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Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 24, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Arpan Question by Arpan on Jun 24, 2025Hindi
Money

Hello Sir, I'm 39,a Govt Employee drawing 52k take home after CPF of 10k as my monthly Salary, I want to accumulate 1Cr by the age of 50, and I have following expenses and investment- 1- Rs 5300 LIC 'Jeevan Anand' started on 2015 for 33 years and sum assured value is 200000. Don't know how much ill get after 33 years some online platform says maturity amount 86L. What to do with this LIC someone suggest to surrender and invest elsewhere.. 2- SIP 2k UTI Nifty 50, 1k sbi contra, 1k sbi small cap and 2k sbi psu. Total accumulation around 50K till date 3- 6.5L loan, Monthly premium 14k, still 6L left for repayment. 4- CPF- 10k monthly 5- PPF bal till dat RS 6L 6- SSA of my girl child is 3k monthly 7- My monthly expenses 20k 9- no health insurance. However, I have a facility of reimburse if hospitalized but in CGHS rate. 10- no term plan as Im in a believe that LIC may help. 11- Emergency fund bal 1L PLEASE SUGGEST ME TO MANAGE MY FINANCE.

Ans: You are 39, a government employee, and take home Rs. 52,000 monthly.
You have financial discipline, which is a big strength.

You wish to build Rs. 1 crore by age 50.
That gives you 11 years.
This goal is achievable with a structured plan.

Let’s evaluate your current position first.
Then we will build a 360-degree financial strategy.

Your Current Cash Flow and Expenses
Monthly take-home: Rs. 52,000

Loan EMI: Rs. 14,000

LIC premium: Rs. 5,300

SIPs: Rs. 6,000

SSA: Rs. 3,000

Expenses: Rs. 20,000

Total outgoing = Rs. 48,300

Surplus left = Around Rs. 3,700

Your monthly flow is tight.
Surplus is very low.
Still, your savings habit is good.

But we need to reduce pressure on cash flow.
And make your money work better.

LIC Jeevan Anand Policy – The Hidden Problem
This is your biggest cash-flow drain now.
You pay Rs. 5,300 monthly (Rs. 63,600 yearly).
Policy term is 33 years. Sum assured is Rs. 2 lakh.

You mentioned some platform shows maturity value as Rs. 86 lakh.
That is not realistic. These are misleading assumptions.

Let’s understand the issue:

Actual guaranteed benefit is very low

Most return comes from non-guaranteed bonuses

These bonuses are not fixed or promised

Real return is often just 4% to 5%

Very poor return over 33 years

Life cover is only Rs. 2 lakh – too low

Not enough for your family protection

Action Plan:

Surrender this policy now

Take paid-up value if surrender is costly

Reinvest this Rs. 5,300 into better SIPs

This shift will build higher wealth

You will also free up cash flow for other needs

SIP Portfolio Review – Unbalanced Allocation
You invest Rs. 6,000 monthly as SIP.
Break-up is:

Rs. 2,000 in index fund

Rs. 1,000 in contra fund

Rs. 1,000 in small cap

Rs. 2,000 in PSU fund

Problems in current portfolio:

Overlap in themes

Too much passive index exposure

Small-cap and PSU sectors are high-risk

No diversification into balanced or flexi-cap

No large-cap active exposure

Index funds have big drawbacks:

No human judgement

Just copy market blindly

Keep bad stocks also

No chance to outperform

Only average return

Solution:

Stop index fund SIP

Shift to active large-cap or flexi-cap

Retain contra fund as it is a diversified style

Keep small-cap only if you can stay invested for 10+ years

Avoid sector-based PSU fund – very cyclical and risky

Choose funds through CFP and MFD only

Do not invest in direct plans – they give no guidance

Use regular plans for expert handholding

Loan EMI – Too High for Your Salary
You pay Rs. 14,000 EMI monthly.
Loan balance is Rs. 6 lakh.

That eats 27% of your income.
It is putting pressure on savings.

Suggestions:

Try to prepay small amounts yearly

Use any bonus, arrears, or gifts

Clear loan within 3–4 years

After loan closure, shift EMI to SIP

Reducing EMI will increase monthly surplus.
That surplus can fund your Rs. 1 crore goal.

CPF and PPF – Safe Long-Term Instruments
You contribute Rs. 10,000 to CPF.
PPF balance is Rs. 6 lakh.

These are good for long-term savings.
PPF is tax-free and secure.
CPF also builds retirement corpus.

But returns are moderate.
So, these alone can’t meet your Rs. 1 crore goal.
You need equity SIPs for growth.

Action Plan:

Continue PPF every year

Contribute at least Rs. 1 lakh yearly

Continue CPF as per government norms

Sukanya Samriddhi Account – Keep Going
You invest Rs. 3,000 monthly in SSA.
This is a good long-term choice.
Your daughter’s future is protected.

Keep in mind:

Use only for daughter’s education or marriage

This is not for your retirement or wealth-building

SSA gives fixed interest

Use SIPs for your own goals

No Health Insurance – Very Risky
You don’t have personal health insurance.
You depend on CGHS rate reimbursements.

