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41-Year-Old Earning 1.7 Lakh Seeking Retirement Planning Advice

Milind

Milind Vadjikar  |1216 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Oct 07, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more
Asked by Anonymous - Oct 05, 2024Hindi
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I am 41 years old........ I am earning approximately 1.7 lakh per month...... My family liability is approximately 50000 per month.......i have a liability of 10 lakh home loan for which i am paying 12500 monthly EMI.......my investment include 40000 per month in PPF, 4200 in NPS and 3 lakh invested in mutual funds......I own a house worth 70 lakh and a plot of land worth 30 lakh.......please guide me for my forther planning as i will retire at age of 54 on 2037.

Ans: Hello;

If you are sure about not using the land plot in future then I suggest you sell it and invest the proceeds into mutual funds.

So land sell proceeds(30 L) + existing corpus of 3 L if stays invested in pure equity mutual funds for next 13 years, it will yield you a corpus of 1.62 Cr.

Also I recommend you to start a monthly sip of 50 K into pure equity fund for 13 years. At the end of 13 years it may yield you a corpus of around 2.04 Cr. (A modest return of 13% is assumed for all mutual fund investments)

NPS investment will not mature till you reach 60 so I am keeping it out of our working.

Your contribution of 40 K per month to EPF+PPF(PPF contribution cannot be more then 1.5 L per person per year) will grow into a corpus of 1.1 Cr after 13 years.(A modest return of 8% is assumed)

So your comprehensive corpus in 2037 will be 1.62+2.04+1.1= 4.76 Cr.

If you buy an immediate annuity from an insurance company for your corpus of 4.76 Cr, you may expect a monthly payout of 1.66 L(post tax) considering annuity rate of 6%.

If you don't want to sell the land parcel then I recommend you to start an sip of 60 K per month for 13 years. This may yield you a corpus of 2.45 Cr after 13 years.

3 L current MF corpus will grow to 0.1469 Cr after 13 years

So your comprehensive corpus now is 2.45+1.1+0.1469=~3.70 Cr

If you buy an immediate annuity from an insurance company for your corpus of 3.7 Cr then you may expect to receive a monthly payout of 1.3 L(post tax).

Further NPS will yield you a corpus of 25.5 L at the attainment of 60 years of age.(9% return considered; hoping you will continue to contribute after your retirement at 54 age)

I am sure you have adequate term life insurance and healthcare insurance for yourself and family.

You are ready to retire at 54 as planned.

Happy Investing!!

You may follow us on X at @mars_invest for updates.

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.
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.
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Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 25, 2024

Asked by Anonymous - Jun 14, 2024Hindi
Money
Am 33 yrs old female, married, have no kids now. Earning 1.40 cash in hand every month. Have got emi s 35k per month for 3 yrs. Expenses of 30k. Ppf and nps of 12k per month together. And 16k per month into cashback policy commited for 10yrs and pays back from 11th year. Want to plan a home and also retirement plans. Suggest a few
Ans: It’s great that you’re proactively planning for your financial future. At 33, you have a solid income and are managing your expenses and savings well. With Rs. 1.40 lakh in hand monthly and committed investments, you’re on the right path. Let’s take a closer look at how you can achieve your goals of buying a home and planning for retirement effectively.

Understanding Your Current Financial Situation
You’re already juggling multiple financial responsibilities. Here’s a breakdown:

Income:

Monthly take-home pay is Rs. 1.40 lakh.
Monthly Obligations:

EMI of Rs. 35,000 for the next three years.
Monthly expenses of Rs. 30,000.
PPF and NPS contributions totaling Rs. 12,000.
A commitment of Rs. 16,000 per month in a cashback policy for 10 years.
Let’s sum up your current cash flows:

Income: Rs. 1,40,000
Expenses and commitments: Rs. 93,000
EMI: Rs. 35,000
Monthly expenses: Rs. 30,000
PPF and NPS: Rs. 12,000
Cashback policy: Rs. 16,000
This leaves you with a surplus of Rs. 47,000 each month.

