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Ramalingam

Ramalingam Kalirajan  |6568 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 20, 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
Vani Question by Vani on Aug 19, 2024Hindi
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Thank you so much sir for explaining about all the options. I will go with paid-up option.

Ans: You're welcome! If you have any more questions or need further assistance, feel free to ask. Best wishes on your financial journey!

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  |6568 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 25, 2024

Asked by Anonymous - Jun 10, 2024Hindi
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Hi Whether to choose SIP or money back policy
Ans: Understanding SIP vs. Money Back Policy

When deciding between a Systematic Investment Plan (SIP) and a Money Back Policy, it's important to evaluate each option carefully. Here's a detailed comparison to help you make an informed choice.

What is a Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) allows you to invest a fixed amount in a mutual fund at regular intervals. It promotes disciplined investing and helps you benefit from market fluctuations through rupee cost averaging.

What is a Money Back Policy?
A Money Back Policy is a type of life insurance policy that provides periodic payouts during the policy term. It combines insurance coverage with investment returns, offering a lump sum at the end of the policy term along with regular payouts.

Benefits of SIP
Higher Returns Potential:

SIPs typically offer higher returns compared to money back policies. This is because mutual funds invest in a diversified portfolio of stocks and bonds, which have historically provided better returns than traditional insurance products.

Flexibility:

SIPs offer flexibility in terms of investment amount and frequency. You can start with a small amount and increase it over time as your income grows.

Liquidity:

SIPs provide liquidity, allowing you to redeem your investments partially or fully at any time. This is crucial for meeting unexpected financial needs.

Rupee Cost Averaging:

SIPs benefit from rupee cost averaging, which helps in averaging the purchase cost of mutual fund units. This reduces the impact of market volatility on your investments.

Drawbacks of Money Back Policy
Low Returns:

Money back policies generally offer lower returns compared to SIPs. The returns from money back policies barely beat inflation, limiting wealth growth.

High Costs:

Money back policies come with high premium costs due to the combination of insurance and investment components. A significant portion of the premium goes towards insurance rather than investment.

Limited Flexibility:

Money back policies lack flexibility. The periodic payouts are fixed, and the policy term is rigid. You cannot adjust the premium amount or the payout frequency based on your financial situation.

Complexity:

Money back policies are complex products. Understanding the fine print and the exact returns can be challenging. This complexity can lead to uninformed decisions.

Why SIP is a Better Choice
Wealth Creation:

SIPs are designed for wealth creation. By investing regularly in mutual funds, you benefit from the power of compounding, which can significantly grow your wealth over time.

Transparency:

SIPs offer transparency. You can track the performance of your mutual fund investments easily. There are no hidden charges, and the expense ratio is disclosed upfront.

Tax Efficiency:

Investments in equity mutual funds through SIPs are tax-efficient. Long-term capital gains (LTCG) from equity funds are taxed at a lower rate compared to traditional insurance products.

Goal-Oriented Investing:

SIPs allow for goal-oriented investing. You can align your SIP investments with specific financial goals, such as buying a house, children's education, or retirement planning.


Choosing the right investment option can be overwhelming. It's natural to feel confused about where to invest your hard-earned money. Remember, the goal is to secure your financial future and achieve your life goals.


You're considering your options and seeking the best investment strategy, which shows your commitment to financial planning. This proactive approach will help you make informed decisions and grow your wealth effectively.

Final Insights
While money back policies may seem appealing due to the periodic payouts and insurance coverage, they are not ideal for wealth creation. SIPs, on the other hand, offer higher returns, flexibility, liquidity, and tax efficiency. They are a better choice for building long-term wealth and achieving financial goals.

Investing in SIPs requires discipline and patience, but the rewards can be significant. Consult with a Certified Financial Planner to tailor an investment plan that suits your needs and financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Milind

Milind Vadjikar  |387 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 13, 2024

Asked by Anonymous - Oct 12, 2024Hindi
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Hi, age 40 years, monthly net salary Rs 85k, married , 1 kid. Recently have constructed new house. Ground floor commercial shops, and 1st floor residential 2bhk flat were we stay. Home loan 1.05 cr with monthly EMI of 85k for next 30 years & All current savings exhausted due to new construction. Commercial shops have potential for monthly rental income of 60k to 70k.please guide on below for strategy: 1) how to close home loan in next 10 years 2) considering 60 as retirement age, need corpus of 8 cr to fund kid education, marriage and for rest of livelihood.
Ans: Hello;

1. Immediately let out the commercial shops on long lease with yearly rent hikes. This is crucial to fund your loan EMI.

Assuming this to yield rental income of 70 K per month.

You will still need to shell out 15 K for the EMI amount from your income.

2. So after deducting EMI cut from your monthly pay we are left with
70 K.
Earmarking 30 K for your regular expenses, I suggest you start a monthly SIP of 40 K in a pure equity mutual fund with yearly top-up of 11% minimum.

This may grow into a corpus of 1.47 Cr after 10 years part of which you may utilise to settle off the overdue loan amount.

3. The balance corpus left after settling the loan is expected to be around 54 L. At this stage you will need enhance monthly sip to 1.5 L with 13 % yearly top-up for the next 10 years.

4. The corpus from SIP after the next 10 years may be 6.3 Cr. The balance corpus of 54 L may grow into a sum of 1.83 Cr. Both added will give you a comprehensive corpus of 8.13 Cr, as desired. ( A modest return of 13% from pure equity mutual funds is considered).

Happy Investing!!

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

...Read more

Nayagam P

Nayagam P P  |3811 Answers  |Ask -

Career Counsellor - Answered on Oct 13, 2024

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Sir the median package at ssnce for cse core is less than rvce ise .So does it make more viable option considering placement in mind .I have a dream of becoming software engineer from my childhood. But my seniors are advising for rvce ise.what to do should I follow my dream or placement.I am a Bangalore resident and Tamil is my mother tongue.
Ans: Ashwin, my son, graduated from RVCE in 2023 and secured employment through campus placement with a reputable software company. Despite being among the highest achievers in COMEDK, he opted for ECE instead of the more accessible CSE. We did not compel him to join CSE. Following his second year, he progressively shown an interest in software and obtained several certifications through NPTEL, Internshala, and similar platforms. Regarding his experience, while ISE is commendable, CSE is the superior option. Simply enter 'RV placement statistics 2024'. Select the initial result to get the Placement Statistics of RV directly. The top placements are for Computer Science Engineering, followed by Electronics and Communication Engineering, and then Information Science Engineering. The recommendations of your seniors, your personal interests, and the branch with the highest placement statistics are distinct considerations. Kindly review the Course Curriculum for both CSE and ISE and make a decision. Kindly review one of my detailed responses below, in which I have explicitly outlined the stages, recommendations, and methods that a first-year engineering student should adhere to till their fourth year for campus placement. All the BEST for Your Prosperous Future.

To know more on ‘ Careers | Education | Jobs’, ask / follow Us here in RediffGURUS.

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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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