This is dangerous.
CGHS hospitals may not be enough in serious cases.

One medical emergency can:

Drain your savings

Break your SIPs

Increase debt

Delay your goals

Action Plan:

Buy personal health cover of Rs. 5–10 lakh

Add top-up plan for higher coverage

Premium is low if taken early

Buy individual or floater policy

Claim CGHS first, then use policy if required

No Term Insurance – Big Mistake
You don’t have term insurance.
You believe LIC will help.

But your LIC policy only gives Rs. 2 lakh.
That is too low.
If anything happens, your family will struggle.

Term insurance is pure life cover.
It gives large sum assured at very low cost.

Action Plan:

Take term insurance for Rs. 50–75 lakh

Premium will be very affordable

Take policy till age 60 or 65

This gives your family protection

Do not delay this step.
It is as important as health cover.

Emergency Fund – Needs Boosting
You have Rs. 1 lakh emergency fund now.
Your monthly expense is Rs. 20,000
So, you have 5 months’ buffer.
That is good start.

Next Steps:

Build this to Rs. 1.5–2 lakh over next year

Keep in sweep-in FD or liquid account

Never use it for regular expenses

Use only for job loss, medical, urgent repairs

Goal: Rs. 1 Crore in 11 Years
You want Rs. 1 crore by age 50.
You are 39 now.
Only 11 years left.

To reach this, you need:

Higher monthly SIP

Disciplined savings

Better fund selection

Avoiding LIC-type products

Ending loan quickly

Having term and health cover

Step-by-step path:

Surrender LIC policy

Stop index and PSU funds

Choose balanced portfolio with help of CFP

Increase SIP from Rs. 6,000 to Rs. 12,000 gradually

Close loan early

Buy term insurance and health insurance now

Continue PPF and SSA regularly

Link each SIP to goal

Review fund performance every year

Rebalance if any SIP underperforms

Track progress of Rs. 1 crore goal every year

You will need guidance to build this plan.
So always invest in regular mutual funds through an MFD
who has CFP qualification.

They will guide portfolio review, risk level, tax planning, and more.
Avoid direct funds. They do not support long-term goals properly.

Finally
You are sincere and focused.
That itself is a big strength.

You are 39. Still have enough time.
But decisions must be smart and timely.

LIC is not the way to create wealth.
SIPs with proper fund selection will help.

Avoid index and direct plans.
Stay with active and guided mutual funds.

Don’t ignore health and term cover.
One medical crisis can ruin your goal.

Build your Rs. 1 crore target step by step.
Start with what is in your control.

Keep cash flow under control.
Keep expenses low.
Increase savings each year.

And track your goal with a clear path.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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.
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Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 03, 2024

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Dear Sir, I am 44 yrs old with wife and 2 kids of age 9&11.I have been investing my money into the following sectors over the last few years back. 1.LIC and SBI money back policies of 8.5L and will be mature in 2034. 2.Life cover for self of 50L has to pay till 2047 annually of 20K. 3.Max life ULIP plan SA 6L mature in 2031. 4.Family floater Health I surance of 5L 4.HDFC life click 2I combo plan invest of 9L 5.SSA till date for both children 1L each 5.SIP of 20K since last 4.5yrs monthly 6.SIP lumpsum of 1L invested in Axis medium cap fund invested 4yrs back My question is to secure my child education and retirement life after 55 yrs , corpus should be 2 Crore what else I have to do
Ans: It's commendable that you've been diligently planning for your family's future. Your commitment to securing your children's education and ensuring a comfortable retirement is truly admirable.

Considering your current investments, it's essential to evaluate if they align with your long-term goals. While your existing plans offer some protection and potential growth, diversifying your portfolio could provide added stability and growth potential. Have you explored avenues beyond traditional insurance policies and mutual funds?

Certified Financial Planners can offer personalized strategies tailored to your aspirations and risk tolerance. They can suggest options that balance growth potential with risk mitigation, guiding you towards achieving your desired corpus. Have you considered consulting one to fine-tune your financial roadmap?

Remember, the journey to financial security is not just about numbers—it's about ensuring peace of mind and enabling your loved ones to pursue their dreams. By proactively seeking guidance and exploring diverse investment avenues, you're laying a robust foundation for a fulfilling future. Keep nurturing your financial garden, and the seeds you sow today will bloom into a prosperous tomorrow.

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Ramalingam Kalirajan  |9758 Answers  |Ask -

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

Asked by Anonymous - Jun 27, 2024Hindi
Money
Hi I am 29 years old unmarried, earning 90 per month(77 in hand), fixed expense 20k per month. I have sip 25000 per month,I don't have any loans as of now. I have fd of 9.5 lakh,2 lakhs in savings and 4 lakhs lended to someone, mutual fund investment of 12.5 lakhs(including profit) and stock portfolio of 7 lakhs(including profit) ,I have 1 lakh in PPF and 3 lakhs in PF as well.Kindly suggest how can i manage my finance to reach a amount of 1 cr till I am 45 years old. Mutual funds I am investing are- 1- quant else tax saver 2- parag parekh flexi cap 3- HDFC midcap opportunities direct 4- ICICI prudential Bharat 22 ETF 5- quant absolute direct growth 6 - SBI small cap(1k) 7- Quant small cap (2k)
Ans: You’re doing great at 29 with your savings and investments! Let’s see how you can achieve your goal of Rs. 1 crore by the age of 45.

