Hi, I am 32 years old, I am earning 1.8L pm and have own house with rental income of 25K. My spouse has 50 K income. I have used all my PF and MFs for house construction.. so I am starting my investments from the scratch. I don't have any emis and loans. Planning to purchase a car(worth 15L) on emi. Currently investing in UTI nifty 50 and next 50 10K each, PPfas flexi 20K and mirae asset large cap 10K. I want to increase my investments, please suggest if I can continue with the existing or should I add new funds
Ans: At 32, with no loans and stable family income, you are in a strong position.
Owning a house, earning rental income, and starting investments again shows your resilience and planning mindset.
This attitude gives a good base to build long-term wealth.
Let’s now guide your financial strategy to grow consistently and protect your future goals.
» Evaluate Your Current Financial Position
– Your monthly income is Rs 1.8 lakh.
– Rental income adds Rs 25,000 per month.
– Your spouse earns Rs 50,000 per month.
– Total family income is around Rs 2.55 lakh per month.
– No EMI or loan liability as of now. That is a huge strength.
– You have just finished building a house.
– Your existing savings have been used. So investments are starting from scratch.
– You are already investing Rs 50,000 monthly in mutual funds.
– This is an excellent start for your current stage of life.
» Car Purchase Plan: Reconsider EMI Burden
– Planning to buy a car worth Rs 15 lakh.
– This may bring a new EMI for 5 to 7 years.
– Your total net monthly income is healthy. But car loan EMI could go over Rs 25,000.
– A car is not an appreciating asset.
– It depreciates the day you drive it out of showroom.
– So try to pay higher downpayment.
– Keep EMI tenure short, ideally below 5 years.
– Don’t allow this EMI to impact your monthly SIPs.
– If SIPs get delayed or paused, goal progress slows.
– Avoid zero-downpayment schemes.
– Prefer planned, budgeted vehicle buying.
» Emergency Fund: Create It Before Anything Else
– Before investing further, build an emergency fund.
– Keep 6 to 9 months of monthly expenses aside.
– This will help you in case of job loss, health issue, or income delay.
– Use fixed deposits or liquid funds to keep this.
– This buffer gives peace and avoids panic withdrawals.
» Insurance Planning: Check for Gaps
– Check if you have a term insurance.
– If not, please buy one immediately.
– Cover should be at least 15–20 times your annual expenses.
– Ensure you have personal health insurance too.
– Don't depend only on employer's policy.
– Buy a floater health plan for the full family.
– Prefer Rs 10–20 lakh base plan with top-up.
– Also consider personal accident and critical illness cover.
» Existing Mutual Funds: Strengths and Gaps
– You are investing in 4 funds.
– UTI Nifty 50 – Rs 10,000 monthly
– UTI Nifty Next 50 – Rs 10,000 monthly
– Parag Parikh Flexi Cap – Rs 20,000 monthly
– Mirae Asset Large Cap – Rs 10,000 monthly
– These total to Rs 50,000 monthly SIP.
– Fund count is not too high, which is good.
– However, both UTI Nifty 50 and UTI Nifty Next 50 are index funds.
Index funds have major drawbacks:
– They cannot handle market volatility actively.
– In sharp falls, they fall exactly like the market.
– No fund manager can step in to control damage.
– In recovery phase also, they can lag due to sector rotation.
– In India, actively managed funds still beat index in many periods.
– Especially in mid-cap and small-cap spaces.
– Passive approach may work in US. India is still evolving.
So avoid relying heavily on index funds.
Keep only a small portion, if at all.
Focus more on quality actively managed funds with good track records.
» Direct vs Regular Funds: Choose Wisely
– If you are investing in direct plans, rethink the strategy.
– Direct plans lack advice, review, and monitoring.
– When markets fall or goals change, direct plans offer no handholding.
– Investors often stop SIPs or redeem at wrong times.
– This affects compounding.
– Instead, invest through a Certified Financial Planner and MFD.
– Regular plans give access to guidance and behavioural coaching.
