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Ramalingam

Ramalingam Kalirajan  |9441 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 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 - May 28, 2025
Money

Hi sir. I have 50 lakhs to invest and require inputs on where/how to. I currently have 1.2 Cr in Mutual funds (63% in large cap, 25% in midcap, 11% in small cap, rest 1-2% in gold funds). Monthly SIP of 50k ongoing in ICICI Pru Bluechip, Quant Mid Cap, PP Flexi cap, Quant Small Cap, Invesco India Contra, SBI Gold Fund. I have an under-constrution home loan for 1.3 Cr with current EMI of 80k which will increase to 1.2 lakh pm in 2 yrs when the project is completed. Could you suggest if I should reduce the loan requirement or invest the 50 lakh in add-on mutual funds/other investment products such as land (given current market scenario)?

Ans: Your current investments reflect clarity and structure.

It’s good to see your Rs. 1.2 crore mutual fund portfolio is well spread.

The Rs. 50,000 monthly SIP also shows strong financial discipline.

The Rs. 1.3 crore home loan with an increasing EMI in 2 years needs attention.

Your Rs. 50 lakh surplus gives you both flexibility and opportunity.

Let’s look at your options from a 360-degree financial planning lens.

We will explore four important areas:

– Debt management
– Investment suitability
– Portfolio structure
– Contingency planning

Let’s begin.

Loan Management – Reduce or Retain?
Your current EMI of Rs. 80,000 will go up to Rs. 1.2 lakh in two years.

Home loan rates may not go down significantly in short term.

You still have time to reduce the loan burden if needed.

Prepaying some loan amount now can reduce future EMI pressure.

You may also negotiate with the bank to restructure or reduce interest.

But don’t use full Rs. 50 lakh for loan prepayment.

Keeping liquidity is more important than full loan clearance.

Best strategy: Use 20–25 lakh for part prepayment.

This brings interest outgo under control.

It also brings mental peace before EMI rises.

Balance Rs. 25–30 lakh should be retained for investing purpose.

Investment Route – Where to Use Rs. 25–30 Lakh?
You already have Rs. 1.2 crore in mutual funds.

SIP of Rs. 50,000 per month is already active.

Your portfolio shows good mix: large, mid, small cap and gold.

No need to add more mutual fund categories now.

Instead, strengthen exposure in same structure.

Fresh lump sum must be staggered in tranches.

Use STP (Systematic Transfer Plan) for this.

Park Rs. 25–30 lakh in a good ultra-short duration fund.

Then transfer Rs. 1.5–2 lakh monthly into your current equity funds.

This way, you reduce market risk while entering.

Don’t go for direct funds even if expense ratio is less.

Regular funds through Certified Financial Planner give better guidance.

You gain personalised help, behavioural correction and fund review.

Direct plan investors often miss these, and returns suffer.

You should continue all your current SIPs.

Don’t introduce new schemes without specific purpose.

Also avoid exotic themes like international, thematic, sectoral funds.

They carry concentration risk and timing risk.

Asset Allocation Review – Balance Equity with Safety
98% of your mutual fund portfolio is in equity.

This is aggressive, and suitable only for long-term goals.

But now with large home loan and rising EMI, safety is key.

Allocate a part of your Rs. 50 lakh to safe products.

This ensures peace of mind and emergency coverage.

Choose short-term debt funds with high-quality papers.

Fixed deposits are fine for very short-term needs.

Avoid NCDs and corporate bonds without credit rating comfort.

Don't chase high returns from unlisted or private bonds.

Your core portfolio should balance return with stability.

Aim for 80:20 ratio between equity and safety instruments now.

Avoid Real Estate as Investment Route
You already have an under-construction property.

Real estate is illiquid and needs high maintenance.

Buying land or more property locks capital without regular returns.

Rental yield is also low. Liquidity during crisis is zero.

You also face risks like legal delays, registration cost, capital gain tax.

Avoid investing your surplus Rs. 50 lakh into any land.

Let your investments remain flexible, safe and growth-oriented.

Tax Perspective – Be Aware of Capital Gains Tax
Equity mutual fund gains up to Rs. 1.25 lakh are tax-free yearly.

Beyond that, long-term gains are taxed at 12.5%.

Short-term gains are taxed at 20%.

Don’t redeem in bulk to avoid higher taxation.

Plan withdrawals during non-working years or post-retirement.

For debt funds, taxation is per your income slab.

Choose investments where taxation suits your slab.

Consult your tax expert once a year to rebalance smartly.

Contingency Planning – Emergency and Safety Check
Check if your emergency fund covers 12 months expenses.

You are already committing Rs. 80k EMI monthly.

In 2 years, it will go up by 50%.

In case of job loss or income dip, EMI stress may arise.

Always keep Rs. 8–10 lakh as emergency reserve.

Use sweep-in FDs or ultra-short debt funds for this.

Make sure health insurance and term insurance are adequate.

Any sudden illness or job risk shouldn’t break your portfolio.

Children’s Future – Start Goal-Based Planning
If you have children, plan now for education.

