Home > Money > Question
Need Expert Advice?Our Gurus Can Help
Sunil

Sunil Lala  | Answer  |Ask -

Financial Planner - Answered on Apr 10, 2024

Sunil Lala founded SL Wealth, a company that offers life and non-life insurance, mutual fund and asset allocation advice, in 2005. A certified financial planner, he has three decades of domain experience. His expertise includes designing goal-specific financial plans and creating investment awareness. He has been a registered member of the Financial Planning Standards Board since 2009.... more
Satish Question by Satish on Apr 02, 2024Hindi
Listen
Money

Currently, I am 50 years, with two kids - one kid 10+1 and a second kid 5 grade. Till now I have invested 31 lakh in MF with 13 Lakhs as capacity gain + 32 in PF + 3 lakhs in FD + 2 CR as term policy ( still 7 lakhs to be paid to cover death coverage till 75 years) + 1CR as personal accidental policy every year payment of 10K+ 5 lakhs LIC Death coverage + few other polices (5) + Own house + two open plots current liabilities 25 lakhs in EMI and 50 K monthly investing in MF, how much money I need to invest further more to have 5 CR as corpus at the age of 58

Ans: What is the current market price of your 22 plots because that would also be the part of corpus
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.
Money

You may like to see similar questions and answers below

Ramalingam

Ramalingam Kalirajan  |8377 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 11, 2024

Money
Hi my age is 34 earning 1.30l per month, my saving are monthly 26k in different sips, 12.5k monthy ppf, 2 policies total amount of 15-16lakhs paying 30 and 70k premium yearly ( mature in 2035), investing montly in gold - 500 and 50,000 yearly in nps. Rest 5 to 10k in saving account. I have 2 questions 1.Should I need to invest more if i want total corpus of 3 crore? 2. I have 2 daughters so i should have enough amount for their education and their marriage
Ans: Planning for Your Financial Future: Building a Rs 3 Crore Corpus and Securing Your Daughters' Futures

Congratulations on your disciplined saving and investment habits. Your current financial strategy is commendable, and it’s clear you’re committed to securing a prosperous future for yourself and your daughters. Let’s address your questions and develop a comprehensive plan.

Understanding Your Current Financial Situation
To start, let’s review your existing financial commitments and investments:

Monthly Income: Rs 1,30,000
Monthly Savings and Investments:
SIPs: Rs 26,000
PPF: Rs 12,500
Policies: Rs 30,000 and Rs 70,000 annually (equivalent to Rs 8,333 per month)
Gold: Rs 500
NPS: Rs 50,000 annually (equivalent to Rs 4,167 per month)
Savings Account: Rs 5,000 to Rs 10,000
Your total monthly investments sum up to approximately Rs 51,500, excluding the savings account contributions.

Setting Clear Financial Goals
You have two primary goals:

Accumulating a Rs 3 Crore Corpus
Ensuring Funds for Your Daughters’ Education and Marriage
Goal 1: Accumulating a Rs 3 Crore Corpus
Calculating the Future Value of Your Investments
To determine if you need to invest more, we must project the future value of your current investments. Let’s assume an average annual return of 12% for your SIPs, considering they are likely invested in equity mutual funds.

Formula for Future Value of SIP:

FV = P * [(1 + r/n)^(nt) - 1] / (r/n)

Where:

P = Monthly investment (Rs 26,000)
r = Annual interest rate (0.12)
n = Number of times interest is compounded per year (12)
t = Number of years (26, assuming retirement at age 60)
Future Value Calculation for SIPs
Using the formula above:

FV = 26,000 * [(1 + 0.12/12)^(12 * 26) - 1] / (0.12/12)

FV = 26,000 * [(1 + 0.01)^(312) - 1] / 0.01

FV = 26,000 * [(1.01)^312 - 1] / 0.01

FV = 26,000 * [36.786 - 1] / 0.01

FV = 26,000 * 35.786 / 0.01

FV = 26,000 * 3,578.6

FV = 9,30,43,600

So, the future value of your SIPs after 26 years would be approximately Rs 9.3 crores.

Future Value Calculation for PPF
The PPF has a fixed rate of return. Assuming an average annual return of 7.1%:

Formula for Future Value of PPF:

FV = P * [(1 + r/n)^(nt) - 1] / (r/n)

Where:

P = Monthly investment (Rs 12,500)
r = Annual interest rate (0.071)
n = Number of times interest is compounded per year (1)
t = Number of years (15, due to PPF maturity period)
FV = 12,500 * [(1 + 0.071/1)^(1 * 15) - 1] / (0.071/1)

FV = 12,500 * [(1 + 0.071)^15 - 1] / 0.071

FV = 12,500 * [(1.071)^15 - 1] / 0.071

FV = 12,500 * [2.847 - 1] / 0.071

FV = 12,500 * 1.847 / 0.071

FV = 12,500 * 26.014

FV = 3,25,175

So, the future value of your PPF after 15 years would be approximately Rs 3.25 lakhs.

Future Value Calculation for NPS
NPS investments typically yield around 10% annually. Assuming the annual contribution is Rs 50,000:

Formula for Future Value of NPS:

FV = P * [(1 + r/n)^(nt) - 1] / (r/n)

Where:

P = Monthly investment (Rs 4,167)
r = Annual interest rate (0.10)
n = Number of times interest is compounded per year (1)
t = Number of years (26)
FV = 4,167 * [(1 + 0.10/1)^(1 * 26) - 1] / (0.10/1)

FV = 4,167 * [(1 + 0.10)^26 - 1] / 0.10

FV = 4,167 * [(1.10)^26 - 1] / 0.10

FV = 4,167 * [10.835 - 1] / 0.10

FV = 4,167 * 9.835 / 0.10

FV = 4,167 * 98.35

FV = 4,09,445

So, the future value of your NPS after 26 years would be approximately Rs 4.09 lakhs.

Additional Investments
Your existing policies (LIC, ULIP) may not offer the best returns. Consider surrendering them and redirecting the premiums into mutual funds for potentially higher growth.

Goal 2: Funding Your Daughters’ Education and Marriage
Estimating Future Expenses
Education Costs: Assume a need of Rs 20 lakhs for each daughter’s higher education.
Marriage Costs: Assume Rs 20 lakhs for each daughter’s marriage.
Let’s estimate the inflation-adjusted cost of education and marriage in the future.

Formula for Future Value of Education Costs:

FV = PV * (1 + r)^t

Where:

PV = Present value (Rs 20 lakhs)
r = Inflation rate (0.06)
t = Number of years until the expense (assume 10 years for education)
Future Value Calculation for Education
FV = 20,00,000 * (1 + 0.06)^10

FV = 20,00,000 * (1.06)^10

FV = 20,00,000 * 1.791

FV = 35,82,000

So, the future value of education costs after 10 years would be approximately Rs 35.82 lakhs.

Future Value Calculation for Marriage
Assuming marriages in 20 years:

FV = 20,00,000 * (1 + 0.06)^20

FV = 20,00,000 * (1.06)^20

FV = 20,00,000 * 3.207

FV = 64,14,000

So, the future value of marriage costs after 20 years would be approximately Rs 64.14 lakhs.

