Dear Sir I had ancestral property at native place which fetch 14K Rent monthly...Property is 40Years old.. Will it be good If I sell that property for 70Lakh and keep that money in Balanced fund or in NPS account

Ans: Financial Position Assessment

You have a monthly pension of Rs. 42,000 and a personal loan of Rs. 4 lakhs with a monthly EMI of Rs. 17,000. You also receive Rs. 4,000 as rent. Your primary asset is 5 cents of land, valued at Rs. 25 lakhs.

You have no children and live in your own house. Your husband earns Rs. 1 lakh monthly and has savings in PF.

Debt Management

Prioritize repaying the personal loan. The high EMI reduces your disposable income. Consider using part of the land sale proceeds to clear this debt. This will relieve financial stress.

Asset Utilization

Selling your 5 cents of land could provide immediate liquidity. With Rs. 25 lakhs, you can clear your personal loan and still have a significant amount left. This could enhance your financial stability.

Investment Strategy

Instead of reinvesting in farmland, consider diversifying your investments. Farm land can be risky and illiquid. Here are some options to explore:

Mutual Funds: Opt for actively managed mutual funds. They offer potential for higher returns. They also provide professional management.
Fixed Deposits: For safety and guaranteed returns. They offer peace of mind.
Post Office Schemes: Safe and offer decent returns. Ideal for retired individuals.
Senior Citizen Savings Scheme (SCSS): Offers regular interest payments. Safe and government-backed.
Income Generation

Continue renting out your property for Rs. 4,000 monthly. This provides a steady income stream.

Insurance Review

Review your insurance policies. Ensure adequate health and term insurance coverage. This protects against unforeseen events.

Husband's Contributions

Leverage your husband's income and savings. His PF savings can be a good backup. Plan together for a secure retirement.

Consult a Certified Financial Planner

A CFP can help you make informed decisions. They offer professional advice tailored to your needs.

Final Insights

Selling your land can provide immediate financial relief. It allows you to clear your personal loan and invest the remaining amount wisely. Diversifying your investments ensures financial stability and regular income.

Avoid reinvesting in farmland due to its risks. Leverage your husband's income and savings for a secure future. Consulting a CFP ensures you make the best decisions for your financial well-being.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

Ans: Yes it is advisable that you exit that non growing property investment and reinvest the proceeds in mutual funds for long term horizon.

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing.

Happy Investing

Ans: I propose that you estimate the long term(assumed) capital gain tax liability that may arise after sale of this flat considering indexation or without indexation as is optimal for you. Next consider the future redevelopment potential in the tier-1 city particularly in the area where you have the flat. Another point to be borne in mind is if your daughters need to move to tier-1 city in future for better coaching, education, prospects then this aspect needs to be considered. If you still want to sell the flat then time it in such a way when you want to buy new residential property in tier2 city because you can utilise all your gains here without paying any capital gain tax(Section 54 of Income tax act allows exemption subject to conditions) and/or buying section 54 EC Capital Gain bonds to save LTCG payment(50L per FY limit & 6 months within sale of property subject to eligibility).

Unless you have strong knowledge of markets or an investment advisor to assist you, I would recommend you to redeem your(family) stock holdings(subject to high volatility and needs regular monitoring) of 85L+15L and invest it in a staggered manner into equity savings and value focussed balanced advantage fund for horizon of 4-5 years.

*Investments in mutual funds are subject to market risks. Please read all scheme related documents carefully before investing

You may follow us on X at @mars_invest for updates

Happy Investing!!

Ans: You are managing across two countries—Hyderabad, Chennai, and the US—which already shows impressive discipline. You have three large areas to manage:

Your outstanding home loan on a Hyderabad apartment

Your son’s private engineering college fee of Rs?2.5 lakh annually

US 401(k) savings equivalent to Rs?28 lakh

You want to know which option suits you best:

Sell Hyderabad apartment, pay off loan, invest remaining in FD

Sell inherited property

Use your US 401(k) savings

I understand this is not just finance—it’s your son’s future and your family’s security. Let me provide a careful, 360-degree evaluation without overload, but with clear guidance.

