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24-year-old confused about SIP investment strategy: Am I on the right track?

Anil

Anil Rego  | Answer  |Ask -

Financial Planner - Answered on Jul 31, 2024

Anil Rego is the founder of Right Horizons, a financial and wealth management firm. He has 20 years of experience in the field of personal finance.
He’s an expert in income tax and wealth management.
He has completed his CFA/MBA from the ICFAI Business School.... more
Asked by Anonymous - Jul 24, 2024Hindi
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Hi, my age is 24 next year will be 25 And I started SIP approx 8k per month it's been 2 months I've started in different funds large, small, flexi but I'm confused that I'm doing it Right or not. I'll increase it 10% or 5% every year. Please guide Thanks in advance ????????????

Ans: Hi,
You should analyse whether 8k per month is a good enough investment per month given your income. Target to invest at-least 25-30% of your monthly income. Since you are young, you can consider Mid & Small-cap funds with a small portion to large-cap funds to generate welath in the long run. You can consider to increase the investment by 10-15% every Year to build upon the Wealth.

Best Regards,
Anil Rego,
Founder & CEO,
Right Horizons
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 Kalirajan  |9198 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 02, 2024

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I am 40 year old, I have started doing SIP , some are one-time and some are per month SIP, Here is the list:- A---One time SIPs 1.Quant Small Cap Fund Direct Plan- One time invested One lakh and have kept it for 5 years. 2.Nippon India Multi Cap Fund Direct Growth-One time invested One lakh and have kept it for 5 years. 3.ICICI Prudential Small Cap Fund Direct Plan Growth-One time invested One lakh and have kept it for 5 years. 4.Kotak Nifty AAA Bond Jun 2026 HTM Index Fund Direct Growth B--Monthly SIPs 1.HDFC Mutual fund - 10,000 per month 2.Quant Small Cap Fund Direct Plan- 15,000 per month 3.SBI PSU Direct Plan Growth-10,000 per month. My aim is to make 50 Lakhs in 5 Years, am i actually contributing in the right fund or do I need to change, I have taken high risk. Thank you Sunny Sinha
Ans: It's great that you're investing systematically through SIPs to achieve your financial goals. However, it's essential to review your investment strategy periodically to ensure it aligns with your objectives and risk tolerance.

Considering your aim to accumulate 50 lakhs in 5 years and your willingness to take high risk, here are some considerations:

One-time SIPs: Investing in small-cap and multi-cap funds can potentially offer higher returns but also comes with higher volatility. Given your relatively short investment horizon of 5 years, ensure you're comfortable with the risk associated with these funds.
Monthly SIPs: Continuing SIPs in small-cap and PSU funds aligns with your risk appetite. However, it's crucial to monitor the performance of these funds regularly and be prepared for market fluctuations.
Review and Adjust: Periodically review the performance of your funds and assess if they're on track to meet your goal of accumulating 50 lakhs in 5 years. If necessary, consider rebalancing your portfolio or switching to funds with better growth potential and risk-adjusted returns.
Diversification: While high-risk investments have the potential for higher returns, it's essential to diversify your portfolio to mitigate risk. Consider adding funds from different categories such as large-cap or balanced funds to achieve diversification.
Consult a Financial Advisor: Given the complexity of investing and your specific financial goals, consider consulting with a financial advisor who can provide personalized advice tailored to your needs and objectives. They can help you evaluate your investment strategy, identify any gaps or areas for improvement, and make informed decisions to maximize your returns while managing risk.
By staying informed, regularly reviewing your portfolio, and seeking professional guidance when needed, you can increase the likelihood of achieving your financial goals effectively.

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Ramalingam Kalirajan  |9198 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 06, 2024

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Sir/Madam, I am 27 years, 6 months ago I started doing sip of 10k total, five mutual funds 2k each, 1. Quant small cap 2. Parag parikh flexi cap 3. Kotak equity opportunities 4. Parag parikh elss tax saver 5. HDFC dividend yield I know I started a bit late, but now I am full stable and disciplined to be consistent and increase the sip amount by time to time. Am I going right, are my chosen funds are good, or I should change, please help and guide, give corrective suggestions
Ans: It's fantastic to see your proactive approach to investing at such a young age. Let's delve into your portfolio and see how you're doing:

• Starting a SIP at 27 is a commendable step towards building wealth for your future. Remember, it's never too late to begin investing, and your consistency will be key to your success.