Investment Strategy for Daughters’ Future
Child Education Funds: Invest in dedicated mutual funds for child education. These funds typically offer higher returns and are tailored for education expenses.
Systematic Transfer Plan (STP): Use STP to gradually move funds from equity to debt as the expense time nears to minimize risk.
Sukanya Samriddhi Yojana (SSY): Consider SSY for long-term savings for your daughters, offering tax benefits and secure returns.
Monitoring and Adjusting Investments
Regularly review your investments to ensure they align with your goals. Rebalance your portfolio annually to maintain the desired asset allocation.

Periodic Reviews
Annual Performance Review: Evaluate the performance of your investments and adjust as necessary.
Adjusting Asset Allocation: Shift funds between equity and debt based on market conditions and your risk tolerance.
Risk Management
Diversification is crucial to minimize risks. Spread investments across various asset classes to safeguard against market volatility.

Market Risk
Equity Investments: High returns but subject to market fluctuations. Diversify across sectors and companies.
Debt Investments: Lower returns but more stable. Include high-quality debt instruments for stability.
Tax Considerations
Maximize tax efficiency by leveraging tax-saving instruments under Section 80C. Ensure investments align with your overall financial strategy.

Tax-Efficient Investments
Equity-Linked Savings Scheme (ELSS): Provides tax benefits and good returns. Suitable for long-term goals.
Public Provident Fund (PPF): Safe and tax-efficient. Ideal for conservative investors.
Professional Guidance
Consider consulting a Certified Financial Planner (CFP) for personalized advice. A CFP can help tailor your investment strategy to meet your specific goals.

Advantages of CFP
Expertise in Financial Planning: Offers professional insights and strategies.
Personalized Advice: Tailored to your financial situation and goals.
Final Insights
Achieving a Rs 3 crore corpus and securing funds for your daughters’ education and marriage requires disciplined investing and strategic planning. Your current investments are a strong foundation, but consider increasing contributions for higher returns.

Diversify your investments, monitor performance regularly, and adjust your portfolio as needed. Consulting a Certified Financial Planner can provide valuable guidance and help you stay on track.

Stay committed to your goals, and with careful planning, you can achieve financial security and ensure a bright future for your daughters.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8377 Answers  |Ask -

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

Money
Sir, I am 43 years old living in UAE, with FD of 10L and current MF accumulation of 1.04 Cr and monthly SIP 50K along. I have a 2BHK apartment in Chennai which yields a rent of 8000 Rs and a 3-bedroom house inherited from my parents as gift where we live currently. Along with this we have 2400 Sq ft of land in Chennai and 3000 Sq ft of land in Madurai. I am contributing 69K yearly for the last 11 years in my name until 2035 (expected returns 30Lakhs), 28K yearly in my daughter’s name until 2034 (expected returns 10Lakhs). Addition to this i have icici pru gift long terms with annual payment of 2L Rs on my name (to pay for another 10 years and the return of 16K per month) icici future perfect 1L Rs (to pay for another 10 years). Will receive a sum of 5L Rs from a LIC policy which is getting matured this year and a Term policy of 2 Cr for which I must pay 47K annually and it must be paid for another 22 years and 20 Lakhs worth of gold. I wish to invest in stocks in the next 7 years with an average risk and stop SIP at the age of 50. I have a 9th grade daughter who wishes to pursue Medicine and a son who is in grade 2. I wish to retire at the age of 50 (7 years from now) and start consulting. Could you please guide me how much corpus I should create in the next 7 years to live a normal lifestyle and ensure to pay the balance ICICI investments and my daughters’ education regards Raj
Ans: Current Financial Situation
Raj, you have done a commendable job in managing your finances and building a diversified portfolio. Let's assess your current financial landscape.

Fixed Deposits and Mutual Funds
You have a fixed deposit (FD) of Rs 10 lakhs and a mutual fund (MF) portfolio worth Rs 1.04 crore. You also contribute Rs 50,000 monthly to SIPs. This shows a disciplined approach towards long-term wealth creation.

Real Estate Holdings
You own a 2BHK apartment in Chennai, which generates a rental income of Rs 8,000 per month, and a 3-bedroom house inherited from your parents. Additionally, you possess 2400 sq ft of land in Chennai and 3000 sq ft of land in Madurai.

Insurance and Investments
You have various insurance and investment plans:

Annual contribution of Rs 69,000 for yourself until 2035 (expected returns Rs 30 lakhs).
Annual contribution of Rs 28,000 for your daughter until 2034 (expected returns Rs 10 lakhs).
ICICI Pru Gift Long Term with an annual payment of Rs 2 lakhs, yielding Rs 16,000 monthly after maturity.
ICICI Future Perfect with an annual payment of Rs 1 lakh for another 10 years.
LIC policy maturing this year with a sum assured of Rs 5 lakhs.
Term policy with a cover of Rs 2 crore, annual premium Rs 47,000 for the next 22 years.
Gold worth Rs 20 lakhs.
Family Commitments
Your daughter, currently in 9th grade, aspires to pursue medicine. Your son is in grade 2. You plan to retire at 50 and transition into consulting.

Financial Goals
To ensure a smooth transition into retirement and meet your financial obligations, let's break down your goals:

Retirement Corpus
Daughter's Education
Continuation of Investments
Living Expenses Post-Retirement
Retirement Corpus
You plan to retire in 7 years. To maintain a comfortable lifestyle post-retirement, you need to determine a retirement corpus. This corpus should cover your monthly expenses, healthcare, and unforeseen emergencies.

Daughter's Education
Medical education is expensive. It is crucial to allocate sufficient funds for your daughter's medical education to avoid financial stress later.

Continuation of Investments
You have ongoing investments that require continued funding. Ensuring these are adequately funded until their maturity is essential for maximizing returns.

Living Expenses Post-Retirement
Post-retirement, you will require a steady income to cover living expenses. Your rental income, SIP returns, and maturity proceeds from insurance plans will contribute to this.

Strategy to Achieve Financial Goals
To meet your financial goals efficiently, consider the following strategies:

Increase SIP Contributions
Currently, you invest Rs 50,000 monthly in SIPs. Increasing this amount will help accumulate a larger corpus. Given your current financial stability, consider increasing your SIP contributions by 10-15% annually. This will compound your wealth significantly over the next 7 years.

Diversify Mutual Fund Investments
Review your mutual fund portfolio and diversify across various sectors and market caps. Actively managed funds tend to outperform index funds in the long run due to professional fund management and active stock selection. This can provide better returns and reduce risks.

Surrender Low-Yield Insurance Policies
Your LIC policy maturing this year will yield Rs 5 lakhs. Reinvest this amount in mutual funds for better returns. Assess the ICICI Pru Gift Long Term and ICICI Future Perfect plans. If they are not performing well, consider surrendering them and reinvesting in higher-yield mutual funds. This can maximize returns and provide better growth opportunities for your investments.

Plan for Daughter's Education
Estimate the total cost of your daughter's medical education, including tuition fees, living expenses, and other costs. Create a dedicated education fund using a mix of debt and equity mutual funds. This will ensure safety and growth of the corpus.

Utilize Gold Holdings
Your gold holdings worth Rs 20 lakhs can be a valuable asset. Consider partial liquidation of gold to fund higher-yield investments. Alternatively, keep the gold as a hedge against inflation and as a contingency fund.

Create an Emergency Fund
Ensure you have an emergency fund covering at least 6-12 months of living expenses. This fund should be in a liquid asset class, such as a liquid mutual fund or a high-interest savings account, to access funds readily in case of emergencies.

