Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Ramalingam

Ramalingam Kalirajan  |9777 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 21, 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
Rohit Question by Rohit on Jun 09, 2025Hindi
Money

I am 24 year old earning a salary of 112k per month after all deductions. I want to make a solid portfolio in long term. My current investments and SIP are :- 1. PF : 12800 (6400 employer + 6400 employee) 2. Parag Parikh flexi cap fund: 7k 3. Kotak Multicap Fund: 4k 4. Motilal Oswal Mid Cap fund: 4k 5. Bandhan small cap fund: 4k 6. Axis small cap fund: 2k 7. Motilal Oswal Defence Index fund: 1k I can take risks since I have the advantage of time with me and will step up my investments as my salary grows. Please take a look at my investments and give your review. If anything more needs to be added please highlight those also. Thanks

Ans: At 24, your commitment to investing is impressive. You are taking the right steps early, which is essential for long-term wealth creation.

Let us now evaluate and structure your portfolio from a 360-degree perspective.

Income and Investment Allocation
Your monthly take-home is Rs. 1,12,000.

You are investing nearly Rs. 22,000 in mutual funds.

Your PF contribution is Rs. 12,800 (combined employer and employee).

This means 31% of your monthly income is going into long-term savings.

This savings rate is excellent for your age.

Let us now go deeper into each element of your investments.

Provident Fund (PF)
PF is a stable and tax-friendly retirement corpus builder.

It offers assured compounding at decent rates.

Contributions are automatic and disciplined.

It gives long-term debt exposure to your portfolio.

Keep contributing. Do not withdraw it.
Use this as your long-term retirement backbone.

Mutual Fund SIPs – Overview
You have spread Rs. 22,000 across 7 SIPs:

1 Flexi Cap Fund

1 Multicap Fund

1 Mid Cap Fund

2 Small Cap Funds

1 Defence Thematic Index Fund

1 Sectoral Index Fund (Defence)

Let us now assess these in detail and suggest improvements.

Parag Parikh Flexi Cap Fund – Rs. 7,000
This is a good choice for broad diversification.

Flexi cap funds can switch between large, mid, and small caps.

You should retain this fund.

Make it your core anchor in equity allocation.

Keep investing. Increase SIP here when income grows.

Kotak Multicap Fund – Rs. 4,000
Multicap funds invest in all three market caps with minimum allocations.

Works well as a diversification strategy.

Offers more balanced risk compared to small/mid caps.

This fund complements the flexi cap allocation well. Keep it.

Motilal Oswal Mid Cap Fund – Rs. 4,000
Midcap funds carry higher volatility than large-cap and flexi cap funds.

Suitable for long-term growth.

However, this category should not exceed 20% of your equity portfolio.

Limit exposure to one midcap fund only.

Bandhan Small Cap Fund – Rs. 4,000
Axis Small Cap Fund – Rs. 2,000
You have two small-cap funds.

This leads to duplication and overlap.

Small caps are high risk, though high potential.

Two funds here add complexity and no major diversification.

Keep only one. Stop the other. Prefer a consistent performer.

Motilal Oswal Defence Index Fund – Rs. 1,000
This is a sectoral index fund.

Sectoral funds are concentrated bets.

They do not diversify your portfolio.

This fund tracks a niche theme: defence stocks.

This is a tactical bet, not a core holding.

Stop fresh SIPs here.

These funds lack flexibility.

They cannot exit underperforming stocks.

A Note on Index Funds
You have invested in an index fund (Defence).
It’s important to understand why actively managed funds are better:

Index funds follow the market blindly.

No fund manager expertise to beat the market.

No exit flexibility from weak stocks.

Cannot adapt to market cycles.

Actively managed funds, with strong research teams, offer better long-term potential.

They can outperform and protect downside risk better.

Portfolio Duplication and Overlap
Two small-cap funds create unnecessary duplication.

One mid-cap fund is enough.

Sector fund adds volatility, not value.

Keep only 3 to 4 quality funds.

This brings simplicity, better tracking, and effective compounding.

Suggested SIP Structure
Here is a more effective and balanced approach:

Flexi Cap Fund – Rs. 7,000

Multicap Fund – Rs. 5,000

Mid Cap Fund – Rs. 4,000

Small Cap Fund (Only One) – Rs. 4,000

Keep Rs. 2,000 as buffer to increase one of the above.

This way:

You reduce clutter.

You avoid overlap.

You gain better performance tracking.

Review on Direct vs Regular Plans
If you are investing in direct funds, let’s pause for a moment.

Disadvantages of Direct Plans:

No support or guidance when markets fall.

Portfolio often becomes cluttered over time.

Investors chase short-term returns, not long-term goals.

No periodic review by experts.