– You get periodic rebalancing and timely strategy review.
– A CFP keeps your plan aligned with your life goals.
So, avoid direct plans. Use regular plans with trusted CFP-led process.
» Portfolio Assessment & Suggestions
– Your current portfolio is large-cap and flexi-cap heavy.
– Missing mid-cap and hybrid category.
– A well-diversified portfolio should include 4–5 fund types.
You can consider:
– One actively managed mid-cap fund.
– One dynamic asset allocation or balanced advantage fund.
– These help reduce volatility and improve long-term return stability.
– Don’t keep adding too many funds.
– Each new fund should have a clear purpose.
– Don’t overlap funds with similar strategies.
– Avoid chasing past performance.
– Mirae Asset Large Cap is fine.
– Parag Parikh Flexi Cap gives global plus domestic exposure.
– That’s a good base.
– Replace one of the index funds with mid-cap.
– Add hybrid fund with goal-focused investing.
» Goal-Based Investing: Bring Purpose to Every SIP
– Without goal alignment, SIPs may be discontinued or misused.
– Define short-, medium-, and long-term goals.
– Examples: Car purchase, child education, retirement, wealth creation.
Short-Term:
– Car downpayment or travel within 1–2 years.
– Use RD or short-term debt funds.
Medium-Term:
– Child education in 8–10 years.
– Use 60% equity, 40% hybrid strategy.
– Protect value closer to goal year.
Long-Term:
– Retirement, wealth creation (15+ years).
– Equity-focused SIPs, mix of flexi, large, mid, multi-cap.
– Use SWP for income post-retirement.
Goal tagging helps with focus, and protects from panic decisions.
» SIP Increase Strategy
– Your income allows you to invest more than Rs 50,000 monthly.
– Once emergency fund and car loan EMI are managed, increase SIPs.
– Target 40% of family income in investments.
– That can be around Rs 1 lakh monthly.
Start step-up SIPs.
This automatically increases your SIP every year by 10%–15%.
It matches your rising income and reduces effort.
Start with Rs 60,000–65,000 now. Gradually push it further.
Higher SIPs early mean lesser pressure later.
» Rebalancing and Review
– Every 6 to 12 months, review your portfolio.
– Check goal progress and rebalance allocations.
– Equity may grow faster than planned. Shift to hybrid or debt gradually.
– Review fund performance with help of a CFP.
– Avoid frequent fund changes. Stay with consistent funds.
– Don’t time the market.
– Don’t stop SIPs when markets fall.
– Best wealth is built when markets are low.
– SIP works best in volatility.
» Tax Planning on Mutual Funds
– Equity fund LTCG above Rs 1.25 lakh per year taxed at 12.5%.
– STCG taxed at 20%.
– Debt fund gains taxed as per your income slab.
– Plan redemptions smartly to avoid tax shocks.
– Use SWP after retirement for steady tax-efficient income.
– Avoid lump-sum redemptions unless urgent.
» Behavioural Factors to Watch
– Stay focused on your long-term goals.
– Avoid fund switching or stopping SIPs in panic.
– Don’t chase top-performing funds.
– Don’t get influenced by market news or media noise.
– Trust in the plan.
– Stick to it even when markets don’t behave.
– Compounding works silently and slowly.
– But it rewards the patient investors massively.
» Family Financial Planning
– Involve your spouse in all money matters.
– Share the portfolio details and keep login access ready.
– Ensure all investments have proper nomination.
– Write a simple Will. Update it when needed.
– Make a one-page sheet of assets, insurance, and goals.
– This helps in emergencies and gives clarity.
» Finally
– You are on the right track.
– Great income, zero debt, and already investing wisely.
– With better diversification and goal tagging, your wealth will grow faster.
– Avoid index funds in large proportion.
– Focus on quality actively managed funds.
– Review SIPs, upgrade to goal-based approach.
– Invest through regular plans with MFD and CFP support.
– Protect your family, build corpus, and achieve financial freedom with confidence.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment