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Anu

Anu Krishna  |957 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on May 23, 2024

Anu Krishna is a mind coach and relationship expert.
The co-founder of Unfear Changemakers LLP, she has received her neuro linguistic programming training from National Federation of NeuroLinguistic Programming, USA, and her energy work specialisation from the Institute for Inner Studies, Manila.
She is an executive member of the Indian Association of Adolescent Health.... more
Asked by Anonymous - May 20, 2024Hindi
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Relationship

I am 67 yrs.old female staying with my husband.We have 2sons younger one is having problems with his wife right from the beginning of their marriage.They have a one year old daughter too.My son blames us for his problems as it was arranged marriage and doesn't talk to any family members.Once their fights led to preparation for divorce but at that point both decided to stay together and tried for child .Now the child is one year old but they behave same.This causes so much distress to me .Pl.help

Ans: Dear Anonymous,
Arranged or Love marriage; the two people in the marriage are responsible for how and what they experience in it.
Kindly don't take the trouble of accepting the blame that very conveniently your son is transferring to you instead him taking charge of his marriage.
If it was the case that the marriage was going on wonderfully well, would he have applauded you for finding him a good bride? No, right? So, how is it that when things go downhill, he thinks he needs to pin the blame on you...
Kindly ignore; let him realize his duties as a responsible adult and a responsible partner and do the needful. Your job as a mother and mother-in-law is to support them through the process of them rebuilding their marriage.
And even in your conversations with them, if you hear him lashing at you, be absolutely silent on it (difficult but not impossible) and then ask: What is it that I can do to support the two of you?
It will give him the message that you area not going to take the blame and that you are passing the baton back to him to handle his marriage.
Every relationship issue must be dealt with by the people who are part of it as a stakeholder. The rest are support staff...

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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Anu

Anu Krishna  |957 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Oct 19, 2022

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Hi Anu, I have been reading your articles for quite some time. I am 40 years old in a marriage for last 12 years. I have a 11.5 year old son.My marriage is going through a very rough phase. My husband doesn't leave any chance to abuse me, doesn't matter where and with whom we areMy husband proposed to me knowing I have Vitiligo (discoloration of skin). Plus I was not as rich as him. I did make him aware of this before going ahead. His family was against our marriage still he went ahead. From the day of marriage he suddenly changed, and started abusing me in and out. First I thought my mother-in-law is creating problems which she did every time we came together. Infront of every maid and in the absence of my husband she tried to humiliate me based on my skin condition and financial status. But she'd become caring in his presence.After five years of marriage, for a few years we were away from family. It was peaceful and we had a nice time. But during the lockdown and online school we were back with the same problem. Now the condition is that I cannot stay with my husband. My family is very supportive but suggest that before taking any step I should think of my child. And that we should both sit and talk.If I try talking to my husband I know it will end in a fight. Kindly suggest which way should I go?
Ans:

Dear KB,

Maybe someone from the family or his friends have commented on your condition and made him feel that he made the wrong choice.

Even if it’s that, when he knew and had no objection, what is a man’s word is that he keeps it no matter what!

Now that he has gone back on it, it’s natural for others to take advantage of it and mock you for what the society considers as ‘not beautiful’.

In a way, we are obsessed with some sort of standards for what’s beautiful and what’s not. Beauty standards, you might call it so!

He seems to be a different person with his family and without, it suggests that he may not have a very strong mind to back up the decision of marrying you in the first place possibly against the wishes of his family.

Abuse, at no point is justifiable and you need to take a strong stance and draw a boundary as this is going to continue.

Your family has made a wise suggestion and for the sake of the child, it might be worth the effort to sit down have that chat with your husband however hard that might be.

Do not compromise on the fact that this so-called beauty standards and labels within his family will continue. Be unapologetic about who you are and own your beauty your way.

This is non- negotiable and you need to state this clearly when you have that conversation with him. Period!

All the best!