Prioritizing Your Goals: Home and Retirement
To make a robust plan, we need to prioritize your goals. Here’s a step-by-step approach:

Short-Term Goal - Buying a Home:

You may want to buy a home in the near future, especially considering the EMI burden you’re managing now.
Let’s plan to save effectively for a down payment and subsequent EMIs.
Long-Term Goal - Retirement Planning:

Retirement is a crucial long-term goal. You’re already contributing to PPF and NPS, which is a good start.
We need to ensure that you have a diversified investment strategy for a comfortable retirement.
Evaluating Your Existing Investments
Your current investments and commitments include:

PPF and NPS (Rs. 12,000/month):

These are excellent for long-term savings and provide tax benefits.
Cashback Policy (Rs. 16,000/month):

This policy gives returns after 10 years. It’s good to reassess its value as it might not provide the best returns.
Monthly EMI (Rs. 35,000):

It’s important to clear this debt to free up cash flow for future investments.
Given these, let’s look at how to optimize your savings and investments.

Streamlining Investments for Better Returns
You’ve got a good base with PPF and NPS, but there are ways to optimize your portfolio further:

Reevaluate the Cashback Policy:

Traditional insurance plans like cashback policies often provide lower returns.
Consider surrendering this policy and redirecting funds into higher-yield investments such as mutual funds.
Focus on High-Growth Investments:

Consider equity mutual funds for higher growth potential over the long term.
Actively managed funds can provide better returns than index funds and are worth considering for diversification.
Maintain Liquidity:

Ensure you have adequate emergency savings. Six months' worth of expenses (Rs. 1,80,000) should be kept in easily accessible accounts.
Strategic Planning for Your Home Purchase
Buying a home is a significant financial commitment. Here’s how you can plan for it:

Down Payment Savings:

Start saving specifically for the down payment. Aim for at least 20% of the property value to avoid high-interest EMIs.
Future EMI Planning:

Once your current loan is paid off, you’ll have Rs. 35,000 more available monthly. Plan to use this for new EMIs.
Dedicated Savings Fund:

Set up a dedicated savings account for your home purchase. Allocate a portion of your monthly surplus (e.g., Rs. 20,000) into this fund.
Enhancing Your Retirement Plan
To ensure a comfortable retirement, consider the following:

Diversify Retirement Investments:

Beyond PPF and NPS, invest in mutual funds through SIPs. Equity funds can offer high returns over long periods.
Increase Retirement Contributions:

As your salary grows, increase your contributions to retirement funds.
Monitor and Rebalance:

Regularly review your investment portfolio. Rebalance as needed to stay aligned with your retirement goals.
Crafting a Balanced Investment Portfolio
To balance growth and stability in your investments, here’s a suggested approach:

Equity Mutual Funds:

Allocate a portion of your monthly surplus to equity mutual funds. These funds offer higher growth potential, especially if you start early.
Debt Instruments:

Continue investing in PPF and NPS for stable, long-term returns.
Balanced Funds:

Consider balanced funds that invest in both equity and debt. They offer a good mix of growth and stability.
Financial Discipline and Monitoring
Maintaining financial discipline is key to achieving your goals:

Budget and Save:

Stick to a budget to manage expenses and savings effectively. Allocate funds specifically for your goals.
Automate Investments:

Set up automated transfers to your savings and investment accounts. This ensures consistency and removes the temptation to spend.
Regular Reviews:

Review your financial plan regularly. Adjust based on changes in income, expenses, and goals.
Planning for Future Expenses
You’ve mentioned no kids currently, but future family planning could impact your finances:

Plan for Child Expenses:

If you plan to have children, consider the additional expenses and savings needed for education and upbringing.
Insurance Needs:

Ensure adequate health and life insurance coverage. This protects your family and assets in case of unforeseen events.
Leveraging Tax Benefits
Maximize your tax savings to enhance your investment returns:

Utilize Section 80C:

Contributions to PPF, NPS, and ELSS funds qualify for deductions under Section 80C. Ensure you’re using this to your advantage.
Home Loan Benefits:

When you buy a home, home loan EMIs provide tax benefits on both principal and interest components under Sections 80C and 24(b).
Tax-Efficient Investments:

