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Sanjeev

Sanjeev Govila  |458 Answers  |Ask -

Financial Planner - Answered on Nov 08, 2023

Colonel Sanjeev Govila (retd) is the founder of Hum Fauji Initiatives, a financial planning company dedicated to the armed forces personnel and their families.
He has over 12 years of experience in financial planning and is a SEBI certified registered investment advisor; he is also accredited with AMFI and IRDA.... more
Rajeev Question by Rajeev on Nov 08, 2023Hindi
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sir my son has just started earning and i want to save some amount from his salary to send him for higher studies.Kindly advise how i could do so.Now i am putting 20 thousand in FD from his salary every month.Kindly advise

Ans: It is difficult to give my opinion on this since I have no idea of what is the likely time horizon of your investment.

If you wish to send him within next 1-2 years, then probably a Recurring Deposit (RD) in a bank or a SIP in a debt fund is right way to invest. If the time horizon is longer, then SIP in a Debt fund, Hybrid Fund or an equity fund would be better, more tax efficient and more flexible. Please consult a financial advisor if you feel you need professional help for this.
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  |8311 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 2024

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Dear Sir, My son is in 7th grade and I want to save 15 lakhs when he completes his 12th grade for his higher education. Pls advise best investment options for this. How much should I save every month and in which funds. Regards
Ans: planning for your child's education is a heartfelt commitment. Here’s a tailored strategy for you:

Investment Horizon: You have approximately 5 years to reach your goal. This is a medium-term horizon, and considering this, a balanced approach is advisable.
Monthly Savings: To accumulate 15 lakhs in 5 years, you would need to save around 25,000 per month, assuming an annual return of 10%. This is a ballpark figure and can vary based on market conditions and fund performance.
Investment Options:
Equity Mutual Funds: Given the 5-year horizon, equity funds can offer potentially higher returns. Opt for a mix of large-cap, mid-cap, and multi-cap funds to diversify and spread risk.
Debt Mutual Funds: To add stability to your portfolio, consider allocating a portion to debt funds or fixed-income instruments.
Tax Efficiency: Look for tax-saving mutual funds under Section 80C if you haven’t exhausted the limit. This can provide tax benefits and align with your investment goal.
Asset Allocation:
Equity: 60-70% for growth potential.
Debt: 30-40% for stability and capital preservation.
Review & Adjust: Periodically review your investments to ensure they are on track to meet your goal. If needed, adjust your investments based on performance and market conditions.
Education Inflation: Keep in mind the inflation rate for education expenses, which tends to be higher than general inflation. Adjust your savings goal periodically to account for this.
Emergency Fund: While saving for your child's education, ensure you have an emergency fund to cover unexpected expenses. This will prevent you from dipping into your education savings.
Remember, the key to achieving your goal is disciplined saving, informed investing, and regular monitoring. Your dedication to your son’s education is commendable, and with prudent planning, you can certainly realize this dream. Best wishes for your savings journey!

..Read more

Ramalingam

Ramalingam Kalirajan  |8311 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 17, 2024

Asked by Anonymous - Apr 16, 2024Hindi
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Sir , i am 35 yrs old earing 55k monthly , I am married and 2 son . I have no saving no sip ,my expenses are 25 k monthly so can you tell me how can I save for my child's future education .
Ans: Given your monthly income, expenses, and family responsibilities, it's essential to start saving and investing for your child's future education. Here's a simple plan to help you get started:

Budgeting and Savings:

Track Expenses: Monitor your monthly expenses to identify areas where you can reduce spending and increase savings.
Emergency Fund: Build an emergency fund equivalent to 3-6 months of expenses in a liquid and accessible form to handle unexpected expenses without tapping into your investments.
Start SIPs for Child's Education:

Investment Amount: Allocate a portion of your monthly savings towards SIPs in mutual funds to build a corpus for your child's education.
Asset Allocation: Consider a balanced allocation between equity and debt mutual funds based on your risk tolerance, time horizon, and financial goals.
Investment Duration: Start SIPs with a long-term perspective (e.g., 10-15 years) to benefit from the power of compounding and potential market growth.
Education Planning:

Calculate Future Expenses: Estimate the future cost of education for your children based on the current cost and expected inflation rate.
Investment Goal: Set a specific investment goal and target amount to achieve by the time your children reach college age.
Regular Review: Periodically review and adjust your SIPs and investment strategy to stay on track towards achieving your education savings goal.
Insurance Coverage:

Life Insurance: Ensure you have adequate life insurance coverage to provide financial security to your family in case of any unforeseen events.
Health Insurance: Invest in a comprehensive health insurance plan to cover medical expenses and ensure your family's well-being.
Recommendation:

Start Early: Begin investing as early as possible to benefit from the power of compounding and achieve your education savings goal.
Systematic Investment: Start SIPs in mutual funds to build a disciplined saving habit and accumulate wealth over time.
Financial Discipline: Maintain financial discipline, avoid unnecessary expenses, and stay committed to your investment plan to achieve your financial goals.
Consult with a financial advisor to create a personalized education savings plan tailored to your needs, helping you achieve your financial goals and secure your children's future.