You may miss opportunities and fall into DIY traps.

Invest through a CFP-qualified MFD in regular plans instead.

Offers handholding in tough markets.

Brings clarity and discipline.

Helps review and rebalance regularly.

Most importantly, helps you stay on track with your goals.

Costs of regular plan are worth the guidance it offers.

Risk Appetite and Time Advantage
At 24, your age is your biggest advantage.

You have a 30+ year runway to build wealth.

You can afford short-term volatility.

But still, your portfolio must be structured and monitored.

High risk should not mean unmanaged risk.

What More Can Be Added
Here are a few additional strategies:

Step-Up SIPs: Increase SIPs every year with salary hike.

Emergency Fund: Keep Rs. 1.5 to 2 lakhs in a liquid fund.

Term Insurance: If you have dependents, buy pure term cover.

Health Insurance: Don’t depend only on employer cover.

Tax Planning: Use ELSS or other tools efficiently.

Investment Habits You Should Build Now
Keep reviewing your portfolio once a year.

Don’t panic in a falling market.

Avoid switching funds too often.

Read fund factsheets quarterly.

Stick to SIP discipline during volatility.

Increase investments, not expenses, with salary hike.

How You Can Grow This Portfolio
Assuming you increase your SIPs every year:

Rs. 22,000 monthly SIP today

Rs. 2,000 increase per year

In 10 years, this becomes a solid corpus.

But only if you stay invested and avoid knee-jerk reactions.

What You Should Avoid
Don’t chase short-term returns.

Don’t over-diversify with 6-7 funds.

Don’t go heavy on sectoral or thematic funds.

Don’t fall for trending NFOs or fancy themes.

Focus on core + satellite approach.

Ideal Portfolio Mix for Your Profile
At your age, this mix works well:

Flexi Cap / Multicap – 50%

Mid Cap – 20%

Small Cap – 20%

Debt (via PF) – 10%

This balances growth, volatility, and stability.

Taxation Clarity – If You Sell Later
New mutual fund tax rules are:

Equity LTCG over Rs. 1.25 lakhs taxed at 12.5%.

STCG from equity taxed at 20%.

Debt funds taxed as per income slab.

So stay invested for the long term.
Avoid unnecessary exits.

Rebalancing and Reassessment
Once a year:

Review returns.

Check fund performance.

Align with your goals.

Remove underperformers.

Increase SIPs.

If you work with a CFP-qualified MFD, this becomes easier.

Finally
You are doing very well already.
Most 24-year-olds delay investing.
You are ahead of the curve.

With minor corrections, you will build a strong foundation.

Just keep things:

Simple

Structured

Consistent

Avoid the noise. Stick to the plan.
Time and discipline will do the magic.

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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |9777 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 03, 2024

Money
Hi, I am 23 years old earning a salary of 108k per month after all deductions. I am doing SIP of 19k per month in these following funds:- 1. Parag Parikh Flexi Cap Fund:- 4000 2. Quant Flexi Cap Fund:- 4000 3. Nippon India Large Cap Fund :- 3000 4. Motilal Oswal Mid Cap Fund:- 3500 5. Bandhan Small Cap Fund:- 2500 6. Axis Small Cap Fund:- 2000. Other than these combined contribution towards EPF (employee+employer) = 12800 per month. Please give a review of my portfolio. My investment horizon is for long terms. I will step up my investment depending on my salary increment.
Ans: t’s fantastic to see someone as young as you already planning for the future and investing wisely. Your SIPs and contributions towards EPF are commendable. Let's dive into your portfolio and see how it aligns with your long-term goals.

Understanding Your Current Investments
Monthly SIPs
Parag Parikh Flexi Cap Fund: Rs 4,000
Quant Flexi Cap Fund: Rs 4,000
Nippon India Large Cap Fund: Rs 3,000
Motilal Oswal Mid Cap Fund: Rs 3,500
Bandhan Small Cap Fund: Rs 2,500
Axis Small Cap Fund: Rs 2,000
EPF Contributions
Combined contribution (employee + employer): Rs 12,800 per month
Portfolio Review
Diversification
You have a good mix of large-cap, mid-cap, and small-cap funds, which is great for diversification. This approach balances risk and return, leveraging the growth potential of different market segments.

Flexi Cap Funds
Flexi Cap Funds are versatile, investing across market capitalizations. Your allocation in Parag Parikh and Quant Flexi Cap Funds is a smart move, providing flexibility to capitalize on market opportunities.

Large Cap Funds
Large Cap Funds like Nippon India Large Cap Fund offer stability with moderate returns. These funds invest in well-established companies with a proven track record.