Investment in Mutual Funds
Instead of investing directly in stocks, mutual funds can provide a balanced approach to achieving your financial goals with moderate risk. Here are the benefits:

Professional Management: Mutual funds are managed by professional fund managers who have the expertise to make informed investment decisions.
Diversification: Mutual funds provide diversification across various sectors and asset classes, reducing overall risk.
Liquidity: Mutual funds offer liquidity, allowing you to redeem your investments as needed.
Tax Efficiency: Equity mutual funds held for more than a year qualify for long-term capital gains tax benefits.
Increase SIP Contributions in Mutual Funds
Currently, you invest Rs 50,000 monthly in SIPs. Increasing this amount will help accumulate a larger corpus. Given your current financial stability, consider increasing your SIP contributions by 10-15% annually. This will compound your wealth significantly over the next 7 years.

Diversify Mutual Fund Investments
Review your mutual fund portfolio and diversify across various sectors and market caps. Actively managed funds tend to outperform index funds in the long run due to professional fund management and active stock selection. This can provide better returns and reduce risks.

Corpus Calculation for Retirement
To estimate the corpus required for retirement, consider the following:

Monthly Living Expenses: Calculate your current monthly expenses and account for inflation.
Healthcare Costs: Factor in healthcare costs, which tend to rise with age.
Contingency Fund: Include a contingency fund for unforeseen expenses.
Desired Lifestyle: Consider the lifestyle you wish to maintain post-retirement.
Monthly Living Expenses
Assume your current monthly expenses are Rs 50,000. Accounting for inflation at 6%, these expenses will rise over the next 7 years.

Healthcare Costs
Healthcare costs can be substantial post-retirement. Ensure you have comprehensive health insurance and allocate a part of your corpus towards healthcare.

Contingency Fund
Set aside at least 10% of your retirement corpus for emergencies. This ensures financial security during unforeseen circumstances.

Desired Lifestyle
Factor in any lifestyle changes you wish to make post-retirement, such as travel, hobbies, or relocation.

Final Insights
Raj, your current financial situation is strong, with a diversified portfolio and substantial assets. To ensure a comfortable retirement and meet your financial goals, focus on increasing SIP contributions, diversifying mutual fund investments, and planning adequately for your daughter's education. Reviewing insurance policies and reallocating funds to higher-yield investments will optimize your returns. Investing in mutual funds can provide balanced growth and reduce risk, ensuring financial security post-retirement.

Building a robust retirement corpus requires careful planning and disciplined investing. With the right strategies, you can achieve your financial goals and enjoy a comfortable retirement while ensuring your family's financial security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8377 Answers  |Ask -

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

Asked by Anonymous - Jun 23, 2024Hindi
Money
Iam 50 years. Iam investing 1.75 in sip mf, planning to invest for next 10 years,and 20 k in post office R D. And 5lac per year. I have an ESOP worth 50 lac, PPF -30 lac,Epfo- 40 lac.TAta AIA WEALTH PRO PLAN FOR my daughter. Iam having F.D of 40 lacs. My question is How much do I need to invest to get the corpus of 10 crores in next ten years? Apart from these I have term and Health insurance for me and my family and a house to live in.
Ans: I'll provide you with a comprehensive and detailed investment strategy to achieve a corpus of Rs. 10 crore in the next 10 years, considering your current investments and goals.

Understanding Your Current Financial Position
First, let's assess your current investments:

SIP in mutual funds: Rs. 1.75 lakh monthly
Post Office RD: Rs. 20,000 monthly
Annual investment: Rs. 5 lakh
ESOP: Rs. 50 lakh
PPF: Rs. 30 lakh
EPFO: Rs. 40 lakh
FD: Rs. 40 lakh
Tata AIA Wealth Pro Plan for your daughter
Term and health insurance for you and your family
House to live in
You have a well-diversified portfolio with a mix of equity, debt, and fixed-income instruments.

Calculating Your Goal
To accumulate Rs. 10 crore in the next 10 years, we'll consider the power of compounding and the expected returns from your investments. Let's break down the steps to achieve this goal.

Review and Optimize Existing Investments
Mutual Funds
SIPs are an excellent way to invest regularly and benefit from rupee cost averaging. Given your current SIP amount of Rs. 1.75 lakh per month, you are on a solid path. Consider the following mutual fund categories:

Equity Mutual Funds: These should form the core of your portfolio. Invest in a mix of large-cap, mid-cap, and small-cap funds. Equity funds typically offer higher returns, which is crucial for your long-term goal.

Debt Mutual Funds: These provide stability and reduce overall portfolio risk. Consider investing in short-term debt funds or corporate bond funds.

Hybrid Mutual Funds: These funds offer a balance between equity and debt. They are ideal for moderate risk-takers and provide diversified growth.

Post Office RD
Post Office RD is a safe investment but offers lower returns compared to equity and mutual funds. While it provides stability, consider if you can allocate more towards higher-return investments like mutual funds.

ESOPs
ESOPs are a valuable asset. Depending on your company's performance, they can provide significant returns. Monitor their performance and decide on the right time to exercise or sell them to maximize gains.

PPF and EPFO
Both PPF and EPFO are excellent for tax-saving and long-term growth. They offer guaranteed returns and should be continued for their benefits.

Fixed Deposits
FDs offer security but with lower returns. Consider moving a portion of your FD investments into mutual funds or other higher-yielding instruments to enhance growth.

Tata AIA Wealth Pro Plan
Review the performance and charges of this plan. ULIPs often have high charges which can impact returns. If the charges are high, consider surrendering and reinvesting the proceeds into mutual funds.

Calculating the Required Investment
To achieve a Rs. 10 crore corpus, you need a strategic investment approach. Let's assume different annual returns for various asset classes:

Equity Mutual Funds: 12-15% per annum
Debt Mutual Funds: 7-8% per annum
Fixed Deposits and RD: 5-6% per annum
PPF and EPFO: 7-8% per annum
Given these returns, we'll determine how much you need to invest additionally to reach your goal.

Power of Compounding
Compounding is crucial in wealth creation. The earlier and more consistently you invest, the greater the compounding effect. Here's a breakdown of how different investments can grow:

SIPs in Mutual Funds
Your Rs. 1.75 lakh monthly SIP in equity mutual funds can grow significantly over 10 years with an average return of 12-15%. The power of compounding will exponentially increase your corpus.

Post Office RD
Your Rs. 20,000 monthly RD will provide stable but lower returns. While it's a safe option, consider increasing your allocation to equity funds for higher growth.

Annual Lump Sum Investment
Investing Rs. 5 lakh annually can significantly boost your corpus. Allocate this amount to equity and hybrid mutual funds for optimal growth.

Systematic Investment Plan (SIP)
SIPs are a disciplined way to invest in mutual funds. They allow you to invest a fixed amount regularly, taking advantage of rupee cost averaging. Here's how to optimize your SIP strategy:

Increase SIP Contributions
Start with your current SIP amount and gradually increase it as your income grows. This will maximize the compounding effect and help you reach your goal faster.

Diversify Across Fund Categories
Invest in a mix of large-cap, mid-cap, and small-cap funds to diversify risk and enhance returns. Consider sector-specific funds for additional growth potential.

