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Can a 24-year-old earning 30k/month buy a 20L house in Bangalore without paying interest?

Sunil

Sunil Lala  |201 Answers  |Ask -

Financial Planner - Answered on Jul 28, 2024

Sunil Lala founded SL Wealth, a company that offers life and non-life insurance, mutual fund and asset allocation advice, in 2005. A certified financial planner, he has three decades of domain experience. His expertise includes designing goal-specific financial plans and creating investment awareness. He has been a registered member of the Financial Planning Standards Board since 2009.... more
Asked by Anonymous - Jul 25, 2024Hindi
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Hi I’m a 24 year old. Earning a salary of 30k a month. Planning on buying a individual house/plot/flat in Bangalore with a budget of 20L (I do not have the 20L) however, my religion doesn’t permit me to pay interests so I’m not sure if I can proceed for a home loan in this case. Please give me best suggestions to save 20L/buy a house. Thanks

Ans: Take interst free loan from family and friends
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  |6558 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 11, 2024

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Hi sir, I want to buy a house but my bad I had no knowledge of saving money and till date not done any!!! I am 34 yrs and working in manufacturing industry, have two daughters aged 4 and 15 months old!! Can u please help me ???? and give the best ways to save money and have house.... My CTC is 9.63LPA.
Ans: It's great that you're looking to start saving for a house despite not having done so in the past. Here's a step-by-step guide to help you get started:

Create a Budget: Begin by tracking your monthly expenses and income. This will give you a clear picture of where your money is going and where you can cut back to save more.

Set Savings Goals: Determine how much you need for a down payment on your house. Factor in other expenses like closing costs, moving expenses, and any repairs or renovations you may need to make.

Emergency Fund: Before you start saving for your house, ensure you have an emergency fund to cover unexpected expenses like medical bills or car repairs. Aim for 3-6 months' worth of living expenses.

Automate Savings: Set up automatic transfers from your salary account to a separate savings account dedicated to your house fund. This will help you save consistently without having to think about it.

Cut Expenses: Look for areas where you can cut back on expenses to free up more money for savings. This could include dining out less, cancelling unused subscriptions, or finding cheaper alternatives for everyday expenses.

Increase Income: Consider ways to increase your income, such as taking on a side hustle or exploring opportunities for career advancement or higher-paying jobs.

Explore Government Schemes: Look into government schemes or subsidies available for first-time homebuyers in your area. These programs may offer financial assistance or lower interest rates on home loans.

Consult a Financial Advisor: Consider consulting with a financial advisor who can help you create a personalized savings plan tailored to your financial situation and goals.

Remember, saving for a house is a long-term goal that requires patience and discipline. Stay focused on your objectives, and celebrate small victories along the way. With determination and smart financial planning, you can achieve your dream of homeownership for your family.

..Read more

Ramalingam

Ramalingam Kalirajan  |6558 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 14, 2024

Asked by Anonymous - May 01, 2024Hindi
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Hi, I'm a 27 year old, starting this month my in hand salary is going to cross 2 lakh pm, so far I am investing in step up SIPs mainly small and midcap, around 22k pm, and I have a trading capital of 3 lakhs, I have an emergency fund of around 1.5 lakh in my savings account, apart from this I don't have any savings except my pf, currently I have an active car loan EMI of 15k pm and education loan EMI of 15k pm and I also support my family, my family or I don't own any house, and we live in different cities on rent, so the total expenses sums up to around 90-95k pm and my family is constantly asking me to buy a house on loan, but I don't even have corpus for paying the down payment yet, and also I have not seriously thought about buying my own house in my 20s, what would you suggest, also if I had to, how should I save up for the down payment
Ans: Congratulations on your increased salary! That's a great achievement. Let's discuss your situation and how to navigate between your financial goals:

1. Financial Snapshot:

Strong Start! Investing Rs. 22,000 per month in SIPs and having an emergency fund shows financial responsibility.

Balancing Responsibilities: Supporting your family while managing EMIs and rent is commendable.

2. Homeownership vs. Other Goals:

Family Pressure: It's understandable that your family wants you to buy a house. However, prioritize your financial goals first.

Owning vs. Renting: Homeownership comes with responsibilities and hidden costs. Renting allows for flexibility in your current situation.

3. Prioritizing Your Goals:

Debt Management: Focus on paying off your car and education loans early. This frees up cash flow for other goals.

Emergency Fund: Consider increasing your emergency fund to 3-6 months of your living expenses for unexpected situations.

Investing for Growth: Your SIPs in Small and Mid Cap funds are good for long-term wealth creation. Actively managed funds like these have fund managers who try to outperform the market by picking stocks they believe will grow.

