Hello Sir, I am 38 years old and my wife is 37. We have 2 kids (1 boy 9 yr, 2nd boy 3 yr). My current investments are as below: I am swedish citizen, so I will always have to pay 30% tax on any profit as per sweden rules (If i pay 10% LTCG in india, then I have to pay remaining 20% in Sweden). Monthly in hand salary : 3L INR Home Loan : 75L (60L remaining) 75000/month EMI, loan will finish in next 6 years. Birla Sun life Classic Life Plan (Started Feb 2011, for kids education): Quarterly 15000 Aegon Life Guaranteed Income Advantage Insurance Plan (started Jan 2018, for kids education) : Yearly 97000 SIPs : (All Direct Growth) Parag Parikh flexi cap : 3000 Axis bluechip : 3000 Axis smallcap : 2000 Nippon smallcap : 5000 Tata Digital India : 1500 Mirae LArgecap & Midcap Fund : 2500 Total : 17000/month Question 1: I have capacity and want to increase my SIPs to 50000/month. Can you please help me with financial planning and review SIP portfolio and guide on which ones I can keep and which ones to replace by what fund, and which ones to increase sip amount. My risk capacity is medium to higher.
My recent interest of funds are momentum fund, PSU fund, defense fund.
Ans: You are already moving in the right direction.
Your structured approach and commitment to family goals are truly appreciated.
Let’s now build a 360-degree financial roadmap for you and your family.
We will review your existing SIPs, identify gaps, and plan for your future goals.
Your medium to high risk profile allows better flexibility in portfolio construction.
Understanding Your Financial Position
Your monthly income is Rs 3 lakhs.
Home loan EMI is Rs 75,000, and the loan will close in 6 years.
You currently invest Rs 17,000 per month via SIPs.
You have two insurance-cum-investment policies.
You want to increase your SIPs to Rs 50,000 per month.
Your investment interest is in momentum, PSU, and defense-related funds.
You are a Swedish citizen, and subject to 30% tax on capital gains globally.
Existing SIP Portfolio – Detailed Assessment
Let’s review each SIP with a focus on performance and relevance to your goals.
Parag Parikh Flexi Cap Fund – A well-diversified, stable long-term option.
Axis Bluechip Fund – Inconsistent performance recently. You may consider exiting it.
Axis Small Cap Fund – Has shown good growth. Volatile but suitable for higher risk appetite.
Nippon India Small Cap Fund – Aggressive fund, good past performance. Suitable for long term.
Tata Digital India Fund – Sector-specific. Good in bull phases, but high risk due to concentration.
Mirae Asset Large & Midcap Fund – Balanced option with strong historical performance.
Insurance-Cum-Investment Policies – Need Re-evaluation
You are paying premiums for two policies:
Birla Sun Life Classic Life Plan – Started in 2011. Returns from such plans are often lower.
Aegon Guaranteed Income Plan – Likely gives low returns and limited flexibility.
Insurance policies with investment features often provide poor growth.
They also lock your money for long periods.
Consider surrendering these policies.
Reinvest the proceeds in mutual funds through a Certified Financial Planner.
It will offer better growth potential and liquidity.
Direct Funds – Should You Continue?
Currently, you invest in direct mutual funds.
These funds seem cheaper, but they lack personalised advice.
You are on your own to review and rebalance regularly.
Also, direct funds don't offer emotional coaching during market corrections.
A Certified Financial Planner can guide you better with regular funds.
You get tailored advice and better investment discipline.
Better investment decisions matter more than lower expense ratios.
Consider moving from direct funds to regular funds through a Certified Financial Planner.
Important Note on Index Funds and ETFs
Though many investors talk about index funds, they are not ideal for all.
They just copy an index. No professional decision-making happens.
They don’t adapt to changing market conditions.
Actively managed funds offer better flexibility.
Fund managers adjust holdings based on opportunities and risks.