Current Financial Overview
You have a monthly income of Rs. 90,000 and take home Rs. 77,000. Your fixed expenses are Rs. 20,000 per month. Your investments include:

Rs. 9.5 lakhs in Fixed Deposits
Rs. 2 lakhs in Savings
Rs. 4 lakhs lent to someone
Rs. 12.5 lakhs in Mutual Funds
Rs. 7 lakhs in Stocks
Rs. 1 lakh in PPF
Rs. 3 lakhs in PF
You also have a monthly SIP of Rs. 25,000. Your mutual fund investments include a mix of tax saver, flexi cap, midcap, ETF, and small cap funds.

Goals and Planning
Setting a Clear Target
You aim to reach Rs. 1 crore by 45. That’s 16 years from now. Your current investments are well-placed. Now, let’s strategize to ensure you meet your goal.

Investment Strategy
Increase SIP Contribution
Currently, you’re investing Rs. 25,000 per month in SIPs. This is excellent. But increasing your SIP gradually will help you reach your goal faster. Consider increasing your SIP by 10% each year. This will leverage the power of compounding.

For instance, if you start with a SIP of Rs. 25,000 and increase it by 10% annually, it will significantly boost your corpus over the years. The power of compounding means your returns will generate more returns, accelerating your wealth growth.

Review and Optimize Portfolio
Your mutual funds include a good mix. However, it's important to review your portfolio annually. Check the performance of each fund. If any fund underperforms for more than 3 years, consider switching.

Emergency Fund
Maintain Liquidity
Keep 6 months of expenses as an emergency fund. You have Rs. 2 lakhs in savings, which is good. Ensure this fund is easily accessible. You can use a combination of savings accounts and liquid funds. This ensures you have funds available for unexpected expenses without having to liquidate your investments.

Fixed Deposits and Debt Investments
Utilize Fixed Deposits Wisely
You have Rs. 9.5 lakhs in FDs. FDs are low-risk but offer lower returns. Consider using part of this amount to increase your SIPs or invest in higher-return options like debt funds.

Debt funds can offer better returns than FDs while still being relatively low-risk. They invest in bonds and other fixed-income securities, providing a balance of safety and returns.

Stock Investments
Diversify and Monitor
You have Rs. 7 lakhs in stocks. Stock investments are high-risk, high-return. Ensure you diversify across different sectors. Regularly monitor and review your stock portfolio. Avoid putting all eggs in one basket.

Diversification reduces risk. If one sector underperforms, others may perform well, balancing your overall returns. Regular monitoring helps you stay updated on market trends and make timely adjustments.

PPF and PF Contributions
Long-Term Stability
You have Rs. 1 lakh in PPF and Rs. 3 lakhs in PF. These are great for long-term stability and tax benefits. Continue contributing to these regularly. PPF matures in 15 years, aligning well with your goal.

PPF and PF provide guaranteed returns and tax benefits. They are excellent for long-term financial security and should be a core part of your investment strategy.

Lending and Recovering Funds
Ensure Safety
You have Rs. 4 lakhs lent to someone. Make sure to recover this amount in time. Consider the safety and reliability of the borrower. Use this money to invest further once recovered.

Lending money can be risky. Ensure you have proper agreements in place and track repayment. Once recovered, reinvest it to generate returns.

Additional Investments and Insurance
Health and Life Insurance
Ensure you have adequate health insurance. Life insurance is crucial too, especially once you have dependents. Consider term insurance for adequate coverage.

Adequate insurance protects you and your family from financial distress in case of medical emergencies or untimely demise. Term insurance is cost-effective and provides substantial coverage.

Building Retirement Corpus and Child Education Fund
Power of Compounding
Mutual funds are excellent for building a retirement corpus. The power of compounding works wonders over long periods. Start early, invest regularly, and stay invested. This helps in growing wealth significantly.

Mutual funds, especially equity funds, have the potential for high returns over the long term. Compounding means you earn returns on your returns, exponentially growing your wealth.

Mutual Funds vs. Direct Stocks
Mutual funds offer diversification, professional management, and lower risk compared to direct stocks. They are suitable for investors who prefer a hands-off approach. Direct stocks require active management and market knowledge. Mutual funds are more consistent for long-term goals.

Direct stocks can provide high returns but require market knowledge and time to manage. Mutual funds, managed by professionals, offer diversification and consistent returns, making them suitable for most investors.

Regular Review and Adjustment
Annual Review
Review your financial plan annually. Adjust SIPs, check fund performance, and rebalance your portfolio. Stay informed about market trends and economic changes. Adjust your strategy as needed.