Use a separate SIP for child goal if not done already.

Select balanced or hybrid equity funds for child goals.

This provides growth with lower volatility.

Avoid child ULIPs or traditional insurance plans.

They are low-return and poor liquidity options.

If you hold any of them, consider surrender and reinvest into mutual funds.

Avoid Index Funds – Here’s Why
Index funds only mimic markets, not beat them.

You don’t get downside protection in falling markets.

Actively managed funds aim to outperform benchmarks.

In India, skilled fund managers can still beat index returns.

You miss expert judgement in index approach.

Also, same returns mean less room for alpha generation.

Stick to active funds under regular plans with a Certified Financial Planner.

Portfolio Monitoring – Keep Regular Reviews
Track your SIPs and lump sum investments quarterly.

See which funds are lagging beyond 2–3 years.

Don’t rush to exit due to 6-month poor return.

Use Certified Financial Planner to reallocate, not switch randomly.

Make goals-based buckets: home EMI, retirement, child education.

Link each fund to a goal. Track progress. Rebalance once a year.

Stay invested during market dips. That’s when wealth is built.

Finally – What You Should Do Now
Use Rs. 20–25 lakh to partly prepay the home loan.

Use Rs. 25–30 lakh for investment through STP into your current mutual funds.

Don’t add new fund types unless your goals demand.

Stay with regular mutual funds. Avoid direct mode and index funds.

Create safety net through short-term debt funds and FDs.

Maintain emergency fund. Avoid real estate or land purchases.

Monitor all funds quarterly. Rebalance annually with a planner’s support.

Keep discipline, avoid over-diversification, and stay goal focused.

You’re already doing well. Now, strengthen the base further.

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.
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Ramalingam

Ramalingam Kalirajan  |9441 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 22, 2024

Asked by Anonymous - Oct 21, 2024Hindi
Money
Hello Sir, Am 47 year old private sector employee earning around 125K salary + 40K ( some other income) monthly. Currently all my loans cleared but planning buy a home for which I need to pay 100K towards loan EMI per month towards home loan of 1.0 Cr. Having commitments of children's education as well in next 2 year onwards. Currently holding MF investments of 2Lacks as mentioned below: 1. Motilal Oswal midcap fund regular growth - 10K 2. SBI PSU fund -growth -10K 3. HDFC small cap fund regular growth - 20K 4. ICICI prudential infrastructure fund growth - 10K 5. HDFC NIFTY Next50 Index Fund direct - 50K 6. HDFC Mid-Cap Opportunities Fund-DG - 50K 7. SBI Nifty Smallcap 250 Index Fund Reg - 40K 8. SBI silver ETF FoF Reg growth - 10K Assuming retirement at the age of 60. Pls advice how can I create additional wealth to pre-close the home loan and create 1cr on retirement.
Ans: You are earning Rs. 125,000 from your salary and Rs. 40,000 from other sources, which gives you a total monthly income of Rs. 165,000. With all your loans cleared, you’re now planning to take a home loan of Rs. 1 crore with an EMI of Rs. 100,000. You also have upcoming commitments related to your children's education in two years.

You have Rs. 2 lakhs invested in mutual funds (MFs) across various schemes. Your goal is to pre-close your home loan and create a retirement corpus of Rs. 1 crore by age 60.

At 47, you have a 13-year window before retirement. To meet these goals, we need to take a 360-degree approach. Let’s evaluate your current investments, income, and future commitments, and suggest steps that align with your goals.

Key Points to Consider
Your home loan EMI of Rs. 100,000 per month will significantly impact your cash flow.

Children’s education costs are expected in two years, adding further financial responsibility.

You have 13 years to create wealth before retirement.

These commitments demand a balanced approach between managing EMIs, future expenses, and growing your wealth for retirement.

Assessing Your Current Mutual Fund Investments
Your mutual fund portfolio of Rs. 2 lakhs is diversified across various categories. Here’s an analysis of your current portfolio:

Mid-Cap and Small-Cap Funds
You have a notable exposure to mid-cap and small-cap funds. These funds offer high growth potential but come with higher volatility. Since you have a long-term horizon, this is fine. However, you need to ensure you don’t over-expose yourself to these funds. Mid- and small-cap funds can be highly volatile, especially in the short term.

A balanced portfolio would reduce the risk of short-term market swings while keeping the potential for long-term growth intact.

PSU and Sectoral Funds
You are also invested in PSU and infrastructure funds. Sector-specific funds can be risky as their performance is tied to the particular sector’s growth. Such funds may not perform consistently across market cycles. You could consider reducing your exposure to sectoral funds and reallocating to diversified equity funds.

Diversified equity funds can reduce the sector-specific risks while providing similar growth potential over the long term.

Index Funds: A Suboptimal Choice
You have invested in index funds, which simply replicate market indices. While these funds come with lower expense ratios, they lack flexibility. Index funds do not outperform the market, as they are designed to mirror it. In contrast, actively managed funds are managed by professional fund managers. These managers aim to outperform the market and make tactical decisions based on market conditions.