..Read more

Dev

Dev Ashish  | Answer  |Ask -

MF Expert, Financial Planner - Answered on Jun 25, 2024

Asked by Anonymous - Jun 25, 2024Hindi
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Hello, I am 43 yrs old and have a govt job . M monthly salary is 1 lakhs. I have two kids of age 13yrs and 8yrs.. How can I save a good amount for higher studies if my kids.
Ans: While your monthly salary is Rs 1 lakh, the surplus available after expenses is not known. But to give you an idea about how much would the investment requirement for both kids, we can run a simulation.

For the elder child aged 13 years, you have about 5 years to save money. If we assume a goal cost of Rs 20 lakh (in today's value) and adjust it for 10% inflation over the next 5 years, then the corpus required in 5 years will be about Rs 32 lakh. And since details of existing savings aren't available, then at 50:50 Equity:Debt allocation, you will need to start investing Rs 37,500 per month. And this amount needs to be increased by at least 5% each year (assuming similar growth in income) for the next 10 years.

Similarly for the younger child aged 8 years, you have about 10 years to save money. If we assume a goal cost of Rs 20 lakh (in today's value) and adjust it for 10% inflation over the next 10 years, then the corpus required in 10 years will be about Rs 52 lakh. And since details of existing savings aren't available, then at 75:25 Equity:Debt allocation, you will need to start investing Rs 20,500 per month. And this amount needs to be increased by at least 5% each year (assuming similar growth in income) for the next 10 years.

We don't have information about your risk appetite. But assuming that it is at least moderately aggressive, then, you can start investing in a combination of largecap index funds, flexicap funds, midcap funds.

Thanks
Dev Ashish,
SEBI Registered Investment Advisor (Fee-Only RIA)
Founder, StableInvestor.com
Twitter (@Stableinvestor)

Note (Disclaimer) - As a SEBI RIA, I cannot comment on specific schemes/funds that are provided or asked for in the questions in the platform. And the views expressed above should not be considered professional investment advice or advertisement or otherwise. No specific product/service recommendations have been made and the answers here are for general educational purposes only. The readers are requested to take into consideration all the risk factors including their financial condition, suitability to risk-return profile and the like and take professional investment advice before investing.

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Moneywize

Moneywize   |181 Answers  |Ask -

Financial Planner - Answered on Sep 03, 2024

Asked by Anonymous - Sep 02, 2024Hindi
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I am 43-year-old and have a private job. My annual income is Rs 12 lakh and my monthly take home is 80,000. I have two kids of 15 and 8. How can I save a good amount for higher studies of my children?
Ans: Saving for Your Children's Higher Education


Understanding Your Needs

Given your annual income and monthly take-home, saving for your children's higher education is a commendable goal. To create a solid plan, consider the following:

• Estimated Costs: Research the projected costs of higher education for the courses your children might pursue. This includes tuition fees, living expenses, and other related costs.
• Time Horizon: Determine how many years you have to save. This will depend on your children's ages and their planned start dates for higher education.

Investment Strategies

Here are some effective investment strategies to consider:

1. Systematic Investment Plan (SIP) in Equity Mutual Funds:

• Benefits: Offers regular investment, potential for higher returns, and tax benefits under Section 80C of the Income Tax Act.
• Considerations: Involves market risk, and returns can fluctuate.

2. Public Provident Fund (PPF):

• Benefits: Provides guaranteed returns, tax benefits, and a long-term investment horizon.
• Considerations: Lower potential returns compared to equity funds.

3. National Pension Scheme (NPS):

• Benefits: Offers tax benefits, a pension plan, and the option to invest in various asset classes.
• Considerations: Lock-in period and potential for lower returns in certain asset classes.

4. Child Education Plans:

• Benefits: Often offer a combination of insurance and investment components.
• Considerations: Can be more expensive and may have limited flexibility.

5. Additional Tips

• Start Early: The earlier you start saving, the more time your investments have to grow.
• Diversify Your Investments: Spread your investments across different asset classes to manage risk.
• Review and Adjust Your Plan: Regularly assess your financial situation and adjust your investment strategy as needed.
• Consider Education Loans: As a backup plan, explore education loan options if you fall short of your savings goals.

