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Ramalingam Kalirajan |10894 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 29, 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 - Jul 06, 2025Hindi

Hi Sir, I am 37 years old and have a monthly income of 2.5lakhs.. I have a home loan of 79lakhs with emi of 66k and 17 years remaining. Also have a home improvement loans of 10 lakhs with emi of 10k with 14 years remaining. I have 2 kids with monthly school fees coming to 32k. Monthly household expenses come to 40k-50k. I have a sip of 50k per month which is now 4 lakhs. A paid up ULIP which is 6 lakhs now. A piece of land which is around 50lakhs. I am confused and not sure about the way forward. Please help

Ans: – You are earning Rs. 2.5 lakhs per month. That gives good planning potential.
– You are managing EMIs, school fees and SIPs. That shows discipline.
– You are also aware of your confusion. That is a sign of maturity.

? Current Financial Snapshot
– You have two loans: Rs. 79 lakhs home loan and Rs. 10 lakhs improvement loan.
– Total EMI is Rs. 76,000 per month.
– School fees come to Rs. 32,000 monthly.
– Household expenses are Rs. 40,000–50,000 per month.

– You are investing Rs. 50,000 per month via SIPs.
– SIP corpus is Rs. 4 lakhs now.
– You also have a paid-up ULIP worth Rs. 6 lakhs.
– You own a land worth Rs. 50 lakhs.

? Assessing Loan Exposure
– Home loan tenure is 17 years.
– Improvement loan tenure is 14 years.
– Long tenures keep interest payout high.
– It also affects future flexibility and peace of mind.

– You are paying nearly 30% of income as EMI.
– That is acceptable, but not ideal.
– A more efficient plan can reduce this pressure.

? School and Household Commitments
– Rs. 32,000 per month for school is high.
– Kids' education is an important responsibility.
– You are meeting that well. That’s a good sign.

– Household expenses are within range.
– Total fixed outgo is around Rs. 1.5 lakhs.
– You are left with Rs. 1 lakh monthly.

– This is a strong position to build future wealth.
– It allows space for structured and secure investments.

? SIP and Mutual Fund Review
– You are investing Rs. 50,000 monthly in SIP.
– SIPs are a strong tool for long-term wealth.
– Your existing corpus is Rs. 4 lakhs.
– You have started well, but more consistency is needed.

– Please ensure funds are regular plans, not direct.
– Direct plans lack handholding and behavioural guidance.
– Regular plans via MFD with CFP support offer full-service engagement.
– Portfolio gets rebalanced, reviewed, and corrected periodically.

– Avoid index funds. They do not suit Indian markets well.
– Actively managed funds have better flexibility and expertise.
– Indian markets are still evolving, needing active stock picking.

– Stay invested with long horizon.
– Don’t redeem early unless for clear goal.
– Add goal-wise SIPs going forward.

? Regarding the Paid-Up ULIP
– ULIPs are low-return, high-cost products.
– Insurance and investment should not be mixed.
– A paid-up ULIP is often stagnant in returns.

– Surrender the ULIP if lock-in is over.
– Reinvest proceeds in goal-based mutual funds.
– That will improve long-term returns.

– Use a regular mutual fund route.
– Connect with a Certified Financial Planner to guide fund selection.

? Real Estate Holding: Rs. 50 Lakhs Land
– Land as an asset is illiquid.
– It does not generate monthly income.
– Also, price discovery and resale is unpredictable.

– Please do not depend on this for retirement.
– Use it only for lifestyle needs or family use.
– Do not use it as a core investment pillar.

? Short-Term Priorities to Focus
– Maintain an emergency fund of Rs. 3–6 lakhs.
– That protects against health or income disruption.
– Right now, this fund is not mentioned. Please prioritise it.

– Review insurance. You need term life cover.
– Should be 15–20 times your annual income.
– Health insurance must cover family and self adequately.

– Avoid depending on employer coverage only.
– Personal policies are more stable and independent.

– Avoid new loans. That can spoil the cash flow.
– Instead, build liquid financial reserves.

? Optimising Loan Management
– Consider prepaying small chunks of improvement loan.
– Start with Rs. 1–2 lakhs yearly part prepayment.
– This will reduce tenure significantly.

– Home loan can continue with EMI for tax benefits.
– But in future, any surplus should reduce principal.
– That builds ownership faster and saves interest.

– Avoid investing aggressively while loan interest is high.
– Balance is the key.

? Financial Goals Clarity Needed
– List short-term and long-term goals.
– Child education, higher studies, retirement and family security.
– Each goal needs a clear cost and time estimate.

– Link SIPs to these goals.
– For example: Rs. 20,000 for retirement, Rs. 15,000 for education.
– This creates a focused investment plan.

– Add step-up SIP every year.
– As income increases, SIPs should increase too.

– This helps stay ahead of inflation and life costs.

? Risk Protection Measures
– Term insurance is essential. Check current coverage.
– Get separate health insurance for family.
– Evaluate accidental and critical illness policies too.

– Insurance gives peace and financial backup.
– Don’t rely on investment-based policies for protection.

? Kids’ Education and Future Planning
– Plan for two stages: school and higher education.
– Higher education will cost 20–40 lakhs per child in future.
– Use mutual funds for this.

– Start SIPs in equity mutual funds for long term.
– Goal should be 10–12 years away.
– Use 70–80% equity and balance in debt or hybrid.

– Use STP (systematic transfer plan) to shift funds before usage.

? Retirement Readiness and Strategy
– At 37, retirement may be 20+ years away.
– But planning must start now.
– Use a dedicated SIP for this purpose.

– EPF, PPF, and NPS can be support tools.
– But main retirement corpus should be in mutual funds.

– Revisit every 3 years with a Certified Financial Planner.
– Use goal reviews to stay aligned.

? Tax Planning Optimisation
– Continue claiming home loan interest and principal benefits.
– Also claim school fees for 2 kids under Section 80C.

– Invest in ELSS funds via regular plans.
– That gives tax benefit and long-term growth.

– Avoid tax-saving insurance plans or annuity options.
– They lock money and offer poor returns.

? Behavioural and Cash Flow Discipline
– Don’t withdraw SIPs for lifestyle use.
– Avoid lump sum investments without a goal.
– Invest only through verified MFD under CFP guidance.

– Review expenses every 6 months.
– Keep credit card use minimal.
– Track monthly budget and set targets.

– Spend only after saving, not before.

? Action Steps from Here
– Maintain Rs. 3–6 lakhs emergency fund immediately.
– Review and surrender ULIP. Reinvest amount in mutual fund.
– Rebalance SIP portfolio with goal-wise approach.

– Start small annual part-prepayment on improvement loan.
– Take adequate term and health insurance cover.
– Work with Certified Financial Planner regularly.

– Prepare a goal sheet with year-wise and amount-wise layout.
– Add step-up in SIP each year by 10%.
– Stick to mutual funds only for wealth creation.

? Finally
– You are already doing many things right.
– You are earning well, investing steadily, and aware of debt.
– With proper alignment and professional guidance, growth is assured.

– Avoid mixing investment and insurance.
– Focus on liquidity, flexibility, and clear goal-based investing.
– Follow this structured approach to stay stress-free and wealthy.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

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