Consider investments that offer tax-free returns or lower tax liability, like PPF and long-term capital gains on equity mutual funds.
Building a Comprehensive Financial Plan
To summarize, your comprehensive financial plan should include:

Debt Management:

Focus on clearing your existing EMIs to free up cash flow for future investments.
Savings and Investments:

Create a balanced portfolio with a mix of equity and debt. Focus on high-growth investments for long-term goals.
Home Purchase Plan:

Save diligently for a home down payment. Plan your future EMIs to fit within your budget.
Retirement Planning:

Diversify your retirement savings and increase contributions as your income grows. Review and adjust your retirement plan regularly.
Tax Optimization:

Maximize your tax savings through strategic investments and utilizing tax benefits on loans and savings schemes.
Final Insights
You’re on a promising path with your current financial discipline. With a strategic approach, you can achieve both your home purchase and retirement goals effectively. Simplify your investments, focus on high-growth opportunities, and maintain financial discipline to ensure a secure and prosperous future.

Streamline and Focus:

Simplify your portfolio to focus on high-growth, well-diversified investments.
Plan for the Long Term:

Keep your retirement and home purchase goals in sight. Regularly update your plan to stay on track.
Stay Disciplined:

Maintain a disciplined approach to budgeting, saving, and investing. This is key to achieving your financial goals.
If you have any questions or need further guidance, feel free to reach out. I’m here to help you navigate your financial journey.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 23, 2024

Money
I Am 35 yrs old, working in a product based semi conductor company. 1 daughter 7 yrs old. Current salary is 2.5L after deduction take home is around 1.9L. I Home and housing plot worth 1cr( EMIs completed). Having only one liability car loan(28k per month for next 5yrs). I have MF 7.5L, Indian shares 6L, US Shares 10L, SSY 5L, NPS 2L, PF 12L. 3.5cr personal term policy, 1cr term policy from company.Ancient properties ~1Cr. Investing 60k per month for all above instruments.My future requirements are 6Cr for retirement carpus, 2cr for my kid higher studies and marriage. In next 15 yrs I want make this corpus and retire at the age of 50. Please suggest.
Ans: It's great to see you taking charge of your financial future. At 35, working in a semiconductor company with a healthy salary of Rs 2.5L, you're in a strong position. Your take-home salary is Rs 1.9L, which gives you good leverage for savings and investments.

You have a home and a housing plot worth Rs 1 crore, with no EMIs pending. That’s an excellent milestone. Your only liability is a car loan of Rs 28k per month for the next five years.

Your existing investments are quite diverse:

Mutual Funds (MF): Rs 7.5L
Indian Shares: Rs 6L
US Shares: Rs 10L
Sukanya Samriddhi Yojana (SSY): Rs 5L
National Pension System (NPS): Rs 2L
Provident Fund (PF): Rs 12L
Additionally, you have significant term insurance coverage: Rs 3.5 crore personal term policy and Rs 1 crore term policy from your company. Your ancient properties are worth around Rs 1 crore. You are currently investing Rs 60k per month across various instruments.

You aim to accumulate a corpus of Rs 6 crore for retirement, and Rs 2 crore for your daughter's higher education and marriage, within the next 15 years.

Evaluating Your Financial Goals

Your financial goals are ambitious but achievable with a structured approach. Let's break down your goals:

Retirement Corpus of Rs 6 crore in 15 years: This requires disciplined saving and strategic investing.

Rs 2 crore for Daughter's Higher Education and Marriage: Planning for these expenses in 15 years means you need to ensure growth in your investments while managing risks.

Current Investment Portfolio Analysis

Your current portfolio is well-diversified across various asset classes. Here’s a quick analysis:

Mutual Funds (Rs 7.5L): Offers potential for high returns. Consider a mix of large-cap, mid-cap, and small-cap funds for balanced growth.

Indian Shares (Rs 6L) and US Shares (Rs 10L): Good diversification. Continue monitoring and adjusting based on market performance.

Sukanya Samriddhi Yojana (Rs 5L): Great for your daughter’s future. It provides tax benefits and decent returns.

National Pension System (Rs 2L): Long-term retirement savings with tax benefits.

Provident Fund (Rs 12L): A safe and tax-efficient investment.