4. Saving for a Down Payment (if needed):

Increase Savings: Once your EMIs are paid off, consider increasing your SIP amount or starting a dedicated SIP for a down payment.

Review and Rebalance: A Certified Financial Planner (CFP) can review your investments and suggest adjustments to potentially reach your down payment goal faster.

Remember, financial planning is a journey, not a destination. Consulting a CFP can help you create a roadmap that balances your financial obligations, long-term goals, and your family's needs.

Here's the key takeaway: You're making smart financial decisions! Focus on debt repayment, emergency savings, and long-term investing. Owning a house is a great goal, but prioritize according to your current situation. A CFP can help you create a personalized plan.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6558 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 31, 2024

Asked by Anonymous - May 30, 2024Hindi
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Hi Sir, is buying a home in bangalore with 50lacs loan for a tenure of 20 year might be a good investment plan. I'm not interested in buying a home but due to Parents request Im forced to buy a home, I earn 70k monthly can pay 10lacs of down payment for the home.
Ans: Assessing the Decision to Buy a Home in Bangalore
Buying a home is a significant financial decision. In your case, the decision is influenced by parental pressure rather than personal interest. It's essential to evaluate the financial implications of this decision.

Monthly Income and Loan Repayment Capacity
Your monthly income is Rs 70,000. After paying Rs 10 lakhs as a down payment, you'll need a Rs 50 lakh loan. The EMI for a 20-year loan at 7% interest would be around Rs 38,765. This EMI consumes more than half your monthly income, leaving limited funds for other expenses.

Impact on Lifestyle and Savings
Paying a high EMI can strain your monthly budget. You may have to cut back on lifestyle expenses, savings, and investments. It's crucial to consider if this sacrifice aligns with your long-term financial goals.

Real Estate Market in Bangalore
Bangalore's real estate market has seen significant growth. However, market conditions can fluctuate. Property appreciation isn't guaranteed, and selling the property might take time if the market slows down.

Alternative Investment Opportunities
Instead of investing in real estate, consider other investment options. Diversifying your investments can provide better returns and liquidity. Mutual funds, stocks, and fixed deposits are worth exploring.

Emotional and Cultural Factors
Respecting your parents' wishes is important. However, it's also essential to make financially sound decisions. Discuss your concerns with your parents and explain the potential financial strain.

Long-term Financial Planning
Consult a Certified Financial Planner to create a long-term financial plan. This plan can help balance your desire to meet your parents' wishes with your financial stability and growth.

Evaluating the Decision
Let's break down the evaluation process into specific aspects:

1. Financial Burden
A Rs 50 lakh loan for 20 years means committing to long-term financial responsibility. Ensure you can handle this without compromising other financial goals.

2. Investment Returns
Real estate isn't the only way to grow wealth. Evaluate other investment avenues that might offer better returns with lower risk.

3. Flexibility and Mobility
Owning a home can limit your flexibility. If job opportunities or personal reasons require relocation, selling the property can be challenging.

4. Emotional Satisfaction
Owning a home can provide emotional satisfaction and a sense of stability. However, weigh this against the financial stress it may cause.

Conclusion
Buying a home in Bangalore with a Rs 50 lakh loan is a significant decision. It requires careful consideration of your financial capacity, long-term goals, and market conditions. Balancing parental wishes with financial prudence is key. Consulting a Certified Financial Planner can provide tailored advice for your situation.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6558 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 13, 2024

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Hi' I am 37 yrs old married with wife working and hardly get 45 k per month both.we have two kids aged 9 and 5 and both are studying.we are planning to buy one house in which I need to pay 20 lacs as a half payment.pls suggest us how we can manage this much of amount within 5 to 10 years. Our current monthly expenses are arround 30k something.pls help me to get this much amount at the earliest.
Ans: You have a combined monthly income of Rs 1.45 lakhs. Your expenses are Rs 30,000, leaving you with Rs 1.15 lakhs. You plan to buy a house and need Rs 20 lakhs in 5 to 10 years. This is achievable with disciplined planning and focused savings.

Setting a Realistic Savings Goal
You need to accumulate Rs 20 lakhs. Here's how you can break it down:

Monthly Savings Target: To reach Rs 20 lakhs in 5 years, save Rs 30,000-35,000 monthly. In 10 years, you’ll need to save Rs 15,000-20,000 monthly.

Prioritize: Saving for the house should be your top financial goal. Cut down on non-essential expenses.

Review Periodically: Regularly assess your savings progress. Adjust your plan if needed.

Budgeting and Cash Flow Management
Your current expenses are Rs 30,000. You can increase your savings by managing your cash flow effectively:

Essential vs. Non-Essential: Identify essential expenses like food, utilities, and school fees. Limit non-essential spending like dining out and entertainment.