6. Consulting a Financial Advisor

For personalised advice and to create a tailored plan, consider consulting a financial advisor. They can help you assess your risk tolerance, recommend suitable investment options, and track your progress toward your savings goals.

By following these guidelines and making consistent contributions to your savings, you can significantly increase your chances of providing your children with the financial resources they need for their higher education.

..Read more

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Ramalingam

Ramalingam Kalirajan  |8311 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 29, 2025

Asked by Anonymous - Apr 29, 2025
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Hi Sir, I have a property in Mumbai suburb (approx 40L) and its location is perfect near station, bus stop, heart of the city etc. It's very old around 36 years old. I have just inherited it and I am finishing the legal procedure of it. The monthly maintenance is increasing every year and we are still waiting for redevelopment to happen. I am housewife and require monthly income. We also have loans around 25 L. My husband is int IT field and I am German language expert. We have a son 3 years. Some are saying to give it on rent and some are saying to sell it off for repaying loans. Even if I sell it I would like to reinvest it somewhere for getting monthly income, preferably a property. I want a secure investment for meeting the requirements for my son's education as my husband's field is very volatile due to regular layoffs and stuff. Kindly guide
Ans: You have inherited a 36-year-old property worth around Rs 40 lakh.
You have Rs 25 lakh loans to repay.
You are a housewife but a German language expert, and your husband is in IT.
You want monthly income and secure future planning, especially for your son.

You have inherited a valuable property in Mumbai suburb.

You are completing the legal formalities rightly, which is very important.

You are thinking ahead for monthly income, child education, and loan repayment.

Very few people show this kind of foresight. You deserve appreciation.

Challenges You Are Facing Now

Property is old, around 36 years, and needs maintenance.

Maintenance charges are rising every year, increasing burden.

Redevelopment is uncertain and unpredictable.

You have Rs 25 lakh loans creating stress.

Husband's IT field is unstable due to layoffs.

You want a secure monthly income and financial stability.

Option 1: Giving Property on Rent

You can earn monthly rental income by renting it out.

Typical rent may be around Rs 8,000 to Rs 12,000 per month.

Rental yield will be hardly 2%-3% on Rs 40 lakh value.

This is very low compared to your needs and loan burden.

Maintenance charges, property tax, repairs will further reduce your income.

Vacancy risk is also there if tenants leave.

Overall, rental income may not fully support your financial goals.

Option 2: Selling the Property

Selling can give you around Rs 40 lakh.

You can immediately clear Rs 25 lakh loans.

After repaying loans, you will still have around Rs 15 lakh.

Loan closure will bring huge mental peace and cash flow freedom.

No more EMI burden means husband's salary can be saved better.

You can use balance Rs 15 lakh wisely to generate monthly income.

Important Insights on Redevelopment

Redevelopment can take 5-10 years easily.

Many projects get delayed due to disputes and permissions.

Till redevelopment happens, maintenance and repair costs rise.

You may have to stay invested without any income for long.

Your immediate needs for income and loan closure will not be solved.

Depending on redevelopment alone is very risky at this stage.

What You Should Ideally Do

Prefer selling the property now while market is still decent.

Clear all Rs 25 lakh loans fully and become completely debt-free.

Debt-free life is the biggest financial freedom you can gift your family.

With balance money, create a secure income plan.

Stay light without property burdens and maintenance worries.

Focus on building an education corpus for your son and retirement corpus.

Where to Invest After Selling

Do not buy another property immediately for investment.

Property rental yields are low, and liquidity is very poor.

Instead, create a mix of debt mutual funds and hybrid mutual funds.

These can give you monthly income using Systematic Withdrawal Plan (SWP).

This method protects your capital and gives you flexible monthly payouts.

Debt mutual funds can provide 6%-7% returns safely with low risk.

Balanced advantage funds can give 8%-10% returns over 3-5 years.

Always choose regular mutual fund plans through a MFD who is also a Certified Financial Planner.

Why Not Property for Reinvestment?

Property is illiquid; selling it again takes months or years.

Property has heavy costs like stamp duty, registration, brokerage, repairs.

Rentals are taxed fully as income, eating away returns.

If tenant defaults or property is vacant, you get zero income.

Maintaining property is a headache, especially in old buildings.

Mutual funds offer better flexibility, better tax-efficiency, and better liquidity.

Disadvantages of Direct Plans (Important for You to Know)

If you invest in direct mutual fund plans yourself, you miss expert guidance.

Wrong fund selection, wrong withdrawal rate can destroy your capital.