• Your choice of mutual funds reflects a diversified approach, covering different sectors and market capitalizations. This is a smart strategy as it spreads your risk across various segments of the market.

• Investing in small-cap, flexi-cap, equity opportunities, ELSS tax saver, and dividend yield funds provides you with exposure to different investment styles and strategies. However, it's essential to review these funds periodically to ensure they continue to align with your financial goals.

• Consider assessing the performance of each fund against its benchmark and peers to gauge whether they are meeting your expectations. Look for consistency in returns and fund management expertise.

• As you progress in your investment journey and your financial situation evolves, you may consider increasing your SIP amount gradually. This will accelerate the growth of your portfolio over time.

• Additionally, stay updated with market trends and changes in economic conditions to make informed decisions about your investments. Keeping yourself informed will help you navigate any market volatility effectively.

• If you're unsure about whether your chosen funds are the right fit for you, don't hesitate to seek advice from a Certified Financial Planner. They can provide personalized recommendations based on your financial goals, risk tolerance, and investment horizon.

In conclusion, you're off to a great start with your SIP investments. Stay disciplined, continue to educate yourself about investing, and periodically review your portfolio to ensure it remains aligned with your objectives. With patience and perseverance, you're on track to build a strong financial foundation for the future. Keep up the excellent work!

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Ramalingam

Ramalingam Kalirajan  |9198 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 14, 2024

Asked by Anonymous - May 08, 2024Hindi
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Hi Team, I am 35 and have below SIPs. Please review them and let me know if i have to make any changes. Parag Pareikg flexi cap fund - 10000 Motilal Oswal S&P 500 index fund - 2500 Quant Small Cap Fund- 5000 PGIM India Mid Cap Opportunities Fund- 5000 SBI Banking & Financial Services Fund- 2500. Focus is to continue SIP for longterm
Ans: It's great to see your commitment to investing for the long term. Let's review your current SIP portfolio and discuss if any adjustments are needed to align with your goals.

Evaluating Your SIPs
Your portfolio consists of a mix of equity funds focusing on different market segments. Here's a brief overview of each fund:

Parag Parikh Flexi Cap Fund (Rs. 10,000): Known for its flexible investment approach across market caps and sectors, providing diversification and potential for long-term growth.

Motilal Oswal S&P 500 Index Fund (Rs. 2,500): Provides exposure to the top 500 companies in the US stock market, offering diversification and growth potential in the world's largest economy.

Quant Small Cap Fund (Rs. 5,000): Invests in small-cap companies with high growth potential, suitable for investors with a higher risk tolerance and longer investment horizon.

PGIM India Mid Cap Opportunities Fund (Rs. 5,000): Focuses on mid-cap companies with strong growth prospects, offering potential for capital appreciation over the long term.

SBI Banking & Financial Services Fund (Rs. 2,500): Invests in companies operating in the banking and financial services sector, benefiting from the growth potential of the Indian financial industry.

Recommendations for Optimization
Your portfolio is well-diversified across different market segments, which is essential for long-term growth. However, here are a few suggestions to consider for further optimization:

Monitor Performance: Regularly review the performance of each fund and assess whether they continue to meet your investment objectives. Consider replacing underperforming funds or reallocating assets based on changing market conditions and your financial goals.

Assess Risk Tolerance: Ensure that your portfolio's risk level aligns with your risk tolerance and investment horizon. While small-cap and mid-cap funds offer higher growth potential, they also come with increased volatility. Make sure you're comfortable with the level of risk in your portfolio.

Consider International Diversification: While the Motilal Oswal S&P 500 Index Fund provides exposure to the US stock market, you may consider adding more international diversification to your portfolio. Explore options such as global equity funds or international index funds to broaden your investment horizon.

Review Sectoral Exposure: Given your investment in the SBI Banking & Financial Services Fund, be mindful of overexposure to a single sector. Monitor the fund's performance and consider diversifying across sectors to reduce concentration risk.

Conclusion
Overall, your SIP portfolio is well-structured and positioned for long-term growth. By regularly reviewing and optimizing your investments, you can maximize returns and achieve your financial goals with confidence.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9198 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Oct 15, 2024

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I am investing in parag parikh flexi , quant small cap, kotak multi asset fof, nippon small cap and icici all seasons bond fund and i am 25 started my sip when i was 23 and i have accumulated 3.4 lakhs am i am doing the right way
Ans: Starting your SIP journey at 23 is a smart decision. It gives you a long horizon to ride through market cycles. This helps in compounding your investments over time.

You’ve accumulated Rs 3.4 lakhs already, which shows discipline in your savings. It’s great to see your commitment. Let’s take a closer look at your chosen funds and their suitability based on your goals.

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Diversified Fund Selection: Evaluating the Mix
You’ve chosen funds across different categories. Each fund has a specific role in your portfolio. But there are things to consider for long-term efficiency.

Let’s evaluate the categories and assess the advantages and disadvantages.

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Flexi Cap Funds: Parag Parikh Flexi Cap
Flexi Cap funds give flexibility to the fund manager. They can invest across large, mid, and small caps. This approach allows better returns during market ups and downs.

The fund you’ve chosen is well-known. However, the performance relies heavily on the manager’s strategy. This means your success depends on how the fund manager shifts between caps.

For a 25-year-old like you, it’s a good choice. But remember, you need to keep an eye on its performance.

?

Small Cap Funds: Quant Small Cap & Nippon Small Cap
Small-cap funds come with high growth potential. But they also carry more risk. They are suitable for young investors like you. But make sure you can tolerate volatility.

Both Quant and Nippon Small Cap funds can generate strong returns over time. However, market downturns may significantly affect them. Holding too many small caps may also increase risk. Consider reducing exposure to small caps to balance your portfolio.

For stability, try not to have more than 20-30% in small caps.

?

Multi Asset Funds: Kotak Multi Asset Fund of Funds
Multi-asset funds spread your investment across different asset classes like equity, debt, and gold. These funds reduce risk by diversifying your portfolio. However, being an FoF (Fund of Funds), the expense ratio may be higher.

Although it adds a layer of safety, multi-asset funds may limit your growth potential. For someone with a long investment horizon like you, direct equity funds may yield better results. If you prefer stability, it’s a reasonable choice.

But, focus more on equity-heavy funds at this stage.

?

Debt Funds: ICICI All Seasons Bond Fund
Debt funds, like ICICI All Seasons Bond Fund, are meant for conservative investors. They offer stable returns but less growth compared to equity.

At your age, having too much in debt can hold back your growth. It’s wise to include some debt for safety. But limit it to 10-15% of your portfolio. Given your time frame, equity-oriented funds would work better for wealth creation.

You can keep this fund but ensure your overall exposure to debt doesn’t exceed 15%.

?

Analyzing Portfolio Allocation: Equity vs Debt Balance
Your current portfolio leans more toward equity, which is perfect for your age. Equity funds tend to perform better in the long term. The small-cap funds add aggressive growth potential. However, they also increase risk.

Since you are 25, it’s the best time to take some risk. But, too much exposure to small caps may lead to higher volatility. Ideally, consider adding large and mid-cap funds to maintain a balance between growth and safety.

Remember, having a mix of large caps, mid-caps, and small caps will ensure you capture growth while protecting your portfolio from wild swings.

?

Actively Managed Funds vs Index Funds
It’s good that you haven’t invested in index funds. Index funds follow the market, which may not provide high returns in volatile conditions. They don’t give you the benefit of active fund management.

Active funds, like the ones you’ve chosen, allow fund managers to take advantage of market opportunities. This makes them a better choice for long-term investors like you. You can expect better risk-adjusted returns through active management.

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Why Regular Funds Are Better Than Direct Funds
It’s worth considering if you’ve chosen regular funds or direct funds. Direct funds may seem to offer lower expenses. But they often miss the expert guidance you get from a Certified Financial Planner (CFP).

When investing through a CFP, you get ongoing support, portfolio monitoring, and rebalancing. These services help in aligning your investments with your financial goals. With regular funds, you can make the most of professional advice to maximize your returns.

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Taxation Rules for Mutual Funds
Being aware of mutual fund taxation is essential to avoid surprises later. For equity mutual funds, the Long-Term Capital Gains (LTCG) tax is 12.5% for gains above Rs 1.25 lakh. Short-Term Capital Gains (STCG) are taxed at 20%.