Asset Allocation and Diversification
A well-diversified portfolio balances risk and return. Here's a suggested asset allocation:

Equity Mutual Funds: 60-70%
Debt Mutual Funds: 10-20%
Fixed Income (PPF, EPFO, FD, RD): 20-30%
Regularly review and rebalance your portfolio to maintain this allocation.

Risk Management and Contingency Planning
Adequate insurance coverage and an emergency fund are essential. Ensure you have term life insurance and health insurance to protect your family's financial future. Maintain an emergency fund covering 6-12 months of expenses in a liquid and safe instrument like a high-interest savings account or liquid mutual fund.

Tax Planning
Optimize your investments for tax efficiency. Utilize tax-saving instruments like PPF, ELSS, and life insurance premiums under Section 80C. Equity investments held for more than a year benefit from long-term capital gains tax, which is lower than short-term capital gains tax.

Equity Linked Savings Schemes (ELSS)
ELSS funds offer tax benefits under Section 80C and have a lock-in period of three years. They are excellent for long-term wealth creation and tax planning.

Final Insights
Reaching a Rs. 10 crore corpus in 10 years is an ambitious goal, but with disciplined and strategic investing, it's achievable. Here's a summary of your investment strategy:

Increase SIP Contributions: Gradually increase your SIP amount as your income grows. Focus on equity mutual funds for higher returns.

Optimize Existing Investments: Review and potentially reallocate your RD and FD investments into higher-return instruments like equity and hybrid mutual funds.

Utilize Annual Lump Sum Investments: Continue investing Rs. 5 lakh annually in a mix of equity and hybrid mutual funds.

Diversify and Rebalance: Maintain a diversified portfolio with a mix of equity, debt, and fixed-income instruments. Regularly review and rebalance to stay aligned with your goals.

Maximize Tax Efficiency: Utilize tax-saving instruments and plan your investments to minimize tax liabilities.

Risk Management: Ensure adequate term and health insurance coverage. Maintain an emergency fund for financial stability.

By following these steps, you can work towards achieving your Rs. 10 crore goal within the next 10 years. Stay disciplined, review your investments regularly, and adjust your strategy as needed.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8377 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 26, 2024

Money
Hello Sir , I am 42 years old . I have one child 3 years old. I have invested in Max Life High Growth fund of one lakh per year which is 5 years now . Amount reflecting is 10 lakhs today. 5 years more to go for completion. I have my own house 62 lakhs just purchased . No loans . I recently purchased one more ulip policy midcap momentum 150 max life yearly one lakh for 10 years.I have invested in 3 Bhk apartment amount 1.7 cr which I will complete payment in next year. I earn around 36 to 40 lakhs per year. At present the expense is 50 thousand per month. How much amount should I invest yearly and where to develop a corpus of 5 cr at the age of 60 after deduction for one .child education. Thanks
Ans: First, let's understand your financial situation. You're 42, have a 3-year-old child, and a substantial annual income of Rs 36-40 lakhs. Your expenses are Rs 50,000 per month. You own a house worth Rs 62 lakhs and a 3BHK apartment for Rs 1.7 crores. No loans exist, and you’ve invested in ULIPs.

Compliments and Understanding
It's commendable that you've built a solid financial base and are debt-free. Your foresight in investing for the future is impressive. Let's plan for a corpus of Rs 5 crore by age 60, covering your child's education expenses too.

Evaluating Your Current Investments
Max Life High Growth Fund
You’ve invested Rs 1 lakh per year in Max Life High Growth Fund for 5 years. It's now worth Rs 10 lakhs. This ULIP has 5 more years to go. Evaluating ULIPs for high charges and lower flexibility, consider other options for higher returns.

New ULIP Policy
You recently bought another ULIP policy (Midcap Momentum 150, Max Life) with Rs 1 lakh annually for 10 years. ULIPs have mixed reviews due to their high charges and lower liquidity compared to mutual funds.

Real Estate Investments
Owning a house and a 3BHK apartment indicates a strong asset base. However, real estate might not yield high liquidity or returns compared to other investments. We'll focus on diversifying your portfolio further.

Creating a Financial Plan
Defining Financial Goals
Your primary goal is accumulating Rs 5 crore by age 60. Secondary goals include funding your child’s education. Let's outline steps to achieve these objectives.

Diversification Strategy
Diversification is key to managing risk and maximizing returns. We'll explore various investment options, ensuring a balanced portfolio.

Mutual Funds: A Preferred Investment Avenue
Equity Mutual Funds
Equity mutual funds offer high growth potential, suitable for long-term wealth accumulation. They invest in stocks, providing inflation-beating returns.

Debt Mutual Funds
Debt mutual funds are less risky, providing stable returns. They invest in fixed-income securities like bonds. They suit investors seeking steady income with lower risk.

Hybrid Mutual Funds
Hybrid funds balance risk and return by investing in both equities and debt. They offer a diversified approach, suitable for moderate risk-takers.

Benefits of Regular Funds
Investing through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP) credential provides personalized advice. MFDs help choose funds aligning with your goals and offer ongoing portfolio management.

Systematic Investment Plan (SIP)
Regular Investments
Investing through SIPs in mutual funds is beneficial. It ensures disciplined investing and rupee cost averaging, reducing the impact of market volatility.

Calculating SIP Amount
To accumulate Rs 5 crore by age 60, we need to determine the annual investment amount. Given your financial situation, a significant portion of your income can be allocated towards SIPs in equity and hybrid funds.

Public Provident Fund (PPF)
Long-Term Savings
PPF is a government-backed savings scheme offering attractive interest rates and tax benefits under Section 80C. It suits risk-averse investors seeking assured returns.

PPF Strategy
Investing a portion of your savings in PPF can provide a secure and stable return, balancing the overall risk of your portfolio.

National Pension System (NPS)
Retirement Planning
NPS is a government-sponsored pension scheme offering diversified investments in equities, corporate bonds, and government securities. It provides tax benefits and helps build a retirement corpus.

NPS Contributions
Allocating funds to NPS ensures a steady income post-retirement. It complements other investments, ensuring financial security in later years.

Gold: A Traditional and Reliable Asset
Gold ETFs and Sovereign Gold Bonds
Investing in Gold ETFs and Sovereign Gold Bonds offers benefits of gold without storage hassles. Sovereign Gold Bonds also provide periodic interest, enhancing returns.

Health and Term Insurance
Health Insurance
Comprehensive health insurance is crucial to cover medical expenses, protecting your savings and ensuring quality healthcare.

Term Insurance
Term insurance provides high life cover at low premiums. It ensures financial security for your family in case of your untimely demise. Choose a plan with adequate coverage.

Reviewing and Adjusting Investments
Regular Portfolio Review
Regularly reviewing your investment portfolio ensures it aligns with your goals. Make necessary adjustments based on market conditions and personal circumstances.

Avoiding Emotional Investing
Stick to your financial plan and avoid making investment decisions based on emotions. Make informed decisions and seek professional advice when needed.

Benefits of Actively Managed Funds
Professional Management
Actively managed funds are managed by professional fund managers. They conduct extensive research and make informed investment decisions, aiming to outperform the market.

Potential for Higher Returns
Actively managed funds have the potential to deliver higher returns compared to index funds. Fund managers can take advantage of market opportunities and mitigate risks through active management.

