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Ramalingam Kalirajan |10924 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 11, 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

Question by Ajay on Sep 08, 2025Hindi

My age is 36. 2k SIP in SBI CONTRA, 2k SIP in NIPPON and Rs 500 SIP in MOTILAL. Apart from this 2k investment in DIGITAL GOLD and around 60k per month investment in committee where I get 10% profit in 15 Months that's around 1L. Home EMI 14K and house hold expenses 25k. Through SIP is it possible to generate 1.5Cr in next 20 years ??

Ans: You have already started investing early through SIPs and that is appreciable. At 36, you have almost 20 years to let compounding work in your favour. Even small SIPs can create a meaningful future base. But to reach Rs. 1.5 Cr, you will need careful planning and disciplined execution.

» Assessing Your Present Investments
– Current SIPs are Rs. 4,500 per month across three equity mutual funds.
– You also invest Rs. 2,000 in digital gold.
– A committee contribution of Rs. 60k monthly is substantial, but it works like informal chit funds.
– EMI of Rs. 14k and household expenses of Rs. 25k show controlled lifestyle.

» Will Current SIPs Alone Reach Rs. 1.5 Cr?
– With just Rs. 4,500 per month, even 20 years of compounding may fall short.
– Rs. 1.5 Cr is possible, but not with this SIP amount alone.
– Increasing SIP amount consistently is the key to achieving the goal.
– Your income and committee contribution suggest more investible surplus is possible.

» Importance of Increasing SIP Step by Step
– Start with Rs. 4,500 but increase SIPs every year.
– Even a small 10 to 15% rise in SIPs each year can change the outcome.
– In 20 years, this step-up strategy can push your corpus closer to the target.
– Inflation also eats into value, so Rs. 1.5 Cr today will not be same after 20 years.

» Committee Investment Assessment
– Committee or chit funds are high risk and unregulated.
– Returns may look attractive, but safety is not guaranteed.
– Instead, this Rs. 60k can partly be channelled into disciplined SIPs in mutual funds.
– Mutual funds are regulated and professionally managed with better risk-adjusted growth.

» Digital Gold Allocation
– Rs. 2,000 monthly in digital gold adds diversification.
– But gold is not a wealth creator in long term.
– Gold is more a hedge against uncertainty, not for compounding growth.
– Restrict gold allocation to not more than 10% of portfolio.

» Mutual Funds Role in Your Goal
– Equity mutual funds are the best vehicle for long-term compounding.
– They deliver inflation-beating returns when held for 15–20 years.
– Avoid index funds because they only mirror the market.
– Actively managed funds with expert decisions have higher potential to create wealth.
– Investing through regular plans with Certified Financial Planner ensures discipline and monitoring.

» Managing Loans and Expenses
– Home EMI is manageable at Rs. 14k per month.
– Household expenses are modest at Rs. 25k.
– This gives enough room to save more once committee cycles end.
– Channel freed-up amounts into SIPs to fast track wealth creation.

» Insurance Protection
– You have not mentioned term insurance or health cover.
– At your age, it is vital to have adequate term insurance.
– At least 10 to 15 times your annual income should be covered.
– Health insurance ensures savings are not disturbed during medical emergencies.

» Emergency Fund Creation
– Keep 6 months of expenses aside in liquid assets.
– This protects SIPs from being stopped during sudden needs.
– Emergency fund avoids premature redemption of mutual funds.

» Tax Angle in Mutual Funds
– Long-term equity gains above Rs. 1.25 lakh taxed at 12.5%.
– Short-term gains taxed at 20%.
– Debt funds taxed as per income slab.
– A Certified Financial Planner can design a tax-efficient SWP later.

» Lifestyle and Discipline
– Your controlled expenses show financial maturity.
– But ensure no future big-ticket loans for vehicles or luxury spends.
– Every hike in income should be translated into higher SIP amounts.

» Strategy for Reaching Rs. 1.5 Cr
– Keep current SIPs running as base.
– Slowly divert committee funds into SIPs.
– Increase SIP amount by 10 to 15% yearly.
– Keep gold allocation limited.
– Build emergency fund and ensure insurance.
– Review SIP performance every year with Certified Financial Planner.

» Realistic Expectation of Wealth Creation
– Rs. 4,500 SIP for 20 years is not enough.
– But Rs. 15k to Rs. 20k monthly SIP with step-up plan can reach Rs. 1.5 Cr.
– Discipline and consistency matter more than timing.
– With your income and surplus, this is achievable.

» Finally
Your current SIPs are a good start, but alone they may not reach Rs. 1.5 Cr. By increasing SIPs regularly, reducing risky committee exposure, and adding more structured investments, you can comfortably achieve this goal in 20 years. Discipline, insurance cover, and tax planning will ensure smooth progress.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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