For debt funds, both LTCG and STCG are taxed as per your income tax slab. This could affect your returns, especially if your income tax slab is high. This is why it’s crucial to balance your equity-debt allocation based on your tax situation.

You are still young, so equity-focused investments should dominate your portfolio.

?

SIP: A Powerful Tool for Long-Term Wealth Creation
You’ve adopted the Systematic Investment Plan (SIP) strategy, which is great. SIP allows you to invest small amounts regularly and benefit from market fluctuations. It also reduces the risk of timing the market.

For a long-term goal of 20-25 years, SIPs will help you accumulate wealth slowly and steadily. The key is to continue investing consistently and avoid stopping during market downturns. This ensures you benefit from rupee cost averaging.

Keep increasing your SIP amounts as your income grows. This will boost your wealth-building process.

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Should You Open a Demat Account in Your Daughter's Name?
Opening a demat account in your daughter’s name seems like a good idea. But there are some points to consider.

She’s currently 7 years old. You’ll be managing the account on her behalf. The gains will be clubbed with your income and taxed accordingly.

Managing multiple accounts can become complicated. Instead, you can continue investing in your name. Later, you can pass it on to her when she turns 18.

Keep the investment focused on long-term goals like her education or marriage. You can maintain the funds in your name for now. You can also create a trust fund in the future if needed.

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Final Insights: Aligning with Your Goals
Overall, you are on the right path. You’ve made some solid investment choices at an early age. But here are some points to enhance your strategy:

Consider reducing your exposure to small-cap funds. Add more mid-cap or large-cap funds for stability.

Limit debt fund allocation to 10-15% of your portfolio. Focus more on equity for long-term growth.

Stay invested in actively managed funds for better returns. Avoid index funds due to their passive nature.

Ensure you invest through a Certified Financial Planner to get the best advice. Regular funds offer more value with professional support.

Continue your SIPs, increase your amounts, and stay disciplined. This will help you achieve your financial goals smoothly.

Keep reviewing your portfolio every year. Adjust your allocation based on your evolving goals and risk appetite.

?

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |9198 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 24, 2025

Asked by Anonymous - Jun 24, 2025Hindi
Money
Hi Sir, I am a 40 year old woman. I am a mother of 2 daughters. I have a montly income of 70,000. I have invested in parag parikh flexi cap :: 7k, aditya birla sunlife digital india fund::2k, quant small cap:: 1k. I also invest montly 1k into SSS and 1k into PPF. Household expenses take upto 10k per month and try saving monthly 5k as cash for emergency fund which i have just started and approx 4lakhs towards kids education. I want to invest in good gold ETF scheme. Kindly chk my investment portfolio and suggest changes on the existing fud and any better funds to go for. My family of 4 is currently dependent on my income.
Ans: You are doing a great job managing your responsibilities as a mother and sole earner. Taking care of your family, while also investing for the future, is truly admirable. Let us now assess your overall financial situation from a 360-degree perspective.

Income and Expense Review

Your monthly income is Rs. 70,000.

Household expenses are limited to Rs. 10,000. That is very good control.

You are saving Rs. 5,000 monthly in cash for emergencies. This is a positive start.

You have Rs. 4 lakhs earmarked for children’s education. Very thoughtful planning.

Total committed monthly investments are Rs. 12,000.

You have struck a fair balance between expenses and savings.

Let us evaluate your investments and suggest improvements.

Review of Current Mutual Fund Investments

You are investing in 3 mutual fund schemes:

A flexi-cap fund (Rs. 7,000)

A sectoral tech fund (Rs. 2,000)

A small-cap fund (Rs. 1,000)

Here is the assessment:

1. Flexi Cap Fund (Rs. 7,000)

This category gives fund manager freedom to invest across large, mid and small caps.

You have chosen a well-diversified fund type. This is suitable for medium to long term.

Continue with this fund. Keep monitoring annually for performance.

2. Sectoral Tech Fund (Rs. 2,000)

Sector funds are high-risk. They lack diversification.

They perform only in specific market cycles. Not suitable for long-term goals alone.

Suggest you stop SIP here gradually. Shift this amount to diversified equity fund.

3. Small Cap Fund (Rs. 1,000)

Small caps can give high returns but with high volatility.

It is good you have kept the exposure small.

Retain it if your risk appetite allows. Avoid increasing it further.

