Freefincal Q & A: lump sum investing to using the same portfolio for all goals

Published: April 22, 2017 at 10:51 am

Last Updated on

Each week, I try to answer generic questions from readers. Here is this week’s edition. You can use the form below to ask your questions. I have also included a video showing how one can login into Value Research via Excel. to use the Excel stock screener.

John Galt: What is the procedure to convert existing Regular MF units to Direct via the MFU portal?

Pattu: You can initiate a “switch” transaction from the regular plan for a fund to its direct plan via the MFU console.

Dorothy: Would you please analyse, what makes a better sense – planning annual vacations on your own as and when you need or, one-time investment in club mahindra like offers? I know, it is difficult, unless you know, info on vacations’ frequency and other things… but still you can come up with a post on this topic. Reference:

Pattu: This is not any different from a gold scheme run by a jeweller or a STP from a AMC – it is a way to lock-in business. DIY every aspect of a holiday makes sense to me. I will perhaps Pranav Surya – with whom I am co-authoring a lifestyle book –Gamechanger – to write about this.

RK: I have been reading your blog (and purchased and read your book) for few months. I had not invested in stock so far. I want to start SIPs. However, I truly have lumpsum investments to make – around 15Lak+ , as some FDs are maturing this month and I receive bonus around this time in the year. That is little less than half of my total corpus. So it is definitely a lump sum from all your definitions provided in one of the previous posts. If I invest this as 50k SIP (my normal savings per month), it would take 2+ years, which is clearly not the one you recommend – you suggested 3 months or so I believe. Should I stick with 3 months?

Pattu: Thank you. If you have never invested in equity before, then I suggest you first invest an amount of 50K or less and observe the daily ups and downs for at least a couple of weeks. Then recognise what kind of losses to expect when that amount eventually becomes 15 Lakhs.  Once you are comfortable about this, you can gradually add more. There is no need for a SIP. You can manually invest an amount each week or each month. Or set up a SIP if that is convenient for you. I am assuming that you do not need this money for several years.

Related post: How to invest a lump sum in an equity mutual fund?

Sanjy: Hello Prof.Pattu… I’m 23 and I just started reading your blog. First of all thank you for the informative articles and helpful calculators. My question is regarding the SIP date in some calculators. You have asked to keep the value as 1 if invested in the beginning of the month and 0 if invested at the end. What difference does it make if I make the monthly SIPs at the end of the month or start of the month?

Pattu:   That matters only for the compounding formulae. Not in real life. Don’t worry about it and invest when you can spare the money.

Kiran: Hello Pattu Sir! I have been following your esteemed blog for quite a few months now and have the below questions: 1) Can one have a single Mutual Fund for various goals (like Child’s higher Education, Retirement)? My thoughts were how can one judge when to take out? (I mean if a child’s education is upcoming in 3 years then take out from equity allocation and deploy in debt). However, won’t this alter the surplus for other goals? How to tackle this situation? Is it advisable to have different mutual funds for each of the goals (But again not sure if its too much of an overloaded portfolio) Thank You

Pattu:  Yes, you can have a single portfolio as opposed to separate folios for each goal. There are pros and cons with each approach. If the equity market does well, then there is no much of a problem when you redeem. If it crashes a few years before any of those goals, then when we redeem, we will be eating into the corpus needed for the other goals. So this means will have to gradually shift to debt well in advance and when the market does well. Certainly possible to do, but I personally prefer separate folios.

A unified portfolio can be used by those who cannot invest enough for goals separately. See: Financial Goal Planning with a Unified Portfolio.

Priya: Sir, Which ITR to file if I am filing professional income u/s 44 ADA – presumptive taxation and have income from capital gains as well .. Since ITR 4S doesn’t have cap gains and ITR 3 – don’t know if allowed under presumptive taxations?

Pattu:   According to this, if you are going to file under presumptive income, interest income and capital gains should be added under total income and then you deduct 80C savings from such income.

However, 4S filing is not mandatory. Get an audited report of your income and file ITR 3 or ITR5. If you look at the 4S instructions, then I think this is what you should do.

S Krishnan: Will I T R Filing For A / Y 2017-18 Be Accepted Without Rejecting And / Or Without Treating It As INVALID , If Aadhaar Is Not Linked With P A N ; Unable To Link Due To Mismatch In Name ; Though TheNames printed in P A N Card And Aadhaar Card Are the Same , but In P A N Data , it differs because the name shown in full lengthy ?

Pattu: All you need to do is to mention your Aadhaar no in the ITR form. There is no need to link it with PAN. The govt will bring out a easier method for linking and it is not related to ITR filing.

SUBHASH VHATKAR: I am serving in Central Govt. Service since 24.03.1990 and I will get old pension plan. I saved more than Rs.1,50,000/- in GPF, re-payment of Housing loan, insurance, etc. Further, I saved Rs.50,000/- in New Pension Scheme on 21.01.2017 under section 80 CCD (1b) and submitted my Income Tax Declaration Form to my Department. My Department ignored the saving of Rs.50,000/- in NPS under section 80 CCD (1b) stating that I have not appointed in Central Govt. Service on or after 01.01.2004. Kindly advice that I can claim the deducted Income Tax of Rs.10,300/- through Income Tax Return for the financial year 2016-17 or otherwise. Your kind advice in helpful to me. Thanking you, Madam

Pattu: Of course you can claim it and get reimbursed. What your department did is  wrong.

