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Ramalingam Kalirajan10893 Answers |Ask - Follow
Mutual Funds, Financial Planning Expert - Answered on May 29, 2025
Asked on - May 25, 2025
I am 32 years old my monthly income is 65000. Ihave one daughter with 1 year old. How to plan my child education future. I bought a plot 1400sq.ft in municipal town. I had taken personal for 15 lakhs. Every month emi 40000. Still 40 months emi left. No returns on my land from 3 years. Should I sell or hold. Value has not increased on my land. I lost around 5 lakhs in stock market. Should I start in sip or not.
Ans: Current Financial Overview and Challenges
Your age is 32 years with monthly income Rs 65,000.
You have a 1-year-old daughter, so child’s future is important.
You hold a 1400 sq.ft plot in a municipal town for 3 years.
No returns or value appreciation from this land so far.
Personal loan of Rs 15 lakh with Rs 40,000 EMI left for 40 months.
Loss of Rs 5 lakh in the stock market.
You ask if you should sell the land and whether to start SIP investments.
Evaluating the Land Investment and Loan Impact
Holding land without income or appreciation ties your money unproductively.
Personal loan EMI Rs 40,000 consumes over 60% of your monthly income.
High EMI restricts your monthly cash flow and financial flexibility.
Land is a non-income asset, with no rent or dividends.
In absence of price appreciation, opportunity cost is high.
Loan interest adds financial burden; you pay interest with no return.
Should You Sell the Land?
Selling land can release capital to reduce loan burden.
Liquidating this asset can free monthly cash flow by reducing EMI.
If land value is stagnant, holding longer may not add value.
Selling can stop further erosion of your finances through loan interest.
Use sale proceeds to prepay or close part of personal loan.
Reducing loan will reduce interest outgo and improve monthly savings.
This improves your ability to invest for child’s education.
Child Education Planning – Key Focus Areas
Your child is 1 year old, education expenses start after 15 years.
Early planning helps beat inflation and accumulation of corpus.
Estimate future education cost considering inflation (usually 10-12%).
Aim to accumulate a corpus that covers education fees and living costs.
Prioritise systematic investments in suitable mutual funds.
Regular SIP builds wealth through rupee cost averaging and compounding.
Should You Start SIP Now?
Yes, starting SIPs early is beneficial despite past market losses.
Losses show market volatility, but disciplined investing works long term.
Actively managed equity mutual funds offer potential to outperform index funds.
Avoid direct funds if you lack expertise; professional management reduces risk.
Invest through certified financial planners and mutual fund distributors.
Start SIP with affordable amount matching your cash flow post loan reduction.
Gradually increase SIP as income or savings grow.
Managing Current Loan and Investments
Personal loan interest is high and EMI is heavy on your income.
Reducing loan by selling land helps you focus on investing.
Avoid fresh loans for investments; it increases financial stress.
Maintain emergency fund for at least 6 months of expenses before investing more.
Avoid panic selling equities during losses; stay focused on long-term goals.
Investment Strategy Post Loan Reduction
After loan burden reduces, increase SIP amount systematically.
Choose diversified equity funds with good past performance and risk management.
Include debt funds for stability and reduce overall portfolio risk.
Review investments annually to adjust according to market and goals.
Avoid index funds; actively managed funds help in changing market cycles.
Other Important Financial Aspects
Health insurance for family, especially child, is a must.
Ensure you have adequate life cover to protect family’s financial future.
Monitor expenses strictly to improve savings rate.
Avoid impulsive investments or speculative stock market trades.
Consider professional guidance for comprehensive financial planning.
Psychological and Behavioural Aspects
Losing money in market can hurt confidence; do not lose heart.
Consistency and discipline matter more than timing market.
Avoid emotional decisions like panic selling or aggressive investing.
Focus on long-term wealth creation for your daughter.
Final Insights
Selling stagnant land to reduce high personal loan is wise.
This will improve monthly cash flow and reduce interest cost.
