Hi Gurus, I'm 31, married, no kids, both working in IT MNCs, combined monthly take home salary ~5L (post tax). Combined we have invested around 70L in FDs (flexible/linked to savings) and relatively new to mutual funds. Invest around 20k each/month in SIPs since last 1.5 years. Other than that there's PPF, PF etc (the usual). I don't have any asset, wife owns a house for which she's paying around 35k/month EMI, but she hardly has any savings. We are planning to buy a home in NCR and potentials options fitting our needs are falling somewhere around 2.5CR. What is the best way ahead to plan for such purchase and also ensuring we have decent liquid funds for future needs and investments.

Ans: You both have a solid monthly income and disciplined savings.
That is a good base to plan from.

Now let us break your query into different parts.
This will help us find a clear and confident direction.

Review of Your Current Financial Foundation
You are earning Rs. 5L per month together.
This is a strong base for long-term wealth creation.

Your SIPs are Rs. 20K monthly.
You also hold Rs. 70L in fixed deposits.
You are planning to buy a house worth Rs. 2.5CR.
Wife already has a house loan with Rs. 35K EMI.
You have PF, PPF, and other standard savings.

You are still new to mutual funds, which is okay.
You are asking the right questions early.
That is a mature and wise step.

Financial Goals and Prioritisation
Before allocating more investments, list your financial goals.
For example:

Rs. 2.5CR house in NCR (short-term)

Retirement corpus by age 55–60 (long-term)

Child planning and education (mid to long-term)

International trips, car upgrades (mid-term)

Emergency fund for 6–12 months

Each goal must be mapped to an investment type.
You can't use the same fund for every goal.
This mistake leads to confusion and poor returns.

House Purchase Strategy: Smart Use of FDs
You plan to buy a Rs. 2.5CR property.
Avoid using all your Rs. 70L FDs for this.

Break your FDs into 3 buckets:

Rs. 50L: For property down payment

Rs. 10L: For emergency fund

Rs. 10L: For staggered lump-sum investments in mutual funds

Don’t touch the emergency bucket.
This must be untouched even during house purchase.

Don’t rush to liquidate all your savings.
Try to negotiate with the builder for stage-wise payments.
This will help you keep funds earning interest while you pay in tranches.

If you take a loan, cap EMI within 30–35% of your take-home pay.
Do not cross Rs. 1.5L/month combined EMIs.

Review of Wife’s House Loan
Your wife is already paying Rs. 35K monthly EMI.
Understand how long this will continue.
Check if the house is rented or self-used.

Since you are planning another house,
ensure you do not overburden your cash flows.

Home is an emotional asset, not an investment.
Avoid buying just for tax benefit or price appreciation.

Emergency Fund: Must Be a Priority
You must keep at least Rs. 10L aside in liquid funds.
This will help in any medical, job, or family emergency.
Don’t consider FDs or gold as emergency funds.
Use liquid mutual funds or sweep-in accounts.

This fund must cover 6–12 months of expenses.

Insurance Planning: Health and Term Cover
You need a pure term insurance policy.
Cover should be at least 15–20 times your annual income.
That is Rs. 1.5–2CR minimum.

Buy health insurance beyond your office coverage.
You need separate family floater plan.
Buy this early when premiums are low.

Medical costs rise fast.
Don’t depend only on company-provided health cover.
Company insurance stops when you leave the job.

Mutual Fund Portfolio Planning
You have started SIPs of Rs. 20K monthly.
But the fund categories are not yet specified.

Follow this model:

40% in flexi-cap and large-cap funds

30% in mid-cap and small-cap funds (high growth)

20% in hybrid aggressive funds (low volatility)

10% in short-duration debt fund for near-term use

Avoid direct funds.
Invest through a Certified Financial Planner using regular plans.

They give proper fund selection, tax help, rebalancing, and support.
Direct funds lack all these advantages.

Do not chase past performance.
3-year CAGR of 20% looks attractive, but may not be repeated.
Focus on consistency, not one-year returns.

Why You Must Avoid Index Funds
Index funds copy a market index like Nifty 50.
They can’t avoid bad-performing sectors or stocks.
They offer no downside protection.

In falling markets, they fall fully.
Active fund managers can shift and protect value.

In long-term, actively managed funds outperform index.
You need intelligent decisions in volatile markets.
That’s only possible through active management.

Lump Sum Strategy for Mutual Funds
From your Rs. 70L FD pool,
allocate Rs. 10L for phased investing in mutual funds.
Don’t invest all at once.

Use STP (Systematic Transfer Plan) for next 10–12 months.
Park this Rs. 10L in ultra-short fund or liquid fund.
Set up monthly STP of Rs. 80,000 to Rs. 1L into selected mutual funds.

This reduces market timing risk.
And spreads your investment across market cycles.

You already have Rs. 20K SIP.
With this Rs. 1L monthly STP, your equity base will grow fast.

Retirement Planning: Start Early with Right Structure
You are still 30. Retirement seems far.
But it is the most important goal.

Start a retirement-focused SIP immediately.
Use flexi-cap or hybrid funds to begin with.
Gradually increase allocation to equity.

Also track your EPF, PPF, and NPS corpus.
They form your debt base.

Top up your SIPs with every income hike.
Step-up SIPs are powerful for long-term wealth.

Budgeting Tips for Asset Building
You spend Rs. 30K monthly now.
That’s very reasonable.
Your car EMI is only Rs. 10,355.
That’s manageable.

Some simple budgeting steps:

Follow 50-30-20 rule (Needs-Wants-Investments)

Increase SIPs with every salary raise

Don’t buy things on EMI unless essential

Plan every goal with fixed timeline and cost

Avoid lifestyle creep when income rises

Track all expenses monthly for discipline

Use budgeting apps or spreadsheets.
Involve your spouse in monthly reviews.
Together, you can stay financially strong.

Other Suggestions for Long-Term Wealth Creation
Avoid ULIPs, endowment, money-back or any mix of insurance + investment

If you already have LIC-type policies, review and surrender them

Use that money to invest in mutual funds

Avoid investing based on relatives’ or friends’ tips

Don’t invest in schemes promising guaranteed double return

Rebalance your portfolio once every year with your Certified Financial Planner

Final Insights
You have a great start.
Strong income, disciplined savings, low EMIs, and interest in mutual funds.

Now focus on:

Goal-based investing

Avoiding unnecessary debt

Covering all risks (insurance)

Allocating across equity + hybrid + debt

Tracking progress yearly

Working with a Certified Financial Planner for 360-degree guidance

In 10–15 years, this discipline will create real wealth.
You will enjoy financial freedom, not financial stress.

Keep things simple.
Stay consistent and goal-oriented.
That is the real secret to long-term wealth creation.

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