Flexibility
Actively managed funds offer flexibility in investment strategies. Fund managers can adjust the portfolio based on market conditions and economic trends, enhancing performance.

Disadvantages of Index Funds
Lack of Flexibility
Index funds are passively managed and track a specific index. They lack flexibility to adjust to market conditions, which can limit returns.

Potential Underperformance
Index funds may underperform actively managed funds during market downturns. They cannot capitalize on market opportunities or mitigate risks effectively.

Limited Scope
Index funds have limited scope for diversification. They invest in a fixed set of securities, which might not align with your investment goals and risk tolerance.

Final Insights
Achieving a corpus of Rs 5 crore by age 60 requires disciplined investing and strategic planning. Diversifying your investments across mutual funds, PPF, NPS, and gold ensures a balanced and robust portfolio. Engaging a Certified Financial Planner ensures personalized advice and disciplined investing, helping you achieve long-term financial success.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |8377 Answers  |Ask -

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

Money
Sir I am confused about my retirement. Though not fully retirement but want to work easy and joyfully. I know I will get those kind of work. Age 53, earning 3.5 lac/month. Son settled in US. No liability and zero debt. Own house another 2 apartment giving rent 53k/monthly. Medical insurance Lacs. Term plan 50 lacs. PPF saving 32 lacs till now 2 more yrs to go. Equity 4 cr. Giving dividend 3.5 lacs annually (average) 60 lac fixed diposite, Gold value 15 lacs purlely investment purpose. ( Gold Average purchase price 45k). Property from parents 2.5 Cr.(In future) I purchase new home for self living paid 55 lacs as down payment. Still need to pay 1.2 cr. In next 30 months. Once I move to new house will rented out current house(expected rental income will be 90k after 3 years) + monthly dividend 35k + 70k salary (considering opt for easy job) Current Monthly expenses 80k. Should I sold one property keep it for remaining payment of new home. Is that wise decision ? Or continue job till new home payment done? Vimal
Ans: Dear Vimal,

You have built strong financial stability over the years.

You deserve appreciation for staying debt-free and planning wisely.

Your equity, PPF, and property portfolio reflect mature financial discipline.

Still, let’s assess this in depth and help you move toward your relaxed work life.

Below is a 360-degree guidance based on your inputs.





Your Income Sources (Now and Future)

Present salary is Rs. 3.5 lakh per month.



Rental income from two flats is Rs. 53,000 per month.



Dividend income from equity is about Rs. 3.5 lakh per year (Rs. 29,000/month).



After moving into your new home, current home rental may give Rs. 90,000/month.



After shifting to a light job, you expect Rs. 70,000/month as salary.



So, future income = 90,000 (rent) + 70,000 (job) + 29,000 (dividend) = Rs. 1.89 lakh.



Current expenses = Rs. 80,000/month.



You will still have a decent surplus post-retirement-style job.





Your Outgoing: New Home Payment Responsibility

You already paid Rs. 55 lakh as down payment.



Rs. 1.2 crore needs to be paid in 30 months.



That means around Rs. 4 lakh/month for the next 2.5 years.



This is a significant commitment. Needs careful handling.





Option 1: Sell One Property to Fund the New Home

This is the most practical way to reduce stress.



You are already earning rental income from two apartments.



One apartment sale can easily fund the remaining Rs. 1.2 crore.



Property sale proceeds are tax-free if reinvested into a residential house.



Selling now gives you mental peace. No pressure from large EMI-type outgo.



You can invest the balance (if any) from the sale wisely.



It gives you room to semi-retire without worry.





Option 2: Continue Current Job Till Home Payment Ends

You may be able to finish payment from salary and investment withdrawals.



But this will need Rs. 4 lakh/month for 30 months.



That’s higher than your salary of Rs. 3.5 lakh/month.



This will force you to draw from equity or FDs.



That may disrupt compounding and long-term retirement goals.



Mentally and physically, the pressure may not allow a joyful job switch.



You may have to keep working longer just to compensate the shortfall.



Hence, this is not ideal if peace of mind is priority.





Your Equity Portfolio Strategy

You hold Rs. 4 crore in equity. That’s a strong number.



You’re getting Rs. 3.5 lakh as dividends. Approx 0.9% yield.



You must ensure your funds are in well-managed, actively managed mutual funds.



Avoid index funds. Index funds cannot protect during market crashes.



They lack fund manager insights. They blindly copy indices.



Active funds, with skilled managers, adjust strategies based on market shifts.



It’s better to invest in regular plans through MFDs who are CFP certified.



They track performance, suggest portfolio changes, and offer annual reviews.



Direct funds don’t offer advisory or review support.



That leads to unmanaged risk. And missed opportunities.





Your PPF and Fixed Deposit Planning

You have Rs. 32 lakh in PPF. Maturity is in 2 years.



PPF gives tax-free returns. You can continue it in 5-year blocks if needed.



Rs. 60 lakh in FD is good for liquidity and emergencies.



FD interest is taxable. Consider partial shift to hybrid mutual funds for better post-tax returns.



But keep 1–2 years of expenses in FD always.



Emergency fund must be untouched even after home payment.





Gold as Investment

You hold Rs. 15 lakh in gold. Purchased at Rs. 45,000 average.



Current price is higher. Gold acts as hedge against inflation.



Keep gold as long-term hold, but don’t add further for investment.



Returns from gold are not consistent. Use equity for long-term growth.





Medical and Life Insurance Review

You have Rs. 25 lakh health cover. That is good.



Post retirement, premium may rise. Review portability to senior citizen plan if needed.



Term cover of Rs. 50 lakh is fine as you have no liabilities.



You may not need high life cover now. But keep it till age 60.





Future Inheritance Planning

You expect Rs. 2.5 crore from parents in future.



That gives you an additional safety net.



But don’t factor that in for immediate planning.



Plan your new home payment only from current assets.



Future inheritance can support long-term family needs or gifting.





Should You Sell Property or Not? Final Suggestion

You want to move to relaxed work life now.



You are financially ready for it.



But new home payment is a big roadblock.



Selling one rental property today is wise.



It clears the Rs. 1.2 crore due. No stress.



You still keep one rented apartment + old house rent in future.



You get tax-efficient, regular passive income from rentals + dividends.



You reduce risk of liquidating mutual funds or breaking FD.



Equity keeps compounding peacefully. Retirement fund stays safe.



You can then choose a job that brings peace, not pressure.



There’s no need to wait 30 months to relax.





Final Insights

Sell one rental flat now. Use proceeds to close new home payment.



Keep equity untouched. Let it grow for next 10–15 years.



FD should be used only for emergencies. Not home purchases.



Review medical cover annually. Ensure portability at 60+.



Let PPF mature. Reinvest matured PPF as per goals.



Move towards less-stress work as planned. No need to delay it.



Enjoy your financial freedom. Your discipline earned this comfort.



Review your portfolio with a Certified Financial Planner every year.



Ensure estate plan is in place for future asset transition.



Keep one goal clear — peace of mind and simplicity.



Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Dr Shakeeb Ahmed

Dr Shakeeb Ahmed Khan  |157 Answers  |Ask -

Physiotherapist - Answered on May 15, 2025

Health
I have developed slip discs between my L4-L5 and L5-S1 position of back bone. The problem was detected in 2010. Now I am 60 years old. Occasionally I am facing sciatic pain issues during which I need to be in bed rest. Please suggest some remedies including the do's and don't'd. Thank you
Ans: Dear Mr Skt. Thank you for your query.