Increase Savings: Aim to save Rs 40,000-50,000 monthly. This includes the savings target for the house.

Emergency Fund: Maintain an emergency fund. This should cover 6 months of expenses.

Investment Strategy for House Purchase
To accumulate Rs 20 lakhs, a well-planned investment strategy is crucial:

Balanced Portfolio: Invest in a mix of equity, debt, and hybrid instruments. This will help you balance risk and return.

Active Fund Management: Avoid index funds. Actively managed funds offer better potential returns, especially in a dynamic market.

Systematic Investment Plan (SIP): Start SIPs to regularly invest small amounts. This will help you build the corpus over time.

Monitor Performance: Regularly review your investments. Adjust your portfolio as needed based on market conditions.

Debt Management
Currently, you have no specific loans mentioned, but planning to buy a house will involve a significant financial commitment:

Avoid Unnecessary Debt: Don’t take on new debt until you have accumulated enough savings for the house.

Home Loan Planning: When taking a home loan, ensure the EMI is affordable. It should not exceed 40% of your combined monthly income.

Prepayment Strategy: If possible, make prepayments on the home loan. This will reduce your interest burden.

Children's Education Planning
Your children are 9 and 5 years old. Their education expenses will rise in the coming years:

Separate Education Fund: Start a dedicated education fund for your children. This will prevent any dip into your house savings.

SIP for Education: Start SIPs to build an education corpus. Align the investment horizon with their education milestones.

Review Regularly: Track the progress of the education fund. Adjust contributions as needed to ensure sufficient funds.

Insurance and Protection
Insurance is vital to protect your family and financial goals:

Life Insurance: Ensure you have adequate life insurance coverage. This will secure your family’s future in case of unforeseen events.

Health Insurance: A good health insurance policy is necessary to cover medical expenses. It will prevent you from dipping into your savings.

Home Loan Insurance: When taking a home loan, consider insurance to cover the loan. This will protect your family from the burden of repayment.

Tax Planning
Effective tax planning can enhance your savings:

Utilize Deductions: Use available tax deductions on investments, health insurance premiums, and home loan interest.

Tax-Advantaged Investments: Invest in tax-saving instruments that align with your house purchase goal. This will reduce your tax liability.

Plan Early: Start tax planning at the beginning of the financial year. This will avoid a last-minute rush.

Final Insights
You have a clear goal of buying a house. With disciplined savings, smart investments, and proper planning, you can achieve this in 5 to 10 years. Regularly review your progress and adjust your plan as needed. Your determination will lead to the fulfillment of your dream home.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Milind

Milind Vadjikar  |373 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 10, 2024

Asked by Anonymous - Oct 09, 2024Hindi
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Milind Vadjikar  |373 Answers  |Ask -

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Asked by Anonymous - Oct 07, 2024Hindi
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Hello, My current age is 42. Our combined post tax salary is around 6.25 lakhs. We have around 50L in mutual funds, 80L in direct stocks, 14L in gold, 30L in NPS, 31L in PPF, 21L in SSY and 2.5cr in real estate. Our current household expenses are around 1.5L per month and we are contributing 1L/month to NPS, 2L/month to SIP, 20K/month to direct stocks,1.5L/yr to PPF, I.5L/yr to SSY. We have an EMI of 50000/month for next 5 years .Our kids are 12 years and 10 years. We want a corpus of 4 cr for their higher education and of 1cr for their marriage. We are living in a company provided accommodation and plan to live in it till requirement.We want a 4L monthly pension and don't have a home right now. If we are planning to retire at 55, how should we manage our finances?
Ans: Hello;

Since NPS will be available only after you reach 60 and no info. about any rental income from real estate investment hence both are kept out of our purview.

1.Higher education goals for children typically start after 12th so we have 6 to 8 years for kid's education financial goal(4 Cr) attainment.

I have split it in two tranches:
A. 2 Cr after 6 years
B. 2 Cr after 8 years

For achieving target A following will work:
Direct stocks corpus of 80 L will grow into a sum of 1.5 Cr after 6 years. (Moderate return of 11% assumed)

PPF corpus and contributions will grow into a sum of 50 L+ after 5 years block when you may withdraw this corpus towards this goal. (6.9% return considered)

So 1.5 + 0.5=2 Cr

For fulfilling target B following will work:
MF corpus of 50 L will grow into a sum of 1.15 Cr after 8 years. (11% return considered)

50% of SSY corpus eligible for withdrawal expected to be around 27.85 L. (8% return assumed)

Direct stock monthly sip of 20 K will grow into a sum of 30.85 L in 8 years.(11% return considered)

Gold corpus of 14 L will grow into a sum of 24.05 L. (7% growth assumed)

So 1.15+27.85+30.85+24.05~~2 Cr

2. Target for Marriage of offspring:
1 Cr.
3. Retirement pension: 4 L per month
13 years from now.
Investible surplus left after all monthly investments utilized for fulfilling above targets should be immediately redirected to monthly SIPs in mutual funds. That includes 20 K direct stock sip, 12.5 K/pm SSY investment after 8 years from now and 12.5 K/pm PPF investment 5 years from now.

