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Ramalingam Kalirajan |7254 Answers |Ask -Follow

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

Question by Vani on Aug 19, 2024Hindi

Money

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 Kalirajan |7254 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jun 04, 2024

Question by Shaming - Jun 04, 2024Hindi

Money

Thankyou very much sir for your valuable advice.....I will definitely check swp plans...

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

Ramalingam Kalirajan |7254 Answers |Ask -Follow

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

Asked by Anonymous - Jun 10, 2024Hindi

Money

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

Ramalingam Kalirajan |7254 Answers |Ask -Follow

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

Question by Bharath - Jul 11, 2024Hindi

Money

Thank you for a detailed explanation Sir! Will do as suggested.

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

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Question by KP - Nov 01, 2024Hindi

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Thank you Sir for your answers, I will ach as suggested.

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Insurance, Stocks, MF, PF Expert - Answered on Dec 11, 2024

Question by Pradeep - Dec 11, 2024Hindi

Money

I had taken ICICI Pru Savings Suraksha plan for yearly premium of 3L in 2019 for 10 years. As I am not feeling the return is more than 6%, I stopped to pay the premium from 2024, but paid all previous 5 instalments up to 2023. I thought to claim the policy amount in 2029 only to get the other benefits. Is it a good decision?

Ans: Hello;

Traditional endowment life insurance policies provide poor returns.

Term life insurance is the optimal solution for protection.

Now that you have stopped paying premium for this policy it may have been converted into a paid-up policy with reduced benefits at maturity, by the insurer.

In such cases it is better to surrender the policy and invest whatever money you get, into mutual funds.

I presume you have adequate term life cover as protection.

Best wishes;

Ramalingam Kalirajan |7254 Answers |Ask -Follow

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

Question by Leena - Dec 11, 2024Hindi

Money

I have 20 lakhs in my account and a house in my name. At present I am not earning. I have taken SBI Life smart wealth builder with installment of 1Lakh, for 12 years and premium payment term of 7 years. Applicable tax rate is 18%. I also invested in MF and taken a health insurance. I am thinking if it would be wise to continue with the SBI life. If I close SBI life and invest that in MF will it be beneficial for me? I have taken a break from my career due to health issues, and planning to continue with my job soon with an expected income of 40-50k. I am 50 years old. I need to take care of my son's (18 years) higher studies and plan for my retirement.

Ans: You are in a transitional phase with important financial goals. Let’s assess your options to make informed decisions.

Assessing SBI Life Smart Wealth Builder Policy
High Cost of Policy: The policy includes administration charges, fund management fees, and taxes of 18%.

Limited Returns: ULIPs often provide lower returns compared to actively managed mutual funds.

Lock-in Period: Your policy locks funds, restricting liquidity for immediate goals.

Surrender Value: Check the surrender value. Early surrender might lead to penalties and reduced returns.

Potential Benefits of Investing in Mutual Funds
Higher Returns: Mutual funds, especially actively managed ones, often outperform ULIPs over time.

Flexibility: You can withdraw funds based on your needs, offering better liquidity.

Diversification: Mutual funds provide exposure to different asset classes, reducing risk.

Cost Efficiency: Investing through a Certified Financial Planner minimises hidden charges and optimises returns.

Managing Your Rs. 20 Lakh Corpus
Emergency Fund: Set aside Rs. 5-6 lakhs in liquid funds or fixed deposits for emergencies.

Education Planning: Allocate funds in short-term debt mutual funds or recurring deposits for your son’s higher studies.

Retirement Corpus: Invest the remaining amount in a mix of equity and debt mutual funds for long-term growth.

Health Insurance Adequacy: Review your existing health insurance to ensure sufficient coverage.

Planning Your Income Resumption
Once you resume work, save at least 20-30% of your income.

Prioritise retirement contributions alongside education planning.

Use surplus income to reduce financial dependency on investments.

Tax Efficiency
Mutual Funds: Equity mutual funds provide tax benefits but watch for LTCG above Rs. 1.25 lakh (taxed at 12.5%).

Surrendering ULIP: Check tax implications on surrender proceeds. ULIPs offer tax exemption if premiums don't exceed 10% of the sum assured.