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Dr Ashish Sehgal  |97 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Jun 01, 2023

Asked by Anonymous - May 20, 2023Hindi
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Relationship
I'm 66 yrs old retired having two sons, both married according to their choice. My wife 60 going to retire in a couple of months. My elder son who is a Bank executive married since 10 years and issueless. The younger son working as an executive in KPMG married since 4 years and having a child. Due some misunderstanding with the their wives the sons are at times not in talking terms with us. My sons are also not in talking terms with each other. In the recent days the elder son directly instigated not to keep contact with the younger one because he did not like our closeness with him. We are put into dilemma and unable to convince both the children to reconcile the situation. Please advise.
Ans: I'm sorry to hear about the strained relationships between your sons and their wives, as well as the tension between your sons themselves. Here are some suggestions that may help:

Open and honest communication: Encourage open and honest communication between all family members. Try to create a safe and non-judgmental environment where everyone can express their thoughts, concerns, and feelings. Act as a mediator, actively listening to each party and facilitating productive discussions.

Family counseling: Consider seeking the help of a family counselor or therapist who specializes in resolving family conflicts. A professional can provide guidance and help navigate the complexities of the situation, facilitating healthier communication and promoting understanding among family members.

Individual conversations: Have one-on-one conversations with each of your sons to understand their perspectives and concerns. Encourage them to share their feelings openly and without interruption. This can help you gain insight into their individual experiences and provide a foundation for finding common ground.

Encourage empathy and understanding: Emphasize the importance of empathy and understanding in resolving conflicts. Help your sons and their spouses see things from each other's perspectives, fostering compassion and promoting reconciliation.

Promote shared experiences: Find opportunities for your sons and their families to spend time together in a neutral and relaxed environment. Encourage activities that promote bonding, such as family outings, celebrations, or vacations. Creating positive shared experiences can help rebuild connections and mend relationships.

Set boundaries: While it's important to encourage reconciliation, it's equally important to set and maintain healthy boundaries. Ensure that everyone understands the need for respect and mutual consideration, both within the family and between the spouses. Reinforce the importance of maintaining healthy relationships while respecting individual autonomy.

Lead by example: Show your sons and their spouses that you value and prioritize healthy relationships. Demonstrate positive communication, respect, and understanding in your own interactions with them and with your wife. Lead by example and encourage them to do the same.

Remember, resolving family conflicts takes time, effort, and understanding from all parties involved. It may be helpful to seek professional guidance from a family therapist who can provide tailored advice based on a deeper understanding of your family dynamics.

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Love Guru

Love Guru   |187 Answers  |Ask -

Relationships Expert - Answered on Jan 09, 2024

Asked by Anonymous - Dec 22, 2023Hindi
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Relationship
Hello sir, I am 52 years handicapped with a good govt. job. I have been married for 27 years now. My son also married recently and he is in USA. I dont know where to start. Mine was arranged marriage. But my husband and his family cheated us regarding his job. He was jobless after our marriage. I had a son in the first year of our marriage. I stayed with him for only 2 months then I was send to my fathers house for delivery. He never visited me during this time nor he had called me. As he was jobless, I tried hard to build my carrier for sake of my son. I had managed all these years financially. I never received any financial support or emotional support from him past 27 years. We had fought badly accusing each. He will physically abuse me every time. He is addicted to alcohol and watching prone movies. My son once saw his mssg to call girls and other such women in his mobile. I was shocked too. Later I discovered he had many such connections. He had been spending his merger salary for all this self enjoyment and never shared anything for HL or son education. However, I had stayed with him for social security and status. Now I have completed all my duties. My son is safe and far from him. Even after my sons marriage, he behaved violently after consuming alcohol. I am really fed up with him. I have my income and properties. But I have no one to share my emotions as my son also has left and busy with his life in USA. I don't need any physical needs but need emotional support for rest of my life. I am in total depression for all I have undergone for 27 years. I currently having my father who is 80 years with me in the house. My husbands behaviour towards my father is very bad. Now my fathers health is getting affected because of my husbands shouting. I have no other friends or relations to relate to. My health also is getting slowly affected and I my mobility is very much restricted. Sometimes I was having succidal ideas. I have no life goals now. I have achieved all my goals. I have completed all my duties now. What should I do now?
Ans: Hats off to you my dear lady. You need to file for divorce and get this vile man out of your life and home once and for all. You have the means and the economic upper hand as well — consult a strong divorce lawyer and kick him to the curb! And there is life, love and companionship out there for you, so don’t give up on finding your own happiness — 52 is not old, you have a lot of years ahead with the potential to fulfill your happiness. Go for it!