Mid Cap Funds
Mid Cap Funds, such as Motilal Oswal Mid Cap Fund, strike a balance between risk and return. They invest in companies with high growth potential but are relatively riskier than large caps.

Small Cap Funds
Small Cap Funds, including Bandhan and Axis Small Cap Funds, are high-risk, high-reward investments. They invest in smaller companies with significant growth potential but also higher volatility.

EPF Contributions
Your EPF contributions are excellent for long-term savings and tax benefits. EPF offers a stable, risk-free return, complementing your more aggressive mutual fund investments.

Evaluating Your Portfolio
Advantages
Diversification: Your portfolio is well-diversified across market capitalizations, reducing risk.
Long-Term Horizon: Investing for the long term allows you to ride out market volatility and benefit from compounding.
Regular Investment: SIPs ensure disciplined investing, averaging out market highs and lows.
Areas of Improvement
Overlapping Investments: Flexi Cap Funds may have overlapping stocks with your other funds. Review fund portfolios to avoid redundancy.
Risk Management: High allocation to small and mid-cap funds increases portfolio risk. Ensure it aligns with your risk tolerance.
Certified Financial Planner's Recommendation
Review Fund Performance: Regularly review the performance of your funds. Replace consistently underperforming funds with better options.
Monitor Overlap: Use tools to check for overlapping holdings in your funds. Diversify to reduce concentration risk.
Rebalance Portfolio: Periodically rebalance your portfolio to maintain your desired asset allocation.
Steps to Enhance Your Portfolio
Increase SIPs with Salary Hike
As your salary increases, step up your SIP contributions. This leverages the power of compounding and accelerates wealth creation.

Emergency Fund
Maintain an emergency fund covering 6-12 months of expenses. This provides financial security during unforeseen circumstances.

Tax Planning
Invest in tax-efficient instruments to maximize your returns. Utilize sections like 80C, 80D for tax deductions.

Health and Life Insurance
Ensure adequate health and life insurance coverage. This protects your family and financial goals in case of emergencies.

Avoid Over-Reliance on One Category
Avoid over-relying on one fund category. Maintain a balanced approach with a mix of equity, debt, and other instruments.

Power of Compounding
How Compounding Works
Compounding is earning returns on your returns. The longer you stay invested, the more your investments grow exponentially.

Example
If you invest Rs 10,000 monthly at an annual return of 12%, in 20 years, it could grow to approximately Rs 1 crore. Starting early and staying invested is key.

Benefits of Early Investing
Starting early gives your investments more time to grow. Even small amounts can accumulate significantly over time.

Actively Managed Funds vs. Index Funds
Actively Managed Funds
Professional Management: Actively managed funds are managed by experts who make investment decisions based on market research.
Potential for Outperformance: These funds can outperform the market by selecting high-potential stocks.
Disadvantages of Index Funds
Lack of Flexibility: Index funds simply track a market index, offering no flexibility to capitalize on market opportunities.
Average Returns: Index funds provide market-average returns, which may not meet your financial goals.
Why Choose Actively Managed Funds?
Actively managed funds offer potential for higher returns through expert stock selection and market timing. They provide a dynamic approach to investing.

Regular vs. Direct Funds
Regular Funds
Advisor Support: Investing through a Certified Financial Planner (CFP) provides guidance and expertise.
Convenience: Regular funds offer ease of investment, portfolio reviews, and rebalancing.
Disadvantages of Direct Funds
No Advisory Support: Direct funds require you to make investment decisions without professional guidance.
Time-Consuming: Managing direct funds can be time-consuming, requiring regular monitoring and analysis.
Benefits of Investing Through CFP
A CFP helps you create a personalized investment plan, ensuring your portfolio aligns with your financial goals and risk tolerance. They provide valuable insights and adjustments as needed.

Final Insights
Stay Disciplined
Stick to your investment plan, regardless of market fluctuations. Regular investments and patience are crucial for long-term success.

Educate Yourself
Keep learning about different investment options and market trends. This helps you make informed decisions and optimize your portfolio.

Review Regularly
Regularly review and adjust your portfolio based on performance and changing financial goals. This ensures your investments remain aligned with your objectives.

Seek Professional Advice
Consult a Certified Financial Planner for personalized advice. They provide valuable guidance to optimize your investment strategy and achieve your goals.