Regular reviews ensure your investments are aligned with your goals. Rebalancing helps maintain the desired asset allocation, reducing risk and optimizing returns.

Advantages of Mutual Funds
Professional Management
Mutual funds are managed by experienced fund managers who make informed investment decisions. This professional expertise can lead to better returns compared to individual stock investments.

Diversification
Mutual funds invest in a variety of securities, spreading risk. Diversification reduces the impact of poor performance by any single investment.

Systematic Investment
Mutual funds allow systematic investment plans (SIPs), enabling disciplined investing. SIPs help in averaging the cost of investments and reduce market timing risk.

Liquidity
Mutual funds offer high liquidity. You can redeem your investments anytime, providing flexibility in managing your funds.

Tax Efficiency
Equity mutual funds are tax-efficient, offering benefits like long-term capital gains tax exemption up to a certain limit. ELSS funds provide tax deductions under Section 80C.

Final Insights
Planning your finances to achieve Rs. 1 crore by 45 is attainable with disciplined investing and regular reviews. Ensure you maintain a diversified portfolio, leverage the power of compounding, and keep your goals in focus. Stay consistent with your investments, and increase contributions gradually. Remember, financial planning is a dynamic process. Regular reviews and adjustments are key to staying on track. Your current financial habits are commendable, and with these strategies, you’re well on your way to achieving your goals.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 15, 2024

Asked by Anonymous - Jul 15, 2024Hindi
Money
Good day Sir, I am 37 years old, I own a 2 bhk house in panvel and car which is debt free. Currently I do not have any ongoing loan. I am a seafarer , I sail for around 7 months on ships and 5 months on land, while on land I do not have any income. My salary package is 65 lakhs/year. My investments are as below. I wish to be invested in LIC for 15 years till the maturity date. LIC FAMILY PLAN - Investment started in Au2024 - with quaterly plan total of 57700/quater 1. LIC JEEVAN LABH 836 SELF 2. LIC JEEVAN LABH 836 WIFE 3.LIC JEEVAN TARUN -834 1ST CHILD 4. LIC JEEVAN TARUN - 834 2ND CHILD Above is for 15 years for self and wife and for children it is 20 years maturity date. Mutual funds - Planning to be invested only for 10 years. 1.HDFC LIFE SAMPOORN NIVESH-HEFC FLEXI CAP FUND , TAKEN FOR SLEF -INVESTING 2.0LAKHS/YEAR FOR 5 YEARS., INVESTMENT STARTED IN JAN 2024, WITH 5 YEARS LOCKIN PERIOD. 2. MAX LIFE NIFTY SMALLCAP QUALITY INDEX FUND. TAKEN FOR WIFE. INVESTED 2.0 LAKHS/ YEAR INVESTED IN JAN 2024 WITH 5 YEARS OF LOCKIN PERIOD. 3.SBI CONTRA FUND REGULAR GROWTH - LUMPSUM , INVESTED 50K IM DEC 2023. SIP's Planning to be invested for 10 to 15 years 1.Kotak small cap fund 2500/ month 2.axis bluecip fund 2500/ month 3.Edelwesis mid cap fund 2500/ month 4.Canara MF 2500/Month 5.ICICI Prudential INDIA opportunities fund 2500/ month 6.ICICI Prudential Blue chip fund 2000/month 7.Tata small cap fund 3000/ month 8 Tata ethical fund regular plan growth 5000/month.. 9.SBI large and midcap regular growth 800/ week 10.SBI small cap fund direct growth 10000/month 11.SBI Automative opportunities fund dire t plan growth 5000/ month. Sharemarket Parga parek 50k INR shares. Crypto- 1 lakhs investment. Request you to reveiw my investment, I am planning to have a corpus of 10 crore till i retire, which i will be planning till the age of 45 to 50 years. I have 2 son, current age are 7 years and 5 years. Also want to build a good corpus for there education. Also in next 2 years i will be planning to build emergency funds around 10 lakhs, and that i wish to park in liquid funds, so i will be able to get some minimum growth. I also have mediclaim of 40k per year for my family. Term plan for 2 cr. As per my retirment planning is the above investment enough to grow 10cr in next 13 years. Thanks and warm regards Ramiz
Ans: Hello Ramiz,

It's great to see your detailed investment strategy. You have made significant strides in planning for your future and your family. Your current investment portfolio is diverse and well-structured. Given your goal of accumulating a corpus of Rs 10 crore by the age of 50, let's review your investments to ensure they align with your objectives.

Current Investment Overview
Life Insurance Policies
You have invested in several LIC plans for yourself, your wife, and your children. While LIC policies provide financial security and maturity benefits, they often offer lower returns compared to other investment avenues.

Mutual Funds
Your mutual fund investments are a mix of equity and hybrid funds, with a focus on long-term growth. This is a good approach as equity mutual funds tend to provide higher returns over the long term.

Systematic Investment Plans (SIPs)
Your SIPs are spread across various fund categories, including small cap, mid cap, and blue chip funds. This diversification helps mitigate risk while aiming for significant returns.