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Anu

Anu Krishna  |957 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Jun 12, 2024

Asked by Anonymous - Jun 02, 2024Hindi
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Relationship
I've been married for 20 years and my in laws staying with us for over 14 years now. I'm ok with my mother in law but have a very stressful relationship with my father in law. 13 years back he tried to overstep his boundaries in FIL-DIL relationship and i created lots of noise about it and told everyone in no unclear terms that such overture are not acceptable. However due to their complete financial dependency on my husband, they have still continued to stay with us. My FIL tried a couple of time to apologize personally but after sometime he has started telling that he is the aggrieved party and misunderstood. I strictly avoid speaking with him unless totally necessary wrt some house issue or child related issue. He interferes in my decision related to my child, like taking him off the activity classes where i enrolled, allowing him to eat junk food when i have strictly told no because of IBS related problem etc. I've also told my husband in no unclear terms that i want a separate household, but unfortunately because of their old age and for fear of society norms he isn't doing it. The environment in my house is quite stressful because of this to me, everyone else is just continuing without bother. How to deal with this? I tried living in other city with my child as well but then felt my house is breaking without any fault in our relationship (husband- wife), and my child was feeling emotional so i returned. This situation and stress has given me health conditions and made me irritable as well. I just don't want to live like this but have no option but to continue it seems. I need suggestion how to handle this.
Ans: Dear Anonymous,
What society says is more important that actually safeguarding his wife from a predator father? Seriously?
Your husband needs a lesson or two in responsibilities in marriage and that also includes 'protecting' his wife...
Now, if he is worried that they are old and what will the society say, ask him what the same society will say when they know what his father is up to?

Your father-in-law is just trying to punish you for your refusal by interfering in how you should be raising your child...
Please do not put up with this kind of nonsense! Someone needs to drive sense into your husband and yes, you need to live separately from your in-laws. Your father-in-law is not a great influence at this point in time and your husband needs to move beyond his 'blind' love and sense of duty towards them.

You and your child are also his priority and when a wife feels unsafe, the husband has no option but to address it and make her feel safe again. Your husband is conveniently avoiding the confusion that will emerge from living separately and hence is taking the easy way out.
Talk to him and put your foot down. If he is still unwilling, please ask your family members to drive some sense in him. He can take care of them living a few blocks away, right?

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

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Asked by Anonymous - Jun 16, 2024Hindi
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My daughter scored 251 in BITSAT, and 25k in jee mains. She is getting mechanical and chemical in warangal nit. What should we do?
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All The BEST for your Daughter’s Bright Future.

To know more on ‘ Careers | Education | Jobs | Resume Writing | Profile Building | Salary Negotiation Skills | Building Professional LinkedIn Profile | Choosing Right School Board (State | Matriculation | CBSE | ICSE |International Board) | Student Psychological Counselling | Exam Preparation Techniques (Board | Entrance & Competitive)| Strategies to Attempt Exams | Job Interview Skills | Skill Upgrading | Parenting & Child Upbringing Skills | Career Transition | Abroad Education | Education Loan (India | Abroad) | Scholarship (India | Abroad) | SOP Writing Tips’, please FOLLOW me in RediffGURU here.

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Nayagam P

Nayagam P P  |387 Answers  |Ask -

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Hi,My son got sandip University nashik cse (AIMl) is it good college to go for his studies or else need to try another colleges in Bangalore??
Ans: Raju Sir, you have asked the need for Bengaluru Colleges. If your son has appeared for COMEDK or any other Private Colleges' its own entrance exams, better he tries through them. It depends upon your son's Rank / Score & the streams he prefers. Recommended before your son goes for Sandip University (if he has no other option, as time is very less now). Whatever Institute / University & Branch your Son chooses, he should keep upgrading his skills from his 1st year itself till his Campus Placement during his last year, from LinkedIn, Coursera, NPTEL, Internshala etc. and / or any other online platforms, recommended by his College Faculties, to be COMPETENT among other Students.

