My age is 40, and gross salary is 42000, I am a father of two daughter, i live on rent with my parents and family, I am indecisive in the case whether to buy a property or to keep live on rent and start investing in Sip. However I do not pay the rent it is been borne by my father, due to some clash in understanding, after purchasing a property the liability of emi would be mine. So please suggest, Whether to keep living on rent with sip investment, or to make a permanent, place for us. Also, suggest the fund name in case of sip which can give a good growth in next 5/6 Years, As I would have liability of my elder daughter's marriage that time.

Ans: Assessing Your Situation
You are 40 years old. Your gross salary is Rs 42,000. You have two daughters. You live on rent with your parents and family. Your father bears the rent. You face a dilemma: buy a property or invest in SIPs while renting. Buying a property would mean taking on an EMI.

Financial Considerations
Buying a Property:

EMI Liability: An EMI can strain your budget.
Long-term Commitment: You need to commit to regular payments for many years.
Property Maintenance: Owning a property involves maintenance costs.
Living on Rent:

Lower Initial Cost: No need for a large down payment.
Flexibility: You can move if needed.
Investment Opportunity: Free up funds for investment in SIPs.
Advantages of SIP Investments
Regular Savings: Helps in disciplined savings.
Compounding: Benefits from the power of compounding over time.
Flexibility: You can adjust the investment amount as per your need.
Diversification: Spreads risk across various assets.
Benefits of Actively Managed Funds
Actively managed funds can be more beneficial than index funds.

Professional Management: Experts manage your investments.
Better Returns: Potential to outperform index funds.
Risk Management: Active management can mitigate risks.
Disadvantages of Index Funds
Market-Linked Returns: Performance tied to the index, with no potential for outperformance.
No Active Management: No expert adjusting your portfolio based on market conditions.
Disadvantages of Direct Funds
Direct funds might seem cost-effective but have drawbacks.

No Advisory Support: Lack of expert guidance.
Time-Consuming: Requires personal research and monitoring.
Higher Risk: Greater chance of making uninformed decisions.
Benefits of Regular Funds
Investing through a Certified Financial Planner (CFP) offers many advantages.

Expert Guidance: Personalized advice from a CFP.
Stress-Free: Less time and effort needed from your side.
Potentially Higher Returns: Professional management often yields better results.
Evaluating Your Options
Investing in SIPs:

Short-Term Goals: Use SIPs to build a corpus for your daughter’s marriage.
Long-Term Benefits: SIPs can help in wealth creation over time.
Flexibility: Adjust investments as per your financial situation.
Buying a Property:

Stability: Owning a home can provide stability.
Asset Creation: A property can be a valuable asset.
Financial Burden: EMI can be a significant financial burden.
Recommendations
Considering your situation, investing in SIPs while living on rent seems more prudent. This approach provides flexibility and allows you to save for your daughter's marriage.

Suggested SIP Approach
Diversified Equity Funds: Focus on growth potential.
Regular Monitoring: Review and adjust your investments regularly.
Professional Advice: Consult a CFP for personalized fund recommendations.
Final Insights
Investing in SIPs offers flexibility and growth potential. It helps you prepare for your daughter’s marriage without the financial burden of an EMI. Consult a Certified Financial Planner for tailored advice and fund recommendations.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in