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Ramalingam

Ramalingam Kalirajan  |8077 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 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
ARVIND Question by ARVIND on May 11, 2024Hindi
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Sir, U am retiring on 31 May 24 after the age of 57 years. Three months back I have invested Rs. 5,000/- each in MF like Kotak equity opportunities fund, ICICI prudential blue chip fund and Quant elss tax saver fund. Please guide me whether it is right or should I invest in some other mutual fund. I am investing 30 lakhs in Post office SCSS in joint account, 02 lakh in Mahila samman scheme and 09 lakhs in MIS. After getting my balance retirement amount U will invest in gold. My both the sons are in job. I am keeping 10 lakhs as emergency fund in Saving account. An I correct ? Is my investment planning is going to right path ? Please guide me sir. Thanks n regards.

Ans: Assessing Your Investment Portfolio: A Comprehensive Review

Reviewing Mutual Fund Investments:

Your investment in Kotak Equity Opportunities Fund, ICICI Prudential Blue Chip Fund, and Quant ELSS Tax Saver Fund demonstrates a diversified approach to equity investing. These funds offer exposure to different market segments, enhancing portfolio resilience.

Analyzing Fund Selection:

Kotak Equity Opportunities Fund focuses on capital appreciation by investing in high-growth potential stocks, while ICICI Prudential Blue Chip Fund emphasizes stable, large-cap companies. Quant ELSS Tax Saver Fund offers tax benefits along with equity exposure.

Considering Investment Horizon:

Given your impending retirement in May 2024, it's essential to reassess your investment horizon and risk tolerance. Equity investments are typically suited for long-term goals, and as you approach retirement, a more conservative approach may be prudent.

Evaluating Fixed Income Investments:

Allocating 30 lakhs to the Post Office Senior Citizen Savings Scheme (SCSS), 2 lakhs to the Mahila Samriddhi Scheme, and 9 lakhs to Monthly Income Schemes (MIS) reflects a focus on stability and regular income post-retirement.

Ensuring Liquidity with Emergency Fund:

Maintaining 10 lakhs as an emergency fund in a savings account provides liquidity and financial security, ensuring you're prepared for unexpected expenses or emergencies.

Exploring Gold Investments:

Your intention to invest in gold post-retirement diversifies your portfolio and acts as a hedge against inflation. Gold's intrinsic value and historical stability make it a viable asset class for wealth preservation.

Guidance for Investment Planning:

While your current investment planning demonstrates prudence and diversification, it's crucial to align your portfolio with your retirement goals and risk tolerance. As you transition to retirement, consider gradually reallocating a portion of your equity investments to more conservative options to mitigate risk.

Consultation with a Certified Financial Planner:

Engaging with a Certified Financial Planner (CFP) will provide personalized advice tailored to your specific needs and goals. A CFP will help optimize your investment strategy, ensuring financial security and peace of mind in retirement.

Conclusion:

Overall, your investment planning showcases a balanced approach, with a mix of equity, fixed income, and emergency liquidity. By staying informed and periodically reviewing your portfolio, you're well-positioned to achieve your retirement objectives.

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  |8077 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 27, 2024

Asked by Anonymous - Dec 11, 2024
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51 years old , I am started 25000 rs investment in mutual fund from last year , presently two houses one loan of rs 40 lakhs and 1/2 kg gold and 35lakhs fd, and 1 open plot of worth 65Lakhs my daughter is studying B.E and son 9th is it effoungh for my retirement.Lic of rs 5000.rs.per month.
Ans: At 51, you are building a good foundation for retirement. Let us evaluate your current situation and provide actionable insights to strengthen your plan.

Current Financial Assets
Mutual Funds: A monthly SIP of Rs. 25,000 started last year is a strong beginning.

Real Estate: You own two houses and an open plot worth Rs. 65 lakhs.

Fixed Deposits (FDs): You have Rs. 35 lakhs in FDs for stability.

Gold: Possession of 1/2 kg of gold adds diversification to your portfolio.

Insurance: A LIC premium of Rs. 5,000 monthly ensures some financial protection.

Loan: You have a Rs. 40 lakh home loan that requires regular servicing.

Strengths in Your Portfolio
Asset Diversification: Your portfolio includes real estate, mutual funds, gold, and fixed deposits.

Children’s Education: You are well-placed to support their higher education expenses.

Steady Investments: The SIP ensures consistent contributions towards wealth creation.

Areas for Improvement
Mutual Fund Investments
Expand Your SIP Contributions: Rs. 25,000 monthly may need an increase to meet retirement goals.

Focus on Active Funds: Actively managed funds can deliver higher returns than index funds over time.