Given your goals, actively managed funds are a better choice for wealth creation. They can provide better returns over time compared to passive index funds.

Direct Funds vs Regular Funds
You’ve also invested in direct plans, which may seem attractive because of their lower expense ratios. However, direct funds don’t come with the guidance and professional advice you get from regular funds through a Certified Financial Planner (CFP). A CFP can help you regularly review and rebalance your portfolio based on market conditions, helping you avoid costly mistakes.

Investing in regular plans through a CFP can provide the much-needed personalized advice and periodic portfolio reviews to ensure your investments stay on track to meet your goals.

Creating Additional Wealth to Pre-Close Home Loan
Your goal of pre-closing the home loan is achievable with the right strategy. Let’s look at some key points:

1. Increase Your SIP Investments
You should increase your Systematic Investment Plan (SIP) contributions. You are currently investing Rs. 2 lakhs across different funds. To meet your goal of creating additional wealth to pre-close your loan and retire with Rs. 1 crore, you need to boost your monthly SIPs. Consider increasing your SIPs by 10-15% every year.

For example, if you start with an additional Rs. 20,000 per month and increase it annually, your portfolio will grow significantly over time.

2. Focus on Balanced Funds
Since you have high exposure to mid-cap and small-cap funds, you should consider adding balanced advantage funds to your portfolio. These funds dynamically shift between equity and debt depending on market conditions. This will provide some stability to your portfolio, especially as you approach retirement.

Balanced funds help mitigate risks and offer consistent returns over the long term.

3. Prioritize Equity-Oriented Funds
Given your long-term horizon, equity-oriented mutual funds should remain your primary investment. They offer the highest potential for growth over a 13-year period. However, you need to diversify across large-cap, multi-cap, and flexi-cap funds. These funds are less volatile than mid-cap and small-cap funds but still provide good returns.

By maintaining a diversified equity portfolio, you can benefit from market growth while keeping your risk profile balanced.

4. Reduce Sectoral Fund Exposure
Consider reducing your exposure to sectoral funds like PSU and infrastructure funds. Instead, reallocate those investments to diversified equity funds or large-cap funds. These funds provide more consistent returns and are less risky compared to sectoral funds.

A well-diversified portfolio will perform better across different market conditions.

Planning for Your Children’s Education
Education expenses for your children are a significant commitment in the next two years. You need to start setting aside funds specifically for this goal. Here’s what you can do:

1. Create a Dedicated Fund for Education
Set up a separate SIP for your children’s education. You could invest in hybrid funds or debt-oriented funds to build a corpus for this goal. Since this is a short-term goal, it’s better to focus on funds with lower risk.

By setting aside a specific amount every month, you can ensure that your children’s education is taken care of without impacting your other financial goals.

2. Use Debt Funds for Short-Term Needs
For short-term commitments like education, consider debt mutual funds. These funds are less volatile and can offer better returns than traditional fixed deposits. Additionally, debt funds are more tax-efficient compared to FDs, as they benefit from indexation if held for more than three years.

Debt funds are an ideal option to save for upcoming educational expenses.

Creating a Rs. 1 Crore Retirement Corpus
Your goal is to create Rs. 1 crore by the time you retire at 60. Here’s a strategy to achieve this:

1. Increase Equity Exposure Gradually
You are currently 47 years old, and with 13 years left to retirement, you should maintain a high equity exposure for the next 7-10 years. Gradually increase your equity investments in a mix of large-cap and multi-cap funds. These funds provide growth potential with a more stable risk profile.

Over time, you can start reducing your equity exposure as you approach retirement.

2. Keep Reinvesting Dividends
If your funds offer dividend options, ensure that you reinvest dividends. Reinvesting helps compound your returns and grow your wealth faster. Compounding can significantly boost your corpus over time.

3. Tax-Efficient Investments
Keep in mind the tax implications of your investments. Equity mutual funds are taxed differently based on the holding period:

Long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%.

Short-term capital gains (STCG) are taxed at 20%.

When planning withdrawals during retirement, it’s essential to manage taxes efficiently to maximize your returns.

Managing Your Home Loan
Paying a home loan EMI of Rs. 100,000 per month will be a significant expense. Here’s how you can manage it:

1. Increase EMIs When Possible
Whenever you get a salary hike or an increase in your other income, try to increase your EMI payments. This will help you reduce the loan tenure and save on interest costs.

2. Use Bonuses and Windfalls
If you receive any bonuses, incentives, or windfalls, consider using a part of these to make pre-payments on your home loan. Pre-paying can help you clear the loan faster, reducing the interest burden.

Final Insights
At 47, your focus should be on balancing between your short-term and long-term financial goals. While the home loan will consume a significant portion of your income, you can still build wealth by strategically increasing your investments.