All The BEST for your Son’s Bright Future.

To know more on ‘ Careers | Education | Jobs | Resume Writing | Profile Building | Salary Negotiation Skills | Building Professional LinkedIn Profile | Choosing Right School Board (State | Matriculation | CBSE | ICSE |International Board) | Student Psychological Counselling | Exam Preparation Techniques (Board | Entrance & Competitive)| Strategies to Attempt Exams | Job Interview Skills | Skill Upgrading | Parenting & Child Upbringing Skills | Career Transition | Abroad Education | Education Loan (India | Abroad) | Scholarship (India | Abroad) | SOP Writing Tips’, please FOLLOW me in RediffGURU here.

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Career Counsellor - Answered on Jun 17, 2024

Ramalingam

Ramalingam Kalirajan  |3754 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 17, 2024

Asked by Anonymous - Jun 17, 2024Hindi
Money
I want to invest in 10 L lumpsum for 3-5 years. What is the best strategy for getting good returns (at least 12-15 %)? I want to use this money further for my own business.
Ans: Understanding the Investment Landscape
Investing a lump sum of Rs 10 lakh with the goal of achieving good returns requires a thorough understanding of the investment landscape. Given your objective to use this money for your own business in 3-5 years, it's important to choose a strategy that balances potential returns with acceptable levels of risk.

The Importance of Time Horizon
Your investment time horizon significantly impacts the type of investment strategy you should adopt. While you are considering a 3-5 year period, achieving a 12-15% return may require a slightly longer horizon.

Investing for at least 7 years could better align with your return expectations and allow your investment to ride out market volatility.

Embracing Market Volatility
Investing in the market inherently involves dealing with volatility. Market fluctuations are natural and can impact short-term investment performance.

However, historically, equity markets have shown growth over longer periods, offering potential for substantial returns. Embracing this volatility is crucial to achieving your financial goals.

Benefits of Mutual Funds
Mutual funds offer a diversified investment option that can help mitigate risks while providing exposure to growth opportunities. Actively managed funds, in particular, are managed by professional fund managers who aim to outperform the market by making strategic investment decisions.

Advantages of Actively Managed Funds
Professional Management: Skilled fund managers actively monitor and adjust the portfolio, aiming for higher returns.

Diversification: Mutual funds invest in a variety of assets, reducing the risk associated with individual investments.

Liquidity: Mutual funds offer liquidity, allowing you to redeem your investment when needed.

Transparency: Regular updates and reports keep investors informed about their investments.

Disadvantages of Index Funds
Market Mimicry: Index funds aim to replicate the performance of a specific index, limiting their potential to outperform.

No Active Management: Lack of professional management can lead to missed opportunities in dynamic market conditions.

Limited Flexibility: Index funds follow a predetermined strategy, offering little flexibility in response to market changes.

Benefits of Investing Through Certified Financial Planners
Investing through a Certified Financial Planner (CFP) ensures that your investments are aligned with your financial goals.

CFPs offer personalised advice and can help navigate the complexities of the financial markets.

Advantages of Regular Funds
Expert Guidance: MFDs with CFP credentials provide valuable insights and strategic advice.

Tailored Solutions: Regular funds offer customised investment strategies based on individual goals and risk tolerance.

Support and Service: Professional support for investment decisions and portfolio management.

Holistic Planning: CFPs consider your overall financial situation, ensuring comprehensive financial planning.

Understanding Investment Risks
Every investment carries a certain level of risk. It's crucial to understand and accept these risks when aiming for higher returns.

Types of Risks
Market Risk: The risk of investments declining due to market fluctuations.

Interest Rate Risk: The risk of interest rate changes affecting investment values.

Inflation Risk: The risk of inflation eroding purchasing power over time.

