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Ramalingam

Ramalingam Kalirajan  |8325 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 14, 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
Saurabh Question by Saurabh on Jun 13, 2024Hindi
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Thanks for the detailed valuable advise. I forgot to mention that I have 9 lacs of mediclaim Insurance and 50 lacs term Insurance as well. I also made a 30 lakhs investment in office space for capital appreciation. Having own house and a car loan of 4.5 lakhs.

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

Asked by Anonymous - Nov 11, 2024Hindi
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Hello, My current assets are: - Around 1.5 CR in Equity Mutual Fund managed by Anand Rathi - 50 L in Market Link Debentures, managed by Anand Rathi - 45 L in Equity Shares, - 40L PPF investment between my wife and daughter, - 20L of ESOP (Employee stock options) - 58L of Employee Provident Fund - Cash Savings of around 5-7 L for emergency needs - I stay in my own flat with nearly (1 Cr worth) - I have another flat (1 Cr worth) which is given on rental. Liabilities: - No Liabilities. Insurance Coverage: - Have a term insurance of around 2 Cr. Premium of 35k per annum as of today. - Health insurance (floating) for the family for 50L. Premium of around 65k per annum as of today. - I plan to continue with the health insurance and close the term insurance in next 5 years. Expenditure: - My monthly expense is around max of 80k to 1 Lakh. - Future Expenses include my daughter’s marriage for which I expect an expense around 80L to 1 Cr. - I do plan to make some foreign family trip (maybe twice or thrice in next 10 years), which I assume will cost me around 15-20 Lakhs per trip. Future income: - I receive nearly 25k rental income from one of my properties (which would be worth around 1 CR). This I expect to continue with standard rental increments year on year. - Expect some recurring pension of 40k per month from 2034 onwards from one of the LIC policy scheme till the age of 100. - I also expect to receive around 30L from some of my LIC policy maturity. (12.5L in the year 2027, 2.5L in 2026, 3.5L in 2029, 13.5L in 2034) - I do plan to become a full-time trader in future and do expect, that I will be able to generate some regular income from that. However, do not want to plan my retirement (from primary job) decision based on that. I am currently 49 Years old and draw nearly 4.5L as a monthly income; can you suggest if I can retire from my primary job in next 2-3 months.
Ans: Hello;

Your current portfolio is:
1. MFs-1.5 Cr
2. MLDs-0.5 Cr
3. Equity- 0.45 Cr
5. PPF-0.4 Cr
6. ESOP-0.2 Cr
7. EPF-0.58 Cr
Grand Total -3.63 Cr
Minus 1 Cr for wedding goal-2.63 Cr
Minus 0.6 Cr for foreign trip goal-2.00 Cr

If you buy an immediate annuity from a life insurance company for your Net corpus of 2 Cr then you may expect monthly income of around 85 K(post-tax).

You may select option of joint annuity for yourself and spouse for life with return of purchase price to your nominee.

Add to this your rental income of 25K so your net monthly income will be 1.10 L per month now.

The LIC policy maturity proceeds may be used to top-up your annuity corpus for protecting against inflation.

Further the LIC pension(40 K) slated to begin from 2034 will be a booster for your retirement income.

The emergency fund (7 L)is not considered here and should be preferably kept untouched.

The best part which I liked about your financial planning, apart from meticulous investments, is the adequate term and healthcare insurance cover.

However do not carry any myths about being able to generate a regular income from trading.

Sebi data points towards a a very low percentage of individual traders being able to make real profit.

This is reenforced by data released by other reliable agencies.

If at all you still want to pursue it take proper coaching from reputed agencies, do some mock trading assignments to test how your strategies pan out and only then venture out for trading with clearly defined risk capital, properly ring fenced from your other assets and incomes.

Last important point, strictly NO borrowing for trading.

Happy Investing;

..Read more

Ramalingam

Ramalingam Kalirajan  |8325 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 29, 2024

Money
Sir My Age is 38 Now. Running Business In Pune city. Below are the My Assets & Liabilities. Current Values - Assets. Own Industrial Plot - Rs. 2.0 Cr, Business Income Yearly Rs. 24.00 Lack, Own Company Investment ( Machinery, Debtors Etc ) - Rs 2.40 Cr, Mutual Fund & Share Market Investment Rs. 2.10 Cr, Bank FD - Rs. 50.00 Lack, Own 3 Flats in Pune - Rs. 75 lack, 50 Lack & 35 Lack ( Current Values ), Golds - Rs. 25.00 Lack, Land - Agriculture - Rs. 20.00 Lack, Term Insurances - Rs. 20.00 Lack ( Till Date Premium Paid ) Labilities. House Loan - Rs. 30.00 Lack ( EMI 26500.00 PM ) Loan will close after 17 years. Car Loan - Rs. 6.35 lack ( EMI 12500.00 PM ) Loan will close after 5 years. This Assets & investment sufficient for maintain 7 family members Expenses after retirement ? ( 4 Adult + 3 Children (Below 5 Years) ). I will retire at the age of 45.
Ans: Your financial position is commendable, with diverse investments and significant assets. Let's carefully evaluate your portfolio and determine its adequacy for retirement.