As a physiotherapist, I understand how challenging slip discs (L4-L5 & L5-S1) can be, especially with recurring sciatic pain. Managing this condition requires a combination of professional physiotherapy and consistent home care. Physiotherapy is crucial, it helps reduce pain without surgery, prevents recurrence by strengthening core and spinal muscles, and improves mobility for long term relief. I strongly recommend attending 10-15 physiotherapy sessions at a nearby clinic, where you’ll receive manual therapy, targeted exercises (like McKenzie extensions or Williams flexions, depending on what eases your pain), sciatic nerve glides, and postural training. These sessions will also teach you safe exercises to continue at home, such as gentle stretches and strengthening.

At home, avoid forward bending, heavy lifting, or prolonged sitting/standing, take breaks every 30 minutes. Use a lumbar support pillow while sitting and sleep in a back-friendly position (either on your side with a pillow between your knees or on your back with a pillow under your knees). Staying active with controlled movements is key, but avoid high-impact activities like jumping.

Commit to the initial physiotherapy sessions, then maintain your exercises regularly at home. Consistency is vital for recovery and preventing flare ups. Wishing you a quick recovery! Stay patient and diligent your efforts will make a difference.

...Read more

Ramalingam

Ramalingam Kalirajan  |8377 Answers  |Ask -

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

Asked by Anonymous - May 15, 2025
Money
Dear Sir, I am 32 years old. I have multiple loans, details below - Auto loan -> outstanding amount 16 lakh -> emi 40k - Auto loan top up -> outstanding amount 3 lakh -> emi 14k - Over Draft Loan 1 -> 38 lakh -> emi 47k - Over Draft Loan 2 -> 10 lakh -> emi 12k - Personal loan 1 -> outstanding amount 4 lakh -> emi 12k - Personal loan 2 -> outstanding amount 5 lakh -> emi 17k My monthly in hand income is 1,88,750/- My monthly expenses - Sending 15k to my parents - Rent 30k - Monthly Expenses 50k I live in Hyderabad. My savings - 1 lakh in Mutual funds, will mature in December - 11 lakh in EPF - 3 lakh in NPS How can get out of this. EMI is huge and very hard to manage all.
Ans: You are 32 years old, staying in Hyderabad. Your monthly income is Rs. 1,88,750. But your EMI pressure is very high. You also have some decent long-term savings. Your question shows responsibility and the right mindset. That’s a good start.

Let’s now assess your situation fully and see step-by-step solutions.

?

Understanding Your Current Financial Structure

You are paying six EMIs.

?

Total EMI amount is Rs. 1,42,000 per month.

?

Your other monthly expenses are Rs. 95,000. That includes rent, groceries, parents.

?

Your total monthly outgoing is about Rs. 2,37,000.

?

Your in-hand income is Rs. 1,88,750.

?

That means, every month, you are in a negative cash flow of around Rs. 48,000.

?

This cannot continue for long.

?

You must act immediately. Else the pressure will only grow.

?

You also have savings of Rs. 11 lakh in EPF and Rs. 3 lakh in NPS.

?

Mutual fund of Rs. 1 lakh will mature by December.

?

These are helpful, but not enough for short-term rescue.

?

?

Break Down of All Existing Loans

Auto loan of Rs. 16 lakh – EMI Rs. 40,000

?

Auto top-up loan of Rs. 3 lakh – EMI Rs. 14,000

?

Overdraft loan 1 of Rs. 38 lakh – EMI Rs. 47,000

?

Overdraft loan 2 of Rs. 10 lakh – EMI Rs. 12,000

?

Personal loan 1 of Rs. 4 lakh – EMI Rs. 12,000

?

Personal loan 2 of Rs. 5 lakh – EMI Rs. 17,000

?

Together, this is too much EMI burden for your income level.

?

Action is required to reduce EMI burden fast.

?

?

Immediate Action Plan to Handle Debt Load

Do not take any new loans at all.

?

This includes credit card EMI and BNPL schemes too.

?

Sit with a Certified Financial Planner and create a debt priority list.

?

Pay off the highest EMI burden with smallest balance first.

?

Personal loan 2: EMI Rs. 17K for only Rs. 5L loan.

?

If you can close this, it will ease pressure by Rs. 17K.

?

Similarly, personal loan 1 is Rs. 4L but EMI is Rs. 12K.

?

Focus on clearing these two personal loans first.

?

You can consider part-withdrawing EPF to close one of these.

?

EPF partial withdrawal is allowed for repayment of loans.

?

It is better to close a high interest loan than keep EPF untouched.

?

Do not touch NPS now. It is not liquid and meant for retirement.

?

The mutual fund maturing in December can also help close part of another loan.

?

Avoid touching EPF entirely for now. Use only if no other option.

?

If possible, sell one of your vehicles and close auto loan or top-up.

?

This is tough. But temporary sacrifice helps long-term relief.

?

?

Restructuring Strategy for Existing Loans

Approach your bank for loan restructuring.

?

This is allowed in hardship cases by RBI guidelines.

?

You can request to increase tenure of personal loans.

?

That will reduce EMI and ease cash outflow monthly.

?

You can also consider consolidating all loans into one.

?

A debt consolidation loan may give lower EMI burden.

?

Approach bank where you have salary account.

?

Show all EMI proofs and request for consolidation or top-up loan.

?

Use that single loan to clear all smaller EMIs.

?

This is not new debt, only better restructuring.

?

?

Budget Correction and Expense Reduction

Your current household expense is around Rs. 50,000.

?

Plus rent and parents' support, total fixed cost is Rs. 95,000.

?

Review your monthly lifestyle budget very sharply.

?

Cut down online subscriptions, eating out, shopping.

?

Even saving Rs. 5,000 a month helps in EMI pressure.

?

Rent is Rs. 30,000. See if you can shift to slightly cheaper house.

?

Even Rs. 5,000 rent cut helps monthly flow.

?

Request parents to allow break in support for 6 months.

?

Or reduce support to Rs. 5,000 temporarily.

?

Explain situation openly. This is temporary.

?

These all together can give Rs. 10,000 to Rs. 15,000 cash flow.

?

?

Start Emergency Fund, Even Small Amount

You don’t have any liquid emergency fund right now.

?

Begin with saving just Rs. 1,000 or Rs. 2,000 per month.

?

Keep this in savings account or sweep FD.

?

Do not lock this in PPF or NPS.

?

Emergency fund gives you mental peace and confidence.

?

?

No New Investment Until Loans Are Handled

You already have EPF and NPS. That is enough for now.

?

Do not start new SIPs or gold chits until EMI load reduces.

?

Mutual fund maturity in December must go to debt closure.

?

Re-start new investments only after EMI comes below Rs. 70K.

?

That is your comfort level based on income.

?

?

Rebuild Credit Score Gradually

If you miss EMIs, your credit score will drop fast.

?

Restructuring loan is better than missing EMI.

?

Closing small loans improves credit score steadily.

?

Keep 100% payment record after restructuring.

?

?

Don’t Use Credit Cards for Loans Again

Do not take loan on credit card.

?

Interest is very high and can trap you quickly.

?

Pay credit card in full. No minimum due payment method.

?