Stock Market and Cryptocurrencies
Investing in the stock market and cryptocurrencies adds another layer of diversification. However, these investments come with higher volatility and risk.

Emergency Fund and Insurance
Planning to build an emergency fund of Rs 10 lakhs in liquid funds is wise. Your mediclaim policy and term plan ensure financial protection for your family.

Review and Recommendations
Life Insurance Policies
LIC policies are secure but may not offer the best returns for wealth creation. Considering the lock-in period and the lower returns, you might want to reassess these investments.

Consider Surrendering Policies: You could surrender some LIC policies and reinvest the proceeds into mutual funds or SIPs with higher growth potential. This can accelerate your corpus building.
Mutual Funds
Your mutual fund investments are generally well-chosen. However, let's focus on maximizing their potential.

Actively Managed Funds Over Index Funds: Actively managed funds have the potential to outperform the market, unlike index funds which mirror market performance. Your mutual funds should remain actively managed to benefit from professional expertise and potential higher returns.

Regular Plans Over Direct Funds: Regular plans offer access to professional advice through Certified Financial Planners (CFP), which can be beneficial for making informed decisions and navigating market complexities.

SIPs
Your SIP investments are well-diversified, which is excellent for balancing risk and return. Here are some additional thoughts:

Continue Diversification: Your SIPs in small cap, mid cap, and blue chip funds ensure a balanced risk profile. Continue this strategy to maintain growth and stability.

Review Performance Regularly: Keep an eye on the performance of your SIPs and make adjustments as needed. This ensures your investments stay aligned with market conditions and your goals.

Stock Market and Cryptocurrencies
While these are high-risk investments, they can yield high returns. Here's how to approach them:

Limit Exposure: Given their volatility, limit your exposure to stocks and cryptocurrencies to a small percentage of your overall portfolio. This will protect your capital while allowing for potential growth.

Stay Informed: Keep abreast of market trends and news related to your stock and crypto investments. This will help you make timely decisions and mitigate risks.

Emergency Fund
Building an emergency fund in liquid funds is a sound strategy. Liquid funds provide easy access to your money and offer some returns.

Regular Contributions: Make regular contributions to your emergency fund until you reach your Rs 10 lakhs goal. This disciplined approach ensures you are prepared for any financial contingencies.
Insurance
Your current insurance coverage seems adequate. The mediclaim policy and term plan provide necessary financial protection.

Review Coverage: Periodically review your insurance coverage to ensure it meets your family’s needs. Adjust the coverage if necessary to keep pace with inflation and changing life circumstances.
Planning for Children's Education
Building a corpus for your children's education is crucial. Here are some strategies:

Invest in Child-specific Plans: Consider child education plans that offer a mix of equity and debt. These plans are designed to provide significant returns over the long term and ensure funds are available when needed.

Regular Investments: Continue regular investments in SIPs and mutual funds. This will help grow the education corpus systematically.

Consider Education Loans: If required, education loans can supplement your savings and ensure your children receive the best education without financial strain.

Achieving the Rs 10 Crore Goal
To reach your goal of Rs 10 crore by the age of 50, focus on the following strategies:

Increase Investment Amounts
Boost SIP Contributions: Gradually increase your SIP contributions as your income grows. This can significantly enhance your corpus over time.
Optimize Portfolio Returns
High-growth Investments: Allocate a portion of your portfolio to high-growth investments like mid-cap and small-cap funds. These have the potential to offer higher returns.
Monitor and Rebalance
Regular Review: Conduct regular reviews of your investment portfolio. Rebalance it periodically to ensure it remains aligned with your goals and risk tolerance.
Tax Planning
Utilize Tax-saving Instruments: Invest in tax-saving instruments like ELSS (Equity Linked Savings Scheme) to reduce your tax liability and increase your effective returns.

Tax-efficient Withdrawals: Plan your withdrawals in a tax-efficient manner to maximize the amount available for your goals.

Final Insights
Your current investment strategy is robust and well-diversified. By making a few adjustments, you can optimize your portfolio to achieve your financial goals. Focus on high-growth investments, regularly review your portfolio, and ensure your insurance coverage is adequate. With disciplined investing and strategic planning, you are well on your way to achieving your Rs 10 crore target and securing your family’s future.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Dec 16, 2024

