Do you know which mutual funds are safe to invest your money when the markets are falling? How much money should you invest in mutual funds to get Rs 50 lakh after after 15 months?

Should you invest in mutual funds for the long term or the short term? How can you save your entry load while investing in mutual funds?

Is there any ideal amount that you should invest every month?

Part I: How to achieve financial freedom 

shweta asked, hi sridhar.. my CTC is 23000 per month. I want to know how much savings should be done ideally every month?

Vetapalem Sridhar answers, Dear Shweta, there is no ideal ratio as such. Ideally U should save as much as possible. The most important thing about saving is ur attitude towards savings. There must be discipline in savings. Also not how much u save but how u invest ur savings would decide how ur financial future would be.

kumar ss asked, Dear Sridhar, I heard long term investment in mutual funds is good. Don't we have the same thing in shares investment?

Vetapalem Sridhar answers, Long term invest is suggested for equity investments in general. Shares and equity oriented mutual funds is equity investing. U can understand why if u read thro the following link where i have explained why u need to have a long term focus to invest into equities. 

Sharmila asked, Good Noon to you. Please advice whether DSPML TAX SAVER & DSPML BALANCED FUND would be safe for 2 years perspective? Or should DSPML Equity will be a good one? Regards.

Vetapalem Sridhar answers, Hi Sharmila, as in all funds there is exposure to equity investments, these funds would be subjected to mkt risks. It is not possible to say with certainty wat would happen to equity mkts in 2 yrs. The probability of making gud returns with a 5 plus years horizon in equity investing in very high. So would suggest that no matter which of the above funds u select, do invest with a long tem horizon.

sathish asked, Sir, this is sathish here from chennai? where do you think our market is going? Do you think we shall able to reach the magical figure of 21000 points again?

Vetapalem Sridhar answers, Dear Sathish, it is not possible to predict with certainty where our mkts will go from here. Mkts r expected to remain volatile for some time. Along with the global issues like US problems and OIL price, our economy is also showing signs of a definite slowdown. In such a scenario we can expect the mkts to remain subdued for a while. having said that let me also point out that Mkts do have a mind of their own, and they do prove us wrong time and again. The mkts will definitely reach 21k but then it is a matter of when. It may happen in mnths or may even take yrs.

NoVice asked, How much one has to save and cut expenses so that in 15 years down the line I have 50 Lakh cash surplus? My salary is 50,000 per months and my age is 24.

Vetapalem Sridhar answers, If u invest around 8K p.m. for 15 yrs and this money continues to grow at 15% p.a., u should end up with around 52L then. The purchasing power of this money would be around 21L.

Mona asked, Me and my hubby are planning to buy flat worth 60 lacs in gurgaon. Our joint monthly earning is 90k. Can we show that we both are taking the home loans? Also I haven't yet invested in MFs all i have is some equity stocks and LIC [Get Quote] plans and NSC. so my another question is how and where do i invest so that i get better returns?

Vetapalem Sridhar answers, U and ur husband together can take a joint housing loan. For both or u to be able to claim tax benefits on housing loan, the flat should be on joint name. In case u plan to take on such a huge liability then be sure to take up adequate TERM insurance cover that will cover this liability. Over longer run, equities have the potential to deliver higher return. U can invest into equities either thro direct stocks or thro equity oriented mutual funds.

SandeepK asked, Hi..i'm 23 yrs & I recently got a package of rs. 3 Lacs i.e 25K per month. Plz guide me thru the best tax savings options. I have parents who are senior citizines, i wish to take Mediclaim policy also for them. Need your guidance & assistence.

Vetapalem Sridhar answers, The new tax slabs is gud news to all salaried people. In ur case tax liability is small. U can invest u/s 80C upto 1L. Also for parents if u buy medclaim, there is some tax advantage (not sure, do check up with a CA). If u plan properly, ur tax liability will be less than 5K next yr.

raj asked, Hi Sridhar, Is it correct that we can save on the entry load if we invest my MF SIPs directly instead of going thru mu agent? Secondly I am doing SIP with following allocation : 2000 in Reliance [Get Quote] RSF, 2000 in Standard chartered premium equity, 2000 in UTI infrastructure fund, 2000 in Kotak opportunities fund and 5000 in DSP Tiger. Is my allocation ok?

