Home > User

विशेषज्ञ की सलाह चाहिए?हमारे गुरु मदद कर सकते हैं

Ankur
Ankur
Ramalingam

Ramalingam Kalirajan9383 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 16, 2025

Asked on - Jun 16, 2025

Money
Dear Sir, Please find below my financial details. Kindly advice further for wealth creation. PPF 10 Lacs LIC Jeevan Anand 6 Lacs RD 2000 per month Fixed Deposit 3.75 Lacs SBI- Small Cap 4000 Per month ( for 3 Years) Axis Blue chip 3000 Per month ( For 3 Years) Canara Robeco Blue Chip 3000 Per month ( For 1 Year) Mirae Asset Blue chip 4000 per month for 3 years) Medical Insurance 5 Lacs Term Insurance 50 Lacs Home Loan 28 Lacs( started in april25). Paying 8K per month extra except EMI). Property is rent out. Regards Ankur Gupta
Ans: You have taken some good steps towards financial discipline. Your efforts to diversify across various instruments and maintain insurance coverage are appreciated. I will now evaluate your financial situation under different aspects, and guide you with actionable steps for wealth creation in a simple and clear manner.

Emergency Fund
You haven't mentioned a separate emergency fund.

Emergency fund is essential before investing.

It should be at least 6 months’ monthly expenses.

Include EMIs, insurance, household, and medical costs.

You can use a savings account or liquid fund for this.

Do not use fixed deposits or mutual funds for this.

Keep this fund easily accessible.

Life Insurance and Health Cover
Your term insurance of Rs 50 lakhs is a good start.

But it may be on the lower side.

Cover should be 15–20 times your annual income.

LIC Jeevan Anand is a traditional plan.

These plans give low returns and poor liquidity.

It mixes insurance with investment.

It is better to have pure insurance and invest separately.

You can surrender this LIC plan.

Reinvest proceeds in mutual funds via regular plans through CFP.

You have Rs 5 lakh medical insurance.

This is fine if employer also gives coverage.

If not, increase it to Rs 10–15 lakhs.

Add a top-up health plan for better coverage.

Health costs are rising fast every year.

Loan and Property
Your home loan of Rs 28 lakhs is manageable.

You are paying extra Rs 8000 per month, which is good.

This helps reduce interest and tenure.

Since property is rented out, income supports EMI.

But do not rely on rental for wealth creation.

Real estate gives poor liquidity and high maintenance.

Instead, increase allocation to financial assets.

You can continue prepaying loan if no better options available.

But balance between loan repayment and investment is key.

Fixed Deposit and Recurring Deposit
You have Rs 3.75 lakhs in fixed deposit.

You invest Rs 2000 per month in RD.

These are very low-yield products after tax.

Returns may not beat inflation.

Use these only for short-term goals.

For long term, prefer mutual funds.

Shift RD to a Systematic Investment Plan (SIP) in equity funds.

Keep FD only as part of emergency fund or short-term goals.

PPF – Public Provident Fund
Your PPF balance of Rs 10 lakhs is very good.

It is safe and tax-free.

It gives fixed returns and supports retirement.

Continue PPF for long term stability.

Avoid using this for mid-term goals.

But don’t depend only on PPF for retirement.

It gives lower returns than equity in long run.

Use it as a supporting instrument, not the main one.

Mutual Fund Investments
Your SIPs in multiple funds show good intent.

Monthly SIPs total Rs 14,000.

You are investing in both large cap and small cap.

SIPs are a smart way to build wealth.

Here are a few suggestions:

You are investing in four equity mutual funds.

Three are large cap or blue chip. One is small cap.

Do not invest in too many similar funds.

Large cap funds usually move in same pattern.

This leads to over-diversification with no added benefit.

Instead, choose one or two quality diversified funds.

Keep small cap fund for long term only.

Small caps are risky and volatile in short term.

Do not choose index funds.
They simply copy the market index.
They do not manage risk during market falls.
Actively managed funds are better in Indian market.
Fund managers pick quality stocks and reduce downside.
Active funds give better returns if selected with care.

Also, avoid direct mutual fund plans.
They may look cheaper, but come without proper guidance.
Many investors make emotional decisions in direct plans.
They miss rebalancing and portfolio correction.
Invest through regular plans via MFD who is also a CFP.
You get proper advice, reviews, and rebalancing support.
Good advice helps you avoid costly mistakes.

Investment Strategy – Next Steps
You can now structure your financial plan like this:

Short-Term Goals (0–3 years)

Keep emergency fund of at least 6 months’ expenses.