Term Insurance: Adequate coverage. Your Rs 3.5 crore personal term policy and Rs 1 crore from your company ensure financial security for your family.

Strategic Recommendations

1. Consolidate and Optimize Investments

It’s essential to streamline your investments to maximize returns and minimize risks.

Mutual Funds: Evaluate the performance of your current funds. Consider moving to actively managed funds for potentially higher returns. Regularly review and rebalance your portfolio with the help of a Certified Financial Planner (CFP).

Indian and US Shares: Diversify across sectors and industries. Avoid putting all your eggs in one basket. Monitor global and domestic economic trends.

Sukanya Samriddhi Yojana (SSY): Continue contributing to SSY for its tax benefits and secure returns.

National Pension System (NPS): Increase your contributions if possible. NPS offers good long-term benefits and tax savings.

Provident Fund (PF): Continue your contributions. PF is a low-risk, tax-efficient investment.

2. Increase Monthly Investment Allocation

Currently, you are investing Rs 60k per month. To meet your ambitious goals, consider increasing this amount progressively.

Prioritize High-Growth Investments: Allocate more towards mutual funds and equity shares. This can potentially offer higher returns over the long term.

Utilize Windfalls and Bonuses: Any additional income or bonuses should be invested to boost your corpus.

3. Education and Marriage Fund for Daughter

To ensure Rs 2 crore for your daughter’s education and marriage, focus on long-term growth instruments:

Child Education Plans: Invest in plans specifically designed for education goals. These often offer benefits aligned with educational milestones.

Equity Mutual Funds: Consider equity funds for higher returns. A combination of large-cap and mid-cap funds could provide balanced growth.

Regular Reviews: Monitor the performance of these investments regularly and adjust as needed with your CFP.

4. Retirement Planning

To achieve a Rs 6 crore retirement corpus, focus on a mix of high-growth and stable investments:

Diversified Mutual Funds: Increase your allocation to a diverse set of mutual funds. Actively managed funds often outperform index funds in dynamic markets.

Equity Shares: Continue investing in both Indian and US markets. Keep a balanced portfolio to mitigate risks.

NPS and PF: These are your safety nets. Continue and, if possible, increase contributions to these low-risk instruments.

5. Risk Management

Insurance: Your current term insurance is adequate. Ensure that the policies are reviewed regularly to keep up with inflation and lifestyle changes.

Emergency Fund: Maintain an emergency fund equivalent to 6-12 months of expenses. This ensures financial stability during unforeseen circumstances.

6. Debt Management

Your car loan is the only liability, with a Rs 28k EMI for the next five years.

Early Repayment: If possible, consider early repayment to free up more funds for investments.
Future Financial Strategy

1. Comprehensive Financial Plan

Work with a CFP to create a detailed financial plan. This should include:

Cash Flow Analysis: Understanding your income and expenses to identify saving potential.

Investment Strategy: Tailored to your risk tolerance and financial goals.

Tax Planning: Efficient tax planning to maximize your savings and returns.

2. Regular Financial Reviews

Schedule regular reviews with your CFP. This helps in:

Portfolio Rebalancing: Adjusting your portfolio based on market conditions and life changes.

Goal Tracking: Ensuring you are on track to meet your financial goals.

3. Continuous Learning and Adaptation

Stay informed about financial markets and investment opportunities. Adapt your strategies as required.

Final Insights

Your financial journey is well on track. You have a solid foundation with diverse investments, adequate insurance, and clear financial goals. With a focused strategy, disciplined saving, and strategic investments, achieving your retirement and educational corpus goals is within reach. Regular reviews and professional guidance will ensure that you stay on course.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 23, 2024

Asked by Anonymous - Jul 22, 2024Hindi
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Money
Hi, I am 45. Myself and wife together earning 2.3L p.m. We have kids of aged 11 years and 3 years. Our monthly expenses are around 90K. We have home loan of 75L with 80k EMI for a tenure of 13 years. We have 50L worth apartment, 40L in PPF, 55L in PF, 20L in NPS, 40L in MF, 10L in stocks and 10L in ULPIs. We have monthly MF SIP of 40K and 10K pm for term and health insurances. We want to retire in next 10 years. Please advice on how to plan for our future.
Ans: Current Financial Situation
You and your wife earn Rs 2.3 lakhs per month.

Your monthly expenses are Rs 90,000.

You have a home loan of Rs 75 lakhs with an EMI of Rs 80,000 for 13 years.

Your apartment is worth Rs 50 lakhs.

You have Rs 40 lakhs in PPF, Rs 55 lakhs in PF, Rs 20 lakhs in NPS, Rs 40 lakhs in mutual funds, Rs 10 lakhs in stocks, and Rs 10 lakhs in ULIPs.

You invest Rs 40,000 per month in SIPs and Rs 10,000 per month in term and health insurance.

You want to retire in 10 years.

Assessment of Current Investments
Mutual Funds
You have Rs 40 lakhs in mutual funds and a monthly SIP of Rs 40,000.

Mutual funds offer growth and diversification. Regularly review and rebalance your portfolio.

Provident Fund (PF) and Public Provident Fund (PPF)
You have Rs 55 lakhs in PF and Rs 40 lakhs in PPF. These are safe investments with steady returns. They are good for long-term planning.

National Pension System (NPS)
Your Rs 20 lakhs in NPS will provide a pension after retirement. It is beneficial for retirement planning.

Stocks
You have Rs 10 lakhs in stocks. Stocks can provide high returns but come with higher risk.

Unit Linked Insurance Plans (ULIPs)
You have Rs 10 lakhs in ULIPs. ULIPs combine investment and insurance. They often have high charges and lower returns compared to mutual funds.

Insurance
You invest Rs 10,000 monthly in term and health insurance. This is important for financial security.

Evaluating Future Needs
Retirement Goal
You want to retire in 10 years. Plan to cover expenses and maintain your lifestyle.

Home Loan
Your home loan is significant. Consider ways to reduce this burden before retirement.

Strategies for Future Planning
Increase SIP Investments
Consider increasing your SIP investments. This will help grow your corpus over time.

Diversify Your Portfolio
Diversify your investments to reduce risk and enhance returns. Consider actively managed funds for better performance.

Review ULIPs
ULIPs often have high charges. Consider surrendering ULIPs and reinvesting in mutual funds for better returns.

Regular Fund Investments
Investing through a Certified Financial Planner (CFP) ensures professional guidance. Regular funds provide this advantage over direct funds.

Pay Down Home Loan
Focus on reducing your home loan. This will reduce financial stress in retirement.

Plan for Children’s Education
Set aside funds for your children’s education. This is a significant future expense.

Emergency Fund
Maintain an emergency fund for unforeseen expenses. This should cover at least 6 months of expenses.

Review Insurance Coverage
Ensure adequate term and health insurance. This protects against unexpected events.

Disadvantages of Index Funds and Direct Funds
Index Funds
Index funds track the market. They may not provide the best returns in all conditions.

Direct Funds
Direct funds require active management by the investor. This can be time-consuming and requires expertise.

Final Insights
You have a solid financial base. Focus on increasing SIP investments and diversifying your portfolio.

Review and potentially surrender ULIPs to reinvest in mutual funds.

Work on reducing your home loan to ease financial stress.

Ensure you have adequate insurance and an emergency fund.

Consider professional guidance from a Certified Financial Planner for better investment choices.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 03, 2025

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I am 33yr old Married man. I have my old parents, my brother and my wife live with me. I have a monthly emi of house of 80k which will end in may 2026. I have only 3 lakhs liquid funds. 3laks in mutual funds. My wife and mother have some 3lkah worth of gold. My brother earns 20k monthly. Rent of the house is 33k per month. Suggest on how to plan for future savings and by when I can retire.?
Ans: You are 33 years old and married.
You live with your wife, parents, and brother.
You have a house loan EMI of Rs. 80,000 per month, which will end in May 2026.
Your liquid funds amount to Rs. 3 lakh.
Your mutual fund investments also total Rs. 3 lakh.
Your wife and mother hold gold worth Rs. 3 lakh.
Your brother earns Rs. 20,000 per month.
You receive Rs. 33,000 per month as house rent.
Immediate Priorities
1. Emergency Fund