By adjusting your mutual fund portfolio, increasing your SIPs, and focusing on tax-efficient investments, you can achieve your goal of pre-closing your home loan and creating a Rs. 1 crore retirement corpus.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

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

..Read more

Ramalingam

Ramalingam Kalirajan  |9441 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 04, 2024

Asked by Anonymous - Oct 28, 2024Hindi
Money
I am 42, and my current take home is 1.9 lakh per month. I have a home loan for which I paying 50K EMI. Currently my only investment is 5k monthly SIP and monthly EPF for 22k with current balance of 13 lakh. Now after all expenses I am am able to save 70-75k monthly. Can you please share a road map where I should invest money with 30k amount as high liquidity and flexibility and 40 as long term investment and any other suggestions for investment
Ans: Your dedication to securing a well-rounded financial future is excellent. Based on your profile, I’ll outline an investment roadmap that balances liquidity, growth, and long-term wealth creation.

Key Focus Areas for Your Financial Growth
For a comprehensive strategy, it’s essential to look at both liquidity needs and long-term growth. Given your current savings capacity, we’ll divide your Rs. 70-75k monthly savings effectively.

Here’s how to structure your investments with a balanced approach:

1. Allocating Rs. 30,000 for High Liquidity and Flexibility
In this portion, we’ll target investments that offer quick access to funds while providing a safety net for emergencies and short-term goals.

Liquid Funds
Liquid funds are low-risk and give quick access to cash within a day or two. These funds invest in short-term securities, providing stable returns with high liquidity. This option helps you build an emergency reserve without sacrificing flexibility.

Ultra-Short-Term Funds
Ultra-short-term funds offer slightly better returns than liquid funds but still maintain liquidity. They suit short-term goals and unexpected expenses. Ultra-short-term funds usually require a holding period of three months for optimal returns.

Recurring Deposits (RD)
If you prefer traditional investments, consider an RD with a 6-12 month term. It’s ideal for conservative investors seeking stable growth in liquid funds. It adds a disciplined approach to your savings without tying up funds long-term.

Money Market Funds
Money market funds provide a stable place for parking cash with moderate returns. They invest in high-quality, short-term debt instruments, offering security and fast access to funds. You can liquidate these investments quickly if needed.

2. Allocating Rs. 40,000 for Long-Term Wealth Creation
Long-term investments form the backbone of your financial growth. We’ll focus on higher-growth instruments for wealth building.

Equity Mutual Funds for High Returns
Equity mutual funds are ideal for a 5-10 year horizon and have high growth potential. With actively managed funds, your investment is continuously optimised by fund managers to outperform the market. Unlike index funds, actively managed funds allow for strategic shifts based on market conditions.

Balanced Advantage Funds for Stability and Growth
These funds blend equity and debt, balancing risk while delivering steady returns. They dynamically adjust between debt and equity, helping reduce volatility. They’re a safe choice if you want exposure to equity with controlled risk.

Public Provident Fund (PPF)
PPF is a government-backed option with tax-free returns and long-term benefits. It’s an excellent choice for retirement planning and fits well into a tax-efficient portfolio. It provides a 15-year horizon, aligning with long-term goals.

Debt Funds for Low-Risk Growth
Debt funds are suitable for steady, low-risk income. They invest in corporate bonds and government securities, providing reliable returns. They’re tax-efficient for long-term investors, especially if your income tax slab is high.

Assessing Your Home Loan and EMI Payment Strategy
Paying Rs. 50,000 monthly towards EMI affects your cash flow. You may consider partial pre-payments when feasible to reduce the loan burden. This strategy can help reduce interest over time and ease cash flow, freeing funds for further investment.

Strengthening Your Emergency Fund
An emergency fund is essential to manage unexpected expenses without disrupting your investments.

Set aside six months’ expenses in a high-liquidity option.

Liquid funds or ultra-short-term funds are excellent choices for this buffer.

Aim to allocate a portion of your Rs. 30,000 liquidity funds toward building this reserve.

Enhance Long-Term Security with Retirement Planning
Your monthly EPF contribution of Rs. 22,000 is a strong start. However, considering your future expenses, bolstering your retirement fund will help you secure financial freedom.

National Pension System (NPS)
NPS provides tax-efficient growth for retirement. It invests in equity and debt based on your chosen risk profile, ensuring consistent growth for retirement. NPS offers benefits under Section 80C and 80CCD, giving you tax savings along with growth.

PPF Contributions
Consider supplementing EPF with PPF to balance your retirement fund. PPF provides assured returns, tax efficiency, and can serve as a reliable income source in retirement.

Avoid Direct Funds for Optimized Guidance and Security
Direct funds require continuous market knowledge and time to manage. Instead, consider investing through a Mutual Fund Distributor (MFD) with Certified Financial Planner (CFP) credentials. This guidance brings expertise and helps you make strategic choices in volatile markets, giving better returns without direct fund challenges.

Tax Implications for Your Investments
Your investments should also focus on tax efficiency to maximise post-tax returns.

Equity Mutual Fund Taxation
Long-term capital gains (LTCG) above Rs. 1.25 lakh are taxed at 12.5%. Short-term capital gains (STCG) are taxed at 20%. Equity investments should be held long-term to gain tax benefits.

Debt Fund Taxation
Debt funds are taxed as per your income slab, whether LTCG or STCG. They’re tax-efficient for those in high tax brackets and suit a stable, long-term portfolio.