Health Insurance: Claim Section 80D deductions for premiums paid.

Strategic Steps Forward
Review the policy surrender value. If penalties are high, consider continuing till break-even.

Consult with a Certified Financial Planner for a detailed portfolio review.

Set realistic timelines for education and retirement goals.

Maintain separate funds for short-term needs and long-term growth.

Finally
Your proactive approach will create a strong financial foundation. By reallocating your resources wisely, you can secure your son’s education and your retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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Dating, Relationships Expert - Answered on Dec 11, 2024

Asked by Anonymous - Dec 11, 2024Hindi

Relationship

I recently went through a breakup with my collegemate and now I am finding it hard to move on. I keep thinking about my ex and whether I made the right decision. How can I heal and regain confidence in myself and my future relationships?

Ans: Dear Anonymous,
I understand that it can be difficult to move on from a relationship you put effort into building. But this will pass. You have to let time do its thing. For now, allow yourself to feel the pain. If you bottle it up, it will be harder to move on. Once you feel all the emotions that you are experiencing right now, slowly you'll notice that those sad emotions are passing. Grab onto that. Focus on your studies, hangout with your friends, and soon you will feel a lot better.

Hope this helps.

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Plastic-Aesthetic Surgeon, Emergency Care Consultant - Answered on Dec 11, 2024

Asked by Anonymous - Dec 11, 2024Hindi

Health

Hi Dr Anshuman, I’ve been struggling with uneven skin texture and some pigmentation around my cheeks and forehead for a while now. I’ve tried a few over-the-counter products, but nothing seems to give lasting results. I am 29 and I work as a fashion stylist in Mumbai. I have clients who have suggested laser treatments, microneedling, and chemical peels as potential solutions, but I’m not sure if they would suit my skin. How effective are these treatments? What would be the approx cost? I’m looking for something that gives good results without too much downtime or risk.

Ans: These treatments which you mentioned do work provided right kind of treatment is chosen. Cost depends on the condition and the treatment used.
Please visit a qualified expert and discuss.
Over the counter medicines may not help as they generally hv very less concentration of medicines..

Samraat Jadhav |2111 Answers |Ask -Follow

Stock Market Expert - Answered on Dec 11, 2024

Asked by Anonymous - Dec 11, 2024Hindi

Money

I am in a credit card and loan debt of almost 1.5 lakh and not able to repay. I lost my job with 0 savings and have been trying to search for the same since. Please advice on how I can come out of this.

Ans: 1) write a letter to the bank stating that you cannot pay the dues at one go and convert the same in smaller EMI's
2) look for a job and start paying it from the salary.

Ramalingam Kalirajan |7254 Answers |Ask -Follow

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

Asked by Anonymous - Dec 11, 2024Hindi

Money

I am going to retire soon with retirement fund of 2 Cr along with pension sufficient for me and my spouse. I have own builder flat in Delhi and health coverage. I have one married daughter who is well settled with 2 kids under 5 years. One flat in my building is on sale for 2 Cr. I need advice for investment for 2Cr retirement fund . Should I buy the flat in my building or should I invest 2 Cr in senior citizen saving scheme, post office MIS , fixed deposit in Bank. My spouse of same age is also earning equally.

Ans: Retirement is a significant phase of life, and your financial decisions now will shape your future security and lifestyle. Let’s analyse your situation and investment choices.

Assessing Your Current Position
You have a retirement fund of Rs. 2 crore, which is substantial.

Your pension adequately covers your and your spouse’s living expenses.

Your spouse’s earnings provide an additional safety net.

You own a flat in Delhi and have health insurance coverage.

You have no immediate financial dependency, as your daughter is well-settled.

Should You Invest in Real Estate?
Avoid investing Rs. 2 crore in another flat, even if it is in your building.

Real estate offers low liquidity, making it harder to access funds in emergencies.

Rental income might not justify the high capital investment, considering property management costs and potential downtime.

Real estate lacks diversification compared to other investments, increasing risk.

Alternative Investment Options
1. Senior Citizen Savings Scheme (SCSS)
SCSS is a secure option offering fixed returns for retirees.

Invest up to the permissible limit for predictable and regular income.

It is a low-risk investment backed by the government.

