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Ramalingam

Ramalingam Kalirajan  |6976 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 17, 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
Rohit Question by Rohit on Apr 14, 2024Hindi
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Hi sir, i want to start sip.. This will be my ist investment so what would your suggestion like on which categories should i invest or what should be my breakup.. I want to invest 5000 now then after few months 10k and around 2 year from now 22k

Ans: Starting Your SIP Journey: A Guide to Investing

Congratulations on taking the first step towards investing. Starting a Systematic Investment Plan (SIP) is a wise decision for building wealth over time. Let's break down your investment strategy in a simple and effective manner.

Understanding Your Investment Goals
Before diving into the specifics, it's crucial to understand your financial goals, risk tolerance, and investment horizon. Since you are starting with ?5,000 and planning to increase it to ?10,000 in a few months and ?22,000 in two years, you have a progressive approach.

Suggested Categories for SIP Investment
Large-Cap Mutual Funds
Large-cap funds invest in well-established companies with a stable track record. They provide moderate growth with lower risk compared to mid-cap and small-cap funds. Ideal for new investors, these funds offer stability and consistent returns.

Multi-Cap Mutual Funds
Multi-cap funds invest across companies of different market capitalizations. They offer a balanced approach, providing diversification and the potential for higher returns. This category helps in managing risk while seeking growth.

Balanced Advantage Funds
Balanced advantage funds dynamically adjust the allocation between equity and debt. They aim to provide growth while managing risk effectively. These funds are suitable for beginners as they offer a balanced exposure to both equity and debt.

Debt Mutual Funds
Debt funds invest in fixed-income securities like bonds and government securities. They are less volatile compared to equity funds and provide stable returns. Including debt funds can add a safety net to your portfolio.

Suggested Breakup for ?5,000 SIP
Large-Cap Fund: ?2,000
Multi-Cap Fund: ?1,500
Balanced Advantage Fund: ?1,500
This allocation provides a mix of stability, diversification, and growth.

Suggested Breakup for ?10,000 SIP
As you increase your SIP amount, you can enhance your portfolio diversification:

Large-Cap Fund: ?3,000
Multi-Cap Fund: ?2,500
Balanced Advantage Fund: ?2,500
Debt Fund: ?2,000
Including a debt fund at this stage adds an element of safety and reduces overall portfolio risk.

Suggested Breakup for ?22,000 SIP
When you reach ?22,000 per month, you can further diversify and optimize your portfolio:

Large-Cap Fund: ?6,000
Multi-Cap Fund: ?5,500
Balanced Advantage Fund: ?5,500
Debt Fund: ?3,000
Mid-Cap Fund: ?2,000
Adding a mid-cap fund provides exposure to companies with higher growth potential, albeit with slightly higher risk.

Key Points to Remember
Start Small and Scale Up
Begin with the ?5,000 SIP and gradually increase it. This helps you get comfortable with investing and understand market dynamics.

Regular Review and Rebalancing
Monitor your investments regularly. Rebalance your portfolio at least once a year to maintain the desired asset allocation.

Consult a Certified Financial Planner (CFP)
Seeking advice from a CFP can provide personalized guidance. They can help tailor your investment strategy based on your goals and risk tolerance.

Stay Disciplined and Patient
Investing is a long-term journey. Stay disciplined, avoid emotional decisions, and remain patient. Market fluctuations are normal, and long-term investments usually yield positive results.

Conclusion
Starting your SIP journey with a structured approach will set a strong foundation for your financial future. Diversify your investments across different categories, review regularly, and seek professional advice when needed. Your progressive investment strategy, beginning with ?5,000 and scaling up to ?22,000, will help you build a robust portfolio over time.

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  |6976 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 07, 2024

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Hi sir, i want to start sip.. This will be my ist investment so what would your suggestion like on which categories should i invest or what should be my breakup.. I want to invest 5000 now then after few months 10k and around 2 year from now 22k...my target amount is 25 lacs within 5 yrs
Ans: Starting SIPs for your first investment is a great step towards building wealth over time. Since you have a target amount of 25 lakhs within a 5-year timeframe, it's essential to choose investment options that offer the potential for growth while managing risk. Here's a suggested approach for your SIP investment:
1. Diversified Equity Funds: Since your investment horizon is relatively short (5 years), it's crucial to focus on funds that offer growth potential while minimizing risk. Consider allocating a significant portion of your SIP towards diversified equity funds, which invest in a mix of large-cap, mid-cap, and small-cap stocks. These funds offer diversification across market segments and can potentially deliver higher returns over the long term. Aim to allocate around 60-70% of your SIP towards diversified equity funds.
2. Large Cap Funds: Large-cap funds invest in stocks of large, well-established companies with stable earnings and strong market presence. These funds offer stability and are relatively less volatile compared to mid-cap and small-cap funds. Consider allocating around 20-30% of your SIP towards large-cap funds to provide stability to your portfolio.
3. Mid Cap and Small Cap Funds (Optional): Mid-cap and small-cap funds have the potential to deliver higher returns but come with higher volatility. Given your relatively short investment horizon, consider allocating a smaller portion of your SIP (around 10-20%) towards mid-cap and small-cap funds, if you're comfortable with the higher risk associated with these segments.
4. Systematic Investment Plan (SIP) vs. Lump Sum: Since you're just starting, opting for SIPs can be a prudent approach, as they allow you to invest regularly over time and benefit from rupee cost averaging. As your investment horizon is relatively short, avoid making lump sum investments, as they may expose you to timing risk, especially considering market fluctuations.
5. Regular Review and Adjustment: Regularly review your investment portfolio and make adjustments as needed to ensure it remains aligned with your financial goals and risk tolerance. As your investment horizon progresses and your financial situation changes, consider consulting with a Certified Financial Planner (CFP) or financial advisor to reassess your investment strategy and make any necessary adjustments.
By following this approach and staying committed to your investment plan, you'll be well-positioned to achieve your target amount of 25 lakhs within a 5-year timeframe. Remember to stay disciplined, focus on the long term, and avoid making impulsive decisions based on short-term market fluctuations.