Assets Evaluation
Industrial Plot: The industrial plot adds stability to your portfolio. However, it may not generate regular income.

Business Income: Rs. 24 lakh yearly income supports both savings and current expenses. However, this income will stop after retirement.

Company Investments (Machinery, Debtors, etc.): Rs. 2.4 crore in business assets holds potential but depends on liquidity. Ensure your business succession plan is well-structured.

Mutual Funds and Stock Market Investments: Rs. 2.1 crore in equity investments offers excellent growth potential. A well-diversified portfolio aligned with your goals is crucial.

Bank Fixed Deposits: Rs. 50 lakh provides safety but generates lower returns. This can be retained for emergencies or short-term needs.

Real Estate (3 Flats): Your flats have a combined value of Rs. 1.6 crore. Rental income post-retirement can support your expenses.

Gold: Rs. 25 lakh in gold acts as a hedge against inflation. Gold is a strong reserve asset but not an income-generating one.

Agricultural Land: Rs. 20 lakh in agricultural land may have limited liquidity. Future appreciation depends on market conditions.

Term Insurance: Rs. 20 lakh in term insurance offers coverage but is not an investment.

Liabilities Evaluation
House Loan: Rs. 30 lakh house loan with 17 years remaining. This liability will continue into retirement unless paid early.

Car Loan: Rs. 6.35 lakh car loan with five years remaining. Manage this liability to avoid cash flow pressure.

Retirement Planning Considerations
Expenses for 7 Members: Your family size increases post-retirement costs. This includes education and healthcare for children and adults.

Retirement Age of 45: Early retirement reduces your working years and increases the time funds need to last.

Inflation Impact: Rising costs of living must be considered for a long retirement period.

Corpus Utilisation: Your existing investments need to generate regular post-retirement income while growing to beat inflation.

Suggestions for Asset Allocation
Equity Investments: Continue equity investments in mutual funds and stocks for growth. Consolidate under-performing funds and consider active funds for better returns.

Real Estate Management: If rental income is not substantial, consider selling underperforming properties. Reinvest proceeds into diversified financial instruments.

Emergency Fund: Maintain Rs. 6-8 lakh in liquid funds or FDs for unforeseen expenses.

Loan Repayment Strategy: Prepay car and home loans with surplus funds to reduce interest outflow.

Gold and Agricultural Land: Retain as reserves but avoid additional allocation here.

Business Continuity Plan: Create a clear succession plan to ensure business sustainability. This will protect your assets and provide stability.

Additional Recommendations
Mutual Fund Review: Diversify across large-cap, mid-cap, and balanced funds. Avoid excessive exposure to one category.

Life Insurance Review: Ensure your term insurance covers at least 10-15 times your annual income. Consider increasing coverage for better security.

Health Insurance: Cover all family members with adequate health insurance. Opt for a Rs. 20-25 lakh family floater plan.

Children’s Education and Marriage: Start dedicated investments for these goals using equity mutual funds for long-term growth.

Retirement Corpus Calculation: Target a corpus that generates Rs. 3 lakh monthly. Include inflation-adjusted returns and expenses.

Creating a Retirement Income Plan
Systematic Withdrawal Plan (SWP): Invest a portion of equity funds in debt-oriented SWP to generate regular income.

Rental Income: Generate steady rental income from real estate properties to cover a portion of expenses.

Debt Funds: Allocate a portion to debt funds for stable returns. This helps balance equity risks.

Dividend Yield Stocks: Invest in high-dividend stocks for a regular income stream.

Periodic Portfolio Review: Monitor and adjust your portfolio annually to align with changing goals and market conditions.

Final Insights
Your current assets and investments are significant. However, early retirement requires careful planning. Focus on prepaying loans and optimising investments. Protect your family with adequate insurance and create a robust retirement income plan.

With disciplined investments and adjustments, your goal of retiring at 45 is achievable.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

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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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