Your liquid funds are currently Rs. 3 lakh. This is insufficient.
Aim for at least six months of expenses as an emergency fund.
Considering your EMI and other household costs, target Rs. 5–7 lakh in a high-liquidity option.
Allocate future savings towards this goal before investing in other options.
2. Managing Your EMI Until 2026

The house loan EMI is Rs. 80,000 per month, which is a major expense.
Once the EMI ends in May 2026, you will have additional cash flow.
Avoid any new loans or large unnecessary expenses until then.
The Rs. 33,000 rent you receive can partly support the EMI.
3. Life and Health Insurance

If you do not have life insurance, get a term plan covering at least 15 times your annual income.
Ensure health insurance for yourself, your wife, and your parents with sufficient coverage.
Your brother should also consider a personal health policy.
Savings and Investment Strategy
1. Post-EMI Savings Plan

From June 2026, you will have Rs. 80,000 extra per month.
Redirect this amount towards wealth creation.
Prioritize investing in mutual funds and other growth-oriented assets.
2. Investment Mix for Future Growth

Continue SIPs in mutual funds and increase contributions after 2026.
Maintain a mix of equity and debt investments for long-term financial stability.
Gold can be kept as a backup asset but should not be your primary investment.
Retirement Planning
1. How Much Do You Need to Retire?

Your retirement corpus should be large enough to cover your future expenses.
Factor in inflation, medical needs, and lifestyle expenses.
Your goal should be at least Rs. 5–6 crore by the time you retire.
2. Estimated Retirement Timeline

If you invest aggressively post-2026, retirement by 50–55 could be possible.
Early retirement requires disciplined savings and investment growth.
The longer you stay invested, the better your corpus accumulation.
Final Insights
Focus on repaying your home loan and increasing savings.
Secure health and life insurance for risk protection.
Build an emergency fund before increasing investments.
Start long-term investments aggressively post-2026.
Aim for a retirement corpus of Rs. 5–6 crore for financial freedom.
Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

..Read more

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Shalini Singh  |154 Answers  |Ask -

Dating Coach - Answered on May 13, 2025

Asked by Anonymous - May 11, 2025
Relationship
Hi Shalini ji I was in a serious relationship for 6 years with a boy whom I met on the 1st day of my college. He was from a different caste. Hence when my parents got to know they disapproved of it very strictly so I knew it wasnt going to work that easily. After sometime they started asking to get married. It was an ultimate pressure while we both were preparing for some government exams. I went through utter confusion and I got stuck between trying to study and at the same time thinking about my future with him. I was pressurised by my family including my brother and parents to leave him. Meanwhile I decided to not to carry it forward because I couldn't leave my parents for whole life to be with him because it was either him or my family. I lost all the focus towards my studies due to this decision and also started talking to some other boy (he was from my own caste accidently) whom I met accidentally at an exam centre for comfort. I got a brief moments of happiness with him. I confide my pain in him. Suddenly something happened in my family ,between my parents. And my mother started acting like you can choose your own partner for life because somehow she lost trust on my father. She even was comfortable with my brother's marriage with the one whom he loves. Now I feel completely betrayed because for them I left love of my life and got into another relationship with the boy I met at an exam center ( which now I feel was a hasty decision as I felt alone and depressed). Now no one talks about my real love and what i think about it for the future. I am in a complete state of repentance. I feel like I betrayed him. Now when i think of getting back to him I hesitate a lot because I think that I took a wrong decision due to the pressure and under stress. The person I am with now, I feel is not what I wanted as a partner and I feel that he is not mentally supportive. I wnat to leave him as well. What should I do now to be happy?
Ans: 1. Happiness is in your hand
2. You sound like an adult, over 21 and someone who knows what is right and what is not - so take action
3. If you are not happy in your current relationship, come out of it.
4. If you wish to reconnect with your earlier partner do so, but keep in mind he may not be single and if he is he will not be how you knew him, as in he will come with his own experience of life.

all the best.

