I am 40, I am getting 1.5 lakh in hand salary, having one apartment house and rented it for 15000, staying in rental house with 10000 rent. I have invested in 1.1 lakh in RD, 3 lakh in equities, 78k in MF through 7.5k SIP monthly and till paying it, 1 lakh in SGB. I have 80k PPF, 25 K PPF in kids name and 40k in SSA post office, 25K in NPS and all these I am contributing monthly 1000 to 1500. I am having cumulative debts of 70 Lakhs for 5 years. I want close out all debts and start contributing more in Investing,please suggest.

Ans: Congratulations on your recent marriage and proactive approach to financial planning! To retire comfortably by the age of 45 to 50 years, it's essential to continue your disciplined saving and investment approach while managing your debt effectively. Here's a suggested plan of action:

Reevaluate Insurance Policies:
Reconsider your contributions towards Tata AIA and Bajaj Allianz policies, as they may not offer optimal returns for your retirement goals. Consider consulting with a financial advisor to explore exit options and minimize further contributions.
Explore Mutual Fund Exit Strategies:
Assess the exit options for the Tata AIA and Bajaj Allianz policies to potentially redirect those funds into more efficient investment avenues.
Investigate the possibility of systematic withdrawal plans (SWP) in mutual funds to provide a regular income stream during your retirement years.
Optimize Mutual Fund Investments:
Redirect the funds from the insurance policies towards more suitable investment options, such as mutual funds with a diversified portfolio of equity and debt securities.
Continue investing in Axis Mutual Funds with a focus on achieving short-term financial goals, but ensure alignment with your overall investment strategy and risk tolerance.
Manage Debt Strategically:
Prioritize paying off your gold purchase debt within the agreed-upon timeframe to avoid unnecessary interest payments.
Explore opportunities to optimize your debt repayment plan and allocate any surplus funds towards debt reduction to achieve financial freedom sooner.
Review Financial Plan Regularly:
Regularly review your financial plan to track progress towards retirement goals and make necessary adjustments based on changes in your financial situation and market conditions.
Seek guidance from a Certified Financial Planner to develop a comprehensive financial plan tailored to your specific needs and aspirations.
By reassessing your insurance policies, optimizing mutual fund investments, managing debt strategically, and seeking professional financial advice, you can work towards achieving your retirement goals more effectively and efficiently.

Ans: You are 32 years old with stable income.
You are managing high loan EMIs regularly.
This shows good discipline and financial responsibility.

But right now, your cash flow is tight.
Debt is eating most of your income.
There is no space for savings or investment.
This needs immediate planning and careful correction.

Let us look at your financial situation in detail.
Then we will create a practical action plan.

Income and Loan Outflow Analysis
Your monthly income: Rs.80,000

Home loan EMI: Rs.24,000

Commercial loan EMI: Rs.31,000

Gold loan EMI: Not mentioned, but assumed EMI for Rs.5 lakh loan

House rent: Rs.18,000

Household expenses: Paid by your spouse

Savings: Rs.1 lakh in fixed deposit

From this, we can assess:

Loan EMIs alone are Rs.55,000 or more

Rent is Rs.18,000

Total fixed outgo is Rs.73,000+

Remaining cash flow is just Rs.7,000 or less

That means you are under financial pressure.
You cannot invest or save regularly.
That also increases financial stress.

Let us fix this situation step-by-step.

Step 1: Understand Loan Type and Value
You have three loans currently:

Home loan: Rs.23 lakhs

Commercial property loan: Rs.33 lakhs

Gold loan: Rs.5 lakhs

Gold loan usually has short tenure.
Its interest is also higher.
Commercial loan may not give tax benefit like home loan.
So this structure needs change.

You are paying nearly 70% of your income to EMIs.
This is too high.
Safe EMI-to-income ratio is 40%.
So reduction of debt is the top priority.

Step 2: Emergency Fund Creation
You have Rs.1 lakh in FD.
That is not enough as emergency fund.
You must build 4 to 6 months of EMI buffer.

That means Rs.2.5 lakhs minimum in emergency fund.
Emergency fund gives safety.
It avoids more loans in case of job loss or crisis.