Vetapalem Sridhar answers, Hi Raj, u can save entry load not only on SIPs but on all transactions done directly with the respective Mutual Funds. Ur portf consists of gud funds, but it makes ur portf very aggressive. U may want to replace 2 funds by a large cap/diversified fund to add stabiltiy to ur portf.

singhalmohan asked, Hi VS, I want to enter into the world of Financial Planning. Is there any mandatory requirement to become one?

Vetapalem Sridhar answers, There r a number of courses which claim to teach financial planning. Also there is a Certified Financial Planner exam that u can give to enter this field. Having said this, as of now there is no mandatory requirement to become one now. SEBI is in the process of bringing in some certification programmes for the same. Will know with time wat the plans actually are.

Sachin kumar asked, Hi Sir, I m working with a Retail company As An Accountant since last 1.5 yr n till today there is no saving for me. My engagement is around the corner how can save money for my future?

Vetapalem Sridhar answers, In one of my previous chat I had mentioned tips for Savings. Let me paste the same answer. Tips for saving money:

~ Understand ur income and expenses. keep a written record of ur expenses. review it at the end of each month. look at expenses that u could have avoided. In future avoid such expenses.
~ Look at ur lifestyle habits. if u go to a multipex every week and spend money, cut down on number of visits and try to find activities that cost lesser money and which r more adventurous.
~ keep a tab on ur mobile bill. select a plan that works out cheapest for ur profile of usage.
~ Get into a SIP into a mutual fund which ensures discipline as far as saving is concerned.
~ If u have a credit card then cut it into 2 pieces as u should not fall into the habit of using it. Use a debit card instead.

PVerma asked, Dear Sridhar, My Annual Pkg is 8.5 Lac and My spouse's is 6.7. We gets around 80K/Months after tax deductions. Till now we have Invested 1.25 Lac in Mutual Funds, 1 Lac PPF, 50K in LIC, 10K in ICICI [Get Quote] Prulife Pension Plan (Only Me). I have invested 2.5 Lc in Share Mkt and bearing arnd 70K loss till now. I have 2 Lac Liquid cash and planning to buy a 2 BHK. Ps suggest me how much loan I should get and how should I plan for Investemnt?

Vetapalem Sridhar answers, It makes sense to buy the property on joint name and also take a joint housing loan. This will help both u and ur wife to claim tax benefits for housing loan. Both of u should get adequte TERM Insurance Cover before u take the Housing loan. Invest only that money in equities which u can keep invested for a period of not less than 5 yrs. If the shares that u hold r gud then remain invested.

Reshma asked, Hello sir Is it safe to invest into share market during this period if yes which shares should I purchase? Pls help hav a great day.

Vetapalem Sridhar answers, Falls in Mkts r gud time to buy equities. But do have a long term horizon to invest into equities. Invest amounts regularly as it is not possible to know with certainty wat will be the bottom of the mkts. It does however make sense to pump in more money into equities when mkts correct.

abhaygadiyar asked, what's your view on Term Assurance Plan of life Insurance. Which is a good insurance company in pvt sector or is LIC the better option?

Vetapalem Sridhar answers, All Insurance companies follow IRDA regulations. No company is better or worse, as all of them are regulated well. Select a company with which u feel comfortable. Having said this each Insurance Co has a number of products. Some may be really beneficial based on ur need and some may not be so beneficial. So first be clear of ur needs and then look for the best solution available. Do not look at a product and then see which need of urs it satifies. The chances of going wrong is high in such a case.

Vetapalem Sridhar says, It was gr8 answering ur questions. Will catch up soon again!

Vetapalem Sridhar is a financial planning specialist based in Pune. He can be reached at vetapalems@rediffmail.com.