Retirement and Long-Term Security Planning

As the sole breadwinner, your financial safety is very important.
You are 40 now. Planning for retirement should be given high priority.

Suggestions:

Start a separate SIP for retirement purpose.

Choose a diversified multi-cap or large-cap biased fund.

Invest at least Rs. 3,000 monthly if possible.

This can grow into a strong retirement base over 15-20 years.

Do not depend on EPF or PPF alone.

Children’s Education Fund Planning

You have already saved Rs. 4 lakhs. That is a good start.
But children’s education needs can be higher in future.

Suggestions:

Continue SIP in a good diversified equity mutual fund.

Allocate Rs. 3,000 monthly just for this goal.

Stick to funds that focus on large and mid-cap segments.

Avoid thematic or sector funds for this purpose.

Review portfolio annually to switch if performance drops.

Emergency Fund Planning

You have just started building this. That is great.

Suggestions:

Target 6 to 12 months of expenses as emergency fund.

Since your expenses are Rs. 10,000, aim for Rs. 60,000 to Rs. 1.2 lakhs first.

Store in liquid mutual fund or bank RD or savings account.

Avoid using this fund unless true emergency arises.

Gold Investment Strategy

You asked about gold ETF investments.

Let’s understand the points first.

Disadvantages of Index Funds and ETFs:

ETFs and index funds are passively managed.

They just copy an index or a commodity. No fund manager decisions.

No flexibility to exit underperforming stocks.

These funds underperform in sideways or bear markets.

Gold ETFs have no income generation ability.

They carry expense ratios but no compounding benefits like equity funds.

Gold prices stay flat for years sometimes.

Better Alternative – Actively Managed Gold Mutual Funds:

Choose gold mutual funds with active management.

SIP route reduces gold volatility risk.

You can invest Rs. 1,000 monthly for asset allocation purpose.

Limit gold investment to 5-10% of total portfolio.

Use gold as a hedge, not wealth creation.

SSS and PPF Contribution Review

You are investing Rs. 1,000 monthly in each.

These are safe and government-backed. Good for capital protection.

But returns are lower than equity mutual funds.

Consider this portion more for safety than wealth growth.

Continue if you want low-risk component in your plan.

Do not increase these amounts unless tax benefit is needed.

Cash Flow and Budgeting Evaluation

Monthly investments: Rs. 12,000 (Mutual funds + PPF + SSS)

Monthly saving in cash: Rs. 5,000

Monthly fixed expense: Rs. 10,000

That leaves you with nearly Rs. 43,000 monthly for flexible use.
If possible, increase mutual fund SIPs by Rs. 2,000-3,000 every 6 months.
This will build long-term wealth faster.

Insurance and Risk Coverage (Assuming You Have None)

As you did not mention life or health insurance, this needs urgent attention.

Life Insurance:

You are the only earning member.

Buy a term plan of at least Rs. 50 lakhs to Rs. 1 crore.

This will protect your family if anything happens to you.

Only choose pure term insurance. No investment-linked policy.

Health Insurance:

Cover the entire family under one floater policy.

Go for Rs. 10 lakh coverage at minimum.

Avoid relying only on employer health cover (if any).

Accident Cover:

Low premium personal accident policy is also helpful.

Helps in case of temporary or permanent disability.

Tax Saving Suggestions

PPF and SSS qualify under 80C.

Life insurance premiums also help.

Equity Linked Savings Schemes (ELSS) offer better returns and tax benefits.

You can allocate Rs. 1,000 to Rs. 2,000 per month to ELSS.

Keep it locked for 3 years and review after that.

Discipline and Investment Strategy Tips

Stick to SIPs even when market is down.

Do not stop or switch funds too frequently.

Rebalance your portfolio once a year.

Increase SIPs gradually with income rise.

Keep asset mix – equity, debt, gold – in balance.

Always keep investment and insurance separate.

Avoid Direct Mutual Funds Route

Many people invest in direct mutual funds.
But this is risky without expert guidance.

Why Avoid Direct Funds:

You lose the support of a Certified Financial Planner.

No one tracks performance for you.

No help for rebalancing or goal tracking.

A regular plan through a Certified Financial Planner gives full service.

It helps you make decisions without emotional errors.

Finally

You are already doing better than many people with your planning.