?

Emotional and Mental Health is Also Important

Loan stress can cause worry and anxiety.

?

You are trying to handle the situation. That is good.

?

Talk to someone in family or trusted friend.

?

Keep your mental strength high. That helps decisions.

?

Every month, even 1 step ahead is progress.

?

?

Final Insights

You are facing heavy loan pressure, but solutions exist.

?

Prioritise high EMI, low balance loans first.

?

Restructure loans with bank. Try consolidation option.

?

Use EPF partial withdrawal only as backup plan.

?

Sell unused vehicle if required to reduce auto loan.

?

Pause all new investments for now.

?

Cut budget wherever possible.

?

Begin tiny emergency fund.

?

Mental peace and clarity will help you handle this better.

?

Follow this plan for 12 months and review again.

?

Things will improve. Stay focused.

?

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8377 Answers  |Ask -

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

Money
Sir i ihv home loan 16 Laks emi 15k monthly salary 1 laks . Other income after monthly expenses from my wife business 50 k
Ans: You and your wife are managing your finances well. Having a home loan with stable income is good. With Rs. 1 lakh salary and Rs. 50,000 monthly surplus from your wife’s business, you are in a strong position to plan long-term wealth. Let me give you a full assessment of your situation and steps to move forward smartly.

  
Understanding Your Current Financial Position

Your EMI is Rs. 15,000 monthly for a Rs. 16 lakh home loan.

  

Your monthly salary is Rs. 1 lakh, which gives good monthly cash flow.

  

Your wife contributes Rs. 50,000 monthly after her business expenses.

  

You have a total monthly income of Rs. 1.5 lakhs.

  

This gives a strong foundation for financial growth and long-term planning.

  

Smart Loan Management Strategy

Rs. 15,000 EMI is only 10% of total family income.

  

This is within a safe EMI limit. Keep paying it on time.

  

Don’t rush to prepay the loan aggressively. Instead, invest surplus smartly.

  

Keep 2–3 months’ EMI as emergency backup in a liquid fund.

  

Build Emergency Reserve First

Your priority should be to save 6 months’ family expenses.

  

Keep this emergency money in a separate bank account or liquid mutual fund.

  

This gives peace of mind if income is delayed or an emergency comes.

  

Don’t mix emergency fund with your investments.

  

Build Protection with Insurance

Take a pure term life cover of 15 to 20 times your yearly income.

  

Choose a term policy only, not investment-cum-insurance plans.

  

Avoid endowment or ULIP policies. They give low returns.

  

Take a family floater health policy for Rs. 10 to 15 lakhs.

  

Also take a personal accidental insurance policy.

  

Savings and Investments – Smart Allocation

Your monthly savings potential is high. Use it with planning.

  

Allocate 40% of monthly savings in mutual fund SIPs.

  

Use regular funds through a Certified Financial Planner for guidance.

  

Don’t invest directly. Direct funds give no advice or human help.

  

Regular funds through certified planners give better discipline and performance.

  

Choose a mix of diversified flexi-cap, large-cap, and mid-cap funds.

  

Prefer actively managed mutual funds. They beat markets long-term.

  

Avoid index funds. Index funds copy market returns with no alpha.

  

Index funds don’t protect during market falls. Actively managed funds do.

  

PPF for Safe and Long-Term Goal

Invest some money in PPF for long-term goals like retirement.

  

PPF is safe, gives tax-free returns, and builds discipline.

  

Lock-in works as an advantage for retirement corpus.

  

Invest every year to get compounding benefit.

  

Child’s Future Planning (If You Have or Plan Children)

Start early planning for future education and marriage.

  

Use equity mutual funds for long-term growth needs.

  

Use SIPs in child’s name to build long-term corpus.

  

Tag each SIP with the goal name like “Daughter's College Fund”.

  

Don’t Ignore Retirement Planning

Begin investing for retirement from today. Don’t delay.

  

SIP in mutual funds + PPF + NPS is good mix.

  

NPS gives tax benefit and helps save for retirement.

  

Invest monthly to benefit from compounding effect.

  

Don’t stop SIPs even during market corrections.

  

Avoid Gold Chits and Risky Options

Gold chit funds are risky and unregulated.

  

Instead, invest in sovereign gold bonds or gold mutual funds.

  

They are safe, give interest, and are tax-friendly if held till maturity.

  

Be Careful With Lifestyle and Expenses

Monitor your monthly spending. Track online purchases like Amazon bills.

  

Avoid using credit cards for EMI or unnecessary shopping.

  

Keep personal expenses within 20% of income.

  

Create a monthly budget and review it monthly.

  

Don’t Chase Fancy Investment Schemes

Don’t invest in Ponzi schemes or unknown chit funds.

  

Don’t fall for schemes promising fixed high returns.

  

Stick to tested options with long history like mutual funds, PPF.

  

Avoid investments without proper documentation and transparency.

  

Estate and Will Planning

Prepare a basic will to name your dependents as nominees.

  

Update all nominations in mutual funds, insurance, and bank accounts.

  

This avoids family disputes and smooths financial transition.

  

Tax Planning Tips

Use Section 80C for PPF, ELSS, and life insurance.

  

NPS gives extra Rs. 50,000 deduction under 80CCD(1B).

  

Use health insurance to claim under Section 80D.

  

Take help from a Chartered Accountant if taxes are complex.

  

Keep Financial Records Properly

Maintain separate folders for insurance, mutual funds, PPF, loans.

  

Store soft copies and passwords safely.

  

Share the location of these records with your spouse.

  

This ensures peace of mind during any emergency.

  

Investing Should Be Goal-Based

Don’t invest blindly. Link each investment to a specific goal.

  

Short-term goals: use liquid or short-term funds.

  

Medium goals: use hybrid funds or balanced advantage funds.

  

Long-term goals: use diversified equity funds and PPF.

  

MF Taxation Updates to Know

Equity fund gains above Rs. 1.25 lakh are taxed at 12.5% LTCG.

  

STCG on equity is now taxed at 20%.

  

Debt fund gains are taxed as per your income slab.

  

File taxes properly to avoid notices later.

  

Systematic Investment Review Is Must

Review SIPs every year with your planner.

  

Rebalance your portfolio if one type of fund grows too much.

  

Avoid switching funds often. Stick to plan for long term.

  

Don’t stop SIPs during market dips. Stay consistent.

  

Reinvest Any Windfall Wisely

If you receive bonus or gifts, don’t spend all.

  

Put them in your emergency fund or increase your SIPs.

  

Build wealth slowly and steadily. Avoid shortcuts.

  

Plan for Future Life Milestones

Save for child’s birth, education, your retirement, and family medical needs.

  

Review your goals every year and adjust investments accordingly.

  

Don’t follow friends blindly. Your goals are different.

  

Finally

You are already ahead by having home loan and family income of Rs. 1.5 lakh.

  

You have manageable EMI and a good monthly surplus.

  

Create a written financial plan with proper goals.

  

Avoid emotional investments. Focus on logic and long-term growth.

  

Stay patient. Wealth grows slow, not overnight.

  

Work with a Certified Financial Planner to guide and monitor progress.

  

You will reach your goals with discipline and clear direction.