Disadvantages of Index Funds: Index funds lack adaptability during market fluctuations, limiting growth potential.

Use Regular Plans Through CFP: Regular funds ensure expert guidance, tax efficiency, and consistent monitoring.

Real Estate
Low Liquidity: Real estate may not offer quick access to cash during emergencies.

Maintenance Costs: Real estate requires ongoing expenses, reducing its overall profitability.

Fixed Deposits
Inflation Risk: FD returns are lower and may not match inflation rates.

Better Alternatives: Consider debt funds for higher post-tax returns.

LIC Premiums
Low Returns: Traditional insurance policies like LIC provide limited returns compared to mutual funds.

Recommendation: Surrender and reinvest the proceeds into mutual funds for better growth.

Children’s Education Planning
Daughter’s Higher Education: Prioritise building a specific education fund for her postgraduate expenses.

Son’s Future Needs: Start early to save for his higher education.

Balanced Allocation: Use equity for growth and debt for stability in these funds.

Loan Management
Accelerate Loan Repayment: Clear your Rs. 40 lakh home loan faster to reduce interest costs.

Avoid New Debt: Focus on reducing liabilities to achieve financial independence sooner.

Emergency Fund
Liquidity is Key: Ensure at least 6–12 months of expenses in a liquid emergency corpus.

Fund Sources: Your FDs or a portion of your SIP can be redirected for this.

Retirement Planning
Corpus Estimation
Inflation Adjustment: Factor in inflation to calculate the required retirement corpus.

Living Expenses: Estimate your monthly needs post-retirement, including healthcare and leisure.

Asset Rebalancing
Gradual Shift to Debt Funds: From 55 onwards, reduce equity exposure for stability.

Balanced Allocation: Aim for a 60% debt and 40% equity ratio by retirement.

Tax Efficiency
New MF Tax Rules: Plan redemptions considering the 12.5% LTCG tax above Rs. 1.25 lakh.

Debt Funds Taxation: Gains are taxed as per your income slab; plan accordingly.

Final Insights
Your current financial status is strong, but enhancements are necessary. Increase SIP contributions, diversify into actively managed funds, and focus on reducing liabilities. Revisit your LIC policy and redirect funds for higher returns. Secure your children's education and your retirement with a clear and balanced strategy.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

..Read more

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Hi Mam, Hope you are doing well. I am very worried about my son who is now 12.5 years old and studying in 7th standard in a very reputed school. Since childhood, he has no interest in studies, unless we doesn't seat in front of him, he doesn't study. Every teacher from his kindergarten days upto now has the same complaint that he is doesn't pay attention in class and the result is he doesn't get good marks in the exam. When we scold him for studies, he does it for that particular time only and then get back to his non-interest mode again and start to run from studies. He will play video games, goes to play around with his friends, he will find some or the other reason for not doing studies or homework. The irony is that he is not interested in any sports or any other kind of activities. In every summer holidays, we make him to join some sports or music classes, but there also he doesn't show interest and do things just for the sake of showing. From last year, we have started sending him to tuitions also, but no change in attitude. This year we have found a teacher of his reputed school who is retired and taking tuitions, we are sending him to her and she is charging a big amount for tuitions. please guide how can we change his attitude and make him more serious in any activity he does as he doesn't have interest in anything (we have observed doing everything we can).
Ans: Hello Sunil!!

I am doing great, thank you for asking, God bless you!

I can totally understand when you say you are worried.

Your son is 12.5, he will soon be a teenager. There will be different challenges, I want you to read up on parenting a teenager and be ready to handle him well.

The problem as I see it is that everyone of you, his teachers included have made studies like a burden for him.... and subjected the young child to a lot of anxiety, he just wants to run away form it....
"Every teacher from his kindergarten days upto now has the same complaint that he is doesn't pay attention in class".... this statement of yours... it is the teacher's duty to ensure the child listens to him/her, how can she start labeling a child like this. From a young age your son has been conditioned to believe that he is not not good in studies, he doesn't focus and he doesn't sit in one place. All my sympathies are with your son...every child comes with immense potential and it's our duty as parents and teachers to nurture the child.

The following is what I propose so that we bring him back to loving to learn ( not score marks, that should never be the barometer)-
1. Love your child the way he is now
2. Give him lot of positive strokes
3. Have one on one sessions for any activity you plan for him... let him choose the activity, empower him
4. choose a teacher, who can get along with him and help him develop a positive attitude towards studies and life in general
5. look for a school where they nurture him... not just a reputed one...less number of students and a teacher who is invested in her/ his students,

If you can connect with me, I can help him. Have had many a students in this kind situation.
This is my website..
https://transformme.co.in/

Loads of best wishes to the whole family..

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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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