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Working Woman (35) with 8 Lakh Salary: How Can I Achieve Financial Stability after 10 Years?

Ramalingam Kalirajan |8176 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jan 31, 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 - Jan 31, 2025Hindi

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I am 35 old working women.earning 8lakh per year.monthly expense 33000.sip going on with 21000 per month for 10 yrs.pf 3 lakh.emergency fund 2lakh.own house and land.kids are studying in lower classes.husband also working.what should be my plan for financial stability after 10 years

Ans: You earn Rs 8 lakh per year.

Your monthly expense is Rs 33,000.

You invest Rs 21,000 monthly in SIPs for 10 years.

You have Rs 3 lakh in PF and Rs 2 lakh in an emergency fund.

You own a house and land.

Your kids are still in lower classes.

Your husband is also working.

Strengthening Your Investment Strategy
Your SIP is a good step for wealth creation.

Increase SIP contributions as income grows.

Invest in a mix of high-growth mutual funds.

Actively managed funds can generate better long-term returns.

Review your portfolio annually and rebalance if needed.

Building a Solid Emergency Fund
Your emergency fund is Rs 2 lakh, which is a good start.

Increase it to at least six months of expenses.

Keep emergency funds in liquid instruments.

This will help in unexpected situations.

Avoid withdrawing from long-term investments for emergencies.

Ensuring Adequate Insurance Cover
Life insurance is essential for financial security.

If you have LIC, ULIP, or investment-linked insurance, consider switching to better options.

Term insurance is cost-effective and provides high coverage.

Ensure medical insurance covers your family adequately.

Buy a personal health policy apart from your employer’s coverage.

Planning for Your Children’s Education
Higher education costs will rise in the future.

Start a dedicated investment for children’s education.

SIPs in suitable mutual funds can help accumulate wealth.

Consider education loans to reduce financial burden.

Avoid withdrawing retirement savings for children’s education.

Retirement Planning for Financial Freedom
You are 35, so early retirement planning is wise.

Increase PF contributions if possible.

Diversify investments beyond EPF and PPF for better returns.

Build a corpus that can sustain your expenses post-retirement.

Passive income sources will ensure financial stability in later years.

Managing Debt and Future Liabilities
You have no mention of loans, which is good.

If you have any ongoing loans, clear them early.

Avoid unnecessary loans to maintain financial stability.

Ensure all investments align with future financial goals.

Do not take loans for discretionary expenses.

Creating a Second Income Source
Relying only on salary may not be enough.

Explore options to generate passive income.

Investments in dividend-yielding funds can help.

Consider upskilling for better job opportunities.

Freelancing or consulting can provide additional earnings.

Tax Efficiency in Investments
Use tax-saving options wisely.

Maximise deductions under 80C, 80D, and other sections.

Invest in tax-efficient mutual funds for better post-tax returns.

Avoid tax-heavy investment instruments.

Review tax-saving strategies annually to optimise benefits.

Final Insights
Your financial foundation is strong but needs enhancement.

Increase SIP investments and build a larger emergency fund.

Secure your family with proper insurance coverage.

Plan ahead for children's education and retirement.

A structured investment approach will ensure financial stability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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