  

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

...Read more

Ramalingam

Ramalingam Kalirajan  |8377 Answers  |Ask -

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

Money
Im 30years old woman, I lost my father 4 yrs back, after that I took the responsibility and I have been taking care of my family Im earning 1.20L per month, I have home loan of 34L , (emi 37k 12yrs left) I don't have any other debts ,2 months back I started investing in RD,PPF,NPS,SIP AND GOLD CHITS( everything 20% of salary) I have personal expenses, like en, groceries,gas,amazon bill ) I don't have any huge amount in saving since I started all my investment 2 months back Am I following the correct saving rule or do I need to invest on anything and reduce my expenses) I don't have any jewel, I need to save some money for my marriage Can you please guide me
Ans: You are showing great courage and commitment. Managing everything on your own and still thinking about savings is truly inspiring.

Let us look at your finances from a 360-degree view and guide you clearly.

?

Current Income and Expense Overview

You are earning Rs. 1.20 lakhs per month.

?

Home loan EMI is Rs. 37,000 every month.

?

You have essential personal expenses: groceries, gas, bills.

?

You have started investing in RD, PPF, NPS, SIP, and gold chits.

?

You are investing 20% of your salary every month.

?

This is a good start. You are doing many things right already.

?

Appreciation of Your Actions

You have started investing early. That’s a smart decision.

?

You are balancing loan EMI and savings at the same time.

?

You are saving for your marriage goal. That is responsible thinking.

?

You are investing in different products. You are not keeping money idle.

?

Still, let us go deeper and assess each point with a professional view.

?

Loan Situation

Rs. 37,000 EMI is almost 30% of your salary.

?

That is manageable. But avoid taking any more loans.

?

Do not increase EMI even if income grows. Use the extra to save.

?

You can consider prepaying small amounts in future to reduce interest.

?

But never disturb emergency savings to pay loan faster.

?

Investment Structure Review

Let’s go step by step.

?

Recurring Deposit (RD)

RDs give low interest. Returns are taxable.

?

This can be used only for short-term goals.

?

You can keep a small RD. But avoid big allocation here.

?

RD is not wealth creation tool. It is only for parking money safely.

?

?

Public Provident Fund (PPF)

This is a good long-term saving.

?

Safe and backed by government. Interest is tax-free.

?

Lock-in is 15 years. So, don’t expect early liquidity.

?

It is ideal for retirement or long-term safety.

?

Keep investing here, but with patience.

?

National Pension Scheme (NPS)

NPS is good for retirement planning.

?

Long lock-in. Withdrawals are restricted.

?

Partial withdrawal is allowed, but only under specific reasons.

?

Investment is mostly into equity and debt.

?

Returns are market linked. Not guaranteed.

?

Tax benefits are there. But you will be taxed on annuity at retirement.

?

You can continue this. But don’t over-invest here.

?

Systematic Investment Plan (SIP)

SIP is excellent for wealth creation.

?

It gives better returns over long term.

?

Market fluctuations are handled by monthly investing.

?

SIP in regular mutual funds through a Certified Financial Planner gives guidance.

?

Actively managed funds perform better than index funds.

?

You also avoid wrong fund selection by getting proper advice.

?

SIP must be continued for 10+ years to get best results.

?

Gold Chits

Gold chit is not transparent.

?

Returns are not clear. Also not regulated well.

?

You may not get full benefit in emergencies.

?

You can buy gold for marriage. But go for digital gold or gold mutual funds.

?

These are regulated and more liquid.

?

Chit-based schemes may delay your goals.

?

So, reduce or stop gold chit. Redirect to SIP or gold mutual fund.

?

Emergency Fund Planning

You must build a basic emergency fund.

?

This is for health, job loss, urgent family needs.

?

Keep 4–6 months of expenses in a savings or liquid fund.

?

Don’t touch this for other goals.

?

You can build it slowly over 6–9 months.

?

Saving for Marriage

First, fix a tentative timeline. Example: 2 or 3 years.

?

Decide how much you want to save for it.

?

Use short-term debt mutual fund or hybrid mutual fund.

?

Don’t use PPF or NPS for this. You can’t withdraw early.

?

SIP for marriage goal should be in a suitable fund category.

?

Keep this goal-specific. Don’t mix it with retirement plan.

?

Also don’t use credit card or personal loan to fund wedding.

?

Expense Management Ideas

You are already managing expenses. But do a review again.

?

List every monthly fixed and variable expense.

?

Try to reduce subscriptions, impulse online shopping, and food delivery.

?

Give every rupee a role. Budgeting gives you more power.

?

You can try “50-30-20” model in future.

?

That is 50% for needs, 30% for wants, 20% for savings.

?

But in your case, 30% savings is even better.

?

Do You Need to Save More?

Yes. But do it in a balanced way.

?

Don’t stop all spending. Don’t skip self-care.

?

Slowly increase savings when income grows.

?

Even Rs. 1,000 extra per month makes difference in long run.

?

Avoid gold chits and RDs to make better use of money.

?

Do You Need to Invest in Other Things?

You are already covering all investment types.

?

Just refine your choices.

?

Avoid high-cost or unregulated schemes.

?

Don’t fall for insurance-linked investments unless you need protection.

?

Term insurance is enough. Don't mix insurance with investment.

?

Get guidance from a Certified Financial Planner before choosing new funds.

?

Insurance Planning

You did not mention life or health insurance.

?

Take term insurance for at least 15 times your income.

?

You must have personal health insurance. Not just employer cover.

?

These protect your savings and investments.

?

Premiums are cheaper when you are younger.

?

Tax Planning Check

You are investing in PPF and NPS. These give tax benefits.

?

SIP in ELSS fund can also give tax deduction.

?

You can get Rs. 1.5 lakh deduction under Section 80C.

?

Section 80CCD(1B) allows Rs. 50,000 more for NPS.

?

Use these fully to reduce tax and save more.

?

Goal-Based Approach Needed

Don’t just invest randomly. Fix your goals.

?

Short-term: Marriage in 2–3 years.

?

Medium-term: Emergency fund in 1 year.

?

Long-term: Retirement, maybe child planning later.

?

Assign funds based on goal length.

?

This way, no last-minute pressure will come.

?

Avoiding Common Mistakes

Don’t take loans for gold or marriage.

?

Don’t break PPF or NPS midway.

?

Don’t stop SIPs in a market fall. Stay invested.

?

Don’t invest in unverified chit schemes.

?

Don’t take insurance with return promise. Pure term is better.

?

Mindset and Motivation

You are doing better than you think.

?

Starting investments early gives you more time benefit.

?

Being consistent is more important than amount.

?

Stay focused on your goals. Don’t compare with others.

?

Give time for your investments to grow.

?

Track and Review

Every 6 months, review your plan.

?

Check fund performance and adjust if needed.

?

Continue SIPs for long-term. Don’t skip months.

?

Track net worth every year. It shows your progress.

?

Get help from a Certified Financial Planner when goals increase.

?

Finally

You have made a very strong start. Your direction is right.

?

Now you just need more clarity, structure, and patience.

?

Avoid any emotional or risky decisions. Stick to goal-based investing.

?

Give priority to emergency fund and marriage goal in next 2–3 years.

?

Review gold chit and redirect to mutual funds.

?

Don’t chase returns. Focus on safety, consistency and clarity.

?

You will reach your goals with peace of mind.

?

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.

Close  

You haven't logged in yet. To ask a question, Please Log in below
Login

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds

x