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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 03, 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

Asked by Anonymous - Sep 01, 2025Hindi

I am 34 and completely new to investing. I don’t have any savings right now but want to begin with a SIP of ₹3,000–₹4,000 per month. Could you suggest the best investment platforms and guide me on how to analyze funds before investing?

Ans: You’re making a thoughtful start at the right age. Starting small is better than delaying. Rs 3,000 to Rs 4,000 monthly SIP is a wise first step. At 34, you still have a good 20–25 years to grow your wealth. This early discipline will pay off greatly over time. Now let us guide you with a complete 360-degree plan to start SIP investing the right way.

» Start with a strong mindset

– Investing is not a one-time act.
– It is a long-term disciplined habit.
– SIP is your vehicle for financial freedom.
– Keep investing every month, even during market downs.
– Stay patient. Compounding rewards only those who wait.

» Why SIP is perfect for you

– SIP helps invest small amounts regularly.
– You don’t need to time the market.
– Your investment grows with time, effort-free.
– It also averages out market ups and downs.
– This keeps your emotions out of investing.

» Ideal platform to start SIP investments

– Use an app or platform that is SEBI-registered.
– Make sure it allows SIP in multiple AMC funds.
– Choose platforms that offer goal-tracking features.
– Some offer free portfolio reviews and rebalancing.
– Go with reputed ones known for service and safety.
– Always invest in regular plans via a Certified Financial Planner or MFD.
– Avoid direct plans for now. Guidance matters more than tiny savings.

» Why direct mutual funds are not suitable for beginners

– Direct plans need self-research and experience.
– They don’t give access to expert help from a certified planner.
– Choosing wrong schemes directly may delay your goals.
– Regular plans through MFD with CFP guidance give better alignment.
– Beginners need handholding, reviews, and portfolio monitoring.

» Step-by-step guide to starting your first SIP

– Open an account on a SEBI-registered MF platform.
– Complete your e-KYC process fully.
– Link your savings bank account for SIP debit.
– Set SIP amount and SIP date of the month.
– Select growth option for long-term wealth creation.
– Set a reminder every 6 months to review performance.

» Understanding fund categories suitable for you

You’re just starting. Avoid too much risk early.
Pick funds that are balanced, flexible, and managed well.

– Flexi-cap funds: They invest across large, mid, and small caps.
– Large and mid-cap funds: They offer growth with some stability.
– Aggressive hybrid funds: They mix equity and debt for smoother returns.
– Avoid small-cap and thematic funds in the beginning.
– Diversification across sectors and market caps matters.

» Key criteria to evaluate a fund before investing

Always check these 6 things before starting any fund:

– Fund house reputation: Stick with fund houses with good governance.
– Consistency: 5-year and 7-year returns should be steady.
– Risk-adjusted returns: Compare performance against volatility.
– Fund manager track record: Experience and tenure matter.
– AUM size: Avoid very small or too huge funds.
– Expense ratio: Not too high, but not your only filter.

Don’t chase past performance alone. Use it only as a reference.

» Why actively managed funds are better than index funds

– Index funds blindly copy the market index.
– They offer no protection during market falls.
– Active funds are managed by expert professionals.
– Fund managers take decisions based on research.
– They can avoid weak sectors or overpriced stocks.
– Especially in India, active funds have beaten index returns over long term.
– For small investors, alpha generation matters more.
– Hence, stick to active funds for better compounding.

» Keep these fund analysis tools in mind

– Use your investment platform’s comparison tool.
– Check 3-year and 5-year CAGR of the fund.
– Read fund factsheets every quarter.
– Use tools that score funds on risk-return ratio.
– Avoid free social media tips or YouTube suggestions.

» Setting up SIP goals for long term

You may be investing Rs 3,000–4,000 now. But define your goal early.

– What are you investing for? Retirement? Car? Future house?
– Attach each SIP to a purpose.
– This will keep you motivated.
– It will also help review and increase your SIP yearly.

» SIP amount vs future goals

Rs 3,000 monthly won’t stay enough forever.
As your income grows, increase SIP amount yearly.

– Start with Rs 3,000–4,000 for now.
– Plan to step it up every year by 10–15%.
– Automate it if your platform supports SIP top-up.
– Even Rs 500 extra monthly can create big difference.

» Rebalancing your SIP portfolio

– Once you have 3–4 SIPs running, avoid adding more schemes.
– Instead, increase amounts in existing performing funds.
– Review fund performance every 6–9 months.
– If fund underperforms for 2+ years, consider replacing it.
– Your Certified Financial Planner can help you rebalance.

» SIP and mutual fund taxation rules to know

New rules from 2024 are important. Keep these in mind:

– For equity mutual funds:

If sold after 1 year, gains above Rs 1.25 lakh taxed at 12.5%.

If sold before 1 year, taxed at 20%.

– For debt mutual funds:

All gains taxed as per your income slab, anytime you sell.

So always prefer holding SIPs for 5+ years. That gives tax efficiency too.

» Don’t mix insurance and investment

– Avoid ULIPs, money-back, endowment policies.
– These give poor returns and poor insurance cover.
– If you already hold them, consider surrendering after 5 years.
– Reinvest in mutual funds through SIP.
– Buy term insurance separately if you need life cover.

» Start a small emergency fund too

Before investing, keep Rs 10,000–15,000 as emergency money.
Keep it in savings or liquid fund. Use it for sudden expenses.
This avoids breaking SIPs during emergencies.

» Common beginner mistakes to avoid

– Don’t stop SIP during market fall.
– Don’t start too many schemes at once.
– Don’t follow tips blindly from friends or internet.
– Don’t keep checking returns daily or weekly.
– Don’t assume SIP is risk-free. It still needs time.

» Benefits of SIP via MFD with CFP guidance

– You get professional advice with experience.
– Portfolio tracking and review is handled.
– No need to keep researching funds daily.
– You are shielded from emotional mistakes.
– Your investment is aligned with your personal goals.
– Certified Financial Planner also handles rebalancing and updates.
– Regular plans offer better support and structure.
– MFDs ensure your SIP journey stays smooth for long years.

» How to increase SIP gradually over time

– Review your SIP every year during bonus or increment time.
– Increase SIP by 10–20% every year.
– Even Rs 500 increase makes a big long-term difference.
– This is called SIP step-up.
– Most platforms allow step-up option.

» Stay focused for long-term gains

– Ignore short-term news or stock market noise.
– Don’t stop SIP even during crashes.
– Long-term SIP investors always outperform traders.
– Wealth is not created in 1 or 2 years.
– It takes 10–15 years of patience and discipline.

» Finally

You’ve taken the right first step at the right age.
Starting small is never a weakness. It is how most great journeys begin.
Keep your SIP regular, reviewed, and linked to your life goals.
Trust process over noise. Focus on your goals, not market returns.
Let your investments be guided by Certified Financial Planners.
With time, discipline, and right choices, your Rs 3,000–4,000 SIP will build great wealth.

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.