Importance of Staying the Course
Investing with a long-term perspective requires patience and discipline. Market volatility can be unsettling, but staying the course is essential for achieving your investment goals.

Strategies for Staying the Course
Avoid Emotional Decisions: Base your investment decisions on facts and long-term goals, not short-term market movements.

Regular Reviews: Periodically review your investment portfolio to ensure it aligns with your goals and risk tolerance.

Rebalancing: Adjust your portfolio to maintain your desired asset allocation.

Reinvestment Strategies
If you hold LIC, ULIP, or investment-cum-insurance policies, consider evaluating their performance.

Surrendering underperforming policies and reinvesting in mutual funds can potentially yield better returns.

Benefits of Reinvestment
Higher Returns: Mutual funds typically offer higher returns compared to traditional insurance policies.

Flexibility: Reinvestment in mutual funds provides more flexibility and control over your investments.

Cost Efficiency: Mutual funds often have lower costs and fees compared to insurance policies.

Strategic Asset Allocation
Asset allocation is crucial for managing risk and achieving your desired returns. A well-balanced portfolio should include a mix of equity, debt, and other instruments.

Suggested Allocation
Equity Funds: Allocate a significant portion to equity funds for growth potential.

Debt Funds: Include debt funds for stability and regular income.

Hybrid Funds: Consider hybrid funds for a balanced approach to risk and return.

Regular Monitoring and Adjustments
Continuous monitoring and adjustments to your portfolio are necessary to ensure it remains aligned with your financial goals.

Benefits of Regular Monitoring
Performance Tracking: Monitor the performance of your investments regularly.

Timely Adjustments: Make necessary adjustments to optimise returns and manage risks.

Goal Alignment: Ensure your investments remain aligned with your evolving financial goals.

Final Insights
Investing a lump sum of Rs 10 lakh requires careful planning and a strategic approach.

Understanding the investment landscape, embracing market volatility, and opting for actively managed mutual funds are key steps towards achieving your financial goals.

Staying the course, regularly reviewing your portfolio, and seeking professional guidance from a Certified Financial Planner can enhance your investment experience and outcomes. By focusing on a balanced and diversified investment strategy, you can work towards achieving your desired returns while preparing for your business ventures.

Invest wisely, stay informed, and be patient to see your investments grow.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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Nayagam P

Nayagam P P  |387 Answers  |Ask -

Career Counsellor - Answered on Jun 17, 2024

Asked by Anonymous - Jun 17, 2024Hindi
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Career
Please include one more choice in the selection criteria 1. Vit Vellore CSE in 4th category 2. Pes ec campus CS 3. MIT BANGALORE CSE We are staying in Bangalore, which choice is better and please help with reasoning?
Ans: You have not mentioned in which-all Entrance Exams you appeared (COMEDK \ KCET etc.)? However, order of Preference (1) PES (Electronic City) (2) MIT-Bengaluru (here, however, please note, for some students this is not suitable due to its culture (non-academic / psychological factors). (3) VIT-Vellore (check the fee structure of all 4-years for affordability). If you have appeared in COMEDK & KCET also, find out 1-2 options even the colleges belong to Tier 2 category. Whatever Institute / University / Branch / Domain you choose, keep upgrading your skills from 1st year itself till your Campus Placement during your last year, from LinkedIn, NPTEL, Coursera, Internshala etc. and / or any other online platforms, recommended by your College Faculties, to be COMPETENT among other Students, for jobs.

All The BEST for your Bright Future.
To know more on ‘ Careers | Education | Jobs | Resume Writing | Profile Building | Salary Negotiation Skills | Building Professional LinkedIn Profile | Choosing Right School Board (State | Matriculation | CBSE | ICSE |International Board) | Student Psychological Counselling | Exam Preparation Techniques (Board | Entrance & Competitive)| Strategies to Attempt Exams | Job Interview Skills | Skill Upgrading | Parenting & Child Upbringing Skills | Career Transition | Abroad Education | Education Loan (India | Abroad) | Scholarship (India | Abroad) | SOP Writing Tips’, please FOLLOW me in RediffGURU here.