Asked by Anonymous - Dec 15, 2024Hindi
Money
Hi Experts, Im 30 male from bangalore working in IT Field.Ive kid 1.6old and my is house wife. I would like to check if my current financial approach is correct or need any changes please suggest. My Goal is to have retirement corpus 2cr and ensure my Daughter education atleast 50L-1Cr. Below is my current investments EPF:210000(Both mine and employer contibution so far) SSY on my daughter name:24k(2k per month) SIP:109000(16K Per month)(Current value 120000) Stock investment:73K(Current value 81K) LIC:45K(Paid for 4years, total maturity yeas i 25y, premium to be paid till 16years) Emergency fund: 1L( accumulating it to 2.5 as monthly RD of 10k) And I have term insurance for 1cr. Health insurance im currently having company provided insurance only. My Inhand currently is 75K, Ill be getting 1L from jan month. Considering the above investments and salary what would be my best approach to achieve the Goals I mentioned? And I some how feel LIC investment doesnt feel OK considering the inflation but at the same time I dont want to totally invest in stock market due to voltality. So Is it good to continue in LIC or any other investment option we csn go for other than LIC. Please advise how to achieve above goals.
Ans: You have made thoughtful investments while managing your family's needs. Your goals—Rs. 2 crore for retirement and Rs. 50 lakh-1 crore for your daughter’s education—are realistic. Below, I will evaluate your current financial approach and provide recommendations for improvement.

Current Financial Investments
1. EPF (Rs. 2,10,000)
EPF is an excellent instrument for retirement.
Its compounding benefit and tax-free maturity add to your retirement corpus.
2. Sukanya Samriddhi Yojana (SSY) (Rs. 24,000)
SSY is a good option for your daughter’s education.
It offers high returns and tax benefits but lacks flexibility.
3. Mutual Fund SIP (Rs. 16,000 per month)
A disciplined SIP of Rs. 16,000 is impressive for wealth creation.
Equity mutual funds align with long-term goals and help beat inflation.
4. Stock Investments (Rs. 73,000)
Your stock portfolio is relatively small but has shown growth.
Stocks can provide higher returns but are volatile and need monitoring.
5. LIC Policy (Rs. 45,000 annually)
LIC policies typically provide low returns.
They may not keep pace with inflation compared to equity-oriented investments.
6. Emergency Fund (Rs. 1,00,000)
Building your emergency fund through an RD is a good practice.
Aim to maintain 6-12 months of monthly expenses as an emergency fund.
7. Term Insurance (Rs. 1 crore)
A term plan is a cost-effective way to secure your family’s financial future.
Ensure the coverage is adequate to replace your income until your child is independent.
8. Health Insurance (Company-Provided)
Relying solely on company health insurance is risky.
You need a personal health policy to cover your family adequately.
Recommendations to Achieve Your Goals
1. Retirement Planning
EPF is a good start but may not meet your Rs. 2 crore target.
Increase your SIP contributions whenever income grows.
Invest in equity mutual funds through regular plans under the guidance of a Certified Financial Planner (CFP).
Avoid direct mutual funds. A CFP ensures proper fund selection and periodic rebalancing.
Periodically review your portfolio to ensure it stays on track with your retirement goal.
2. Children’s Education Fund
SSY is suitable for a part of your daughter’s education.
To complement SSY, start a dedicated mutual fund SIP for her higher education.
Equity mutual funds offer the potential to achieve Rs. 50 lakh-1 crore over 12-15 years.
Consider hybrid mutual funds for diversification and reduced volatility closer to the goal.
3. LIC Policy Assessment
LIC policies provide insurance but lack wealth creation potential.
The maturity returns often fail to beat inflation.
Consider surrendering the policy. Reinvest the surrender value in mutual funds.
Alternatively, keep the policy if surrender charges are high but avoid similar investments in the future.
4. Health Insurance
Buy a personal health policy for you, your wife, and your child.
Consider a family floater plan with Rs. 10-15 lakh coverage.
Ensure the policy includes maternity and child coverage, especially with a young child.
5. Emergency Fund Expansion
Your emergency fund target of Rs. 2.5 lakh is reasonable for now.
Maintain this fund in liquid mutual funds or high-interest savings accounts.
Avoid investing your emergency fund in volatile instruments like stocks or equity mutual funds.
6. Enhanced Investment Strategy
With a salary increase to Rs. 1 lakh, allocate the extra Rs. 25,000 systematically:

Rs. 10,000: Increase SIP contributions to equity mutual funds.
Rs. 5,000: Contribute towards your emergency fund or health insurance premiums.
Rs. 5,000: Start a dedicated SIP for your child’s education.
Rs. 5,000: Invest in a mix of balanced mutual funds for diversification.
Diversify your mutual fund portfolio across large-cap, mid-cap, and flexi-cap funds.

Avoid gold investments unless for cultural or specific financial needs.

7. Tax Efficiency
Monitor your investments for tax benefits. EPF, SSY, and term insurance offer Section 80C deductions.

Equity mutual funds offer tax efficiency. Long-term gains up to Rs. 1.25 lakh annually are tax-free.

Keep track of the new tax rules for capital gains to avoid surprises.

Final Insights
You have made a strong start toward your financial goals. With disciplined investing and slight adjustments, you can achieve them effectively.

Focus on mutual funds for wealth creation and education planning.

Secure your family with adequate health insurance.

Reassess your LIC policy and prioritise higher-return investments.