Continue with your flexi-cap and small-cap funds.

Stop the sectoral tech fund and switch to a diversified equity fund.

Avoid gold ETFs. Choose an actively managed gold mutual fund instead.

Start a SIP for retirement and children's higher education.

Protect your family with term and health insurance urgently.

Slowly build your emergency fund to reach Rs. 1 lakh minimum.

Increase SIPs every year as your income rises.

Don’t mix insurance and investment.

Work with a Certified Financial Planner to review annually.

You are on the right path. Just a few small corrections will give you big results over time.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |9198 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 24, 2025

Money
Hi, Need your help to review my SIP allocation: Im 36 y/o with take home post tax 2.8L per monthly. My SIP portfolio looks like this(monthly) Digital gold investment : 35k SBI contra fund growth - 10k HDFC flexi cap fund - 10k HDFC gold ETF -10k SBI bluechip direct plan - 10k Aditya Birla sunlife direct fund -10k Bandhana small cap - 10k Plus I have invested in shares and also have few office RSUs. My immediate plan is to go for home in next 2-3 years and post that save for kids education plus retirement.Please review and suggest few more investment plans. Thanks S
Ans: You are earning well and investing regularly. This is already a good beginning. Now, let’s deeply analyse your SIP allocation and overall investment structure from a 360-degree perspective. Let’s assess your portfolio, identify gaps, and offer suggestions in a simple, structured manner.

Monthly Income and Savings Capacity
Take-home income is Rs. 2.8 lakhs per month.

Your current monthly SIP is Rs. 85,000.

This is nearly 30% of your income, which is excellent.

You also hold RSUs and direct shares, which adds further value.

You are thinking long term – home, child’s education, and retirement. That’s very good.

Let’s evaluate each investment one by one now.

Digital Gold – Rs. 35,000/month
This is a high monthly investment in digital gold.

Gold should not exceed 10-15% of total long-term portfolio.

Digital gold doesn’t give regular income or compounding benefits.

It has storage safety, but no taxation benefit.

You are also investing in gold ETF. That doubles exposure.

Better to reduce digital gold to Rs. 5,000–7,000 per month.

Shift balance to diversified mutual funds with long-term potential.

HDFC Gold ETF – Rs. 10,000/month
Another gold-based investment. This overlaps with digital gold.

You are over-allocated to gold. This limits long-term growth.

Gold should be a hedge, not a primary asset.

Please stop this SIP.

Redirect this Rs. 10,000 into equity mutual funds.

SBI Contra Fund – Rs. 10,000/month
Contra funds follow contrarian investing style.

They take risky sectoral bets.

They are not suitable for core portfolio.

Volatility can be very high in short and medium term.

You can consider reducing this to Rs. 5,000.

Redirect balance to more stable fund types.

HDFC Flexi Cap Fund – Rs. 10,000/month
Flexi-cap category offers diversification across market caps.

They allow fund manager flexibility.

This is a good choice for core allocation.

You can continue this SIP.

Increase gradually if gold allocation is reduced.

SBI Bluechip Direct Plan – Rs. 10,000/month
Important Concern:

You have invested in direct plan of this fund.

Direct plans offer lower expense ratio.

But they offer no service, review, or guidance.

There is no certified financial planner in between.

You are missing goal-based planning and rebalancing.

This can hurt your portfolio in long run.

Why Regular Plan via MFD with CFP is better:

Regular plan connects you to a CFP-certified MFD.

They help design goal-specific investment strategy.

They assist in tax planning and review periodically.

You will also get behavioural coaching during market falls.

With a direct plan, these services are absent.

Action Point:

Switch to regular plan of the same scheme via a certified MFD.

They will support with planning, not just execution.

Aditya Birla Sun Life Direct Fund – Rs. 10,000/month
Concern again:

Another direct plan investment.

Disadvantages are same as mentioned above.

No access to guided review, advisory, and rebalancing.

Regular plans are more useful when backed by a CFP-certified MFD.

Suggestion:

Stop SIP in direct plan.

Restart in regular plan through a qualified MFD.

You will benefit more in long-term wealth creation.

Bandhan Small Cap Fund – Rs. 10,000/month
Small cap funds can be volatile in short term.

But they deliver well in long term.

However, allocation should be limited to 10–15%.

Maintain current SIP amount.