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Ramalingam

Ramalingam Kalirajan  |3754 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 17, 2024

Asked by Anonymous - Jun 16, 2024Hindi
Money
I am 38 and currently investing in four funds through SIP of Rs 8000 each in these funds: Quant flexi cap fund, ICICI Prudential Midcap 250 fund, Parag Parikh Flexi cap fund and UTI Nifty 50 index. I want to invest for next six years through regular SIPs & additionally by some more units on dips. After 6 years I will stop SIPs and keep the accumulated funds with me for next 4 years as I fear I might lose my job by then. Are these funds alright considering my age, duration etc. or would you can suggest any additions/modifications? What much returns can I expect with this portfolio?
Ans: Understanding Your Current Portfolio

You are currently investing Rs 8,000 each in four funds through SIPs: Quant Flexi Cap Fund, ICICI Prudential Midcap 250 Fund, Parag Parikh Flexi Cap Fund, and UTI Nifty 50 Index. Your goal is to invest for the next six years, then hold the accumulated funds for another four years due to potential job loss concerns.

Compliments and Empathy

Your disciplined approach to SIPs and planning ahead for potential job loss shows great foresight and responsibility. You have chosen a diverse mix of funds, indicating a good understanding of investment principles. Let's evaluate and refine your strategy for optimal results.

Evaluating Your Current Funds

Quant Flexi Cap Fund: This fund offers flexibility by investing across market capitalizations. It provides diversification and growth potential. Flexi cap funds can adapt to market conditions, which is beneficial for long-term growth.

ICICI Prudential Midcap 250 Fund: Midcap funds invest in medium-sized companies with growth potential. They can offer higher returns than large-cap funds but come with higher risk. Given your investment horizon, this is a reasonable choice.

Parag Parikh Flexi Cap Fund: This fund also offers flexibility and is known for its value-oriented approach. It invests in both domestic and international equities, providing geographical diversification.

UTI Nifty 50 Index Fund: While index funds have low costs, they mirror the market's performance. They lack the potential to outperform the market, unlike actively managed funds. For a well-rounded portfolio, actively managed funds might be preferable.

Considerations for Portfolio Modifications

Diversification: Your portfolio is diversified across market caps and geographies, which is good. However, having two flexi cap funds might lead to overlapping investments. Consider replacing one with a different category.

Risk Management: Given the potential job loss concern, consider adding a balanced or hybrid fund. These funds invest in both equities and debt, providing growth with reduced volatility.

Long-Term Growth: Actively managed funds can outperform index funds over time due to professional management. Consider replacing the UTI Nifty 50 Index Fund with an actively managed large-cap or multi-cap fund.

Adding Stability with Hybrid Funds

Hybrid funds offer a mix of equity and debt, providing growth potential with lower risk. They are suitable for medium-term goals and can provide stability if market conditions turn unfavorable.

Regular SIPs and Lump Sum Investments

Continuing with regular SIPs is a sound strategy. Additionally, investing lump sums during market dips can enhance returns. Ensure you have a systematic approach to these lump sum investments to avoid market timing risks.

Expected Returns

Estimating returns involves various factors like market conditions, fund performance, and economic scenarios. Historically, equity mutual funds have delivered around 12-15% annual returns over the long term. However, this can vary, and it's important to have realistic expectations.

Planning for Post-Investment Period

After stopping SIPs in six years, holding the accumulated funds for another four years requires a different strategy. Consider these options:

Debt Funds: Shift a portion of your investments to debt funds for safety and stable returns. Debt funds are less volatile and can provide regular income.

Systematic Withdrawal Plan (SWP): If you need regular income, an SWP can provide periodic withdrawals from your mutual fund investments. It ensures liquidity without liquidating your entire portfolio.

Review and Rebalance: Regularly review your portfolio to ensure it aligns with your risk tolerance and financial goals. Rebalance if needed to maintain the desired asset allocation.

Ensuring Adequate Insurance Coverage

Given the potential job loss, ensure you have adequate life and health insurance coverage. This will protect your family and financial interests during unforeseen circumstances. Term insurance is a cost-effective option for life coverage.