Diversifying Your Investment Portfolio for Balanced Growth
To achieve a balanced portfolio, you’ll want diversity across asset classes, combining high growth with stability.

Gold Bonds
Gold bonds are government-backed, low-risk, and help hedge against inflation. They’re also tax-efficient and have no capital gains tax if held to maturity, making them ideal for a diversified portfolio.

Large-Cap and Mid-Cap Funds
Large-cap funds provide stability and lower risk, while mid-cap funds offer higher growth. Combining these funds aligns with your risk appetite and long-term growth goals.

Final Insights
A well-planned investment strategy can create financial stability and growth for your future. By focusing on a balanced approach, with Rs. 30,000 for liquidity and Rs. 40,000 for long-term investments, you secure flexibility and future wealth.

Stay consistent with these contributions, and make adjustments as needed. Working with a Certified Financial Planner can further refine this roadmap, helping you optimise each step of your investment journey.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

Ramalingam

Ramalingam Kalirajan  |9441 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jan 29, 2025

Asked by Anonymous - Jan 24, 2025Hindi
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Money
I am 36 years old with two kids 3.75 years old and 1.25 year old. I have outstanding home loan of 24 lakh. I have mutual fund holding of 9 lakh and 3 lakh in equity. I don't have other savings. My monthly salary is 1.8 lakh and home loan emi is 55k/month and other expenses are 50k/month. I intent to pay off my home loan entirely by April 2025. And then save and focus on purchasing other real estate property. Request you to advise if I should pay off current home loan and then invest in second ( given opportunity cost of rising real estates ) or should I keep current emi and take additional loan to purchase second property as 24 lakh rupees would not be enough for second property.
Ans: Assessing Your Current Financial Situation
You are 36 years old with two young kids.

Your monthly salary is Rs. 1.8 lakh.

Home loan EMI is Rs. 55,000 per month.

Other monthly expenses are Rs. 50,000.

Your current assets include Rs. 9 lakh in mutual funds and Rs. 3 lakh in equity.

No other savings apart from these investments.

You plan to fully repay your Rs. 24 lakh home loan by April 2025.

You are considering investing in another real estate property.

You are evaluating whether to pay off your current home loan first or take an additional loan.

Evaluating Home Loan Repayment
Paying off your home loan will free up Rs. 55,000 per month.

This can increase your savings and investment capacity.

However, prepaying the loan reduces liquidity, which is important for financial security.

Home loan interest rates are lower than potential investment returns from mutual funds.

Instead of full prepayment, partial repayment with continued investment may be better.

Assessing your loan’s interest rate versus expected returns is essential.

Managing Your Cash Flow and Investments
After EMI and expenses, you have Rs. 75,000 surplus per month.

With no emergency savings, all surplus going into loan repayment is risky.

Maintaining liquidity through an emergency fund is crucial.

Investing part of the surplus in mutual funds can create better long-term returns.

A balanced approach between loan prepayment and investment can be more beneficial.

Risks of Purchasing a Second Property
Real estate is illiquid and requires significant investment.

Rental yields are generally low, offering about 2-3% annually.

Capital appreciation is uncertain and depends on market conditions.

Maintenance, taxes, and potential vacancies add to costs.

If property prices fall, you may face financial stress with a higher loan burden.

Opportunity Cost of Investing in Real Estate
Investing in equity mutual funds offers better long-term returns.

You can achieve financial freedom faster through diversified investments.

Real estate locks in a large amount of money with slow growth.

Liquidity is lower compared to mutual funds or fixed-income instruments.

Recommended Financial Strategy
1. Build an Emergency Fund
Keep at least 6-12 months of expenses in liquid funds.

This ensures financial security and avoids forced withdrawals from investments.

2. Balance Loan Repayment and Investments
Instead of full prepayment, allocate some surplus towards investments.

Partial prepayment can reduce interest burden without affecting liquidity.

Continue investing in mutual funds for long-term wealth creation.

3. Avoid Purchasing Another Property
With limited savings and liquidity, another property will increase financial risk.

A second home loan will add EMI burden and reduce investment potential.

Diversifying into equity and fixed-income investments is a better approach.

Real estate investment limits flexibility in case of financial emergencies.

4. Strengthen Your Investment Portfolio
Increase SIP contributions in mutual funds to build long-term wealth.

Focus on a mix of large-cap, mid-cap, and flexi-cap funds for diversification.

Invest in debt funds or fixed-income instruments for stability.

Ensure a proper asset allocation based on risk tolerance and goals.

5. Secure Your Family’s Future
Ensure you have adequate term life insurance to protect your family.

Health insurance for yourself, spouse, and kids is necessary.

Create a financial plan for your children’s education and future needs.

Finally
Paying off your home loan is beneficial but should not drain liquidity.

Investing in mutual funds offers better flexibility and growth.

A second property will increase financial stress and limit investment potential.

Maintaining a balanced approach ensures financial stability and long-term wealth creation.

