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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 16, 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 - Aug 14, 2025Hindi

Am 36 yrs old am earning 58k,expenses are 13000 chit 1, 17/30 months (5lakhs) not lifted, chit 2 10000,6/11 months (1 lakh) completed (lifted), mutual funds (2lakhs as of now),SIP 5k per month in axis large cap(2500), sbi equity hybrid growth (2500), Term insurance 30k per year only one term plan ULIP 6/7 completed ending policy in 2030, stocks 30k, expenses are 10000(room rent)+ 5000 (expenses) now i want to buy house within 1 year, please give me financial plan for me.

Ans: You are only 36 and already saving in mutual funds, chit funds, ULIP, and term insurance. This shows discipline and focus. Wanting to buy a home within one year is a big dream. With structured planning, you can move closer to it.

» Current Financial Snapshot
– Salary income is Rs 58,000 per month.
– Room rent is Rs 10,000 and other expenses Rs 5,000.
– Chit 1 is Rs 13,000 per month, 17 months paid, 30 months total.
– Chit 2 was Rs 10,000 per month, already lifted.
– Mutual fund corpus Rs 2 lakh, SIP Rs 5,000 monthly.
– Stocks value Rs 30,000.
– ULIP running, 6 years paid, policy ends in 2030.
– Term insurance premium Rs 30,000 yearly.

» Expense and Cash Flow Assessment
– Monthly outflow is Rs 28,000 (rent + expenses + chits + SIP).
– Net surplus after all is around Rs 30,000.
– Surplus can be partly directed for house planning.
– But chits reduce liquidity till maturity.
– Your commitments are already tight.

» Chit Fund Impact
– Chit 1 of Rs 5 lakh is still running.
– 13 more months remain.
– This blocks monthly Rs 13,000.
– Chit 2 is closed, but money already used.
– Depending too much on chit reduces flexibility.
– For home planning, you need more liquidity.

» Mutual Fund Position
– Mutual funds stand at Rs 2 lakh.
– SIP is only Rs 5,000 per month.
– This is good discipline but too small for a home goal.
– Current funds may be useful for down payment.
– Equity funds need time for growth.
– Redeeming within a year may not give strong returns.

» ULIP Status
– ULIP is an investment plus insurance product.
– These usually give lower returns.
– Costs reduce the growth of investment.
– You have already completed 6 years.
– Surrendering now and redirecting to mutual funds is better.
– That way, your money works harder for you.

» Insurance Adequacy
– You have one term plan of Rs 30,000 premium yearly.
– Sum assured is not mentioned.
– For your age and income, cover must be minimum 15 times annual salary.
– This ensures family safety if income stops.
– Review and top-up cover if it is less.

» Goal of Buying Home in One Year
– Buying a home within one year will need big down payment.
– Usually banks ask for 20% of cost upfront.
– For Rs 30 lakh home, you need Rs 6 lakh minimum.
– You have Rs 2 lakh in mutual funds and Rs 30,000 in stocks.
– ULIP surrender may add more.
– Still, reaching Rs 6 lakh in one year is tough.

» Practical Approach to House Goal
– First check your affordability.
– EMI should not exceed 40% of income.
– With Rs 58,000 income, EMI must stay below Rs 23,000.
– For Rs 30 lakh house, EMI may cross that limit.
– A smaller home or stepwise approach is better.
– Don’t rush and block all liquidity.

» Suggested Steps for Home Preparation
– Redirect ULIP surrender value into short-term safe instrument.
– Stop chit after maturity, don’t join new chit.
– Increase SIP slightly if surplus allows.
– Build emergency fund separately before house purchase.
– Ensure term insurance cover is adequate.
– Evaluate smaller property if budget is tight.

» Balancing Investments and Loan
– Don’t use all investments for down payment.
– Keep minimum 6 months expenses as reserve.
– After buying house, EMI will start.
– Too much strain can disturb future savings.
– Balance between house, retirement, and safety is must.

» Risks with Chits and ULIP
– Chits carry risk of delayed payments or defaults.
– ULIP locks money for long and gives low growth.
– Mutual funds with CFP guidance are better.
– Regular plans give expert monitoring.
– Direct funds don’t give handholding and advice.
– Mistakes in direct mode can reduce wealth.

» Alternative Plan if House is Urgent
– Use ULIP value, mutual funds, stocks for down payment.
– Keep emergency fund untouched.
– Restrict house budget within realistic EMI limit.
– Avoid stretching for bigger house now.
– Later, with higher income, upgrade if required.

» Other Life Goals
– Retirement planning must continue alongside.
– Child education or marriage goals may also come.
– Don’t let house purchase consume all savings.
– Asset allocation should remain balanced.
– Equity for growth, debt for stability.

» Emotional Aspect
– Owning a house gives security.
– But rushing can bring stress.
– Better to plan carefully and buy peacefully.
– You are still young at 36.
– You can build corpus in 2–3 years.
– A patient approach may serve better.

» Action Plan for Next 1–3 Years
– Surrender ULIP and shift to mutual funds.
– Accumulate down payment corpus safely.
– Avoid new chit commitments.
– Build liquidity of at least Rs 3–4 lakh.
– Keep EMI affordability in mind.
– Ensure term insurance is sufficient.
– Buy house only if down payment and EMI fit budget.
– Else wait 2–3 years and buy with ease.

» Finally
– Your savings discipline is good at 36.
– You already invest in funds and stocks.
– House is possible but needs careful timing.
– Don’t empty all savings for down payment.
– Protect liquidity and balance all goals.
– ULIP can be surrendered for better growth.
– Chits should not continue after present term.
– Term cover must be checked and topped up.
– House goal can be real, but affordability comes first.
– Patience and balance will help you buy without pressure.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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