Emergency Fund

Maintain an emergency fund equivalent to 6-12 months of your expenses. This fund will provide a cushion during job loss or other financial emergencies, allowing you to manage without liquidating your investments.

Tax Planning

Consider the tax implications of your investments. Equity mutual funds held for more than one year qualify for long-term capital gains tax at 10% beyond Rs 1 lakh. Efficient tax planning can enhance your net returns.

Maximizing Returns with Professional Guidance

While you have chosen good funds, professional guidance can help optimize your portfolio. A certified financial planner (CFP) can provide personalized advice based on your financial goals, risk tolerance, and investment horizon.

Regular Reviews and Adjustments

Financial markets and personal circumstances change over time. Regularly review your investment portfolio to ensure it remains aligned with your goals. Make adjustments as needed to stay on track.

Final Insights

Your proactive approach to investing and planning for potential job loss is commendable. By evaluating and refining your portfolio, you can achieve your financial goals with greater confidence. Diversifying investments, managing risk, and seeking professional guidance will enhance your financial stability and growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

Ramalingam

Ramalingam Kalirajan  |3754 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 17, 2024

Money
I have a home loan of 40L at 9.4% interest rate, I'm left with 20k savings every month. Should i make partial payments for my home loan or invest that money in mutual funds?
Ans: Managing your finances is a crucial aspect of ensuring long-term financial stability and growth. You're faced with an important decision: whether to use your Rs 20,000 monthly savings for partial home loan repayments or to invest in mutual funds. Both options have their merits, and the best choice depends on your individual circumstances and financial goals. Let's explore the factors to consider in a detailed manner to help you make an informed decision.

Understanding Home Loan Repayments
Benefits of Partial Home Loan Prepayments
One immediate advantage of making partial prepayments on your home loan is the reduction in interest burden over time. A lower loan principal results in less interest payable, which can significantly reduce the overall cost of your loan. This approach can lead to substantial savings in the long term.

Another benefit is achieving financial freedom sooner. By reducing the outstanding loan amount, you can pay off your home loan earlier than the original tenure, giving you peace of mind and freeing up resources for other financial goals.

Psychological Benefits
Paying off a home loan can also provide a sense of financial security. Many people feel less stressed knowing that their debt burden is decreasing. This psychological benefit should not be underestimated, as financial stress can impact overall well-being.

Considering Mutual Fund Investments
Potential for Higher Returns
Mutual funds offer the potential for higher returns compared to the savings on home loan interest. Over the long term, equity mutual funds, in particular, have historically provided returns that outpace the average home loan interest rates. This can help in wealth creation and achieving financial goals faster.

Diversification and Liquidity
Investing in mutual funds allows for diversification across various asset classes, such as equities, debt, and hybrids. This diversification can help mitigate risks and provide balanced growth. Additionally, mutual funds offer liquidity, meaning you can access your funds relatively easily compared to other investment options.

Compounding Benefits
The power of compounding can significantly enhance your wealth over time. By reinvesting returns, your investment grows exponentially, which can lead to substantial wealth accumulation in the long run. This is a key advantage of investing in mutual funds, especially for long-term goals like retirement or children's education.

Assessing Your Financial Goals
Short-Term vs. Long-Term Goals
Your decision should align with your financial goals. If you have short-term goals, such as buying a car or taking a vacation, it might be beneficial to invest in mutual funds with a shorter time horizon. For long-term goals like retirement or children's education, equity mutual funds can be a suitable option.

Risk Tolerance
Consider your risk tolerance when making this decision. Home loan prepayments offer a guaranteed return in the form of interest savings, which is essentially risk-free. On the other hand, mutual funds, especially equity funds, come with market risk. Assess your comfort level with market fluctuations before deciding to invest.

Evaluating Interest Rates and Market Conditions
Current Interest Rates
Evaluate the current interest rates on your home loan. If your loan interest rate is significantly high, prepaying the loan might be a prudent choice. Conversely, if the rates are relatively low, investing in mutual funds could potentially yield higher returns.