Start SIP investments early with disciplined approach.
Choose actively managed mutual funds via certified planners.
Build emergency fund and insurance coverage first.
Review and adjust plans annually as income and expenses change.
Maintain patience and focus on goals despite market volatility.
This holistic approach protects your family and builds child’s education corpus.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Your age is 32 years with monthly income Rs 65,000.
You have a 1-year-old daughter, so child’s future is important.
You hold a 1400 sq.ft plot in a municipal town for 3 years.
No returns or value appreciation from this land so far.
Personal loan of Rs 15 lakh with Rs 40,000 EMI left for 40 months.
Loss of Rs 5 lakh in the stock market.
You ask if you should sell the land and whether to start SIP investments.
Evaluating the Land Investment and Loan Impact
Holding land without income or appreciation ties your money unproductively.
Personal loan EMI Rs 40,000 consumes over 60% of your monthly income.
High EMI restricts your monthly cash flow and financial flexibility.
Land is a non-income asset, with no rent or dividends.
In absence of price appreciation, opportunity cost is high.
Loan interest adds financial burden; you pay interest with no return.
Should You Sell the Land?
Selling land can release capital to reduce loan burden.
Liquidating this asset can free monthly cash flow by reducing EMI.
If land value is stagnant, holding longer may not add value.
Selling can stop further erosion of your finances through loan interest.
Use sale proceeds to prepay or close part of personal loan.
Reducing loan will reduce interest outgo and improve monthly savings.
This improves your ability to invest for child’s education.
Child Education Planning – Key Focus Areas
Your child is 1 year old, education expenses start after 15 years.
Early planning helps beat inflation and accumulation of corpus.
Estimate future education cost considering inflation (usually 10-12%).
Aim to accumulate a corpus that covers education fees and living costs.
Prioritise systematic investments in suitable mutual funds.
Regular SIP builds wealth through rupee cost averaging and compounding.
Should You Start SIP Now?
Yes, starting SIPs early is beneficial despite past market losses.
Losses show market volatility, but disciplined investing works long term.
Actively managed equity mutual funds offer potential to outperform index funds.
Avoid direct funds if you lack expertise; professional management reduces risk.
Invest through certified financial planners and mutual fund distributors.
Start SIP with affordable amount matching your cash flow post loan reduction.
Gradually increase SIP as income or savings grow.
Managing Current Loan and Investments
Personal loan interest is high and EMI is heavy on your income.
Reducing loan by selling land helps you focus on investing.
Avoid fresh loans for investments; it increases financial stress.
Maintain emergency fund for at least 6 months of expenses before investing more.
Avoid panic selling equities during losses; stay focused on long-term goals.
Investment Strategy Post Loan Reduction
After loan burden reduces, increase SIP amount systematically.
Choose diversified equity funds with good past performance and risk management.
Include debt funds for stability and reduce overall portfolio risk.
Review investments annually to adjust according to market and goals.
Avoid index funds; actively managed funds help in changing market cycles.
Other Important Financial Aspects
Health insurance for family, especially child, is a must.
Ensure you have adequate life cover to protect family’s financial future.
Monitor expenses strictly to improve savings rate.
Avoid impulsive investments or speculative stock market trades.
Consider professional guidance for comprehensive financial planning.
Psychological and Behavioural Aspects
Losing money in market can hurt confidence; do not lose heart.
Consistency and discipline matter more than timing market.
Avoid emotional decisions like panic selling or aggressive investing.
Focus on long-term wealth creation for your daughter.
Final Insights
Selling stagnant land to reduce high personal loan is wise.
This will improve monthly cash flow and reduce interest cost.
Start SIP investments early with disciplined approach.
Choose actively managed mutual funds via certified planners.
Build emergency fund and insurance coverage first.
Review and adjust plans annually as income and expenses change.
Maintain patience and focus on goals despite market volatility.
This holistic approach protects your family and builds child’s education corpus.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment