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Ramalingam Kalirajan |10872 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Jul 23, 2025
Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Jul 19, 2025Hindi
I'm 29 years old, not married, live with my parents (own house). My take home is 1.40L. I have a few EMIs - car loan of 24k for next 2.5 years , I bought a plot and have a loan of 16k with 16 months remaining, personal loan emi 15k with 24 months remaining. I have a term insurance of 1Cr and LIC for 12k and other emis of 15k. I also have 5L loan to pay to my brother (no interest) which I have to payback in a year. My investments are - I have 9L in mutual funds. 2L in FD. 1.5L in stocks. My monthly expenses is around 20k Kindly help me plan my finances accordingly and plan for my future as well.
Ans: You are doing well for your age. Good to see your income, investments, and responsibility taken seriously. Managing EMIs, helping family, and building assets – that is a strong foundation.
? Income, EMIs, and Expense Summary
– Your monthly income is Rs.1.40 lakh
– Car loan EMI: Rs.24,000 (2.5 years remaining)
– Plot loan EMI: Rs.16,000 (16 months left)
– Personal loan EMI: Rs.15,000 (24 months left)
– Other EMIs: Rs.15,000 (purpose not clear – but we’ll consider it)
– Loan to brother: Rs.5 lakh (to repay in 1 year, no interest)
– Monthly expenses: Rs.20,000
So total monthly outgo (EMIs + expenses) is Rs.90,000. That leaves approx. Rs.50,000 monthly surplus.
Your loans are structured but heavy. The good part is – many are short term. That gives room for recovery and growth soon.
? Existing Assets and Investments
– Mutual funds: Rs.9 lakh
– Fixed deposit: Rs.2 lakh
– Stocks: Rs.1.5 lakh
– Term insurance of Rs.1 crore
– LIC with Rs.12,000 premium (details not shared – assuming endowment)
This is a fair start. The investment size is good considering your age and EMI pressure. You are not neglecting your future.
But some adjustments are needed to make it sharper and better aligned.
? Loan Management – Clear Priority Plan
At 29, your top priority should be clearing high-cost loans. Here's a plan:
– First, repay the Rs.5 lakh loan to your brother within 12 months as promised
– Allocate Rs.42,000 every month for 12 months for this
– This should be non-negotiable. No partial delay
Once this is done, focus on clearing the plot loan and personal loan faster. Even though they have short terms, prepaying saves interest.
Car loan is big at Rs.24,000 EMI. But since only 2.5 years are left, let it run unless there’s a windfall.
For now, don’t take any new loans. Not even for investment.
Don’t use FD or MF lump sum to prepay. Keep those for emergencies and growth. Use only surplus income.
? Emergency Fund – Build and Maintain Stability
FD of Rs.2 lakh is good. But ideally, emergency fund should be equal to 6 months of total expenses and EMIs.
In your case, total monthly outgo is Rs.90,000. So emergency reserve should be Rs.5–6 lakh minimum.
Top up your FD by Rs.3 lakh over the next 12–18 months. Or shift part of mutual funds to a liquid or ultra-short debt fund for this purpose.
This fund must not be touched for investing or spending.
? Insurance Review – Smart Protection First
Term insurance of Rs.1 crore is the right decision at your age. Well done.
Please check these:
– Policy must cover till age 60 or 65
– Premium should be regular pay, not single or limited pay
– Claim settlement ratio of the insurer should be 95% or more
Now about the LIC policy of Rs.12,000 yearly:
– If it's a traditional endowment policy, returns will be low (around 4–5%)
– These policies mix insurance and investment poorly
If the policy is older than 5 years and surrender value is more than premiums paid, consider surrendering. Invest the amount in mutual funds aligned to your goals.
If not yet 5 years, stop future premiums after minimum term and make it paid-up. Redirect that money into long-term SIPs.
Keep insurance and investment separate. That gives more clarity and better return.
? Mutual Fund Portfolio – Evaluate, Clean, and Strengthen
You already have Rs.9 lakh in mutual funds. That is excellent for your age.
But now do this:
– Review the number of funds
– Avoid overlapping schemes of the same category
– Retain only quality funds with long-term track record
– Ensure proper mix of large-cap, mid-cap, flexi-cap, and hybrid if needed
Avoid holding too many funds. 4 to 6 well-chosen funds are more than enough.
Ensure the funds are regular plans and are tracked by a qualified MFD with CFP credentials. This ensures fund review, guidance, and rebalancing when needed.
If you hold direct plans, reconsider. While it avoids commission, there’s no guidance.
Mistakes in direct funds (wrong category, poor timing, panic exit) often reduce return more than any fee saved.
Also avoid index funds or ETFs. These don’t adjust during market falls. Active funds provide better downside protection and selection flexibility.
? Stock Holdings – Control Exposure and Risk
Stocks worth Rs.1.5 lakh is okay for your age. Keep direct equity below 10–15% of your portfolio.
Do not increase exposure here unless you have deep knowledge, time, and discipline.
Avoid using stocks for short-term goals.
If you are not tracking regularly, consider shifting future equity investments to diversified equity mutual funds.
These are better managed, tax efficient, and monitored professionally.
? Monthly Surplus – Where and How to Allocate
After all expenses and EMIs, you have approx. Rs.50,000 surplus monthly. Here's how to use it wisely:
– Rs.42,000 towards loan to brother (for next 12 months)
– Rs.3,000 SIP in hybrid mutual fund (for flexibility and stability)
– Rs.5,000 SIP in large or flexi cap fund (for long-term growth)
After 12 months, when the brother’s loan ends, restructure again:
– Rs.15,000 to clear other loans faster
– Rs.10,000 increase SIP
– Rs.5,000 to FD or debt fund as emergency
– Keep Rs.10,000 for variable goals (travel, skills, etc.)
Review this distribution yearly.
? Future Goals – Plan Now, Not Later
Even though you’re not married, you must prepare now. Think 5–10 years ahead.
Likely future goals include:
– Marriage
– House furnishing or interiors
– Starting business or higher education
– Buying a second car (later)
– Retirement (yes, even from now)
Assign timelines to each goal. Begin SIPs accordingly.
Short goals (2–4 years): hybrid funds or short-term debt funds.
Long goals (5+ years): diversified equity mutual funds.
Avoid mixing timelines in one fund. Each goal should have its own basket.
Don’t invest in real estate again just for investment. Your plot purchase is enough for now. Adding more adds risk and reduces liquidity.
? Tax Planning and Structure
You have high EMIs and likely high interest paid. But you can still plan for tax efficiency.
Do these:
– Use 80C: LIC, PF, ELSS SIPs, and home loan principal
– Use 80D: medical insurance for self and parents
– Home loan interest: under 24(b) limit
– Use LTCG limit of Rs.1.25 lakh in equity mutual fund sales smartly
Always redeem mutual funds in a structured way. Avoid excess STCG which is taxed at 20%.
Take help from your MFD (with CFP credentials) to plan redemptions better.
? Review and Rebalancing – Don’t Skip This
At least once in 6 months, do a full portfolio review.
– Check fund performance
– Adjust SIPs as per changing goals
– Reduce overlapping schemes
– Rebalance equity and debt if asset mix shifts
If equity goes above 75% due to rise in market, shift some gains to hybrid or debt.
This avoids future shocks and protects capital.
? Habits to Maintain for Wealth Building
– Keep expense below 40–45% of income
– Avoid impulsive purchases or lifestyle inflation
– Review EMIs before taking new loans
– Keep insurance simple and clean – term only
– Increase SIPs every year by 10–15%
– Avoid loans for consumption
– Don’t check market daily. Focus on goals instead
Stability and discipline matter more than chasing hot stocks.
? Finally
You are off to a strong financial start. You’ve taken responsibility at a young age.
Your EMIs are structured, and your surplus is healthy. Once short-term loans are over, your investable surplus will grow fast.
Use this time to streamline your portfolio, cut down debt, and set up strong SIPs.
Build goal-wise investments through mutual funds. Track using professional guidance through a certified MFD.
Avoid direct funds if you cannot monitor. Avoid index funds as they don’t protect during market downs.
Stick to active funds and review portfolio twice a year.
Keep insurance pure. Keep investing simple.
This 360-degree plan will ensure financial freedom, peace of mind, and smart growth for your future.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
? Income, EMIs, and Expense Summary
– Your monthly income is Rs.1.40 lakh
– Car loan EMI: Rs.24,000 (2.5 years remaining)
– Plot loan EMI: Rs.16,000 (16 months left)
– Personal loan EMI: Rs.15,000 (24 months left)
– Other EMIs: Rs.15,000 (purpose not clear – but we’ll consider it)
– Loan to brother: Rs.5 lakh (to repay in 1 year, no interest)
– Monthly expenses: Rs.20,000
So total monthly outgo (EMIs + expenses) is Rs.90,000. That leaves approx. Rs.50,000 monthly surplus.
Your loans are structured but heavy. The good part is – many are short term. That gives room for recovery and growth soon.
? Existing Assets and Investments
– Mutual funds: Rs.9 lakh
– Fixed deposit: Rs.2 lakh
– Stocks: Rs.1.5 lakh
– Term insurance of Rs.1 crore
– LIC with Rs.12,000 premium (details not shared – assuming endowment)
This is a fair start. The investment size is good considering your age and EMI pressure. You are not neglecting your future.
But some adjustments are needed to make it sharper and better aligned.
? Loan Management – Clear Priority Plan
At 29, your top priority should be clearing high-cost loans. Here's a plan:
– First, repay the Rs.5 lakh loan to your brother within 12 months as promised
– Allocate Rs.42,000 every month for 12 months for this
– This should be non-negotiable. No partial delay
Once this is done, focus on clearing the plot loan and personal loan faster. Even though they have short terms, prepaying saves interest.
Car loan is big at Rs.24,000 EMI. But since only 2.5 years are left, let it run unless there’s a windfall.
For now, don’t take any new loans. Not even for investment.
Don’t use FD or MF lump sum to prepay. Keep those for emergencies and growth. Use only surplus income.
? Emergency Fund – Build and Maintain Stability
FD of Rs.2 lakh is good. But ideally, emergency fund should be equal to 6 months of total expenses and EMIs.
In your case, total monthly outgo is Rs.90,000. So emergency reserve should be Rs.5–6 lakh minimum.
Top up your FD by Rs.3 lakh over the next 12–18 months. Or shift part of mutual funds to a liquid or ultra-short debt fund for this purpose.
This fund must not be touched for investing or spending.
? Insurance Review – Smart Protection First
Term insurance of Rs.1 crore is the right decision at your age. Well done.
Please check these:
– Policy must cover till age 60 or 65
– Premium should be regular pay, not single or limited pay
– Claim settlement ratio of the insurer should be 95% or more
Now about the LIC policy of Rs.12,000 yearly:
– If it's a traditional endowment policy, returns will be low (around 4–5%)
– These policies mix insurance and investment poorly
If the policy is older than 5 years and surrender value is more than premiums paid, consider surrendering. Invest the amount in mutual funds aligned to your goals.
If not yet 5 years, stop future premiums after minimum term and make it paid-up. Redirect that money into long-term SIPs.
Keep insurance and investment separate. That gives more clarity and better return.
? Mutual Fund Portfolio – Evaluate, Clean, and Strengthen
You already have Rs.9 lakh in mutual funds. That is excellent for your age.
But now do this:
– Review the number of funds
– Avoid overlapping schemes of the same category
– Retain only quality funds with long-term track record
– Ensure proper mix of large-cap, mid-cap, flexi-cap, and hybrid if needed
Avoid holding too many funds. 4 to 6 well-chosen funds are more than enough.
Ensure the funds are regular plans and are tracked by a qualified MFD with CFP credentials. This ensures fund review, guidance, and rebalancing when needed.