..Read more

Ramalingam

Ramalingam Kalirajan  |6976 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 06, 2024

Asked by Anonymous - Apr 28, 2024Hindi
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Sir i want to invest in sip my monthly saving will be between 1000 to 2500 Rs please advice.
Ans: It's great that you're looking to start investing through SIPs with your monthly savings! Here's some advice tailored to your budget:

Start Small: Even with a modest monthly savings of Rs. 1000 to 2500, you can begin investing through SIPs. The key is to start early and remain consistent with your contributions.
Choose Low-Cost Funds: Look for mutual funds with low expense ratios, as they minimize the impact of fees on your returns. Opt for direct plans of mutual funds to save on distribution expenses.
Focus on Equity Funds: Given your long-term investment horizon, consider investing in equity mutual funds. These funds have the potential to deliver higher returns over the long run, although they come with higher volatility.
Diversify Your Portfolio: Select a mix of different types of equity funds, such as large-cap, mid-cap, and multi-cap funds, to spread your risk across various market segments. Diversification can help mitigate the impact of market fluctuations.
Stay Invested for the Long Term: SIPs work best when you stay invested for the long term, allowing your investments to benefit from the power of compounding. Aim to invest consistently over several years to maximize your returns.
Review and Adjust: Periodically review your SIP investments to ensure they align with your financial goals and risk tolerance. You may need to adjust your investment strategy based on changes in your financial situation or market conditions.
Stay Informed: Take the time to educate yourself about mutual funds, investment strategies, and market trends. This knowledge will empower you to make informed decisions and stay on track with your financial goals.
Consult a Financial Advisor: If you're unsure about which funds to invest in or how to construct your investment portfolio, consider consulting a financial advisor. They can provide personalized advice based on your financial situation and goals.
By following these tips and starting your SIP journey with discipline and patience, you can gradually build wealth over time and work towards achieving your financial objectives. Remember, every rupee invested today can make a difference in securing your financial future tomorrow.

..Read more

Ramalingam

Ramalingam Kalirajan  |6976 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 22, 2024

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Hi All, I am 38 year old workig in IT. I want to start SIP for 30000 INR for next 8 to 10 years Want advice in which fond I can invest. I can split 10 thousand in each fond. I am looking for 12 to 15% return. Thank you Rahul
Ans: Investing in mutual funds through a Systematic Investment Plan (SIP) is a prudent way to build wealth over time. At 38 years old and working in IT, you have a clear vision of investing ?30,000 per month for the next 8 to 10 years. Your goal is to achieve a return of 12-15%. Let's explore the best fund options for your SIP investment and how you can split your investment for optimal returns.

Understanding Your Investment Goals
Long-Term Horizon
An investment horizon of 8 to 10 years is considered long-term. This allows you to benefit from the power of compounding and ride out market volatility.

Expected Returns
You aim for returns of 12-15%. Historically, equity mutual funds have been capable of delivering such returns over the long term. However, choosing the right mix of funds is crucial.

Types of Mutual Funds
Equity Mutual Funds
Equity mutual funds invest in stocks and have the potential for high returns. They are suitable for long-term goals but come with higher risk due to market volatility.

Balanced or Hybrid Funds
These funds invest in a mix of equities and debt. They offer a balance between growth and stability, making them suitable for moderate risk tolerance.

Debt Funds
Debt funds invest in fixed-income securities like bonds and treasury bills. They provide stable returns but generally lower than equity funds. They are suitable for conservative investors.

Recommended Fund Categories
Large Cap Funds
Benefits
Large cap funds invest in large, well-established companies with strong track records. They offer stability and moderate growth.

Suitability
Ideal for investors seeking relatively lower risk and steady returns.

Mid Cap Funds
Benefits
Mid cap funds invest in medium-sized companies with high growth potential. They offer higher returns compared to large cap funds but come with increased risk.

Suitability
Suitable for investors with a higher risk appetite seeking substantial growth.

Small Cap Funds
Benefits
Small cap funds invest in smaller companies with significant growth potential. They offer the highest returns among equity funds but also come with the highest risk.

Suitability
Best for investors willing to take high risks for high rewards.

Flexi Cap Funds
Benefits
Flexi cap funds invest across market capitalizations—large, mid, and small caps—without any predefined proportion. This flexibility allows fund managers to optimize returns based on market conditions.

Suitability
Ideal for investors seeking a diversified portfolio with balanced risk and returns.