Ways to increase emergency fund:

Use bonuses or incentives

Temporarily reduce other spends

Save tax refunds or gifts

Pause non-essential spending

Keep this fund in a liquid instrument.
Do not break it unless emergency comes.

Step 3: Evaluate Gold Loan for Fast Closure
Gold loan has higher interest.
It may be around 10% to 14% per annum.
Also, gold is a family asset.
It should not be under debt for long.

Steps to reduce gold loan:

Stop luxury spends till gold loan is cleared

Use future bonus to prepay

Explore restructuring with lower EMI

Use idle savings of spouse, if possible

Clearing gold loan will reduce mental pressure.
And give you small extra savings monthly.

Step 4: Commercial Loan Needs Rethink
Commercial property is not for self-use.
Rental income from it (if any) is not mentioned.
If it’s not generating income, it is a big burden.

You are also staying in a rented house.
But paying EMI for two loans.

This is not an efficient use of cash flow.

Suggestions:

If commercial property is not earning rent, consider selling it

Or explore loan transfer to lower interest

Can also check partial repayment options

If value is high, prepay part and reduce EMI

Taking action here will ease your monthly stress.
You can then free cash for other goals.

Step 5: Use Structured Budget to Create Surplus
Your income is fixed, but you can cut expenses.
Every rupee saved is future wealth.
You need monthly surplus of at least Rs.5,000.

Ideas to cut cost:

Reduce eating out, vacations, impulse spends

Share ride to office, cut fuel bills

Switch to cheaper data plans and subscriptions

Buy in bulk for groceries

Track all spends for 3 months.
You’ll find many small savings.
Together they will create a surplus.

Step 6: Insurance and Risk Coverage
If you are repaying loans, then insurance is important.
You must protect your family from loan burden.

Check these points:

Do you have a term insurance of Rs.50 lakhs or more?

Does your spouse have life cover too?

Do you have health insurance outside employer policy?

If not, get a term plan now.
Not ULIP or endowment policy.
Only pure term insurance with low premium.

Health cover should be Rs.5 lakhs minimum.
Don’t rely only on company plan.
Medical bills can ruin your budget.

Step 7: Investment Plan After Debt Control
You are not able to invest now.
But once gold loan is closed and surplus is built, start SIP.

Start small with Rs.2000 SIP.
Later, increase step-by-step.

SIP must be in actively managed regular funds.
Avoid direct funds unless supported by a Certified Financial Planner.
Direct plans give no human guidance.
No help during market crash or recovery.
This causes panic and wrong exits.

Regular plans with a CFP give:

Behavioural guidance

Portfolio review

Fund switch advice

Tax-efficient withdrawal strategy

Also avoid index funds now.
Index funds just copy index.
They cannot beat market.
They fall when market falls.
And give no protection during crisis.

Instead, active funds are better:

Fund manager makes timely decisions

Better sector rotation

Better recovery in falling market

Potential to beat index return

So once your EMI load reduces, focus on regular active fund SIP.
Start small but stay consistent.

Step 8: Long-Term Goals Planning
You are just 32 now.
Your retirement is far, but you must plan today.

List out future goals:

Children’s education

Spouse’s financial freedom

Emergency reserve

Retirement at 55 or 60

Once your debt burden is low, make separate investments for each goal.
Use SIP and lump sum together when possible.

Also review your loans and investments once every year.
Do this with a Certified Financial Planner.
It brings professional discipline and clarity.

Finally
You are managing your debt well with discipline.
But your cash flow is fully locked in EMIs.
There is no breathing room for growth or emergencies.

This is a risk to your long-term goals.
So your focus should be on reducing loan pressure first.

Take below actions in order:

Build emergency fund of Rs.2.5 lakhs

Repay gold loan within 6 months

Explore options for commercial loan (sell, refinance, reduce EMI)

Take term insurance and medical cover

Start SIP after freeing up at least Rs.5,000 monthly

Avoid direct funds, index funds, ULIPs, and real estate as investment

With a clear roadmap and yearly review, you can grow steadily.
Slow and structured steps will build financial strength.
Your current situation is tough, but fixable.

With a Certified Financial Planner, you will stay on track.
That guidance is the most powerful support for your journey.

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