Prioritize an emergency fund, investments, and financial security before taking new liabilities.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

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

..Read more

Ramalingam

Ramalingam Kalirajan  |9441 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 15, 2025

Asked by Anonymous - May 15, 2025
Money
Hello sir, my age is 37 yrs and i have one home loan worth 35L with an EMI of 35k. I m left with 5 yrs of EMI. I have savings of 21L and getting interest of 7.1% on it . I have SIP worth 10L and stocks worth 11L. My monthly salary is 2.5L per month and I m doing regular investment in gold, land and SIPs and stocks when the market is down. I m thinking to take loan worth 30 lakh to reinvest in property. My monthly expense is 40k. Can you tell me how to go about for more investment.
Ans: At age 37, you have already built a strong base. You have a healthy salary, moderate expenses, and diversified assets. You are also investing regularly. That shows clarity and forward-thinking.

Let us now plan your next steps with a 360-degree financial lens.

1. Understanding Your Current Position Clearly

Your home loan EMI is Rs. 35,000 per month.

Only 5 years are left on this home loan. That is very positive.

You have Rs. 21 lakhs in savings earning 7.1% interest.

SIPs of Rs. 10 lakhs and stocks worth Rs. 11 lakhs are also held.

Monthly salary is Rs. 2.5 lakhs, which gives good financial freedom.

Monthly expense is Rs. 40,000. That is very controlled and efficient.

You also invest in gold, SIPs, and stocks when market corrects.

You are now planning to take a Rs. 30 lakh loan to invest in property.

This shows a desire to grow wealth faster, but we must evaluate risk too.

2. Assessing the Need for a New Property Loan

You already have a house loan going on.

Adding a second large loan adds burden on your future cash flows.

Property investing brings risk of low liquidity.

You may get stuck if property prices don’t rise as expected.

There are also stamp duty, registration, maintenance, and tax costs.

Rental yield is low. Selling property also takes time and effort.

Avoid taking a fresh loan just for property investing.

There are more efficient, flexible, and liquid ways to grow wealth.

3. Leverage Strengths, Not Just Debt

You already have strong monthly savings potential.

You have Rs. 2.5 lakhs salary and Rs. 40,000 expenses.

That leaves Rs. 1.75 lakhs monthly.

Even after EMI of Rs. 35,000, you have Rs. 1.4 lakhs surplus.

Use this power to build a disciplined investment plan.

Avoid increasing EMI burden now.

4. Shift Focus from Property to Portfolio Diversification

Real estate is not a liquid asset.

It is hard to rebalance or exit in short time.

A Rs. 30 lakh loan for property brings EMI stress.

Instead, spread that money into equity mutual funds, gold funds, and debt.

You already have stocks and SIPs. Build further through this route.

Long-term returns from mutual funds are often better than rental yield.

Also, mutual funds give better diversification and liquidity.

5. Build Core Portfolio with Balanced Allocation

You already have Rs. 21 lakhs savings earning 7.1%.

That is a good emergency and medium-term buffer.

Do not disturb this amount now.

Consider adding more SIPs to equity funds regularly.

Spread across 3 to 4 actively managed mutual funds.

Choose mix of flexi-cap, large-cap, and hybrid funds.

Avoid index funds now. They just copy the market and give no downside control.

Fund managers in active funds aim for better returns with lesser volatility.

6. Actively Managed Funds Over Index or Direct Plans

You may be tempted to invest in direct plans.

Direct plans give lower expense, but no expert advice or support.

That becomes risky in market corrections or emotional investing.

Invest through regular plans with a certified MFD and CFP guidance.

Regular funds give access to reviews, adjustments, and better control.

In long run, good behaviour matters more than just expense ratio.

7. SIP Strategy Should Be Steady, Not Reactive

You invest in stocks when markets fall. That’s a good instinct.

But timing the market can go wrong too.

Instead, run SIPs without stopping, even in falling market.

SIPs buy more units when market falls. That is built-in benefit.

Continue SIPs monthly, and add lumpsum only if income is surplus.

8. Gold Should Be Small Part of Your Portfolio

You invest regularly in gold.

That’s good for hedge, but don’t go beyond 10% of portfolio.

Gold doesn’t generate income or dividends.

It should act as insurance against currency or equity risks.

9. Stock Portfolio Should Be Reviewed Every Year

You hold Rs. 11 lakhs in stocks.

Review if they are quality businesses with strong earnings.

Avoid trading or frequent buying and selling.

Do not chase market tips or news-based investing.

Consider shifting part of stock holdings to mutual funds gradually.

10. Don’t Overexpose to Real Estate

You mentioned land investments too.

Land is not income-generating. It also has legal, title, and liquidity risks.

Also, property market is very cyclical in India.

Use your money to build flexible financial assets instead.

SIPs, mutual funds, gold, and debt plans offer smoother growth.

11. Life and Health Insurance Should Be Rechecked

At your income level, check if you have Rs. 2 crore term cover.

That protects your family in case of any unexpected event.

Also ensure health insurance of Rs. 15 to 20 lakhs.

