. Consistent, disciplined investing is essential to reach this target.

How Much Should You Invest Monthly?
Let’s get to the heart of the matter: How much should you invest?

To reach Rs 2 crore in 15 years, you need to invest in equity mutual funds that can generate good long-term returns. Equity mutual funds have historically offered returns of 10-12% over long periods.

Based on an expected return of 12%, you might need to invest approximately Rs 30,000 per month in SIPs. This amount might seem significant compared to your Rs 40,000 salary, but let’s break it down.

Start Small: If Rs 30,000 per month seems too high initially, start with a lower amount, say Rs 10,000 or Rs 15,000. Increase the SIP amount gradually as your income grows. This method, called “SIP Top-up,” helps you adjust your savings over time.

Increase Yearly Contributions: Even a 10% increase in SIPs every year can significantly improve your chances of reaching your goal. So, if you start with Rs 10,000 per month, aim to increase it to Rs 11,000 next year, and so on.

Why Actively Managed Mutual Funds?
Investing in actively managed mutual funds through a Certified Financial Planner is crucial. These funds have professional fund managers who constantly monitor and adjust the portfolio. This gives them an edge over index funds, especially in volatile markets.

Actively managed funds can outperform index funds over time, providing higher returns. When investing directly in funds without professional help, there’s a risk of not choosing the right ones or missing out on potential market adjustments. That’s why investing through a Certified Financial Planner ensures that your portfolio is regularly monitored and optimized.

Avoid Direct Mutual Funds
Some people might recommend direct mutual funds to save on commissions. However, the savings from direct funds may not justify the risk of not having professional guidance. When investing through regular funds with the help of a Certified Financial Planner, you get expert advice on rebalancing and portfolio management. This ensures your investments align with market trends and your financial goals.

Diversification and Risk Management
To reach Rs 2 crore in 15 years, it’s important to focus primarily on equity mutual funds for growth. However, a well-diversified portfolio will also contain some debt funds for stability, especially as you approach your goal.

This reduces risk and ensures that not all your investments are exposed to market fluctuations. While equity funds provide growth, debt funds provide safety and balance to your portfolio.

Tax Implications to Consider
It’s also important to consider the tax implications of your investments.

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%.

Debt Mutual Funds: LTCG and STCG are taxed as per your income tax slab. Understanding these tax implications will help you plan your withdrawals more effectively.

Best Practices for Reaching Rs 2 Crore
Discipline: The key to success with SIPs is discipline. Ensure that you invest regularly and do not skip your SIPs. Over time, even small contributions can grow into a large corpus.

Stay the Course: Markets will go up and down, but it’s important not to panic and withdraw your investments prematurely. Stick to your plan for the full 15 years to benefit from market growth.

Top-up Your SIPs: Every year, try to increase your SIP amount as your salary increases. This way, your investments keep pace with inflation, and you build a bigger corpus faster.

Finally
Your goal of Rs 2 crore in 15 years is achievable if you invest Rs 30,000 monthly in actively managed mutual funds. If this seems too high initially, start with a smaller amount and increase it gradually. Avoid direct funds and index funds, as professional guidance through a Certified Financial Planner will provide better long-term growth.

By following these principles, you can stay on track and build wealth steadily over time.

Best Regards,

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

Ans: Today, we’ll discuss a 46-year-old working woman with a 6-year-old daughter, earning Rs 76,000 per month. She invests around Rs 50,000 each month in Sukanya Samriddhi Yojana, PPF, and mutual funds. She has a plan to retire at 60 and receive Rs 1 lakh every month during her retirement.

So, how can she achieve this?

Let's break this down.

Assessment of Current Investments
Firstly, she’s already on a good track with investments. Sukanya Samriddhi Yojana for her daughter’s education is a smart move, and PPF provides a secure, tax-saving instrument with assured returns. However, relying too much on safe options like these might not provide the aggressive growth needed for a higher retirement corpus.

She’s also investing in mutual funds. This is where the real growth potential lies. Mutual funds, particularly equity-oriented ones, can provide the necessary boost. But, it’s essential to ensure she’s in well-diversified, actively managed mutual funds and not just index funds, which might limit returns in the long term.

The Right Mix of Safety and Growth
So, how much should she save and where should it go?

Sukanya Samriddhi and PPF should continue. They provide stability and safety. But for higher growth, she should focus more on mutual funds.

Mutual Funds: Actively managed funds are key here. These funds have the potential to outperform index funds, especially during market volatility. Instead of investing directly, she should consider investing through a Certified Financial Planner. They provide regular monitoring, helping her adjust her portfolio as needed.

Increase SIPs: She’s investing Rs 50,000 monthly now. But to achieve Rs 1 lakh monthly retirement, she should aim to increase this gradually over time. Ideally, at least Rs 30,000 should go toward mutual funds, particularly equity-oriented funds for growth.

Long-term Goal: Since she has 14 years until retirement, her investments need to focus on high-growth options, especially for the next 7-10 years. Equity mutual funds can help here. After that, she can slowly move to safer debt funds to preserve the capital.

Avoid Direct Investments: Direct funds may seem appealing because of lower fees, but they often lack the professional guidance that regular funds offer through a Certified Financial Planner. Investing in regular funds gives you access to expert advice and continuous monitoring. This ensures your investments align with your goals and market conditions.

Taxation Insights
Understanding tax implications is also important for maximizing returns.

Equity Mutual Funds: Long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%, while short-term capital gains (STCG) are taxed at 20%.

Debt Mutual Funds: Both LTCG and STCG are taxed as per your income tax slab. Hence, careful planning and strategy are crucial.

Final Insights
To ensure she meets her retirement goal of Rs 1 lakh per month, she should focus on a well-balanced investment strategy. Increasing SIPs in actively managed mutual funds, along with continuing Sukanya and PPF, will help her build a solid corpus. Tax efficiency and professional guidance will further maximize her returns.

Best Regards,

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