Aggressive Hybrid Funds
Benefits
Aggressive hybrid funds invest in a mix of equities (65-80%) and debt (20-35%). This combination aims to balance high returns from equities and stability from debt.

Suitability
Suitable for investors seeking consistent returns with moderate risk.

Investment Strategy
Splitting Your SIP
Based on your requirement to split ?30,000 into three funds, here is a suggested allocation:

Large Cap Fund: ?10,000 per month
Mid Cap Fund: ?10,000 per month
Flexi Cap Fund: ?10,000 per month
This allocation balances stability, growth potential, and flexibility.

Monitoring and Rebalancing
Regular Review
Regularly monitor your investments to ensure they are performing as expected. Adjust your portfolio based on performance and changes in market conditions.

Rebalancing
Rebalance your portfolio periodically to maintain your desired asset allocation. This helps in optimizing returns and managing risks.

Detailed Analysis of Fund Categories
Large Cap Funds
Stability and Reliability
Large cap funds invest in well-established companies. These companies are leaders in their industries and have a history of providing steady returns. This makes large cap funds a cornerstone of a balanced portfolio.

Example Companies
Think of companies like Infosys or Reliance Industries. Investing in such companies offers lower risk compared to mid and small cap stocks.

Mid Cap Funds
Growth Potential
Mid cap funds target companies that are in their growth phase. These companies have the potential to become large cap companies in the future. The growth potential is higher, but so is the risk.

Market Performance
Mid cap stocks tend to perform well during economic expansions when companies are growing. However, they may be more volatile during economic downturns.

Flexi Cap Funds
Diversification
Flexi cap funds provide the benefit of diversification across different market capitalizations. Fund managers can adjust the allocation based on market conditions, which can help in optimizing returns.

Adaptive Strategy
These funds are adaptive and can shift their focus to the best performing sectors and companies. This flexibility can lead to better performance in varying market conditions.

Benefits of Active Fund Management
Professional Expertise
Actively managed funds benefit from the expertise of professional fund managers who can make informed decisions to optimize returns.

Market Adaptation
Fund managers can adapt to market trends and economic changes, potentially outperforming passive index funds which follow a set index.

Risk Management
Active fund managers can implement strategies to mitigate risks, such as diversifying across sectors or reallocating assets based on market conditions.

Conclusion
Investing ?30,000 per month in SIPs over the next 8 to 10 years can potentially yield the desired returns of 12-15%. A balanced approach with investments in large cap, mid cap, and flexi cap funds offers a good mix of stability, growth potential, and flexibility. Regular monitoring and rebalancing of your portfolio will ensure it remains aligned with your financial goals. Consulting with a Certified Financial Planner can provide personalized advice to optimize your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Dr Nagarajan J S K

Dr Nagarajan J S K   |152 Answers  |Ask -

Health Science and Pharmaceutical Careers Expert - Answered on Nov 06, 2024

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My daughter has completed BSc in Life Science and Masters in Microbiology in June 2024. She is searching/applyin for jobs in pharma companies but no success Please guide
Ans: Hi Sir,

I am glad to hear that she has completed her MSc in Microbiology. Could you let me know what type of project she worked on during her final year? Additionally, what skills has she acquired during her postgraduate studies? While eligibility might be determined by her percentage, it's important to note that skills play a significant role in the job market.

Did she complete an internship in the pharma industry? Nowadays, many candidates claim to have experience, but often lack competency in their subjects.

One essential aspect is preparing her resume. She should highlight her skills, any internships she has completed, and the projects she worked on during her postgraduate program.

Industries are currently facing various challenges due to human resource issues, making them cautious in selecting candidates for specific roles.

I also recommend that she consider an internship at Biocon for six months. They have an academy focused on biotech-related training, and completing this prograHi Sir,

I am glad to hear that she has completed her MSc in Microbiology. Could you let me know what type of project she worked on during her final year? Additionally, what skills has she acquired during her postgraduate studies? While eligibility might be determined by her percentage, it's important to note that skills play a significant role in the job market.

Did she complete an internship in the pharma industry? Nowadays, many candidates claim to have experience, but often lack competency in their subjects.

One essential aspect is preparing her resume. She should highlight her skills, any internships she has completed, and the projects she worked on during her postgraduate program.

Industries are currently facing various challenges due to human resource issues, making them cautious in selecting candidates for specific roles.

I also recommend that she consider an internship at Biocon for six months. They have an academy focused on biotech-related training, and completing this program successfully may lead to a job at Biocon, depending on her performance.

All the best! m successfully may lead to a job at Biocon, depending on her performance.

All the best!