One illness can disturb your entire savings plan.

12. Plan Future Goals With Investment Buckets

Break your goals into short, medium, and long term.

Short term: Emergency fund, travel, insurance premium.

Medium term: Kid’s education, car, home upgrade.

Long term: Retirement, passive income, legacy.

Allocate your SIPs and savings to each goal wisely.

This gives clarity and direction to all your investments.

13. Avoid Over-Borrowing to Chase Growth

You don’t need to borrow more now.

Use your own strong cash flows to invest regularly.

Adding a second loan only increases pressure.

Your money can grow better in financial assets than in property.

14. Reinvest Surplus Monthly Systematically

You have Rs. 1.4 lakh surplus monthly.

Keep Rs. 20,000 for buffer or unexpected costs.

Invest Rs. 1.2 lakh monthly in mutual funds across 3 to 4 funds.

Split across growth and balanced funds.

Review every 6 months with your Certified Financial Planner.

15. Monitor and Rebalance Your Portfolio Annually

Your investments should match your risk profile.

Too much in land or stocks can be risky.

Too much in FD gives low returns.

Rebalancing once a year is important.

It keeps your portfolio aligned to your goals.

Finally

Your finances are strong. Your savings habits are good.

You do not need a second loan now.

Avoid taking risk with borrowed money.

Instead, use your high surplus income for smart investment.

Stay focused on equity mutual funds, gold, and short-term debt funds.

Take advice from a Certified Financial Planner every year.

Your future wealth is already in your hands. Let it grow smartly.

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

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Latest Questions
Nayagam P

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Career Counsellor - Answered on Jul 07, 2025

Nayagam P

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Career Counsellor - Answered on Jul 07, 2025

Asked by Anonymous - Jul 07, 2025Hindi
Career
IIIT Bhagalpur ECE or IIIT Agartala CSE. Keeping in mind on campus placement, average package, location and safety easy commute.
Ans: IIIT Bhagalpur’s ECE program, established in 2017, offers NBA-aligned curricula with PhD-qualified faculty and specialized VLSI, communications and embedded-systems labs, securing an average package of ?10.35 LPA and 98% placement consistency over recent years . Located in Bhagalpur’s third-largest city, students navigate narrow, encroached roads by auto-rickshaw, with smart-city initiatives yet to alleviate traffic and pollution challenges, posing moderate safety concerns and limited public transit. IIIT Agartala’s CSE program, founded in 2018, delivers modern AI/ML, data-science and software labs under a JEE-Main-based curriculum, achieving an average package of ?22 LPA and a 95% placement rate, backed by 460 CCTV cameras and systematic urban surveillance ensuring a relatively safe environment. Agartala’s integrated bus, auto-rickshaw and taxi network offers smoother commutes, while smart-city upgrades bolster campus-city connectivity and security.

For stronger on-campus recruitment, higher average packages, safer surroundings and easier daily commute, recommendation is IIIT Agartala CSE. If specialized ECE research interests prevail and you tolerate moderate transit challenges, consider IIIT Bhagalpur ECE. All the BEST for Admission & a Prosperous Future!

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Career Counsellor - Answered on Jul 07, 2025

Nayagam P

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Career Counsellor - Answered on Jul 07, 2025

Career
Please advise: NIT Trichy, Chemical Engineering vs NIT Surathkal, Chemical Engineering vs ICT Mumbai, Chemical Engineering
Ans: Lalit, NIT Tiruchirappalli’s B.Tech in Chemical Engineering features NAAC accreditation, NIRF #9 ranking, a 79-seat intake, PhD-qualified faculty and modern process-dynamics, reaction-engineering and mass-transfer laboratories under TEQIP funding, complemented by industry MoUs and 85–90% branch-wise placement consistency. NIT Surathkal’s program holds NBA accreditation, NIRF #17 ranking, a 58-seat intake, specialized separation, biochemical and analytical labs with DST-DBT research grants and 73% placement over three years. ICT Mumbai, NAAC A++ and NIRF #53, offers a focused chemical-technology curriculum with pilot-plant, polymer-processing and bioprocessing CoEs, UGC-AICTE approval and integrated B.Tech/M.Tech pathways leading to 100% placement in 2023 with core recruiters like DRDO and Reliance. All three provide rigorous curricula, mandatory internships, strong research-industry linkages and accredited PhD faculty.

For its higher national ranking, comprehensive core labs and sustained industry partnerships, recommendation is NIT Tiruchirappalli Chemical Engineering. Next, recommendation is NIT Surathkal Chemical Engineering for balanced research funding and infrastructure, followed by ICT Mumbai Chemical Engineering for specialized chemical-technology exposure. All the BEST for Admission & a Prosperous Future!

