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Ramalingam Kalirajan |11056 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 30, 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

Question by Ramji on Jul 12, 2025Hindi

Hi i am 36 years old, my monthly salary 2.5 lakhs. I have credit around 10.5 lakhs. I don't have no assets. What can i do for the better retirement. I don't have no idea about investments. Pls advice.

Ans: Thank you for being open about your situation.

You have shown honesty and responsibility.
That is the first big step towards financial freedom.

Rs. 2.5 lakhs salary is a strong income base.
You also have time on your side at age 36.

The debt of Rs. 10.5 lakhs needs attention.
But it is manageable with proper planning.

Let us now explore a complete, simple, and actionable path for you.

This plan is not just for investment.
It covers debt, savings, insurance, and retirement.

It gives you clarity to build wealth, step-by-step.

? Understand Your Income and Expenses

– Start by knowing how much you spend every month.
– Track your fixed costs: rent, bills, EMIs, groceries.
– Then note down variable costs like dining, shopping, travel.
– This helps you see where money leaks.
– Use a simple mobile app or a paper notebook.
– Keep your lifestyle below Rs. 1.5 lakhs monthly.
– This leaves Rs. 1 lakh every month to build wealth.

? Prioritise Debt Clearance

– Your credit of Rs. 10.5 lakhs must be cleared first.
– Find out what kind of loan it is.
– If it’s a personal loan or credit card, the interest may be high.
– If it's education or business loan, the rate may be lower.
– Your first financial goal is to reduce this to zero.
– Dedicate at least Rs. 50,000 monthly to repay the loan.
– No fresh loans until this is cleared.
– Avoid minimum payments. Pay more than the due.
– In about 18–24 months, you should be debt-free.
– Becoming debt-free brings peace and clarity.

? Build Emergency Fund Slowly

– Once your monthly EMI is comfortable, start saving.
– Your first saving target is an emergency fund.
– This must be equal to 6 months’ expenses.
– For example, if your monthly expense is Rs. 1.5 lakhs,
build at least Rs. 9 lakhs.
– Park this money in a liquid mutual fund or sweep-in FD.
– Don’t use this fund for gadgets or trips.
– Use it only for emergencies like medical or job loss.
– Start with Rs. 20,000/month till it’s built.
– You can adjust EMI and saving portions accordingly.

? Take Right Insurance – Not Just Any Insurance

– At this stage, insurance is protection, not investment.
– Buy a pure term insurance plan of Rs. 2 crore.
– Premium may cost around Rs. 20,000–30,000 yearly.
– Avoid ULIPs or endowment policies.
– If you already hold such plans, consider surrendering.
– That money can be better used in mutual funds.
– Also take family floater health insurance of Rs. 10–15 lakhs.
– Choose plans with lifetime renewability.
– These give financial backup in health events.
– Avoid relying on employer coverage alone.
– Also get accidental disability cover.

? Start Investments With Simple Approach

– Once debt is managed and insurance is set,
begin with wealth creation.
– Mutual funds are the best long-term option for you.
– Choose diversified equity funds through MFD with CFP support.
– Avoid direct funds. They look cheaper but lack guidance.
– Wrong fund selection and wrong exit timing reduce returns.
– Regular funds help you stay disciplined.
– Start with 2–3 funds.
– Monthly SIPs of Rs. 30,000–50,000 are a good start.
– Keep increasing SIPs yearly with salary hike.
– Never stop SIP during market falls.
– That is the time your wealth builds fastest.

? Stay Away from Index Funds

– Index funds look cheap but give no active management.
– They don’t protect during market falls.
– They copy the index blindly.
– Active funds try to beat the index.
– Active funds adjust exposure across sectors and stocks.
– A Certified Financial Planner backed fund recommendation
keeps your plan smart and focused.

? Avoid Annuities and Real Estate

– Annuities give low return and lock money.
– You lose flexibility.
– Real estate needs high capital and has poor liquidity.
– Plus, property maintenance and legal issues add pressure.
– Focus on financial assets like mutual funds.
– They are transparent, tax-efficient, and easy to monitor.

? Use Goal-Based Investment

– Retirement is your biggest life goal now.
– You have 20–24 years till age 60.
– That is enough time to build a solid corpus.
– Start SIPs in equity-oriented mutual funds.
– Over time, shift small part to balanced or debt funds.
– This gives you smooth returns with less stress.
– Don’t withdraw before retirement.
– Let compounding work in your favour.
– If you can invest Rs. 50,000 per month,
your corpus can cross Rs. 5 crore in 24 years.

? Consider Other Financial Goals Too

– Retirement is key.
– But life has other goals too.
– You may marry, have kids, or support parents.
– Plan for child’s education and your future needs.
– Keep each goal separate in investment.
– Don’t mix all goals in one fund.
– Use SIP buckets for each goal.
– This gives clarity and peace of mind.

? Don’t Depend on Employer PF Alone

– PF is good but not enough.
– Employer PF corpus won’t match your retirement cost.
– Inflation will reduce its value over time.
– You need equity to beat inflation.
– Mutual funds give better return and flexibility.
– Combine both PF and MF to reach the goal faster.

? Keep Track, But Don’t Panic

– Review portfolio every 6 months with your MFD.
– Don’t track daily. That builds stress.
– Markets rise and fall. Stay focused on long-term goals.
– Avoid stopping SIP or shifting to FD when market falls.
– Stay invested and let professionals manage.

? Maintain Simple Lifestyle

– You earn well. But wealth comes from what you save.
– Avoid lifestyle inflation.
– Don’t compare with others.
– Spend only what gives value, not what gives thrill.
– Choose quality over quantity.
– This helps you live peaceful now and after retirement.

? Upgrade Financial Knowledge Slowly

– You said you know little about investments.
– That is okay.
– Start by reading simple articles or watching videos in Tamil or English.
– Learn about mutual funds, SIPs, tax rules, inflation.
– Don’t fall for flashy apps or tips.
– A Certified Financial Planner can guide you always.

? Secure Documents and Nominees

– Create a list of all your insurance, investments, bank accounts.
– Set correct nominees.
– Inform family about location of papers.
– Keep soft copies too.
– This helps avoid legal delays later.

? Finally

– You are earning well.
– You are young.
– You have time to grow big wealth.
– The only gap is lack of plan.
– Now you have that structure.
– Prioritise debt closure first.
– Build emergency fund.
– Get right insurance.
– Start regular fund SIPs.
– Don’t mix investments with insurance.
– Avoid direct funds and index funds.
– Track your goals with help from MFD and CFP.
– Stick to plan for 20–25 years.
– You can easily retire with financial freedom.
– Most importantly, don’t stop learning and improving.
– You have already taken the first big step.
– Keep going.

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.