If you hold direct plans, reconsider. While it avoids commission, there’s no guidance.
Mistakes in direct funds (wrong category, poor timing, panic exit) often reduce return more than any fee saved.
Also avoid index funds or ETFs. These don’t adjust during market falls. Active funds provide better downside protection and selection flexibility.
? Stock Holdings – Control Exposure and Risk
Stocks worth Rs.1.5 lakh is okay for your age. Keep direct equity below 10–15% of your portfolio.
Do not increase exposure here unless you have deep knowledge, time, and discipline.
Avoid using stocks for short-term goals.
If you are not tracking regularly, consider shifting future equity investments to diversified equity mutual funds.
These are better managed, tax efficient, and monitored professionally.
? Monthly Surplus – Where and How to Allocate
After all expenses and EMIs, you have approx. Rs.50,000 surplus monthly. Here's how to use it wisely:
– Rs.42,000 towards loan to brother (for next 12 months)
– Rs.3,000 SIP in hybrid mutual fund (for flexibility and stability)
– Rs.5,000 SIP in large or flexi cap fund (for long-term growth)
After 12 months, when the brother’s loan ends, restructure again:
– Rs.15,000 to clear other loans faster
– Rs.10,000 increase SIP
– Rs.5,000 to FD or debt fund as emergency
– Keep Rs.10,000 for variable goals (travel, skills, etc.)
Review this distribution yearly.
? Future Goals – Plan Now, Not Later
Even though you’re not married, you must prepare now. Think 5–10 years ahead.
Likely future goals include:
– Marriage
– House furnishing or interiors
– Starting business or higher education
– Buying a second car (later)
– Retirement (yes, even from now)
Assign timelines to each goal. Begin SIPs accordingly.
Short goals (2–4 years): hybrid funds or short-term debt funds.
Long goals (5+ years): diversified equity mutual funds.
Avoid mixing timelines in one fund. Each goal should have its own basket.
Don’t invest in real estate again just for investment. Your plot purchase is enough for now. Adding more adds risk and reduces liquidity.
? Tax Planning and Structure
You have high EMIs and likely high interest paid. But you can still plan for tax efficiency.
Do these:
– Use 80C: LIC, PF, ELSS SIPs, and home loan principal
– Use 80D: medical insurance for self and parents
– Home loan interest: under 24(b) limit
– Use LTCG limit of Rs.1.25 lakh in equity mutual fund sales smartly
Always redeem mutual funds in a structured way. Avoid excess STCG which is taxed at 20%.
Take help from your MFD (with CFP credentials) to plan redemptions better.
? Review and Rebalancing – Don’t Skip This
At least once in 6 months, do a full portfolio review.
– Check fund performance
– Adjust SIPs as per changing goals
– Reduce overlapping schemes
– Rebalance equity and debt if asset mix shifts
If equity goes above 75% due to rise in market, shift some gains to hybrid or debt.
This avoids future shocks and protects capital.
? Habits to Maintain for Wealth Building
– Keep expense below 40–45% of income
– Avoid impulsive purchases or lifestyle inflation
– Review EMIs before taking new loans
– Keep insurance simple and clean – term only
– Increase SIPs every year by 10–15%
– Avoid loans for consumption
– Don’t check market daily. Focus on goals instead
Stability and discipline matter more than chasing hot stocks.
? Finally
You are off to a strong financial start. You’ve taken responsibility at a young age.
Your EMIs are structured, and your surplus is healthy. Once short-term loans are over, your investable surplus will grow fast.
Use this time to streamline your portfolio, cut down debt, and set up strong SIPs.
Build goal-wise investments through mutual funds. Track using professional guidance through a certified MFD.
Avoid direct funds if you cannot monitor. Avoid index funds as they don’t protect during market downs.
Stick to active funds and review portfolio twice a year.
Keep insurance pure. Keep investing simple.
This 360-degree plan will ensure financial freedom, peace of mind, and smart growth for your future.
Best Regards,
K. Ramalingam, MBA, CFP
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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