...Read more

Ramalingam

Ramalingam Kalirajan  |6976 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 06, 2024

Asked by Anonymous - Nov 05, 2024Hindi
Money
Hi Sir, I am seeking your expertise to review my current asset allocation strategy, as I am planning for a 10-year investment horizon. I am currently 48 years old, Moderate risk taker, looking 13-14% CAGR, and would like to ensure that my portfolio is well-structured to meet my long-term financial goals. Proposed Target Asset Allocation: (A) -Equity Instruments: 45% (a)-Direct Stocks: 10% (Large Cap / Blue Chip Stocks: 3%, Mid Cap Stocks: 2%, Small Cap Stocks: 2%, Solar/Green Fuel Stocks: 1%, AI / Semiconductor / Data Storage / EV Stocks: 1%, FMCG Stocks: 1%. (b). International Equity: 5%). (c). Mutual Fund Equity: 30% (Large Cap Funds: 9%,Mid Cap Funds: 6%,Small Cap Funds: 5%,Flexi Cap Fund: 3%,Multicap Fund: 2%,Aggressive Hybrid: 2%,NPS (Equity): 3%) (B). Debt Instruments: 40% ( FD/TFD: 40%, KVP: 8%, NSC: 6%, Debt Mutual Funds: 6%, NCD/Corporate Bonds: 2%, PPF: 2%, NPS (Debt): 2%) (C). Real Estate: 10% (Land/Forms: 7%, House/Flats: 3%) (D). Gold: 5% (Physical Gold: 5%, Sovereign Gold Bonds: 2%, Gold ETF: 2%) Questions: 1. Does this allocation appear appropriate for my age and risk profile? 2. Are there any modifications you would recommend to enhance potential growth or reduce risk? How does this allocation align with current market trends, particularly in sectors like green energy and technology? Thank you in advance for your insights and recommendations! Best regards,
Ans: Let’s assess each section of your proposed strategy, along with suggestions to help optimise your returns within your moderate risk tolerance and 10-year horizon.

1. Equity Instruments - 45%
Your equity allocation is well-diversified across direct stocks, international equity, and mutual funds. Let’s examine each segment:

Direct Stocks (10%): Holding 10% in direct stocks across large, mid, and small-cap stocks, as well as thematic sectors like green fuel and technology, adds growth potential. However, actively monitoring individual stocks and staying updated on market conditions is crucial for these segments.

Considerations: Thematic investments (e.g., solar, AI, semiconductor, and FMCG) add future-focused growth potential but can be volatile. Consider reducing thematic stocks slightly if you prefer a more conservative approach. A 7-8% direct stock allocation could still capture growth while managing risk.

International Equity (5%): Exposure to international equity is excellent for diversifying risk and gaining from foreign markets. Focus on countries with strong technology and industrial sectors, such as the US or emerging markets.

Mutual Fund Equity (30%): Your mix of large-cap, mid-cap, small-cap, flexi-cap, multi-cap, and aggressive hybrid funds provides balance. However, it’s advisable to stick with regular funds through an MFD, especially if you lack time for active tracking. Regular funds offer valuable guidance through certified financial planners, which may help in uncertain markets.

2. Debt Instruments - 40%
Debt provides stability to your portfolio. The allocation across fixed deposits, debt mutual funds, KVP, NSC, NCDs, PPF, and NPS (debt) is balanced.

Fixed Deposits and Term Deposits (20%): FDs offer security but relatively lower returns, especially given rising inflation. You could reduce FD holdings and allocate more to debt mutual funds for potentially higher returns without excessive risk.

KVP, NSC, and PPF: These are secure instruments offering fixed returns and tax-saving benefits. However, ensure that these instruments align with your tax strategy since the interest is subject to tax as per your income slab.

Debt Mutual Funds (6%): Increasing this portion slightly could improve returns. Debt mutual funds also provide better liquidity options compared to FDs. However, remember the new tax rules, where debt mutual fund gains are taxed as per your income tax slab.

3. Real Estate - 10%
Your 10% allocation to real estate is reasonable. Since you are looking at forms of land and residential property, it is critical to consider the liquidity of these investments.

Consideration: Real estate often involves high transaction costs and is less liquid. You may want to weigh this allocation against other investment avenues for improved liquidity.
4. Gold - 5%
Gold is a strong hedge against inflation and market downturns. Your allocation across physical gold, sovereign gold bonds, and gold ETFs is diverse.

Physical Gold (1-2%): Physical gold can be useful but adds storage costs and risks. You could consider shifting more of this portion to sovereign gold bonds and ETFs, which are easier to liquidate and don’t incur storage issues.

Sovereign Gold Bonds (2%): Sovereign Gold Bonds offer a fixed interest component and are tax-efficient if held till maturity. These are excellent for long-term holding.

Current Market Trends and Sectors
Green Energy: Green energy has high growth potential. However, these stocks can be volatile due to policy changes and economic shifts. Limit exposure to avoid over-concentration.

Technology (AI, Semiconductor, EV): The technology sector is growing rapidly, especially in AI and EV. Consider focusing on large-cap or mutual fund options for stability.

Tax Implications and Portfolio Adjustments
Capital Gains on Mutual Funds: For equity mutual funds, long-term capital gains (LTCG) above Rs 1.25 lakh are taxed at 12.5%, while short-term gains are taxed at 20%. Debt mutual funds are taxed as per your income slab, so balancing these investments can optimise tax efficiency.

Reduce FDs for Tax Efficiency: FDs, though safe, attract tax on interest income, which may reduce overall returns. Balancing some FD allocation with debt funds could be tax-efficient and yield higher returns.

Recommendations for Optimal Portfolio Structure
Consider Balanced Growth through Mutual Funds: Given your moderate risk profile, shifting a portion from direct stocks and FDs to actively managed mutual funds could reduce the need for active monitoring.

Optimise Debt Allocation with Debt Funds: A higher allocation to debt mutual funds could enhance returns, with improved liquidity and tax efficiency. Explore funds that align with your investment goals and time horizon.

Review Thematic Stock Exposure: Some exposure to high-growth thematic stocks is good but consider capping this to reduce risk. Mutual funds focused on sectors like green energy and technology can offer exposure with professional fund management.

Final Insights
Your asset allocation strategy is commendable and largely balanced. A few adjustments could potentially enhance your portfolio’s growth, liquidity, and tax efficiency over time.

Consider reducing exposure to direct stocks and fixed deposits.

Increase debt fund allocation for better returns and tax management.

Reassess the thematic exposure, especially for emerging sectors like green energy and technology.

Balance between actively managed funds and stable debt options to keep your risk aligned with your moderate risk tolerance.

By implementing these adjustments, you can optimise your portfolio’s growth while managing risk effectively. Over the 10-year horizon, this should position you well to achieve your financial goals.

Best Regards,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |6976 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 06, 2024

Asked by Anonymous - Oct 30, 2024Hindi
Money
Resp. Sir, I need your guidance regarding Insurance cum guranteed Income Plan. I did purchased ICICI Pru Guaranteed Income For Tomorrow (GIFT) Plan in 2023. I purchased 12 yrs PPT + 2 Year Plan. The annual premium is Rs. 5 Lakh + GST. ( 522500 in 1st year, 511250 for rest of 11 years ). I have paid 2 installment ( 2023 and 2024). Last installment to be paid in March 2034. I have choosed annual Payout. the first payout will start in September 2038 ( as I have chossed save on date) The payout amount will be Rs. 790926- tax free for 25 years ( upto 2062. I will be 95 by 2062). ICICI will return all premium also with 10% bonus. That mean Rs. 6600000/-( 66 Lakhs) will be paid with last payout. Now I am again confused for If I should contimnue or not. Policy is now fully paid after payment of minimum payment of two premium ( it means I will get reduced payout from 2038 onwards). Pl. guide me , 1) If I should continue the payment of premium, 2) what will be the rate of return and XIRR, 3) alternate investment if I discontinue the payment of Premium. Waiting for your reply. Thanks in Advance.
Ans: Your decision to purchase the ICICI Pru Guaranteed Income For Tomorrow (GIFT) Plan reflects a prudent approach to creating a future income stream. The policy offers guaranteed returns and aligns well with long-term financial security. However, it’s essential to carefully assess whether continuing with the premium payments will help you meet your financial goals efficiently.

Let’s evaluate the key elements of this plan, the expected returns, and alternative options to help you make an informed choice.

Key Highlights of Your Current Insurance Plan
Here’s a quick summary of your ICICI Pru Guaranteed Income For Tomorrow Plan:

Premium Payment Term (PPT): 12 years
Annual Premium: Rs 5 lakh + GST (Rs 5,22,500 in the first year, Rs 5,11,250 for the next 11 years)
Annual Payout Start: September 2038
Annual Payout Amount: Rs 7,90,926 (tax-free) for 25 years
Return of Premium with Bonus: Rs 66 lakhs at the end of the payout term in 2062
Evaluation of Returns: Rate of Return and XIRR
Rate of Return: This insurance-cum-guaranteed income plan typically offers returns in the range of 5-6%, which is relatively modest compared to other investment vehicles.

Expected XIRR: Calculating the exact XIRR is complex as it considers both premium payments and the eventual payouts. Given the guaranteed amount, the XIRR is expected to be in the range of 5.5-6.5%.

Opportunity Cost: This return may appear low compared to the potential returns from other investment options like mutual funds, especially when compounded over 12 years. High inflation rates may further erode the purchasing power of the fixed payouts, potentially affecting your financial freedom in the future.

Benefits of Continuing with the Plan
If your primary goal is guaranteed income and stability, here’s why you might consider continuing:

Assured Income: This plan provides a predictable, tax-free income stream for 25 years, helping you maintain cash flow without market risk.

Capital Preservation: With the return of premium and bonus at the end, the plan ensures capital preservation, which may suit a conservative investment outlook.

Tax-Free Income: The payouts are tax-free, which can be beneficial, particularly if you anticipate a high tax bracket in the future.

Considerations for Discontinuing the Plan
Although this plan provides guaranteed income, certain factors may urge you to consider discontinuing:

Lower Rate of Return: Traditional insurance-cum-investment plans generally offer lower returns. These returns may not match the long-term growth rates required for wealth accumulation.

Liquidity Constraints: The plan restricts liquidity since you must commit for 12 years, with no flexible withdrawal options. This can be a drawback if you anticipate needing funds for other investments or emergencies.

Inflation Impact: While the payouts are fixed, the real value of the income will diminish over time due to inflation. Alternative investments can offer growth that more effectively counters inflation.

Alternate Investment Options
If you decide to discontinue premium payments, here are some diversified options to consider for potentially higher returns with a balanced risk:

Actively Managed Mutual Funds: Investing in actively managed funds can offer a blend of equity and debt exposure. Experienced fund managers adjust portfolios to capture market gains while managing risk. Unlike index funds, actively managed funds may outperform due to professional insights. Explore equity mutual funds with a long-term focus for higher returns.

Balanced or Hybrid Funds: These funds offer a combination of equity and debt, reducing volatility while aiming for reasonable growth. Balanced funds are suitable for generating wealth over time, with moderate risk.