In your case, active funds suit better than index funds or ETFs.
Your goals need smarter allocation, not just cheaper options.
Optimised SIP Plan – Suggested Allocation (Total Rs 50,000/Month)
Here is a recommended structure for your new SIP amount:
Rs 10,000 – Diversified Flexi Cap Fund (keep Parag Parikh or another strong one)
Rs 10,000 – Actively Managed Large Cap Fund (replace Axis Bluechip)
Rs 7,500 – Axis Small Cap Fund
Rs 7,500 – Nippon India Small Cap Fund
Rs 5,000 – Mirae Asset Large & Midcap Fund
Rs 5,000 – Sectoral/Theme Fund (Digital, PSU, or Defense – limit exposure)
Keep thematic funds under 10-15% of your total SIP.
Children’s Education Planning
You are already investing with children’s education in mind.
But current insurance-based plans may not offer enough returns.
SIPs in equity mutual funds, through regular plans with expert guidance, work better.
Build two separate mutual fund goals – one for each child.
Choose funds based on goal duration and risk comfort.
Review these every year with a Certified Financial Planner.
Home Loan Strategy
You have Rs 60 lakhs outstanding on home loan.
Loan will end in 6 years.
You are managing the EMI well.
Avoid using extra funds to prepay aggressively.
Instead, invest surplus in mutual funds for better wealth creation.
Use SIPs to grow your corpus faster than loan savings.
Let compounding work for you.
Taxation – India vs Sweden
As a Swedish citizen, your global capital gains are taxed at 30%.
If you pay 10% or 12.5% tax in India, the balance 17.5% or 20% is payable in Sweden.
Be aware of the new mutual fund taxation rules in India:
Equity mutual funds: LTCG above Rs 1.25 lakh taxed at 12.5%.
Equity mutual funds: STCG taxed at 20%.
Debt mutual funds: Taxed as per your income slab.
To reduce tax impact, use long-term equity funds.
Avoid short-term exits unless really needed.
Also, use goal-based withdrawals for better control on taxation.
Emergency Fund and Insurance Review
Build an emergency fund equal to 6 months' expenses.
Keep it in liquid mutual funds or savings account.
Ensure you have term life insurance and health insurance.
Your family’s protection must not be compromised.
Do not mix insurance and investment going forward.
Keep them separate for better clarity and performance.
Goal-Based Planning – Create Clear Buckets
Define your key life goals and link investments to each.
Create separate buckets like:
Children’s higher education (10 to 15 years away)
Retirement (20+ years)
Family corpus for emergencies
Overseas visits or lifestyle goals (if any)
This clarity will give direction and reduce confusion.
Also, rebalancing becomes easier every year.
Discipline and Review – Key to Wealth Creation
Start and maintain your SIPs with discipline.
Review your portfolio every year with a Certified Financial Planner.
Make adjustments based on fund performance, market cycle, and goal changes.
Avoid frequent switching or chasing returns.
Follow a consistent approach.
This will help your money grow steadily.
Your Interest in Momentum, PSU and Defense Funds
These themes are cyclical and high-risk.
Keep your exposure limited to 10-15% of the total SIP.
Do not over-allocate even if returns look attractive.
Themes can underperform suddenly.
Have patience and diversify with core mutual funds.
Let theme-based funds be supporting characters, not the lead.
Finally
You are financially stable and willing to grow your wealth smartly.
You have a strong income and a long-term mindset.
With expert help from a Certified Financial Planner and proper planning, you can achieve all goals.
Review insurance policies, shift to mutual funds, and increase SIPs wisely.
Avoid direct and index funds. Focus on active funds with professional advice.
Stay invested for the long term with discipline and proper tracking.
Your children’s education, your own retirement, and other family goals will be secured.
You are building a strong foundation. Keep moving forward step by step.
Wishing you wealth, wisdom, and well-being.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Question by Ashley on Dec 28, 2021Hindi