2. Post Office Monthly Income Scheme (MIS)
Post Office MIS provides guaranteed monthly income.

It is another safe choice for retirees with capital preservation as a priority.

Returns, though lower, are steady and reliable.

3. Bank Fixed Deposits
Fixed deposits (FDs) offer fixed returns and flexible tenures.

Senior citizen FDs provide slightly higher interest rates.

Split the funds across different banks for better safety and liquidity.

4. Balanced Investment in Mutual Funds
Invest in a mix of debt and equity mutual funds for moderate growth and stability.

Actively managed funds through an MFD with a Certified Financial Planner can optimise returns.

Debt mutual funds provide stable returns while equity offers growth potential.

Avoid direct funds due to their complexity and the need for constant monitoring.

5. Liquid Funds and Emergency Reserve
Allocate a portion to liquid funds for quick access in emergencies.

These funds are more effective than savings accounts for parking surplus money.

Maintain an emergency reserve for at least 24 months of expenses.

6. Inflation-Protected Investments
Some funds and bonds are designed to protect against inflation erosion.

These investments ensure your purchasing power remains intact over time.

Tax Considerations
Plan investments to minimise tax liabilities under your income bracket.

Be aware of the latest tax rules on mutual funds and fixed deposits.

Capital gains from equity investments over Rs. 1.25 lakh are taxed at 12.5%.

Fixed deposit interest is taxed as per your income slab. Plan withdrawals accordingly.

Succession Planning and Gifting
Consider creating a detailed estate plan to avoid future legal hassles.

Set up nominations and update wills to ensure smooth wealth transfer.

You may gift small amounts to your daughter or grandchildren under tax-free limits.

Final Insights
Investing your Rs. 2 crore retirement fund wisely ensures peace of mind and financial stability. Opt for a diversified approach balancing safety, liquidity, and moderate growth. Avoid locking all funds into real estate to keep your portfolio flexible. Thoughtful planning now will safeguard your golden years and your family’s financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Kanchan Rai |435 Answers |Ask -Follow

Relationships Expert, Mind Coach - Answered on Dec 11, 2024

Asked by Anonymous - Dec 11, 2024Hindi

Relationship

Whenever I argue with my partner, it quickly escalates into something bigger than it should be. I don't express how much I love them, but I feel like our communication is breaking down. How can I improve this situation?

Ans: It’s clear that you deeply care about your partner and the health of your relationship, but recurring arguments and a lack of expressed love are creating a disconnect. To nurture love and clarity in your communication, it’s essential to create an emotional space where both of you feel safe, valued, and understood—even during disagreements.

When arguments arise, they often escalate because emotions are heightened, and both people feel the need to defend their perspective. To shift this dynamic, start by focusing on emotional regulation in those moments. Take a deep breath and remind yourself that you’re both on the same team, even if you see things differently. This small pause can prevent reactive words or actions that might escalate the conflict further.

Outside of conflicts, consider the daily emotional climate of your relationship. If love isn’t being expressed regularly, your partner may feel insecure or disconnected, which can intensify disagreements. Begin to nurture love by weaving simple but heartfelt expressions of care into your everyday interactions. This might be as simple as saying, “I appreciate you,” giving a warm hug, or acknowledging something they did, however small. These gestures build emotional reserves that make handling tough conversations easier because they remind both of you of the underlying bond.

When it comes to communication, try reframing the way you approach disagreements. Speak from your feelings rather than placing blame. For instance, instead of saying, “You’re not listening to me,” try, “I feel unheard, and it’s making me frustrated.” This subtle but powerful shift fosters understanding rather than defensiveness. Equally important is listening with an open mind. Practice reflecting back what your partner shares to show you’re truly hearing them. For example, “I hear that you’re upset because you feel I didn’t prioritize you—am I understanding that correctly?”

Love is nurtured in the moments between conflicts—through trust, small acts of kindness, and consistent emotional support. Reflect on what makes your partner feel loved and cherished, and intentionally incorporate those actions into your daily life. At the same time, share what you need emotionally so they understand how to nurture you too. This mutual exchange strengthens your connection and creates a deeper sense of partnership.

