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Sunil

Sunil Lala  |193 Answers  |Ask -

Financial Planner - Answered on Apr 18, 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
Amit Question by Amit on Mar 13, 2024Hindi
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Sunil, as a financial expert, given the financial profile of someone like me - a 42-year-old individual earning a monthly salary of 1.6 lakh rupees, owning two self-occupied flats in Mumbai and Pune, with monthly obligations of approximately 70,000 rupees, and an EPF balance of around 30 lakh rupees - do you think it's realistic to aim to grow the EPF balance to 2.5 crore rupees over the next 10 years, possibly through contributions to EPF and VPF? What specific strategies or adjustments would you recommend to achieve this ambitious goal?

Ans: It's better to do SIP in equity mutual funds than putting money in VPF
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  |4605 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 2024

Asked by Anonymous - May 12, 2024Hindi
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Respected Sir, I am 42 years old. With monthly PPF of 7000, nps of 15000, MF 40000. I am also saving towards emergency fund and put 10000 every month. I also put on adhoc basis 10 to 15 thousands whenever I have some excess cash. My EMIs- 65k on housing loan and 18k on car EMI. My income - 2.3 lakh per month in hand after deduction. My present epf corpus is 40 lakh. I want to save 6 crore in next 15 years. Am I on right track?
Ans: Your commitment to systematic savings across various investment avenues demonstrates a disciplined approach towards building wealth for the future.

Analysis:
Monthly Contributions:

Your monthly contributions towards PPF, NPS, and MFs, along with regular savings for an emergency fund, reflect a diversified savings strategy.
Ad hoc contributions during surplus months further enhance your savings potential, allowing for flexibility in wealth accumulation.
Debt Obligations:

Your housing loan and car EMI constitute a significant portion of your monthly expenses, warranting careful consideration in your financial planning strategy.
EPF Corpus:

Your EPF corpus of 40 lakhs signifies a substantial retirement savings base, contributing to your long-term financial security.
Assessing Goal Feasibility
Analysis:
Target Corpus:
Your goal of saving 6 crores in 15 years is ambitious but achievable with diligent planning and consistent investment efforts.
Considering your current savings rate and investment contributions, it's essential to assess the adequacy of your investment strategy in meeting this target.
Recommendation for Enhanced Planning
Assessment:
Portfolio Optimization:

Review your investment portfolio to ensure optimal asset allocation and diversification. Consider consulting a Certified Financial Planner to align your investments with your risk tolerance and long-term goals.
Debt Management:

Explore strategies to accelerate debt repayment, especially your housing loan, to free up additional funds for investments towards your target corpus.
Regular Monitoring:

Regularly review and adjust your financial plan based on changes in income, expenses, and market conditions to stay on track towards achieving your financial goals.
Conclusion
While your current financial plan demonstrates a proactive approach towards wealth creation, optimizing your investment strategy and debt management can further enhance your path towards achieving a 6 crore corpus in 15 years. With diligent planning and periodic review, you can navigate towards financial success and long-term security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |4605 Answers  |Ask -

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

Asked by Anonymous - May 14, 2024Hindi
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Hello, I'm 33 yrs old, and only earner in family of 4 that includes 2 kids. (2,6). My take home is 2.5L, however my emis and expenses are breaching this by 19k. 30K-home emi(bought 3 years back, outstanding 28L). 85k-another home(under construction, will increase to 109K pm after handover-1.5cr will be outstanding). 23K- car emi(5L outstanding), monthly saving commitments 70K(chits, insurance and MF sip). Expenses further increased due to increase in kids fee. Because of the growing expenses I'm cutting down my monthly contribution to EPF temporarily for 2 years. (to 1800/3600 previously 44000). Please advise if these are manageable going forward in next few years. (I've emergency corpus of 20L which are getting compounded at 10% annually)
Ans: Current Financial Situation

You are 33 years old and the sole earner in a family of four. Your monthly take-home salary is Rs. 2.5 lakhs. However, your EMIs and expenses exceed this by Rs. 19,000.

Commendable Financial Planning

Your dedication to securing your family's future is commendable. Managing finances in such a scenario requires careful planning and execution.

EMIs and Commitments

Home Loan 1: Rs. 30,000 EMI, outstanding Rs. 28 lakhs
Home Loan 2: Rs. 85,000 EMI, increasing to Rs. 1.09 lakh, outstanding Rs. 1.5 crore after handover
Car Loan: Rs. 23,000 EMI, outstanding Rs. 5 lakhs
Monthly Savings: Rs. 70,000 (chits, insurance, and MF SIP)
Reduced EPF Contribution

You have temporarily reduced your EPF contribution to Rs. 1,800/3,600 from Rs. 44,000 due to rising expenses.

Emergency Corpus

You have an emergency corpus of Rs. 20 lakhs, compounding at 10% annually. This is a significant safety net for unforeseen expenses.

Analyzing Current Financial Strain

Your current expenses exceed your income by Rs. 19,000. This deficit needs addressing to prevent long-term financial strain.

Evaluating Home Loan 2 Impact

Once Home Loan 2 EMI increases to Rs. 1.09 lakh, the financial burden will be substantial. It is crucial to plan for this increment well in advance.

Prioritizing Expense Management

Consider the following steps to manage your finances better:

Review Monthly Expenses

Identify areas where you can reduce discretionary spending. This may include dining out, entertainment, and non-essential purchases.

Reassess Savings Commitments

Evaluate if any of your current savings commitments can be temporarily reduced without significantly impacting your long-term goals.

Emergency Corpus Utilization

Your emergency corpus is a significant asset. However, use it judiciously and only in genuine emergencies to maintain financial stability.

Exploring Additional Income Sources

Consider exploring additional income sources. Freelancing, consulting, or part-time work can help bridge the gap between income and expenses.

Benefits of Actively Managed Funds

Actively managed funds offer the potential for higher returns through expert management. These funds can outperform the market, providing better growth for your investments.

Disadvantages of Index Funds

Index funds only replicate market performance and do not aim to outperform. Actively managed funds, guided by professionals, can adapt to market changes, offering higher returns.

Disadvantages of Direct Funds

Direct funds lack professional management. Investing through regular funds with a Certified Financial Planner (CFP) provides expert guidance and regular reviews, optimizing your portfolio.

Long-Term Financial Planning

To ensure financial stability and growth, consider these long-term strategies:

Debt Repayment Strategy

Focus on repaying high-interest debt first. Consider prepaying smaller loans like the car loan to free up monthly cash flow.

Rebuilding EPF Contributions

Gradually increase your EPF contributions as your financial situation stabilizes. EPF is a crucial component of retirement planning.

Education Fund for Children

Start a dedicated savings plan for your children's education. Investing in ELSS or child-specific mutual funds can help accumulate a substantial corpus over time.

Regular Monitoring and Professional Guidance

Regularly review your financial plan with a Certified Financial Planner. They provide expert advice, ensuring your investments align with your goals and market conditions.

Conclusion

Your financial situation requires careful management and strategic planning. By reducing discretionary expenses, reassessing savings commitments, and exploring additional income sources, you can achieve financial stability. Regular reviews with a Certified Financial Planner will help optimize your investments and ensure long-term growth and security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Maxim

Maxim Emmanuel  |288 Answers  |Ask -

Soft Skills Trainer - Answered on Jul 12, 2024

Asked by Anonymous - Apr 23, 2024Hindi
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Career
Hello sir my name is Santu Chakraborty.I am 34 year old now unmarried. My qualification is Bsc botany honours with 2nd class +diploma in mechanical engineering with distinction +btech in mechanical engineering from government engineering college west Bengal with 7.5 dgpa.I have 6 years of teaching experience in private diploma engineering college and now I working as a vocational teacher in automobile engineering department in gov high school.In my early phase of life I am going through lots of Misguide,seveare Anxiety issue. Nobody can help me on that phase.I recover mostly by my own after various dillema.I want to work in mechanical r and d company, Mechanical design basis company and also upgrade my teaching carrier. How can I start my journey at this age ?what is the risk factor also? Please tell me. I am very enthusiastic dedicated person. I have no guide in my home. My father is vegetable seller.
Ans: Hi Santu Chakraborty,

This is a really exhaustive query.

The journey thru' your acquisition of qualifications has been vast!

In the course of your life you are now suffering from SNIOP (SUSCEPTIBLE NEGATIVE INFLUENCE OTHER PEOPLE) this happens when you let others control your life.

I have this poem.. Especially for one's like you!

The Guy in the Glass

When you get what you want in your struggle for pelf,
And the world makes you King for a day,
Then go to the mirror and look at yourself,
And see what that guy has to say.
For it isn't your Father, or Mother, or Wife,
Who judgement upon you must pass.
The feller whose verdict counts most in your life
Is the guy staring back from the glass.
He's the feller to please, never mind all the rest,
For he's with you clear up to the end,
And you've passed your most dangerous, difficult test
If the guy in the glass is your friend.
You may be like Jack Horner and "chisel" a plum,
And think you're a wonderful guy,
But the man in the glass says you're only a bum
If you can't look him straight in the eye.
You can fool the whole world down the pathway of years,
And get pats on the back as you pass,
But your final reward will be heartaches and tears
If you've cheated the guy in the glass.

Dale Wimbrow (c) 1934

Get the enthusiasm going, don't get embroiled in what life has been before!

Take a stranglehold of your life and make it BIG!

The opportunities are.. Miracles waiting to happen, what are you waiting for.. You are the catalyst!?
Maxim Emmanuel.

Pick up yourself don't be a victim of self pity.

If you do need further professional advice happy to assist
https://m.me/maxim.emmanuel.2024

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Nayagam P

Nayagam P P  |1830 Answers  |Ask -

Career Counsellor - Answered on Jul 12, 2024

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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