Don’t increase beyond this unless risk tolerance is high.

Investment in Shares and RSUs
Individual stocks are risky if not actively monitored.

RSUs are good, but depend on employer performance.

Diversification becomes weak if you rely too much on company shares.

Regular profit booking and shifting to mutual funds is wiser.

Goals: House in 2–3 Years
This is a short-term goal.

Equity mutual funds are not suitable for this time frame.

Avoid investing further for this goal in equity or gold.

Start a separate SIP in ultra-short duration debt fund or RD.

Keep your down payment in 100% safe, low-volatility product.

Goals: Children’s Education
This is a long-term goal, assuming child is under 10.

Best suited for diversified equity mutual funds.

You can also consider child-specific mutual fund plans.

Avoid ULIP or insurance-linked products.

SIP through a CFP-guided MFD is most suitable.

Retirement Planning
At 36, you have 20–25 years to build retirement corpus.

Retirement corpus needs growth, safety, and inflation beating returns.

Equity mutual funds through regular SIPs are ideal.

Consider flexi-cap, large & mid-cap, and balanced advantage funds.

NPS can also be added for extra tax-saving and retirement focus.

Don't rely on employer RSUs alone for retirement.

Problems with Index Funds
You haven’t mentioned index funds. But if you ever consider them:

Index funds have no active management.

They can’t protect during market crashes.

They invest in poor-quality stocks just because they are in the index.

They cannot exit risky sectors in a falling market.

You get average returns, not outperformance.

Active Funds are Better Because:

They are managed by experienced fund managers.

They adapt to changing economic and market conditions.

They avoid poor-performing stocks.

They give opportunity to beat index returns.

A certified financial planner will always use active funds for long-term wealth.

Summary of Actions to Take
Reduce digital gold SIP from Rs. 35,000 to Rs. 5,000–7,000.

Stop gold ETF SIP of Rs. 10,000 fully.

Cut contra fund SIP to Rs. 5,000.

Exit direct plans and move to regular plans with help of a certified MFD.

Allocate more to flexi-cap, large & mid-cap, and hybrid equity funds.

Keep short-term goals like house purchase in debt instruments.

Track stock exposure and reduce reliance on RSUs.

Continue small cap SIP but don’t over-allocate.

Create separate SIPs for child’s education and retirement.

Final Insights
Your income level gives you strong investment potential.

You are already saving a good percentage monthly. Very good discipline.

But allocation needs reshaping to remove concentration in gold.

Direct plans offer no advisory help. That creates blind spots.

Actively managed mutual funds via certified MFDs give goal-based structure.

For short-term needs like a home, equity is not suitable.

For long-term goals like retirement and education, equity mutual funds are best.

A certified financial planner can create personalised roadmaps for each goal.

This kind of structured, reviewed investment can ensure you reach your goals without stress.

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

...Read more

Ramalingam

Ramalingam Kalirajan  |9198 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 24, 2025

Asked by Anonymous - Jun 23, 2025Hindi
Money
I am 38 years old,I have a baby boy 9 months old ,where can I invest for his future,also I have to plan for a home,My annual income is around 15 lakhs.No loans or Emi s
Ans: You are 38, with a 9-month-old baby boy. Your annual income is Rs. 15 lakhs. You have no loans or EMIs. You want to plan for your child’s future and buy a home.

This is a very good stage to start. You have good cash flow and zero debt. With structured planning, you can create wealth for your family. Let's look at your goals in a detailed and simple way.

Understand Your Financial Priorities First
Your child’s future.

Buying a home.

Creating an emergency reserve.

Saving for your retirement.

You need to balance these well. Investing without clarity may create confusion later.

Begin With a Strong Emergency Fund
Keep at least 6 to 12 months’ expenses in a liquid fund.

This includes rent, food, medical, school, and monthly needs.

Park this money in a low-risk mutual fund, not in a savings account.

Don’t invest this fund in equity mutual funds or ULIPs.

Emergency fund gives peace of mind during job loss or health issues.

Take Health Insurance Before Investing
Cover yourself, your spouse, and your baby.

Go for a family floater policy with at least Rs. 10 lakh sum insured.

Pick a reputed insurer with fast claim settlement.

Don’t rely only on employer-provided cover. Personal policy is a must.