...Read more

Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 12, 2025

Asked by Anonymous - May 12, 2025
Money
I am 38 years old and self-employed, earning an average of 1.8 to 2 lakhs per month. I have a home loan of 44 lakhs (EMI is 46,000, tenure 15 years). There is no other liabilities. My investments include 11 lakhs in mutual funds, 3 lakhs in fixed deposits, and 1.5 lakh in gold. Should I focus on prepaying the home loan given my irregular income, or keep my investments intact and continue with EMIs?
Ans: You are doing quite well, especially with your investments and controlled liabilities. Your financial discipline is truly appreciable.

You are 38, self-employed, with Rs.1.8 to 2 lakhs monthly income.
Your current home loan is Rs.44 lakhs with EMI of Rs.46,000 for 15 years.
You have Rs.11 lakhs in mutual funds, Rs.3 lakhs in FDs, and Rs.1.5 lakhs in gold.
Your income is irregular, but you have no other liabilities.

Let us now do a 360-degree evaluation of whether to prepay the loan or stay invested.

 

Step-by-Step Financial Assessment
1. Evaluate the Stability of Your Income First
You earn between Rs.1.8 to Rs.2 lakhs per month.

 

But income is irregular. That needs caution.

 

Loan EMI is Rs.46,000 — about 25% of your average income.

 

If income drops in any month, EMI pressure will increase.

 

So we must first ensure EMI is always affordable, without stress.

 

Hence, liquidity is more important for you right now than aggressive loan prepayment.

 

2. Evaluate Your Emergency Reserve
You have Rs.3 lakhs in FD and Rs.1.5 lakhs in gold.

 

That makes it Rs.4.5 lakhs total liquid safety.

 

Your EMI is Rs.46,000, and personal expenses will also be there.

 

Ideal emergency fund for you = 6 to 9 months of expenses + EMI.

 

That is around Rs.6 to Rs.8 lakhs minimum.

 

So current emergency fund is slightly lower than ideal.

 

Please don’t use this for loan prepayment now.

 

3. Assess the Role of Mutual Funds
You have Rs.11 lakhs in mutual funds. That’s a solid step.

Now let’s assess whether to redeem this and prepay loan.

 

Should You Redeem Mutual Funds to Prepay?
Mutual funds, over long term, give better post-tax return than loan savings.

 

Loan interest is 8% to 9%, whereas mutual funds can give 11–13% in long term.

 

Especially if funds are equity-oriented and held for 5+ years.

 

You will also get capital gains tax exemption on Rs.1.25 lakhs LTCG annually.

 

If you redeem funds, you lose growth potential and compounding.

 

That hurts long-term wealth building.

 

So, do not redeem the entire Rs.11 lakhs in mutual funds.

 

4. Disadvantage of Early Loan Prepayment in Your Case
Prepaying early will reduce interest over time, yes.

 

But you may run into cash flow stress in slow months.

 

Once money is used to prepay, it cannot be taken back easily.

 

Liquidity once lost = flexibility lost.

 

Also, income tax benefit under Section 24(b) gets reduced if loan balance drops.

 

So it’s better to maintain balance between repayment and investment.

 

5. Best Strategy for You – A Balanced Approach
Let’s now craft the best plan for you.

 

Maintain Strong Liquidity First
Keep FD and gold untouched.

 

Increase emergency fund to at least Rs.6–Rs.7 lakhs.

 

For that, set aside extra Rs.2.5–Rs.3 lakhs from savings over time.

 

This makes your EMI safe even in low-income months.

 

Continue Your Mutual Fund SIPs Without Stopping
SIPs give long-term growth and beat loan interest in most cases.

 

Don’t stop mutual fund investments to prepay loan.

 

Stay invested. Let wealth compound.

 

Start Small and Periodic Prepayments
Don’t do bulk prepayment now. Do systematic small prepayments.

 

For example, Rs.25,000 to Rs.50,000 extra every 3–4 months.

 

When income is higher, use that surplus to prepay in parts.

 

Target 1–2 bulk part-payments per year.

 

This reduces tenure and interest slowly, without affecting liquidity.

 

Track Your Loan Amortisation Every 6 Months
Use netbanking or get a fresh loan statement every 6 months.

 

Check how each prepayment is reducing principal.

 

Adjust your strategy accordingly.

 

Avoid One-Time Full Prepayment
That would kill your long-term investment compounding.