Your Current Financial Position
Monthly take-home: Rs?1.5 lakh post deductions and tax

Hyderabad home: Currently valued ~Rs?40 lakh, with Rs?12 lakh outstanding loan. EMI ~Rs?28k/month

Son’s education: Rs?2.5 lakh per year needed immediately

US savings: 401(k) showing Rs?28 lakh balance

Another inherited property: Amount and location not specified

No mention of emergency fund or cash buffer

No details on other investments (PPF, mutual funds, gold, etc.)

First, let us stabilise your situation, plan your cash flow, and then decide which asset to liquidate and how.

Step 1: Build or Review Your Emergency Fund
Right now, there is no mention of a cash buffer. Your EMI is Rs?28k/month and education fee is Rs?2.5 lakh yearly, but living expenses aren’t shown.

You need 6 months’ worth of living expenses including EMI and fee instalments. Let us assume expenses run around Rs?80k monthly for family living (food, commute, utilities). On top of EMI and annual fee, this suggests a cash buffer requirement as follows:

Living expenses for 6 months: Rs?4.8 lakh

EMI buffer for 6 months (EMI 28k x 6): Rs?1.68 lakh

Education fee corpus buffer in liquid fund: Rs?2.5 lakh

Total emergency + fee buffer therefore ~Rs?9 lakh
Build or ensure you have this liquid buffer before making any decisions.

Step 2: Evaluate Your Hyderabad Apartment Option
If sold at Rs?40 lakh:

Loan payoff: Rs?12 lakh

Net proceeds: ~Rs?28 lakh minus selling/transfer costs

EMI stops; cash flow improves by Rs?28k monthly immediately

Post-sale capital deployment:

Maintain Rs?9 lakh buffer in liquid funds

Remaining ~Rs?19 lakh for investment

If placed in FD at 7% returns, you get ~Rs?1.1 lakh per annum (Rs?9k/month)

This income can support your son’s yearly fee easily

You also now have no loans to the apartment; simplifies your cash flow and reduces financial stress. Your monthly income of Rs?1.5 lakh would no longer be partially diverted to EMI.

However, before selling you must confirm:

Do you have other suitable housing in Hyderabad? If you may want to reside or rent it, there may be better income opportunity via rental property.

Do you need the apartment in future for retirement or long-term stay? Consider that freedom wisely.

Overall, selling the Hyderabad apartment offers cash and removes financial burden quickly.

Step 3: Evaluate Selling Inherited Property
You mention a second inherited property but haven’t shared its value or location. Please consider:

Market value and liquidity (ease of sale)

Capital gains tax and transfer costs

Emotional or family connection to it

Term remaining in loan (if any) against it

If it is equally liquid and of similar value, selling inherited property could yield similar benefit while keeping apartment as an asset. But:

You may need the apartment if you plan to return to Hyderabad

Or if that property is more profitable for rental

Ask: which property sells easier, gives more net, and creates better post-sale return?

Step 4: Using 401(k) Savings — Is It a Good Idea?
You have Rs?28 lakh sitting in US 401(k). Liquidating it now might:

Provide Rs?28 lakh once cashed out

After considering tax and exit charges, net amount may drop by 20–30%

You lose the long-term compounding power in the 401(k) fund

Early withdrawal may incur tax and penalty depending on your US work visa status or age

And you might face currency conversion risk when converting to INR

So while it provides an immediate cash source, the downsides are:

Loss of tax-deferred retirement savings

Likely tax penalty and other charges

Reduction of future retirement corpus by Rs?50 lakh (accounting compounded return)

This makes it a last-resort option, after other methods are exhausted.

Step 5: Compare All Options
Option A – Sell Hyderabad Apartment:
Clears loan and EMI

Improves monthly cash flow

Gives lump sum to invest

Might lose future asset if you ever move back

Option B – Sell Inherited Property:
Clears loan without touching primary residence

Asset in place for future use

Liquidity depends on location and market

Requires time to ask family or emotional clarity

Option C – Use 401(k):
Tax and penalty leads to lesser net amount

Reduces retirement corpus

Fair solution only if you have no other option

Based on this, Option A or B—selling a property—is better.
Preferably not 401(k) now.