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Nayagam P

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Career Counsellor - Answered on Jul 07, 2025

Career
Thank you sir for your guidance dt 31st May. My son passed 12 ICSE with English 98 marks, PCM group 60% and Mass Com. Wanted to pursue English at best colleges, but CUET score is 380. So St Stephens, JMI n other best DU colleges are out of question. St Xaviers Kolkata was not available at his 282 marks against the cut off 292. Jadavpur, Presidency Kolkata and Christ Bengaluru were closed for registration by the time, we allowed him to pursue English as against our stand to go for B Tech, so that he being the only child can take over the family's heavy engg business ( father has the dealership of Alfa Laval). His JEE percentile was 20. BITs was not possible due to condition of 75% in PCM. NDA also not cleared. IISER rank is 11000+, which is too less for General category. So against the backdrop of dismal scenario, he tried MIT-WPO, where he is getting Applied Economics, Applied Psychology, both as Majors and also possibility of English classes arranged from Harvard or any other global institution. He also got CSE( AI and ML) at D Y Patil, Ambi Pune. Whether he will be able to cope up CSE, as he did not study Computers in classes 11 and 12. He is fascinated by the idea that if he goes for B Tech, his father may arrange interships at Alfa laval here or in Sweden, or other Corporate companies. Kindly guide us what is best for him? Humanities at MITWPS or CSE D Y Patil? I was also thinking of allowing him to go for MIT for on campus course and also enrol him at IIT, Patna, Gauhati or Jodhpur for online BS degree in Data Science and AI, so that his passion and his techological requirements in future, can be amalgamated. Or, 1) should we ask him to take a drop, improve his PCM percentage thru improvement exam and then go for IISER, BITS, NITs thru JEE mains 2) should he try to give Computers thru NIOS as a remedy for a bridge course in Computers, so that he may handle BTech/ CSE. 3) If yes, Should he try MITWPS for CSE instead of going to DY Patil. We are in dire need of your guidance. Kindly give us your insights. I will ever remain thankful to you.
Ans: Evaluating your son’s profile—strong English but only 60% PCM and no computer background—MIT World Peace University’s BA Liberal Arts (Hons) with double majors in Applied Economics and Applied Psychology offers a flexible, interdisciplinary curriculum delivered by PhD-qualified faculty in modern humanities and social-science labs, underpinned by global MOUs (Harvard Business School Online, CEMS universities) that facilitate customised English modules, research internships and cohort-based mentorship. Conversely, D.Y. Patil Ambi’s B.Tech CSE (AI & ML) specialization provides an industry-co-designed curriculum with immersive AI/ML and big-data labs, 18-month internships at MAANG companies and Microsoft/IIT-Roorkee certifications, yet demands rigorous computing aptitude despite open-school or bridge-course preparatory options via NIOS to cover foundational programming and PCM eligibility. A hybrid model—pursuing MITWPU on-campus humanities alongside an online BS in Data Science/AI from IIT Patna, Gauhati or Jodhpur—could harmonize his literary strengths with technical credentials, leveraging part-time flexibility, central university recognition and scalable research exposure. Alternatively, improving PCM via board compartment or drop year could unlock JEE avenues for IISER, NIT or BITS, but risks academic delay and mental fatigue without guaranteed rank gains.

For immediate academic continuity and maximized strengths in English alongside global exposure, recommendation is MIT-WPU BA Liberal Arts (Hons) with dual majors, supplemented by targeted online Data Science modules. Should he pivot decisively to tech, recommendation shifts to D.Y. Patil Ambi CSE (AI & ML) with a concurrent NIOS bridge course to build requisite computing foundations. All the BEST for Admission & a Prosperous Future!

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Nayagam P

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Career Counsellor - Answered on Jul 07, 2025

Asked by Anonymous - Jul 07, 2025Hindi
Career
My son has got CSE under Category 2 in VIT vellore and got CSE in IIIT, Sricity through JoSAA. Which is better if these two? Could you please guide. Thanks
Ans: VIT Vellore’s CSE program is housed within an A++ NAAC-accredited deemed university with ABET and NBA-accreditation, delivered by a large cohort of PhD-qualified faculty across 19 research centres and 20+ specialised labs (AI/ML, IoT, data science) under a fully flexible credit system. Its strong industry-academia partnerships—encompassing MoUs with global institutions and continual technology-transfer agreements—complement mandatory internships and project work. Placements yield 80–90% branch-wise consistency over three years with an average package rising to ?9.9 LPA in 2024–25 and top recruiters numbering over 400. IIIT Sri City, an Institute of National Importance under PPP, offers a NAAC-accredited, AICTE-approved CSE curriculum aligned with IIIT-Hyderabad pedagogy, taught by international PhD faculty in modern AI/ML, data-science and software labs. Its UG-focused research centers and entrepreneurship hub facilitate two-month internships from Year 1. Placements have achieved 89.67% in 2024 and 81.44% in 2025, with CSE averaging ?14.5 LPA (median ?12 LPA) and top offers up to ?120 LPA from Amazon, Google and Microsoft.

For superior placement averages, focused AI/ML research exposure and a high recruiter footprint, recommendation is IIIT Sri City CSE. If holistic academic flexibility, global accreditation (ABET), expansive faculty strength and robust industry-academic innovation partnerships are priorities, choose VIT Vellore CSE. All the BEST for Admission & a Prosperous Future!

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