By following these steps and staying committed to your financial plan, you’re well on your way to securing a prosperous future. Keep investing, stay informed, and watch your wealth grow!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Sunil

Sunil Lala  |218 Answers  |Ask -

Financial Planner - Answered on Jul 18, 2025

Money
Dear Sir, I am 40 year old, my take home is 1.41 lacs per month. I have 11 year old daughter and 3.5 year old son. I am investing 12.5k per month in SSY (27 lacs in total) and 12.5k per month in PPF (6 lacs in total). Investing around 4k in SIP in index fund (1.2 lacs) and I have around 30 lacs in FD. I have taken 1cr term insurance and have 10lakhs health insurance for family. FD is not giving me satisfactory returns and not beating the inflation. I am planning to invest 25 lacs in buying a site. I don't have any loans and don't have major commitment other than children education. I request you to guide me on future investments, I would like to get a constant income of 1-1.5 lacs PM after 5-6 years.
Ans: Hi Ajay, understand the SSY and PPF are also not givin you enough returns, your SIP in index funds and FD all are ineffecient return making assets. Buying a site will not ensure liquidity when you will need it the most, and 10L health insurance for a family of 4 is low as well.
Having a constant income of 1-1.5L p.m. means annually 12-18L of income, and to have a passive income like that, your corpus should be 15-16x of the annual income --> which means we are looking at 1.8Cr to 2.7Cr of corpus in the next 5-6 years.
There are a lot of flaws in your investment strategies because at one place you are wanting to lock in money at a site, in SSY and PPF and on the other you are looking to earn 1-1.5L p.m. which is possible through liquid investments.
I would love to help you out, but to me it feels like there is a gap in the knowledge about investments and personal finance. If you are wanting to have a detailed conversation about your investments and where you can park your money to grow it to have the monthly income you want after a certain number of years, visit my website www.slwealthsolutions.com

...Read more

Sunil

Sunil Lala  |218 Answers  |Ask -

Financial Planner - Answered on Jul 18, 2025

Money
I m a 44 yrs old . My salary 85k net per month. Rent income 1.20 lakh per month. Fixed deposit 46 lakh PPF 21.35 lakh Lap loan 46.50 lakh OD loan 6.50 lakh. Mutual funds 2.75 lakhs Shares 3.25 laks Property in Noida, jewar, dwarka , Rohini and faridbad. My wife is earning 50k per month but not contributing in assests we spend his salary on vacations and foods and cloths as she don't want to save. According to her it is my responsibility to provide foods and investment. At this age I m going to lose my jobs. I can manage all things with rental but how can I build up financial assets from here on and my triple source like salary, rental and interest helps me a lot in past. I m simple man with basic needs no extra expenses on me. But kids are in college in class 9 how can I build assests and ensure their good education
Ans: Hello Sanjiv, you have a lot of money parked in debt instruments like FD, PPF and not-liquid assets like properties as well. I would advise you to calculate your income from each asset on a yearly basis in % terms. I think that will give you a true picture of what you are earning as of now vs what you can earn in equity mutual funds which are managed by professionals.
We can have a detailed conversation around your situation and I can help you understand what re-shuffling can be done in your asset portfolio (with continuing rental+interest income) with greater capital appreciation, visit my website www.slwealthsolutions.com if you are interested

...Read more

Anu

Anu Krishna  |1651 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Jul 18, 2025

Asked by Anonymous - Jul 15, 2025Hindi
Relationship
I'm 34 and have spent the last six years trying to find a genuine partner through every possible route -- dating apps, matrimonial sites recommended by relatives, setups through friends. It's been exhausting and disheartening. The men I match with are either secretly married, emotionally unavailable, or bluntly state that they aren't interested in commitment. On matrimonial sites, I keep coming across entitled MCPs (male chauvinist pigs) who want a docile, obedient wife -- someone to bear their children, manage their homes, and take care of their aging parents like we are living in 1950. The few men I've genuinely connected with emotionally have told me upfront that they don't believe in marriage or aren't looking for anything serious. And here I am, still single. I've been seriously considering signing up for an app purely focused on intimacy. I'm not looking to sleep around without thought. What I crave is connection, touch, and feeling desired, even if it doesn't lead to marriage. I've dated so many men in search of love, and yet, I've ended up alone. Is it wrong to stop chasing 'the one' and instead focus on fulfilling my emotional and physical needs without expecting long-term commitment?
Ans: Dear Anonymous,
It's obvious to me that you haven't yet sat yourself down and asked:
- What do I want in my life partner?
- What do I want from a marriage?

You have shared about what others want from you; what do you want from a potential association?
Being clear will help you stop this chase and anyway, there's no 'The One'...if you find one, do let me know and I will be happy for you...Marriage is not about finding the right person but by knowing what you want from a marriage. This narrows down your choices to someone that close to your thoughts and value systems and then you both have to make the marriage work.

Now, if you are not looking for a committed association or a long-term one, then you will have to keep playing games with people who are half serious or just looking for some fun and hey, the chances of you being emotionally hurt will be greater here...
So, be clear on what you want and then you will know the next step, the next conversation that you wish to have with a person with more certainty that increases your chances at a good sturdy relationship.

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read 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