Also the 50 K getting free from loan EMI after 5 years should be converted into a mutual fund SIP.

After accounting for monthly expenses and monthly investments, from the balance 80 K, I would suggest you to deploy 50 K into MF sip since it will help in target achievement.

So summarily 12.5 K/8 yr, 12.5 K/5 yr, 20 K/5 yr, 50 K/8 yr and 250 K/13 yr will yield you a comprehensive corpus of 9.89 Cr. Add balance 50% SSY corpus of 27.5 L to this and your total corpus comes to 10.16 Cr. (MF returns assumed at a modest 11%)

Earmark 1 Cr for offspring wedding as envisaged.

Net retirement corpus will be 9.16 Cr. An immediate annuity at 6% will yield you a monthly income of 4.58 L from the age of 55 as planned.

You may use commutable corpus of NPS(60%) to buy your house. While NPS annuity portion(40%) may yield you a delta per month so as to have post tax income of 4 L per month.

This looks achievable because you have managed your finances and investments outstandingly well.

I discourage people to take direct stocks exposure especially when they are nearing the retirement but if you have the knowledge and temperament you may dabble into it subject to some minimum amount earmarked as risk capital.

I am sure you have adequate insurance cover for life and health.

Kudos again to your meticulous fiscal planning and execution.

Happy Investing!!

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.

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Asked by Anonymous - Oct 10, 2024
Relationship
Hi, I am not yet mairred. I used to like a man and after a month we decided to get married. He was of my caste so I thought my parents won't deny this mairrage. I used to talk to and wanted to let him know everything about my past so that we can built a strong root of our relationship. I spoke every detail of my past life to him. Then before he proposed me for mairrage I went for a vacation with my male friend to dehradun. I didn't tell him that day as he didn't proposed me till that day then why would I tell everything about me to anyone. He was noone to me at that time. After that he came to visit me in Delhi and on the same when he was on train a friend of mine along with his fiance came to meet me after a very long time. I asked him and he didn't denied. After returning home he blocked me. I cried and cried, called multiple times but he didn't received my call. Even I went to his location and waited for almost 3 hr but he didn't came. Then I asked my sister to call him. Then he talked to me but he said me so much of harsh and vulgar words that I went in shock. I cried a lot but he went on humiliating me. But somehow I convinced him to stay with me. I never talked to that friend ever. Then I told my parents about him that I want to get married with this men. Being a girl's father my father enquired about him by being annonymous. And trust me noone has said anything good about him. Later on we get to know that his father has a murder case on him of his brother in law. But then I wanted to get married. Finally my parents agreed only for my happines. Meanwhile I was never being respected by him. He always doubt me, humiliate me, abuse me mentally and physically, and when I was like I don't want to be with you he used to say sorry and begged me to be with him. He even used to restrict to visit my uncle aunty. His mother wants used to defend him and never used to make him realise that he was wrong. Then before engagement we went to Kolkata to buy dress. Yes one more thing I have informed him on the very first day that I used to drink and smoke occassionally. So whenever he used to visit me he always wanted to drink with me whether I want it or not. He always used to abuse me and humiliate me in front of everyone after drinking, so after a period of time I used to avoid drinking. Then he used to fight with me for that also that why will you not drink. In kolkata the same thing happen. We stayed there for 3 days and he was convincing to go to club from the very first day but I refused. On 3rd he hit me. After engagement his family asked for dowry. After a lot of dealing my parents agreed for an amount. But I felt betrayed. I stopped talking. After after when I initiated the conversation he picked up a fight and said he won't marry. I tried to convince. But when everyone was blaming me then I broke my silence and said everything about him to my parent. But he manipulated everything and made me villain. My parents want me to get married as the society will insult our parents. I am getting married in November only for my parents but I have already made up my mind that I'll divorce him after 1 year of mairrage and will live my life alone. Am I thinking right? What should I do?
Ans: Dear Anonymous,
No, you are not thinking right at all...This man is all RED FLAGS...
Are you actually thinking of spending one year with a person who physically abuses you? Seriously?
And then you expect him to agree to that divorce without any fuss? What world are you in? No compromises on your life please...
Be wise and protect yourself...

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...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.

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