I'm 30, married, no kids, have monthly in-hand salary of 2.25L, my wife has 1L, we together pay around 1L in home, car and study loan. Another 15k in other EMIs. We invest 55k in mutual fund (mix of large, mid and small fund), 20k in stock (using smallcase). I'm thinking to spend another 20k in mutual fund monthly. We might plan kids after 2 years.
We've around 11.75L in mutual fund, 3L in stocks, 2.5L in NPS and PF(not sure about the amount).
Is there anything we need to change or how are we financially?
Ans: You and your spouse are in a strong position. Your income is good. You are managing expenses, EMIs, and savings well.
Now let’s do a 360-degree check on your finances.
We will assess cash flow, debt, protection, investments, and goals in detail.
?Cash Flow and Expense Management
Your combined income is Rs. 3.25 lakh per month.
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Total loan EMIs are around Rs. 1.15 lakh. That is 35% of your income.
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This is an acceptable EMI ratio. But it’s on the higher side.
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You invest Rs. 75,000 (MF + stocks). You are thinking to add Rs. 20,000 more.
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Your saving rate is close to 30%, which is good for your age.
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Ensure you maintain a monthly spending log. This will help avoid leaks.
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Keep monthly expenses under Rs. 80,000 if possible. It improves saving ability.
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Try to maintain a healthy surplus. It improves emergency readiness and investment power.
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Emergency Fund Preparedness
You didn’t mention an emergency fund in savings or FDs.
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You must keep 6 months’ expenses in a savings account or FD.
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With Rs. 80,000 per month expenses, keep at least Rs. 5 lakh aside.
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Never use equity mutual funds or stocks as emergency corpus.
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Treat this fund like insurance, not investment.
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Loan Portfolio Assessment
You are managing home, car, and study loans together.
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If the home loan has a tax benefit, continue. Use annual bonus to part-pay it.
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Try to close the car and study loan early. They don’t give tax benefits.
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Don’t take personal loans or credit card debt. That will damage savings.
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Aim to become loan-free in 7–8 years.
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Use Systematic Transfer Plan (STP) from mutual funds only when nearing goal time.
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Investment Portfolio Check-Up
You invest Rs. 55,000/month in mutual funds.
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You also invest Rs. 20,000/month in stocks via smallcase.
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Mutual fund SIPs should be spread across large, mid, and small caps.
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Reduce small cap exposure if it is above 30%. It increases risk unnecessarily.
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Equity exposure must be managed with asset allocation rules.
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Stocks via smallcase can be risky. Ensure you don’t go beyond 15% of your net worth.
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Avoid direct stocks unless you track markets daily.
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If you are investing in direct mutual fund plans, rethink it.
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Direct plans need constant monitoring. You must switch to regular plans.
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Regular funds via MFD + CFP bring experience, tax-efficiency, and goal-based advice.
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Direct plans miss timely rebalancing, switching, and psychological coaching.
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Your mutual fund corpus of Rs. 11.75 lakh is a good start.
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Increase SIP only if emergency fund is ready.
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Don’t put entire Rs. 20,000 in SIP. Keep some in liquid or hybrid funds for mid-term needs.
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NPS and PF Allocation
You have Rs. 2.5 lakh in NPS and PF combined.
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Your NPS amount is low for your age. Increase contribution slowly, not suddenly.
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NPS is a retirement tool. Money is locked till 60.
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You may raise NPS by Rs. 5,000–10,000/month. But not more now.
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Don’t invest Rs. 1 lakh/month in NPS. It reduces liquidity.
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Continue PPF also. It brings safe compounding over the long term.
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PF (through employer) builds a strong retirement base. Keep it untouched.
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Insurance and Risk Cover Check
You didn’t mention term life cover. Buy one if not taken yet.
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Get term insurance of Rs. 1–1.5 crore for each spouse.
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No need for ULIPs or endowment policies. They don’t build wealth.
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Check if you have personal health insurance apart from employer cover.
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Buy a Rs. 10–25 lakh individual floater policy for both. Employer cover alone is not enough.
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Also buy a Rs. 50 lakh super top-up. It is low cost and gives high cover.
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Without proper protection, your investments can get disturbed in a medical emergency.
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Future Life Goals – Child, Retirement, and Other Needs
You plan to have a child in 2 years.
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Child-related expenses will grow over time. Plan education and marriage goals now.
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Education after 18 years may cost Rs. 75 lakh to Rs. 1 crore.
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You can start with a child education mutual fund SIP now itself.
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Create a separate SIP with name “Child Goal.” That helps stay focused.
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Retirement is still far. But the earlier you plan, the better.
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Retirement goal must include 30 years of inflation, health cost, and lifestyle.
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Use a bucket strategy. Combine equity, hybrid, and debt MFs for different horizons.
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Don't depend only on NPS or PF. Keep mutual funds as the core engine.
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If you plan home upgrades or travel goals, budget and save for them separately.
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Real Estate and Asset Liquidity
You didn’t mention real estate. That’s fine.
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Avoid new property purchases now. It blocks liquidity and delays retirement.
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Real estate gives low post-tax returns and brings maintenance cost.
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Keep investments liquid, flexible, and goal-linked.
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Mutual funds are better than real estate in flexibility and tax-efficiency.
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Stock and Smallcase Exposure – Some Precautions
You invest Rs. 20,000 per month in smallcase.
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This must be capped at 10–15% of total monthly investments.
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Don't expect consistent performance in smallcase-based stocks.
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Returns can swing wildly in some years.
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Track the overlap with your mutual funds also.
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Don't fall into the illusion of “control” with stocks. Stay diversified.
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If needed, reduce this SIP slowly and transfer to equity hybrid or flexi cap funds.
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Recommendations for Better Stability
Keep your debt under control. Try to close loans early.
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Maintain Rs. 5–6 lakh emergency fund at all times.
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Avoid direct mutual funds. Use regular plans via MFD and CFP for guidance.
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Increase term insurance and health cover if not already done.
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Start SIP for child goal today itself.
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Don’t increase NPS sharply. Keep liquidity in hand.
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Avoid real estate. Stay with mutual funds and hybrid funds.
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Review portfolio every 6 months with a Certified Financial Planner.
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Build goals one by one – child, home, retirement, and travel.
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Keep at least 50% of your net worth in mutual funds by age 45.
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Stay patient with SIPs. Compounding will reward you slowly.
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Don’t get distracted by new apps, hot stocks, or trendy assets.
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Finally
You are in the best income years now. Your saving habits are strong.
You are aware of your responsibilities ahead. That is great.
But avoid overcommitment to debt or illiquid assets like real estate or NPS.
Follow a simple, disciplined approach.
Invest smartly, stay protected, and review regularly.
You can enjoy both present comfort and future security.
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Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by Ganesh on Jun 25, 2024English