Kranti Goyal: Hi, Apart from salary, if I have only long term capital gain from equity. Do i suppose to file ITR2 in this case or ITR1 will be sufficient? Thanks and Regards Kranti

Pattu: You will have to file ITR2

SIDDHARTHA: 1.Is it true that buying mutual fund from a NRE account is costlier than normal savings account? 2.If I wanna invest direct in AMC site(mannual SIP;MSIP),can I have any bank savings account or only some saving account do the purpose?

Pattu: You will have to link your NRE account with the AMC. Mr Rajesh Babu after seeing my response has confirmed that there is no difference between NRE and normal SB acct with reg to mf investing expenses.

Join our 1500+ Facebook Group on Portfolio Management! Losing sleep over the market crash? Don't! You can now reduce fear, doubt and uncertainty while investing for your financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community. The 1st lecture is free! Did you miss out on the lockdown discount? You can still avail it! Follow instructions in the above link!

DHIREN SHAH: I have self-occupied property which is inherited and in my name.The same has been let out and we are staying in the other property on rent basis.In this case , Rent received can be adjusted again the rent paid and net has to be shown as Income from House Property. Can you guide for the same.

Pattu: The rent received is to be added to total income. The rent paid can be claimed against the HRA received, subject to limits.  Even if you do not get a HRA, up to 60,000 a year can be claimed as a deduction. See this for details.

Suhas: Hello Sir, Thanks for such a wonderful informative blog. My question is for young earners, during their first few years of earning most young people would have invested in wrong products just to save taxes, and once he/she starts to know more about financial planning they will understand the importance of investing in right products, starting early, knowing expenses and also about planning and investing based on goals. While he appreciates all these , he is confused about goals part, most young earners say 24-25ys old wouldn’t know what could be future goals and it might vary drastically as they get old, but they may be in a good position to articulate their goals only say 10-12 yrs down the line when they are kind of “settled”, so assuming the financial goals will be clear by 35-37yrs what do you think should be the strategy of investing be for young 25-27yrs olds for the next 10-12yrs time frame? Thanks, Suhas

Pattu:   Most earners in the mid-20s dont care to think about life goals. If they do, it will become clear that financial independence is a common goal for all. If they can manage to invest an amount in equity that matches their EPF contribution, that is enough. A clear goal is not necessary.

How to Login to Value Research Via Excel


Ask Questions with this form

And I will respond to them this weekend. I welcome tough questions. Please do not ask for investment advice. Before asking, please search the site if the issue has already been discussed. Thank you.

[contact-form][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form]

Kolkata DIY Investor Workshop May 28th, 2017

Register for the Kolkata DIY Investor Workshop May 28th, 2017

You Can Be Rich Too With Goal-Based Investing

You can be rich too with goal based investing is my new book with PV Subramanyam. If you have not yet got the book, check out the reviews below and use the links to buy.

Reader Quotes:

If you want a book that’s unbiased and that will hold your hand and walk you through the personal finance jungle, then buy this.. the best thing 300 bucks could buy you.

Gift it to your Friends and Relatives whom you care more. Already follower of Pattu and Subra’s forum. Ordered 4 more copies to give gift to my friends and eagerly waiting to read

The best book ever on Financial Freedom Planning. Go get it now!

Your first investment should be buying this book

The (nine online) calculators are really awesome and will give you all possible insights

Thank you, readers, for your generous support and patronage.

Amazon Hardcover Rs. 317. 21% OFF

Kindle at (Rs. 307)

Infibeam Now just Rs. 307 24% OFF.

If you use a mobikwik wallet, and purchase via infibeam, you can get up to 100% cashback!!

Bookadda Rs. 344. Flipkart Rs. 359 ($ 3.70 or Rs. 267)

Google Play Store (Rs. 244.30)

  • Ask the right questions about money
  • get simple solutions
  • Define your goals clearly with worksheets
  • Calculate the correct asset allocation for each goal.
  • Find out how much insurance cover you need, and how much you need to invest with nine online calculator modules
  • Learn to choose mutual funds qualitatively and quantitatively.

More information is available here: A Beginner’s Guide To Make Your Money Dreams Come True!

What Readers Say

Do share if you found this useful
Share your thoughts on this topic at the  Reddit freefincal_user_forum

Reach your financial goals like a pro! Join our 1600+ Facebook Group on Portfolio Management! You can now reduce fear, doubt and uncertainty while investing for your financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community. The 1st lecture is free!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!) or you buy the new Tactical Buy/Sell timing tool!
About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. We operate in a non-profit manner. All revenue is used only for expenses and for the future growth of the site. Follow us on Google News Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)
Free android apps