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Ramalingam Kalirajan5092 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 22, 2024

Asked on - May 21, 2024Hindi

Hi, I'm almost 36years old married no kids, earning around 1.2L, staying in a rented flat in Hyderabad with expenses up to 50-60K per month. No loans and have around 10L in FD and doing the following savings: ELSS: 50k yearly, around 2.86L in investment NPS: 50k yearly, started 3years back LIC: 50k yearly, 16year term (finished 10 installments) MF: 12k monthly combination of Large/Mid/Small Cap’s Stocks: 40k Gold: SGB bond worth 1L and 2L physical gold PPF: 20k yearly EPF: 10k monthly I feel I’m doing the financial planning with less risky and guaranteed returns. With inflation in mind, will these be enough? how to diversify the savings? Even my Parents are staying in Rented flat. Want to buy a flat but worried all my earnings will go into EMI and might become a burden.
Ans: You are doing a commendable job with your financial planning, focusing on a variety of investment options. At almost 36 years old, earning around ?1.2 lakh monthly, and maintaining expenses up to ?60,000 per month, you have managed to save and invest diligently.

Existing Investments
Your current investments include:

ELSS: ?50,000 yearly
NPS: ?50,000 yearly
LIC: ?50,000 yearly
Mutual Funds: ?12,000 monthly
Stocks: ?40,000
Gold: ?1 lakh in SGB bonds and ?2 lakh in physical gold
PPF: ?20,000 yearly
EPF: ?10,000 monthly
Fixed Deposit: ?10 lakh
You are saving well and have diversified into various financial instruments. However, there are areas for improvement to ensure you achieve your financial goals while managing inflation and ensuring long-term growth.

Concerns and Goals
You mentioned concerns about inflation and the sufficiency of your savings. You are also contemplating buying a flat but worry about the financial burden of EMIs. Additionally, your parents live in a rented flat, which might also influence your decision to buy property.

Analysis of Current Investments
Equity-Linked Savings Scheme (ELSS)
ELSS is a good tax-saving instrument that offers potential for long-term growth. However, investing only ?50,000 annually might not be sufficient to keep pace with inflation. Consider increasing your ELSS contribution if possible.

National Pension System (NPS)
NPS is a solid option for retirement planning, offering tax benefits and long-term growth. However, be mindful of the investment choices within NPS, ensuring a good balance of equity and debt for optimal growth.

Life Insurance (LIC)
While LIC policies offer security, they often come with lower returns compared to other investment options. Ensure that your life insurance coverage is adequate for your needs, but consider other investment avenues for higher returns.

Insurance-cum-investment schemes
Insurance-cum-investment schemes (ULIPs, endowment plans) offer a one-stop solution for insurance and investment needs. However, they might not be the best choice for pure investment due to:
• Lower Potential Returns: Guaranteed returns are usually lower than what MFs can offer through market exposure.
• Higher Costs: Multiple fees in insurance plans (allocation charges, admin fees) can reduce returns compared to the expense ratio of MFs.
• Limited Flexibility: Lock-in periods restrict access to your money, whereas MFs provide more flexibility.
MFs, on the other hand, focus solely on investment and offer:
• Potentially Higher Returns: Investments in stocks and bonds can lead to higher growth compared to guaranteed returns.
• Lower Costs: Expense ratios in MFs are generally lower than the multiple fees in insurance plans.
• Greater Control: You have a wider range of investment options and control over asset allocation to suit your risk appetite.
Consider your goals!
• Need life insurance? Term Insurance plans might be suitable.
• Focus on growing wealth? MFs might be a better option due to their flexibility and return potential.

Mutual Funds
Investing ?12,000 monthly in a combination of large, mid, and small-cap mutual funds is a good strategy. Actively managed mutual funds often outperform index funds, offering better potential for returns. Ensure you are regularly reviewing and rebalancing your portfolio.

A direct investment in stocks of ?40,000 is a good start. Ensure you are diversifying across sectors and companies to mitigate risks. Regularly monitor and adjust your stock portfolio based on market conditions and performance.

Holding gold through SGB bonds and physical gold provides a hedge against inflation. However, ensure it doesn't constitute too large a portion of your portfolio, as gold typically doesn't provide significant returns compared to equities.

Public Provident Fund (PPF)
PPF is a safe and tax-efficient investment. Your annual contribution of ?20,000 is good for stable returns. However, considering its lock-in period and return rate, ensure it aligns with your long-term goals.

Employees' Provident Fund (EPF)
EPF contributions are beneficial for retirement, offering tax benefits and stable returns. Your monthly contribution of ?10,000 is a good base, contributing to long-term financial security.

Fixed Deposits (FD)
Fixed Deposits offer safety but with lower returns, often not keeping pace with inflation. Your ?10 lakh in FDs might be too conservative. Consider reallocating some funds to higher-return investments.

Recommendations for Diversification and Growth
Increase Equity Exposure
Equities tend to outperform other asset classes over the long term. Consider increasing your allocation to equity mutual funds or stocks. Actively managed funds often offer better returns compared to index funds, as fund managers can make strategic decisions to outperform the market.

Rebalance Your Portfolio
Regularly review and rebalance your investment portfolio to ensure it aligns with your risk tolerance and financial goals. Diversification across different asset classes can help manage risk while aiming for higher returns.

Benefits of Regular Mutual Funds
Investing through a Mutual Fund Distributor (MFD) who is also a Certified Financial Planner (CFP) can provide valuable guidance. Regular funds often come with advisory benefits that can help you make informed decisions, balancing growth and risk effectively.