Debt Mutual Funds: For conservative growth, debt funds provide stable returns with relatively low risk. Note that debt fund returns are now taxed at your income slab rate, which may affect post-tax returns. Consider debt funds if you prefer a safer, predictable growth without long lock-ins.

Public Provident Fund (PPF): If you haven’t maximized your PPF contributions, this instrument offers tax-free interest and principal, with long-term compounding benefits. PPF is risk-free and provides stable, inflation-protected growth over time.

Sovereign Gold Bonds (SGB): For those interested in gold investments, SGBs offer regular interest income and long-term price appreciation potential. SGBs come with tax-free redemption if held to maturity, providing a hedge against inflation.

Systematic Withdrawal Plan (SWP) in Mutual Funds: An SWP offers regular payouts by systematically redeeming mutual fund units. Unlike insurance payouts, SWPs give you flexibility, and the invested corpus has growth potential, enhancing overall wealth.

Recommendation for Next Steps
To determine whether to continue with the premiums, consider the following steps:

Re-evaluate Your Financial Goals: Consider your long-term objectives and whether guaranteed, fixed returns align with them.

Assess Liquidity Needs: If liquidity is crucial, continuing this plan may limit your ability to allocate funds to better-suited investments.

Discuss with a Certified Financial Planner (CFP): Consulting a CFP can provide tailored insights and assist in calculating the precise XIRR and assessing the tax impact on your returns.

Final Insights
Your current insurance plan provides stability and guaranteed returns, which is suitable if you prioritize capital preservation. However, if wealth accumulation and inflation protection are key, consider exploring other options that offer higher growth potential with some market exposure.

Choosing the right path ultimately depends on balancing security with growth, ensuring that your investments remain aligned with your future financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |6976 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 06, 2024

Money
Sir,I became to cyber fraud in regards to Telegram Prepaid Task where I was deceived and manipulated by the fraudsters under their false pretenses that they were offering me a part time work from home job .I transferred Rs 86000/- to them.I reported to the same to my Indian Bank within 3 days according to RBI guidelines via a phone call to my branch manager but he did not take my complaint initially over the phone and rudely said to visit branch.then on the 4th day I visited branch along with necessary documents and police complaint copy and a written application informing the details of fraud transaction.I also got shadow reversal in account of Rs86000/- which was reflecting as a hold or lien balance in my account then I was to advised by the manager to wait for 1 or 1 and a half month till the investigation gets completed and then he will verify the same and credit the same into my account but they did not do anything for 1 month 6 days till I again visited branch to know that the said manager got transferred to another branch and new assigned branch manager did not knew anything I again submitted a complaint and then they raised a charge back which was rejected by the beneficiary bank stating that there is no balance in the beneficiary or fraudsters account .I complained to RBI but even RBI supported bank and held me responsible and now bank also closed and rejected my claim and that shadow reversal also has been reversed by them..what shall I do?
Ans: I'm truly sorry to hear about your experience with this fraud. Cyber scams, especially in the name of part-time jobs, have become increasingly common. While you've followed the required steps, the response from the bank and RBI can be frustrating. Here’s a structured approach to help you pursue your case further:

1. File an FIR with the Cyber Crime Police Station
Since you've already filed a police complaint, ensure it’s registered as an FIR (First Information Report) if it wasn’t initially.

Visit the Cyber Crime Police Station in your city or use the National Cyber Crime Reporting Portal (cybercrime.gov.in). Online reports are also possible.

Cyber crime units often coordinate directly with banks, so they might offer additional support. The sooner they receive the full complaint, the better the chance to trace the transaction trail.

2. Gather Complete Documentation
Compile all relevant documents: initial complaints to the bank, emails, SMS messages, screenshots of Telegram conversations, bank statements showing the transaction, RBI complaint letters, and any other related correspondence.

This documentation will provide a thorough record of events, which is helpful for authorities and any additional escalations you make.

3. Escalate with the Banking Ombudsman
File a complaint with the Banking Ombudsman under the Reserve Bank of India if you haven't done so already. This is a separate avenue that might yield a different result.

To initiate, visit the RBI’s Banking Ombudsman page and follow the complaint process. Ensure your complaint is detailed, mentioning dates, bank interactions, and the specific RBI guidelines under which you initially acted.

4. Send a Legal Notice to the Bank
If the Banking Ombudsman process does not yield results, you may consider sending a legal notice to the bank. This may compel them to reconsider their stance.

Contact a lawyer who specializes in consumer or banking matters. The lawyer will draft a legal notice mentioning the bank's failure to act as per the initial commitment made by the branch manager.

Sometimes, this step pushes banks to act, as they prefer to avoid further legal disputes.

5. Approach the Consumer Forum
If the above steps don’t help, you may consider filing a complaint with the Consumer Disputes Redressal Forum in your district or state.

Since you suffered financial loss due to what may be considered negligence or delay from the bank's side, the Consumer Forum might provide some relief or compensation.

Provide all documentation and details, especially focusing on the timeline of events and the initial shadow reversal placed on your account.