Regular plans through a CFP-backed MFD give proper fund selection and review.

Charges in regular plan are justified because it protects your long-term wealth.

Getting professional hand-holding is very important for your peace of mind.

Additional Steps You Must Take

Keep a separate emergency fund of Rs 3 lakh in liquid mutual funds.

Buy a good term insurance cover for husband (at least Rs 1 crore).

Ensure you have a good health insurance for the whole family.

Start a small SIP for your son’s education goal systematically.

Slowly explore freelancing as a German language expert to earn extra income.

Future Planning for Your Son

Education costs are rising 10%-12% every year in India.

For good education after 15 years, you will need a large corpus.

Start small SIPs in good mutual funds focused on child education.

Stay committed for long-term without withdrawals.

Education planning must be top priority after loan closure.

Final Insights

Renting out the old property will not solve your loan and income issues properly.

Selling the property now and clearing the loans is the better, safer step.

Remaining money should be invested wisely for monthly income generation.

Avoid buying new properties now. Focus on mutual fund income plans.

Build emergency reserves, insurance covers, and an education fund for your son.

Stay light, stay debt-free, and keep life flexible financially.

Your thinking is already mature. With correct action, your future will be very secure.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8311 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 29, 2025

Asked by Anonymous - Apr 28, 2025
Money
Could you tell me the ideal stock quantity for me as I am investing 10k in each stock and I get minimum 30 percent return so I am not happy with reward. FYI my portfolio is of 5 Lacks investing since 2017.
Ans: You have a Rs 5 lakh stock portfolio.
You are investing Rs 10,000 in each stock.
You are getting around 30% returns, but you are not fully happy.

Let me help you with detailed insights.

Appreciating Your Journey So Far

You started investing in 2017, which shows good discipline.

Growing the portfolio with regular Rs 10,000 investments is a smart habit.

Earning 30% returns is not bad, especially in Indian stock markets.

Many investors struggle even to beat inflation in long-term investing.

You deserve appreciation for steady progress and patience.

Understanding Your Concern

You want even better returns than 30%.

You feel Rs 10,000 in each stock is limiting your potential.

You are looking for an ideal number of stocks for higher growth.

Ideal Number of Stocks to Hold

If portfolio is Rs 5 lakh, then having 15 to 20 stocks is healthy.

Less than 10 stocks can make portfolio risky and unstable.

More than 25 stocks will dilute returns and weaken performance.

Around 18 stocks can give you good balance of safety and growth.

Each stock can ideally carry 4% to 7% weight in your portfolio.

Problems of Over-Diversification

Holding too many stocks reduces focus.

Monitoring all stocks becomes difficult.

Even if some stocks do well, overall portfolio may not reflect it.

Returns get pulled down when poor stocks dilute the strong ones.

Problems of Under-Diversification

Too few stocks increase risks sharply.

Bad performance of one stock hits portfolio badly.

Emotional decision making becomes harder.

Volatility can become scary during market falls.

Fine-Tuning Your Approach

Increase your per stock investment slightly to Rs 15,000 to Rs 20,000.

Focus on holding 15 to 20 strong companies across sectors.

Prioritise companies with strong balance sheet and consistent profits.

Look for companies with leadership in their industries.

Reduce churning of stocks; stay invested patiently.

Sector Allocation Guidance

Allocate across banking, FMCG, pharma, IT, auto, and energy sectors.

Avoid over-investing in one sector or theme.

Always maintain sector diversification for stability.

Reviewing Your Return Expectations

Expecting more than 30% return consistently can be risky.

Stock market returns move in cycles.

In good years, 40%-60% returns may happen.

In bad years, even negative returns can occur.

Long-term average return expectation should be around 12%-18%.

Identifying the Real Issue

30% growth is a strong outcome compared to bank FDs and debt funds.

If you feel unhappy, maybe it is because of high expectations.

Managing emotions is key to wealth creation.

Recommended Action Plan

Stick to around 18 focused high-quality stocks.

Increase amount slightly if you find very strong companies.

Focus on strong fundamentals, not just price movements.

Rebalance portfolio once in a year to maintain sector weight.

Invest fresh money slowly when good opportunities arise.

Additional Important Points

Don't take high risks to chase higher returns.

Wealth building is a marathon, not a sprint.

Stay disciplined and trust your process.

Consistency will reward you richly in next 5-10 years.

Final Insights

Holding around 15-20 carefully selected stocks is ideal for you.

Focus more on quality stocks than chasing return numbers.

Growing wealth steadily is more important than chasing quick profits.

Stay invested with a cool mind, and you will achieve great success.

Celebrate your discipline till now and keep improving step-by-step.

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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