Market Conditions
Market conditions also play a crucial role. During a bullish market, equity mutual funds tend to perform well, providing higher returns. However, in a bearish market, the returns might not be as attractive. Keeping an eye on market trends can help in making a more informed decision.

Tax Implications
Tax Benefits on Home Loan
Home loan repayments offer tax benefits under Section 80C and Section 24 of the Income Tax Act. Principal repayments qualify for a deduction under Section 80C, while interest payments are eligible for a deduction under Section 24. These tax benefits can reduce your overall tax liability, making home loan prepayments an attractive option.

Taxation on Mutual Fund Returns
Mutual fund returns are subject to capital gains tax. Short-term capital gains (STCG) on equity funds (held for less than one year) are taxed at 15%, while long-term capital gains (LTCG) (held for more than one year) above Rs 1 lakh are taxed at 10%. For debt funds, STCG is taxed as per your income slab, and LTCG (held for more than three years) is taxed at 20% with indexation benefits. Understanding these tax implications can help in making a tax-efficient decision.

Balancing Debt Reduction and Investment
Creating a Balanced Approach
A balanced approach might be the best way forward. You could allocate a portion of your savings towards partial home loan prepayments and the rest towards mutual fund investments. This way, you can reduce your debt burden while still benefiting from the potential growth offered by mutual funds.

Emergency Fund Consideration
Before making any decision, ensure you have an adequate emergency fund in place. An emergency fund should cover at least 6-12 months of living expenses. This financial cushion can prevent you from needing to liquidate investments or halt loan repayments during unforeseen circumstances.

Consulting a Certified Financial Planner
Professional Guidance
Seeking advice from a Certified Financial Planner (CFP) can provide personalized insights based on your financial situation. A CFP can help you evaluate your goals, risk tolerance, and current financial standing to recommend the best course of action.

Customized Financial Plan
A CFP can create a customized financial plan that incorporates both debt reduction and investment strategies. This holistic approach ensures that your financial goals are aligned with your resources and risk appetite.

Understanding the Disadvantages of Index Funds
Active Management Benefits
Index funds are passively managed, meaning they aim to replicate the performance of a specific index. While this can lead to lower management fees, it also means missing out on the potential for higher returns that actively managed funds can offer. Active fund managers can make strategic decisions to outperform the market, which can be beneficial in varying market conditions.

Limited Flexibility
Index funds lack the flexibility to adapt to changing market conditions. In contrast, actively managed funds can adjust their portfolios based on market trends and economic indicators, potentially providing better risk-adjusted returns.

Potential for Underperformance
During market downturns, index funds cannot reallocate assets to mitigate losses, as they must strictly follow the index. Actively managed funds, however, have the flexibility to move into safer assets during turbulent times, potentially reducing losses.

Advantages of Regular Funds over Direct Funds
Professional Guidance
Investing in regular funds through a Certified Financial Planner provides access to professional guidance. This can be particularly beneficial for investors who are not well-versed in market dynamics and investment strategies.

Monitoring and Adjustments
Regular funds offer continuous monitoring and periodic adjustments by the fund manager to optimize returns. Direct funds, on the other hand, require investors to make these decisions themselves, which can be challenging without sufficient knowledge and experience.

Convenience and Support
Regular funds provide a higher level of convenience and support, including assistance with paperwork, portfolio reviews, and rebalancing. This support can be invaluable, especially for busy professionals or those new to investing.

Final Insights
Choosing between partial home loan repayments and investing in mutual funds is a significant decision. It requires a thorough evaluation of your financial goals, risk tolerance, market conditions, and tax implications. Both options have their unique benefits, and a balanced approach may often be the most prudent.

Consider consulting a Certified Financial Planner to get personalized advice tailored to your situation. Their expertise can help you navigate the complexities of financial planning and make decisions that align with your long-term objectives.

Remember to maintain an emergency fund to safeguard against unforeseen events. This financial cushion can provide peace of mind and ensure that your investment strategy remains on track even during challenging times.

By thoughtfully assessing all factors and seeking professional guidance, you can make a well-informed decision that promotes financial growth and stability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

...Read more

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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