Use liquid fund or FD for upcoming expenses.

Do not invest this amount in equity mutual funds.

Medium-Term Goals (3–7 years)

Use hybrid mutual funds or balanced advantage funds.

These reduce risk with equity and debt mix.

You can invest some of the FD here.

Long-Term Goals (7+ years)

Use equity mutual funds – large, flexi-cap, small cap.

Do SIPs regularly and increase yearly if income rises.

Stick with long term. Don’t stop during market fall.

Tax Planning and Returns
PPF is already helping in 80C tax saving.

LIC also helps but with low return. Better to surrender it.

SIPs in equity mutual funds are tax-efficient.

New tax rule for mutual funds is now different:

Equity LTCG above Rs 1.25 lakhs is taxed at 12.5%.

Short-term gains are taxed at 20%.

Debt fund gains taxed as per income slab.

Avoid FD as main investment. It gives fully taxable return.

Mutual funds are better after tax adjustment.

Retirement Planning
You are doing some investments but not enough for retirement.

You must plan retirement early for compounding.

PPF is safe but not enough. Use equity mutual funds more.

Estimate your future needs with a financial expert.

Invest with clear goal and timeline.

Child’s Education or Other Goals
You have not mentioned children or specific goals.

Start planning even if child is small.

Education inflation is very high.

Use SIPs in mutual funds for such goals.

Key Action Plan for You
Create emergency fund first. Use FD or liquid fund.

Surrender LIC Jeevan Anand. Invest money in mutual funds.

Stop RD. Start SIP of same amount in balanced mutual fund.

Continue SIPs. Reduce to 2–3 quality funds only.

Invest only through regular plans with CFP-led MFD.

Don’t choose direct plans or index funds.

Keep paying extra to home loan. But balance with investments.

Increase term insurance to at least Rs 1 crore.

Increase health cover with top-up plan.

Track all investments and goals annually.

Finally
You have started well. Your savings habit is good.
You are investing regularly and taking insurance protection.
But your portfolio needs better structure and focus.
Avoid mixing insurance and investment.
Avoid low return products for long term goals.
Use equity funds more through regular plans with CFP support.
Stick to plan for 10–15 years for wealth creation.
Do not panic during market falls. Stay invested.
Rebalance portfolio yearly with professional help.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
Ramalingam

Ramalingam Kalirajan9383 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 13, 2025

Asked on - Jun 13, 2025

Money
Dear sir, I am 43 old , gwtting salary 89,000/-. Toom a home loan rs.30 lacs recently to buy home which is given on rent. Also mothly 14k mutual funds. 3k Rd, 50lacs term insurance, ppf -10 lacs and some 10 lacs of life insurance. Please give me advice further how can i improve my wealth.
Ans: You are already managing many aspects of your finances with discipline. At 43, it is the right time to fine-tune your strategy to build wealth for the long term. Let us examine your current structure and create a 360-degree plan for your financial growth.

Current Financial Picture – Let’s Review
You have a good starting point already:

Monthly salary: Rs. 89,000

Home loan: Rs. 30 lakh, property is rented out

Mutual Fund SIP: Rs. 14,000 monthly

Recurring Deposit (RD): Rs. 3,000 monthly

Public Provident Fund (PPF): Rs. 10 lakh already invested

Term Insurance: Rs. 50 lakh coverage

Life Insurance: Rs. 10 lakh (likely traditional policy)

Your intention to grow your wealth is strong. Now let’s evaluate what can be adjusted or improved.

Cash Flow Assessment – Know Your Numbers
Your monthly income is Rs. 89,000. From this, following goes into investments:

Rs. 14,000 to mutual funds

Rs. 3,000 to RD

That totals Rs. 17,000 monthly. This is around 19% of your salary. While this is good, you should aim for 30% if possible.

Rent from property adds income. But don’t count it for daily expenses.
Use it to partly offset home loan EMI or reinvest elsewhere.

Your Mutual Fund SIP – Check Allocation Mix
You are investing Rs. 14,000 monthly in mutual funds.

But key question is: What type of funds?

If you are investing mostly in small cap or thematic funds, rebalance it.

You must include large cap and diversified equity as well.

You must also include balanced advantage funds.

Don’t hold more than 4–5 schemes in total.

Avoid index funds due to zero flexibility and lack of downside protection.

Actively managed funds give better stock selection in market corrections.