6. Alert the Cyber Cell and RBI Ombudsman about Fraud Trends
To help prevent further fraud, report this Telegram scam with details to the Cyber Cell and the RBI fraud department. This may lead to a warning to banks about specific types of scams, potentially benefitting other customers in the future.
7. Stay Cautious of Follow-up Scams
Fraudsters sometimes target those affected by previous scams with promises of refunds. Stay cautious about any unsolicited communication that claims to assist with recovering the funds for an additional fee or transaction.
Finally: Be persistent and patient as you follow each step. Given the increasing number of cyber fraud cases, authorities are becoming more proactive in tackling these issues, but the process can be lengthy.

Best of luck with your efforts, and I hope your funds are recovered soon.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Anu

Anu Krishna  |1272 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 06, 2024

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Relationship
Hi my son 36 year old having some bed habits like drinking , smoking ,having relationship with other females, have habits of argument with everyone , unable compromise with different circumstances and try to prove himself right all the times. Due to these habits he unable to do job , he already left 2-3 jobs in past . he got married in 2018 with same age of working female. Both were separately in other city from day of marriage. Due to his habits they took divorce in 2024. Even after that he did not changed , continue with his bed habits. Being parent when we tried to make him understand but nothing change in his habits. Now he is job less last 2 months , sitting ideal at home hole day , evening go out and come back home very late , some time early morning. As parents we are very upset and scare , don't know what to do and how to handle this situation.
Ans: Dear Rajbir,
Your son has forgotten that he is a grown-up and has challenges accepting responsibilities for himself.
So, to remind him that he is a grown-up, kindly set up an appointment with a professional who can not just identify the root cause of the issue and guide him to a place of confidence so that he can act his age.
The thing that you can do immediately which may work is to ask someone else in the family who is similar in age to your son to have a chat with him and find out what is going on...

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

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Anu

Anu Krishna  |1272 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Nov 06, 2024

Asked by Anonymous - Nov 04, 2024Hindi
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Relationship
I am a father of two young daughters aged 5 and 3. I and my wife got love married and post marriage things began to fall apart. The relationship is not where I have done any physical abuse as we see generally posted in this group . But the issue is more of the individual viewpoints and hence arguments. For every action I take there are reverse opinions and which ends with a feud which takes a lot of mental toll on me and my wife. So considering what we are going through we decided to seperate in good terms. But I am worried about how this will impact my kids. When separating, obviously I will have to stay seperate and I will not be able to meet and play with my kids like I do daily today. Best case would be weekends where I can spend my maximum time with them. Along with this the other concern is if either of us want to get into another relationship or dating, how best can we do along with co parenting? We both are 35 yrs old
Ans: Dear Anonymous,
It is unfortunate that you both have decided to separate; but now having taken that step, it would be a good idea for both of you to actually have an honest discussion on 'How to Co-parent'. Each couple does it in their own way BUT there are a few pointers that is a MUST DO:
- Make your children a priority; co-parenting is about them and not the two of you
- Make sure that the two of you don't bring in your agenda to be conveyed through the children
- Be respectful of one another when in front of the children so that they don't pick off from the vibes
- Keep the other parent always in the loop about things that concerns the children
- Keep your word on time committed that will support the other parent
- If there is a new relationship that either parent is exploring, when it gets serious, do share that with the other parent so that they will know how to handle the children's questions

The list can go on...but always be sure that you pursue co-parenting from a space of mutual trust, respect and understanding.

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

Pushpa

Pushpa R  |25 Answers  |Ask -

Yoga, Mindfulness Expert - Answered on Nov 06, 2024

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Health
Hi Pushpa, I am 52 Year old never married single. During childhood I had a practice of yogasanas through RSS. But now had a big break. How can I start it again? I have knee pain. Also advise me for financial success and career success as I have under performing career irrespective my 4 Post Graduations qualifications. Thank you. Regards Hanumanth
Ans: Starting yoga again at 52 is a great step toward revitalizing both body and mind. With your early background, you’ll find reconnecting with the practice rewarding. Here’s how to start safely, given your knee pain, and work toward your goals:

Gentle Yoga for Joint Support: Begin with poses like Sukhasana (Easy Pose) for meditation and Bhujangasana (Cobra Pose) to strengthen the back without straining the knees. Chair yoga may also be useful to protect your joints.

Law of Attraction Meditation: Daily visualization meditation can be powerful for career and financial goals. Imagine yourself achieving success, feeling confident and fulfilled. When done consistently, this “law of attraction” meditation builds a positive mindset and aligns your thoughts with your goals.

Pranayama (Breathing Exercises): Practicing Anulom Vilom (Alternate Nostril Breathing) increases focus and clarity, which supports mental well-being and career decision-making.

Partnering with a coach will help you practice safely and effectively, ensuring every step aligns with your body’s needs. With proper guidance, yoga and meditation can inspire growth in every area of life.

R. Pushpa, M.Sc (Yoga)
Online Yoga & Meditation Coach
Radiant YogaVibes
https://www.instagram.com/pushpa_radiantyogavibes/

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Ramalingam

Ramalingam Kalirajan  |6976 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 06, 2024

Asked by Anonymous - Nov 05, 2024Hindi
Money
Hi my age is 28 I would like be to be financially independent after 20 years own a home of 50 lakh. Currently my income is 5 lakh per annum
Ans: Congratulations on setting ambitious goals for financial independence and home ownership. At 28 years, you have ample time to achieve these dreams. Earning Rs 5 lakh per annum currently, you’ll need a well-rounded, disciplined strategy. Let’s create a plan focused on stability, growth, and careful asset building.