Avoid Direct Mutual Funds
While direct mutual funds have lower expense ratios, they lack advisory services. This can be a disadvantage if you are not well-versed in market trends and investment strategies. Regular funds, through an MFD with CFP credentials, offer personalized advice and better support.

Maintain Adequate Insurance Coverage
Ensure your life insurance coverage is adequate to protect your family in case of unforeseen events. However, do not over-invest in insurance products as they generally offer lower returns compared to other investment options.

Assessing the Decision to Buy a Flat
Buying a flat is a significant financial decision. Here are some factors to consider:

Financial Burden of EMIs
Calculate the potential EMI and ensure it doesn't exceed 30-40% of your monthly income. Consider future expenses, such as children's education, while making this decision. Buying a flat might impact your cash flow and savings ability.

Renting vs. Buying
Evaluate the cost of renting versus buying. In some cases, renting might be more cost-effective and flexible, especially if property prices are high. Consider the total cost of ownership, including maintenance and taxes, when making your decision.

Long-term Goals
Ensure that buying a flat aligns with your long-term financial goals. If it hampers your ability to save for retirement or other goals, it might be better to wait or explore more affordable options.

Your current financial plan is robust, but there is always room for improvement. By increasing equity exposure, rebalancing your portfolio, and carefully evaluating the decision to buy a flat, you can ensure financial security and growth.

Remember, the key to successful financial planning is regular review and adjustment based on changing goals and market conditions. You are on the right track, and with some strategic adjustments, you can enhance your financial well-being.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


Anu Krishna1046 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Jan 24, 2024

Asked on - Jan 22, 2024Hindi

Hi, how to know if I'm in Toxic relation? Problem is my wife gets angry for reasons only known to her. When she got angry she locks the door and stay there until you kept banging it. Even left unattended she will stay inside the room for day (last time she stayed for 4days without food- I believe so) or she leaves the house without information and I need go out and search for her. Even if she opens the door by anychance I should beg like anything for her to eat/drink. There's no communication whatsoever. I tried to convey it many times, if you got angry take sometime and should respond saying what mistake I did either by a message or a note or something she is comfortable with. But all the efforts were in vain. Its been almost 1.5years but still we did consumate, I took her to a gynecologist but even after getting some consultation she didn't change. Sometimes she showcases too much affection and also the anger side. I feel like I'm fearing to talk to take even small decisions like spending time with my family/friends/going out alone. Even she gets possessive if I talk to my cousin/neiece which I don't understand. Informed her father/brother on few things but still there is no improvement. I just feel I'm lost and donno about the future (kids/house/bring parents to stay with me/ etc..). Plz help
Ans: Dear Sandeep,
What you are facing is called 'Emotional Blackmail' which is toxic. It's like when a child who cannot speak does not get what he/she wants, there's a tantrum thrown around just to get your attention.
As an adult, your wife is displaying something similar as she protests by locking herself up to get your attention and make you do or undo certain things that has caused her displeasure or sadness.
She must train herself to communicate what she wants and not, what exactly she does not like...instead if she throws a tantrum, ignore her...even if it's a child, instead of giving into the tantrum, if you ignore, the child calms down and then learns how to convey through communication...
When she is hungry or thirsty, eventually she will open the door and eat...don't worry. But the more you accept this behavior, the more she will continue to gain your attention. So help her learn how to communicate.
(By the way, how does a gynaecologist fit in here? I don't understand the relevance!)
But it be good if you did do a blood check to rule out any vitamin deficiencies which can trigger a lot of low states of mind. Talk to your GP who can advice you on this...till then help her learn a new behavior of communication.

All the best!
Asked on - Jan 24, 2024 | Answered on Jan 29, 2024
Hi Anu, thanks for your reply. I undestand she jus want to grab the attention but she's staying inside the room for days (last time it was 4days) and after that when unattended she stepped outside the house. My problem is instead of being stubborn I'm begging her to eat. I don't know how to stop it, its concerns me as a next to person is having an issue and I should help her but not as a wife. And to your query on gynacologist: we hadn't had sex (intercourse) till date, so took her to see if there is an issue, but all is good. spoke to her multiple times but as she's not interested didn't force her. But she takes pleasure from me by othermeans. I had to hire a Cook because she doesn't know cooking (before marriage she told she knew to cook). told her to learn basic cooking so that you can feed the children (in future) and not rely on someone coming and cook for them but of no use. All she wants is to work (doing WFH) and most of the time she says I'm sick (bodyaches, headache, period). Even after coming to home at 10:30pm from office I had to cook food for me/her when needed. All I feel is I'm staying with a roommate and I feel I'm uncertain this relationship (even told her that if I got into a position I don't even listen to my Parents who I treat them as the 1st priority). But still no use.
Ans: Dear Sandeep,
I am still going to say the same thing as my previous response to you.
You really need to 'toughen' up and not heed to this emotional stuff that she is throwing out at you. Like I said: when a person is hungry or thirsty, they will eventually yield to it...allow it to happen...Yes, it maybe difficult for you to make this change, but if it is going to bring in long-term change within your home and marriage, why would you not do it?
Break this habit/pattern that she has built over years of gaining attention in a very unwanted way. It will help...My suggestions are still the same as my previous response.
Don't go around searching for more answers, as it lies within you and in you. So, take charge...

All the best!
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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