If you are using direct mutual fund platforms, stop now.
Invest through regular plans via MFD who holds CFP credential.
They help you with rebalancing, reviews and tax support.
Direct plans may look cheaper but lack expert involvement.
Mistakes in fund choice or exit timing can cost you more later.

PPF Investment – Very Good Long-Term Pillar
You already have Rs. 10 lakh in PPF. That’s excellent.

Continue investing Rs. 1.5 lakh yearly, if possible

It gives tax-free returns and helps in retirement corpus

PPF is safe and suits long-term financial security

Don’t treat PPF as emergency money. Let it grow undisturbed till age 60.

Life Insurance – This Needs Correction
You said you have Rs. 10 lakh in life insurance.
If these are traditional or endowment plans, they are not wealth creators.
Returns are very low, often below inflation.

Also, they mix insurance and investment. That is not good.

What You Should Do:

Check policy surrender value.

If the loss is minimal, stop paying further premiums.

Surrender the policy and reinvest that amount into mutual funds.

Insurance should be only through pure term plan.

You already have Rs. 50 lakh term cover. That’s good.

Consider increasing it to Rs. 1 crore. You still have earning years left.

Term plan premium is small but gives full protection to your family.

Home Loan – Plan Smartly
You have taken Rs. 30 lakh home loan. That is fine.
It is good that the house is rented. That gives extra cash.

But rental income is usually 2–3% of property cost.
And loan interest is 8–10% or more.

So this is not a wealth creator right now.
Still, use the rent wisely.

Key Suggestions:

Don’t use rent for lifestyle.

Use it to part-prepay home loan every year.

Ask bank to reduce tenure, not EMI.

This reduces interest cost greatly.

Try to finish loan before retirement age.

Prepayment every year, even if small, helps you save a lot of interest.

Recurring Deposit – Reduce It Gradually
You are investing Rs. 3,000 monthly in RD.

RD gives low returns (6% or less)

After tax, returns are even lower

Instead, shift slowly from RD to mutual funds

You can stop RD and add Rs. 1,000–2,000 more to SIP.
Equity mutual funds give much better long-term growth.

RD is fine for short-term needs. But not for wealth building.

Emergency Fund – Have You Built It?
You must keep 6 months’ expenses as emergency fund.
This can be in liquid mutual funds or sweep-in FD.
Don’t depend on RD or PPF for emergency use.

Estimate your monthly expenses and save 6x that in a safe instrument.
Emergency fund avoids stress during medical or job issues.

Retirement Planning – Act Now, Not Later
You are 43 now. Retirement is 15 years away.
It is important to act now and build your retirement fund.

Keep SIP running and increase it by 10% every year

Don’t break long-term funds unless it is urgent

Ensure your investment mix is 60–70% equity, rest in PPF and debt

Keep reviewing funds every year with MFD + CFP guidance

Use mutual funds for growth, PPF for safety and term plan for protection.

Additions You Should Plan Now
Health Insurance for yourself and family. If already taken, review sum insured.

Increase SIP gradually. Target Rs. 25,000 monthly over next 2 years.

Stop any future LIC or ULIP plans. Don’t mix insurance and investing.

Use rent income to repay home loan and increase equity investments.

Also, avoid taking loans for travel, gadgets or family functions.
Your salary must create future wealth, not just fulfil present wants.

Check These Things Every Year
Track mutual fund growth and do yearly rebalancing

Check term plan coverage. Increase if salary increases

Revisit health insurance cover regularly

Make will or nomination for all assets

Review asset allocation: equity, debt, gold – adjust when needed

Avoid chasing “hot” fund themes like AI, pharma, etc. blindly

Stay in core diversified equity funds with strong track record.
Review portfolio only once or twice a year. Not every week.

Finally
You are on the right track. You are saving and investing already.
You are also paying your loan on time. That’s a good discipline.

Now you need to improve the quality of investments.
And also increase the savings percentage step by step.

Here’s your action plan from here:

Stop RD slowly and increase SIP

Check and surrender poor life insurance plans

Continue PPF every year till retirement

Use rent income to part-prepay home loan

Review your mutual fund portfolio with help of MFD + CFP

Increase term cover to Rs. 1 crore if affordable

Build emergency fund of 6 months’ expenses

Set clear goal: retirement, child’s higher education, or passive income

Stick to plan. Don’t chase quick returns.

You don’t need 20 funds. You need 4–5 good ones, reviewed yearly.
And you don’t need to work harder, just let your money work smarter.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
(more)
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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x