Finally, consider having a calm, heartfelt conversation about how you both want to handle conflicts and express love moving forward. Creating shared goals for your relationship can bring clarity and purpose, helping you both feel aligned. By approaching your relationship with patience, empathy, and intentional care, you can not only resolve current challenges but also nurture a love that feels steady, secure, and fulfilling.

Prof Suvasish Mukhopadhyay |245 Answers |Ask -Follow

Career Counsellor - Answered on Dec 11, 2024

Question by Hemal - Sep 18, 2024Hindi

Career

Hello Mam , Currently I'm pursuing Diploma In CSE in a university of Vadodara and I want to study my Degree from Germany, Is that actually possible ? And what will be the procedure?

Ans: It is possible. But your diploma will not be considered. You need to take fresh course. Graduation takes four years. Search in net for the procedure for taking admission in German Universities. Best of luck. MAY GOD BLESS YOU. Professor.............:)

Prof Suvasish Mukhopadhyay |245 Answers |Ask -Follow

Career Counsellor - Answered on Dec 11, 2024

Asked by Anonymous - Sep 24, 2024Hindi

Career

I completed my B.Tech in EEE(2023) and plan to pursue an MS in Computer Science with a Spring intake. I’m considering the US, Germany, and Australia. Given the timing and my background, which country do you think would be the best option in terms of internships and job prospects?

Ans: Certainly USA. Best of luck. GOD BLESS YOU. Professor....................................:)

Ramalingam Kalirajan |7254 Answers |Ask -Follow

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

Asked by Anonymous - Dec 11, 2024Hindi

Money

Hi, I am 33. A mom to a 5 months old. I have been working since I was 24 in education industry. I have accumulated a corpus of 1.4 cr ( solely mine) and a house registered jointly in my name and my husband's name. Now if I choose to be a stay at home mom for next 3 yrs. How much will my finances be affected? Could you please let me know.

Ans: Taking a career break for three years will have financial implications. Let us assess it from multiple perspectives to provide insights.

Income Loss Impact
Your current income will cease for three years, reducing your cash flow.

This pause might impact your future earning potential, depending on re-entry challenges in your industry.

Evaluate if your husband's income and your savings can sustain your family needs during this break.

Corpus Utilisation and Growth
A Rs. 1.4 crore corpus is commendable. Assess its current allocation for better optimisation.

If untouched, this corpus can grow significantly over three years through strategic investment.

Avoid dipping into the corpus unless absolutely necessary, as it can reduce future compounding benefits.

Household Budget Planning
Ensure your household expenses are managed within your husband’s income.

Create a detailed budget, listing mandatory expenses like EMIs, child needs, and lifestyle costs.

Plan for inflation while allocating funds for fixed expenses over the next three years.

Emergency Fund Importance
Maintain an emergency fund equivalent to at least 12 months' expenses.

Use a combination of fixed deposits and liquid funds for this purpose.

Avoid using your primary corpus as an emergency reserve.

Investment Portfolio Review
Review the current allocation of your Rs. 1.4 crore. Balance between equity and debt based on your goals.

Equity allocation can grow your wealth but keep debt for stability.

Invest in actively managed funds through a Certified Financial Planner to optimise returns.

Impact on Long-term Goals
Pausing your career may delay achieving some financial goals.

Align your current investments to meet goals like child education or retirement.

Regularly monitor the performance of your investments and adjust as required.

Tax Implications
Check the tax efficiency of your investments during the break.

Consider tax-saving instruments to reduce liability on your husband’s income.

Be aware of the latest tax rules on mutual fund capital gains.

Insurance and Contingency Planning
Review health and term insurance for adequate coverage for your family.

Ensure your husband is adequately covered with term insurance since he will be the sole earner.

Plan for additional medical expenses associated with child care during this time.

Re-Entry Considerations
Stay updated with industry trends to ensure a smooth return to work after three years.

Enhance skills during the break, if possible, to make re-entry easier and impactful.

Consider part-time or freelance work during the break to keep connected with the profession.

Finally
Taking a break to focus on motherhood is a beautiful choice. Planning carefully will ensure your finances remain stable during this period. With a structured approach, you can balance your family needs and long-term financial goals seamlessly.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

See more questions »

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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