Periodic reviews of your portfolio with a Certified Financial Planner will ensure alignment with your goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

..Read more

Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 20, 2025

Asked by Anonymous - Jun 20, 2025
Money
Hello Sir, Please suggest if I'm on the right path of saving for future. I'm 32, unmarried, and earning 1.3L per month after deductions. Relatively new to investing. 1. Started 15K MF SIP monthly since Feb '24 (66% equity, 14% debt and 20% hybrid). 2. Ppf started Apr '24 - Saved upto ~2lakh. Should I continue to invest here? 3. NPS and EPF are deducted from salary every month (7.5k and 18k resp) 4. Chit fund - Need to continue paying ~50k every month till Nov'25 and I'll get ~ 10 Lakh. What should I do with this amount? 5. LIC - need to pay ~2 lakh yearly (for another 15yrs) 6. No additional health or term insurance plans. 7. Office provides 5lakh health insurance + 60L personal accident + 80L term life (I don't understand how this works, but I believe these are yearly). Should I get separate health and term insurance? 8. Own house and no rent. 9. Personal expenses ~20k monthly Might be getting married mid next year and need to have ~15lakh to cover expenses. Please suggest.
Ans: You are thinking in the right direction.
Your structured savings approach is a good start. Let us now assess your investments step-by-step.

Your Income and Expenses Overview
Monthly take-home: Rs. 1.3 lakh

Monthly personal expenses: Rs. 20,000

No rental burden (as you own a house)

Existing liabilities: Chit fund (Rs. 50k/month till Nov 2025), LIC (Rs. 2 lakh/year)

You are saving more than 50% of your income. That’s very good.
This high saving rate gives flexibility for long-term wealth creation.

Mutual Fund SIPs
Started: Feb 2024

Monthly SIP: Rs. 15,000

Allocation: 66% equity, 14% debt, 20% hybrid

Our Evaluation:

SIP is a very effective way to build long-term wealth.

Your equity-debt-hybrid mix is acceptable for your age.

As you are young and unmarried, equity allocation can be a bit higher.

But make sure the equity funds are diversified, and not all are small/mid-cap.

Hybrid funds help to reduce volatility. Good for short to medium-term goals.

Debt fund allocation is small, but useful to keep liquidity and stability.

Suggestions:

Increase your SIP amount to Rs. 20,000 or more once chit ends in Nov 2025.

Review your MF schemes every 6 months with a Certified Financial Planner.

If you’re investing in direct mutual funds, please reconsider.

Why Regular Funds Through Certified Financial Planner are Better:

Regular funds come with guided support.

A Certified Financial Planner helps you manage risk and asset mix.

Direct funds offer no advice.

Without guidance, mistakes are common.

Wrong scheme choices can reduce returns.

Paying a small commission for long-term discipline and advice is worth it.

PPF Investment
Started in April 2024

Saved ~Rs. 2 lakh so far

Our Assessment:

PPF is a good low-risk savings product.

It gives tax-free interest and safe returns.

Useful for long-term goals like retirement or children’s education.

Lock-in is 15 years, so liquidity is low.

But the stability makes it a good balance to your equity investments.

Recommendation:

Continue investing in PPF every year.

Consider contributing Rs. 1.5 lakh per year if affordable.

Treat this as part of your debt allocation.

EPF and NPS Deductions
EPF: Rs. 18,000/month

NPS: Rs. 7,500/month

Assessment:

Both are mandatory and long-term focused.

EPF gives steady, tax-free interest.

NPS gives equity exposure with tax benefits.

Our View:

Continue both as they are salary linked.

NPS can be used as an additional retirement tool.

Do not rely solely on NPS for wealth building.

Equity mutual funds will help you build faster wealth.

Chit Fund Commitment
Paying Rs. 50,000/month till Nov 2025

Will receive ~Rs. 10 lakh at maturity

Our Analysis:

Chit funds are not safe or regulated like other investments.

Use chit funds only for liquidity, not long-term wealth creation.

Since you are already committed, continue till maturity.

What to Do with Rs. 10 Lakh?

Once you receive the maturity amount:

Keep Rs. 2–3 lakh as emergency fund in FD or liquid mutual fund.

Invest balance Rs. 7–8 lakh in mutual funds (mostly equity).

Allocate for medium/long-term goals.

Use regular plans through a Certified Financial Planner.

LIC Policy – Investment cum Insurance
Annual premium: Rs. 2 lakh

Tenure remaining: 15 years

Our Observation:

LIC traditional plans give very low returns.

Returns are 4% to 5% only, and locked-in.

Mixing insurance with investment is not efficient.

Real wealth creation needs better returns.

Suggestions:

Check if it is a traditional policy or ULIP.

If it is traditional or ULIP, consider surrendering it.

Use surrender value to invest in mutual funds.

Ensure you take proper term insurance first.

Insurance Cover – Provided by Employer
Health insurance: Rs. 5 lakh

Personal accident: Rs. 60 lakh

Term life insurance: Rs. 80 lakh

Important Insight:

Employer-provided policies are valid only till you are employed.

No control or portability.

Can stop anytime.

Not sufficient as standalone protection.

Term Insurance:

Rs. 80 lakh cover is decent for now.

But you need your own term insurance.