Secure Your Family With Term Insurance
A term insurance of Rs. 1 crore or more is needed.

Premium is low if you buy early.

Buy till your child turns 25 or you reach 60.

This will protect your child’s future in your absence.

Create a Dedicated Child Education Fund
You have around 17 years to plan. Start now to gain from compounding.

Ideal Investment Approach:
Start SIP in diversified equity mutual funds.

Choose funds with long-term performance across market cycles.

Review every 12 months with a Certified Financial Planner.

Don’t invest in ULIPs or traditional LIC policies.

If you already have them, it is better to surrender and reinvest in mutual funds.

Why Mutual Funds Are Better for Child’s Education
Mutual funds offer higher growth than fixed deposits or LIC.

Equity funds beat inflation in the long term.

You get flexibility, transparency, and liquidity.

Avoid child insurance plans. They give poor returns and low coverage.

Why You Should Avoid Index Funds for Child Goals
Index funds are passive. They copy the market. No fund manager is involved.

Problems with index funds:

Cannot manage risk actively.

Underperform in falling markets.

No protection against poor-performing sectors.

Instead, go with actively managed equity funds. A good fund manager can avoid weak sectors and ride strong trends.

This is very helpful in long-term goals like child education.

Why Direct Funds May Not Suit You
Direct funds have lower expense ratio. But they come with responsibility.

Disadvantages of Direct Funds:

No guidance from an expert.

You have to do all research and portfolio rebalancing.

You may exit too early or stay too long due to lack of advice.

Instead, invest through a Certified Financial Planner via a regular plan. He will:

Monitor your goals.

Switch your funds when needed.

Keep your emotions in check during market ups and downs.

The small cost of regular plan gives huge value in goal achievement.

Home Purchase Planning – Do This Smartly
First, decide how much house you want to buy.

Set a timeline for buying (3 years, 5 years, etc).

If buying within 3 years, use low-risk debt mutual funds.

Don’t invest this amount in equity mutual funds or stocks.

For a longer horizon (5+ years), use aggressive hybrid mutual funds:

65–80% equity + 20–35% debt.

Less risky than pure equity but better than FD.

As you get closer to your home buying date, slowly move funds to debt mutual funds.

Avoid Real Estate as Investment
Buy a house for use, not for investment.

Real estate has problems:

Low liquidity.

High maintenance costs.

Poor transparency.

Long holding period.

For wealth building, mutual funds are better.

Set Up a SIP-Based Monthly Investment Plan
Assume you can invest Rs. 50,000 per month from your income.

You can split this way:

Rs. 25,000 in equity mutual funds for child education.

Rs. 15,000 in hybrid mutual funds for future home.

Rs. 10,000 in debt mutual funds for short-term goals.

If you start early and stay disciplined, you can reach all goals easily.

Keep Reviewing With a Certified Financial Planner
Financial plans are not fixed. Life situations change.

Review your goals every 12 months.

Increase SIP amount with income rise.

Track your funds’ performance regularly.

Rebalance when required.

Only a Certified Financial Planner can do this professionally and without bias.

Taxation Rules You Should Know (For Awareness)
Equity mutual funds: If gains are above Rs. 1.25 lakh in a year, 12.5% tax.

Gains below that – no tax.

Debt mutual funds: Taxed as per your income slab.

So, for child and home goals, keep these tax rules in mind while selling.

Avoid Annuities or Insurance-Cum-Investment Plans
They give low returns (less than 5–6%).

Your money gets locked for many years.

Inflation eats away the value.

Only term insurance + mutual funds work best.

Some Smart Tips to Stay Financially Strong
Don’t mix insurance with investment.

Don’t chase returns. Focus on goals.

Don’t panic in a market crash.

Don’t borrow for luxury.

Don’t take advice from unqualified agents.

Always take help from a Certified Financial Planner for better results.

Finally
You are already doing many things right. You have no debt. You are clear on goals.

Protect your family first with term and health cover.

Build an emergency fund now.

Invest monthly through SIPs in the right mutual funds.

Keep your child’s future as a separate goal.

Don’t delay home planning. Link it to a 3–5 year goal.

Get expert help from a certified person.

Follow this structured path for 2 decades. You will create wealth, peace, and freedom.

Stay disciplined. Keep reviewing. Avoid shortcuts.

You will be financially free. And your child will thank you one day.

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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