Step 6: How to Deploy Fund After Sale
Once you unlock capital:

Clear the outstanding loan immediately

Rebuild emergency fund of Rs?9 lakh

Allocate remaining funds—whichever property you sell—towards your child’s education

Suppose you have Rs?28 lakh after sale and Rs?9 lakh buffer:

Leftover Rs?19 lakh

You can invest this corpus wisely:

Split into two buckets:

Equity mutual fund/STP to generate growth

Debt/hybrid products to preserve short-term security for fee payments

Important: Avoid using FDs only, as they may not beat inflation over next 5–7 years.
Use actively managed equity funds via regular plans through a CFP-backed MFD.
Index funds alone increase risk without active evaluation.

Example deployment:

Rs?10 lakh into equity mutual fund via STP over 12 months

Rs?9 lakh into hybrid or debt fund to match fee payment schedule

If you prefer not to invest lump sum in equity, invest only in debt since you need cash for fee.
But with an EMI freed, you gain room to experiment with a small SIP of Rs?10,000 in equity too.

Step 7: Plan for Remaining Education Fee Needs
Your son needs Rs?2.5 lakh annually for engineering. Next 4 years means at least Rs?10 lakh.

You already have:

FD or corpus after sale

Option to start an equity SIP now (momentum of 12-month STP)

Line up:

Infrastructure fund or balanced advantage fund for next 4–5 years

Keeps money growing but safe closer to fee deadlines

Use STP to stagger equity into this portfolio

Also, maintain flexibility in reallocation if fee structure changes.

Step 8: Keep and Grow Your US 401(k) for Retirement
Avoid liquidating 401(k) now; leave it invested.

It provides:

Long-term retirement growth in USD

Flexibility to withdraw after 59½ years without penalty

Check if you can roll it into an IRA or Indian retirement product when you permanently move

By avoiding early withdrawal, you retain growth and retirement stability.

Step 9: Monitor Cash Flow and Budget Discipline
With monthly income 1.5 lakh and no Hyderabad EMI, your finances will look smoother.

Set up a monthly budget:

EMI-free living expenses (food, bills, commute) ~Rs?70,000

Education-oriented corpus contribution ~Rs?20,000 (SIP or debt investment)

Equity SIP of Rs?10,000

Emergency fund top-up ongoing

Health insurance premium for your son and self (if not already)

This ensures you have liquidity, growth, and no pressure on your current lifestyle.

Step 10: Insurance and Protection Review
Use freed-up resources or monthly gains to secure your insurance:

Health insurance for self and son with Rs?10–15 lakh cover

You already have loan protections? If not, take a term life insurance to protect dependents

Consider critical illness rider for large medical expense protection

These measures help prevent unexpected events from hurting your savings or son's education.

Step 11: Revisit Your Retirement Planning Periodically
Your retention of 401(k) plus India investments must work together.

You need to plan:

Tax-efficient withdrawal from Indian investments

Asset allocation across INR and USD

Review every 12-months with a Certified Financial Planner

You are likely setting up for retirement in India with part of your corpus in the US vesting.

Final Insights
You have three main choices:

Sell Hyderabad apartment – immediate EMI relief, invest proceeds

Sell inherited property – less emotional compromise, similar cash flow

Avoid selling or using 401(k) – that helps preserve retirement corpus

My advice:

Decide on which property to sell based on ease, taxes, and sentimental value

Use proceeds to pay off loan, rebuild emergency buffer, and invest as laid out

Build your son’s fee corpus via balanced and equity mutual funds

Preserve your 401(k) for retirement. Avoid early withdrawal

Use new cash flow wisely—budget, secure insurances, and begin long-term investing

With clear steps, you can support your son’s education and secure your financial future—without jeopardising your long-term stability.

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