1. Financial Independence: Setting a Strong Foundation
Begin with a structured plan. Prioritize investments with growth potential to build a future corpus.

Regular, small investments create compounding benefits. Even small SIPs grow wealth over 20 years.

A Certified Financial Planner (CFP) can guide you. They ensure you meet your milestones.

2. Emergency Fund and Insurance: Ensuring Financial Safety
Keep an emergency fund. Save 6 to 9 months of expenses in a safe, liquid asset.

Health insurance protects against unexpected medical costs. Consider a family floater health policy for broader coverage.

Life insurance secures family finances. Opt for a term policy, ideally 10–15 times your annual income.

3. Mutual Funds: Core Investment Strategy
Actively managed mutual funds can grow wealth over the years. These funds are managed by experts who optimize returns.

Actively managed funds have the flexibility to outperform the market. Index funds lack this adaptability and may fall short in dynamic markets.

Regular fund investments via a CFP offer the added benefit of expert advice. This guidance helps navigate changes over time.

4. Balanced Portfolio: Equity and Debt Allocation
Equity Mutual Funds: Over 20 years, equity mutual funds provide high growth potential. Large-cap and multi-cap funds offer stability with growth.

Debt Funds: Debt mutual funds add balance. They’re less volatile than equity and bring stability to your portfolio.

Regularly review this allocation. Equity-heavy portfolios work best early on, gradually shifting to debt as you near your goals.

5. Goal-Linked Investing: Achieving Financial Independence and Home Purchase
Define two key goals: financial independence and buying a home.

Financial Independence Goal: Plan a corpus that generates passive income covering monthly expenses. Equity mutual funds are ideal for long-term growth towards this goal.

Home Purchase Goal: In 20 years, property prices could rise. Aim to invest in assets growing faster than inflation. Avoid real estate investment directly; mutual funds with high returns will suffice.

6. Power of Systematic Investment Plans (SIPs)
SIPs create disciplined saving habits. They spread investments, lowering market volatility impact.

Over 20 years, SIPs benefit from market cycles. Downturns offer buying opportunities; upturns boost value.

Review your SIP contributions yearly. Increase them as your income grows to boost your wealth accumulation.

7. NPS and PPF: Adding Stability to Your Portfolio
National Pension System (NPS) offers market-linked retirement savings with tax benefits. Partial equity exposure in NPS provides growth without full equity risk.

Public Provident Fund (PPF) is stable, tax-efficient, and safe. With 15-year maturity, it can complement your other assets.

Together, NPS and PPF provide stability. They ensure growth even during market downturns.

8. Avoiding High-Risk Investments
Direct stock investments require active management and market expertise. They’re volatile and may disrupt portfolio stability.

Real estate, while lucrative, requires high capital and often lacks liquidity. Maintenance, taxes, and other factors make it complex.

An actively managed mutual fund approach provides both flexibility and control. It aligns well with your financial independence goal.

9. Tax-Efficient Investment Approach
For equity mutual funds, long-term capital gains over Rs 1.25 lakh are taxed at 12.5%. Plan withdrawals wisely to manage tax impact.

Debt mutual funds are taxed based on your income slab. A balanced portfolio mitigates tax impact across various assets.

Work with a CFP to time withdrawals and reinvestments for maximum tax efficiency. Proper planning reduces tax obligations, optimizing returns.

10. Systematic Transfer Plans (STP) for Rebalancing
As your portfolio grows, shift from equity to debt for stability. Systematic Transfer Plans (STPs) are helpful here.

Move from equity funds to debt funds slowly. This shields your investments from sudden market shifts.

STPs help reduce tax impact and maintain a balanced portfolio. Your CFP can assist in structuring this transition effectively.

11. Investment Tracking and Regular Reviews
Track investments annually to assess performance and adjust as necessary.

Market conditions and life changes may impact your goals. A CFP can guide you to adjust strategies.

Regular reviews ensure investments stay aligned with both your financial independence and home-buying goals.

12. Managing Investment Risk Over Time
Long-term investment requires balancing returns with risk. Equity exposure is ideal early on, tapering as you near your goals.

Debt and equity balance reduces exposure to market volatility. It adds predictability, especially nearing your 20-year goal.

Your CFP can recommend adjustments based on age, life stage, and market conditions.

13. Lifestyle Budget and Expense Planning
Plan a budget that aligns with your income and goals. Track expenses to allocate more towards savings and investments.

Avoid lifestyle inflation as your income rises. This discipline boosts your long-term savings.

An expense budget ensures funds are prioritized towards your larger financial independence and home ownership goals.

14. Managing Debt and Building a Credit Score
Avoid high-interest loans like personal loans or credit card debt. They erode wealth accumulation.

Build a strong credit score by managing debt responsibly. It ensures better loan options if needed in the future.

Minimal debt leaves more income for investments, accelerating your journey to financial independence.

15. Final Insights: Path to Financial Freedom
You’re on the right track, setting specific goals for financial independence and home ownership. With 20 years, time is your ally for compounding and wealth growth.

Focus on actively managed mutual funds over direct stocks or index funds. These offer professional management and adaptability to market changes.

Structured financial planning, consistent reviews, and disciplined investing ensure you meet your goals comfortably.

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.

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