 

Also removes your income tax benefit under Section 24(b).

 

Stay flexible. You are self-employed.

 

You need cash buffers more than salaried people.

 

Final Insights
Do not do bulk home loan prepayment from mutual funds now.

 

Keep SIPs going and maintain your compounding.

 

Grow your emergency fund to Rs.6–7 lakhs minimum.

 

Use surplus months to make small part-payments towards home loan.

 

This protects your peace and builds wealth at the same time.

 

Reassess in 2–3 years. You may be able to prepay more later.

 

You are already in a good financial position. Your thoughtful approach is praiseworthy.

 

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8334 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 12, 2025

Money
i wish to purchase new car i10, should i purchase the same through own money or should i take a vehicle loan from bank and the money own by my to be kept as FDR or liquid mutual fund
Ans: It’s a good sign that you’re thinking before buying a car. You’re not rushing into it. That shows maturity and smart thinking.

We will now evaluate own money vs vehicle loan — from every angle.

 

Understanding the Nature of a Car Purchase
A car is not an investment.

 

It is a consumption asset, not a growth asset.

 

It depreciates every year. Its value goes down, not up.

 

So the cheaper the total cost, the better for your wealth.

 

Option 1: Use Own Money Fully
Pros

No interest cost. You save on total expenses.

 

You are free from monthly EMI pressure.

 

Car becomes fully yours from day one.

 

No need to deal with bank, forms, hypothecation etc.

 

Cons

Your liquid money reduces.

 

You may not have enough cash for emergencies.

 

Opportunity loss if you had invested that money.

 

Option 2: Take Vehicle Loan & Keep Own Money in FDR or Liquid Mutual Fund
Let’s evaluate this with care.

Vehicle Loan Pros

You can preserve your savings for emergencies.

 

EMI can be budgeted monthly, if income is stable.

 

Some banks offer competitive interest rates.

 

Vehicle Loan Cons

You will pay interest on a depreciating item.

 

Loan adds to your monthly obligations.

 

You must pay insurance, EMI, fuel, and service together.

 

FDR and Liquid Mutual Funds give lower returns than loan cost.

 

So you will likely lose more in interest than you gain.

 

Let's Compare: Interest Rate vs Investment Return
Vehicle loan interest is usually 9% to 11% per year.

 

FDR gives around 6% to 7% before tax.

 

Liquid mutual funds give 6% to 7.5% on average.

 

So you pay more to the bank than you earn from investment.

 

Tax on interest or gains reduces actual return further.

 

This means taking a car loan and investing your own money leads to net loss.

 

Best Option for You: Smart Compromise Approach
Let me share a wise solution.

 

Don’t use full own money. Don’t take full loan either.

 

Instead, pay 70–80% from own funds.

 

Take a small car loan for the remaining 20–30% only.

 

This keeps EMI low and retains some liquidity.

 

You reduce interest cost and also keep Rs.50,000–Rs.1 lakh aside.

 

Park that in liquid fund for any urgent need.

 

Repay this small loan fast in 1–2 years.

 

Only Take a Car Loan If:
Your job income is stable.

 

You already have 3–6 months emergency fund ready.

 

You don’t have big loans running now.

 

You can pay EMI without affecting savings.

 

You commit to close the loan early.

 

Avoid This Mistake:
Never buy a more expensive car because loan makes it “feel affordable.”

 

Loan should not expand your car budget.

 

Whether you buy with loan or cash, pick a simple car within limits.

 

i10 is a wise, middle-ground choice. Good thought.

 

Tax Angle (If Business Use)
If you are using the car for business, vehicle loan interest may be tax-deductible.

 

But for personal use, there is no tax benefit.

 

So do not take loan just for imagined tax saving.

 

Final Insights
A car is a need, not an investment.

 

Using your own money fully keeps things simple and cheap.

 

Taking a full car loan and investing the money gives net negative return.

 

Best option is a split approach — pay major part from own funds.

 

Take small loan only if needed and close it early.

 

Always keep emergency money aside before buying.

 

Avoid emotional buying or overbudget cars.

 

Your financially balanced approach is very appreciable.

 

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

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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