Take cover of at least 15–20 times your yearly income.

That’s Rs. 2 crore or more.

Premium is low if bought early.

Take term insurance only, not investment-linked.

Health Insurance:

Rs. 5 lakh cover is low.

If you leave job, you may be left uninsured.

Take separate individual or family floater plan.

Choose minimum Rs. 10 lakh cover.

Health costs are rising fast.

Buy now while you are young and healthy.

Upcoming Marriage Expenses
Marriage planned mid next year

Estimated expenses: Rs. 15 lakh

Suggestion:

Keep money in a safe, non-volatile place.

Use short-term debt mutual funds or fixed deposits.

Avoid equity for this goal.

Equity is risky for goals under 1 year.

If you don’t have full amount ready yet:

Start monthly RD or STP from liquid to short-term debt fund.

Use upcoming bonus or surplus to build corpus.

Other Suggestions for 360° Planning
Emergency Fund:

Keep 6 months of expenses as emergency fund

Include EMI + SIP + household costs

Use FD or liquid fund for this

Goals to Start Planning:

Retirement

Child education (once married)

Travel or sabbatical in future

Car or home upgrade if needed later

Investment Habits to Strengthen:

Set clear goals and match them with right investments

Don’t withdraw from investments for short-term needs

Don’t follow tips or friends for fund selection

Review portfolio once a year

Rebalance equity and debt allocation if it goes off track

Finally
You are doing many things right already

SIPs, PPF, EPF, NPS, and high savings rate are good signs

But a few gaps need fixing:

No personal insurance

LIC policy is not wealth-creating

Chit fund is not ideal

Direct mutual fund route can be risky without expert help

To move forward strongly:

Increase SIPs when chit ends

Build emergency and marriage fund separately

Take term and health insurance urgently

Exit poor-return products like LIC (after taking term cover)

Use regular mutual fund route with Certified Financial Planner

This way, you will move towards strong, stable wealth creation.
Life goals like marriage, family, and retirement can be achieved comfortably.
A 360° plan makes your future confident and clear.

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

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |9758 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 16, 2025

Money
Hi I am 46.working in Pvt sector. Able to save 10000rs per month. Don't have much savings or investment. Kindly guide me how to invest this amount to build up a good corpus in coming 10 years
Ans: You are 46 years old and saving Rs.10,000 every month. You want to create a strong investment plan for the next 10 years. You do not have much existing savings. That’s perfectly okay. You are ready to act now. That’s what matters.

Here is a detailed, simple, and practical 360-degree plan.

? Understand your financial starting point
– You are 46 years old, working in private sector.
– You are able to save Rs.10,000 monthly.
– You have minimal past savings or investments.
– You have not mentioned any LIC, ULIP, or insurance-based investments.
– You are now planning for a better financial future in 10 years.

That’s a great and timely decision.

? Clarify your financial goals
– Think about what you want after 10 years.
– Is it retirement? Or a second income source?
– Or your child’s higher education or marriage?
– Having a clear goal helps in better investment planning.
– You can define your goal in simple terms.
– Also, prioritise between must-have goals and good-to-have goals.

This brings better clarity and commitment.

? Monthly savings are your superpower
– Rs.10,000/month may look small. But it’s powerful.
– In 10 years, it can create meaningful wealth.
– Consistency is more important than amount.
– Keep saving without breaks.
– Even in tough months, try not to skip SIPs.

Discipline is your biggest strength now.

? Emergency fund is your safety net
– You should first build a safety buffer.
– Set aside 6 months of your monthly expenses.
– If monthly expense is Rs.30,000, build Rs.1.8 lakh buffer.
– Start with Rs.1 lakh in savings and liquid fund.
– Keep 30% in savings bank. Keep 70% in liquid fund.
– Avoid fixed deposits. Early withdrawal charges reduce returns.
– Liquid funds are better than savings.
– They offer next-day withdrawal and better returns.

Build emergency fund first. Then start investing for long-term goals.

? Avoid index funds for long-term wealth creation
– Index funds are unmanaged. They just copy the market index.
– They don’t protect you during falling markets.
– They drop fast during crashes.
– They don’t adjust to changing market conditions.
– You need smart fund management for long-term growth.
– Actively managed funds are better.
– They are run by professional fund managers.
– These managers buy or sell based on research.
– You benefit from their market insights.
– In India, actively managed funds have outperformed index funds.

Index funds may look cheap. But they cost returns in long run.

? Avoid direct plans if you are not an expert
– Direct plans don’t give you guidance.
– You must decide fund, amount, changes, rebalancing – all on your own.
– No help during volatile markets.
– No suggestions when your goals change.
– Regular plans through a Certified Financial Planner (CFP) give guidance.
– You get support in fund selection and goal planning.
– CFPs help you avoid costly mistakes.
– They also review your portfolio regularly.
– Regular plans help you stay invested calmly.
– Investing is not just numbers. It’s also behaviour.

Handholding matters more than small expense ratio difference.

? Begin with 2–3 strong equity mutual funds
– Start with only 2 or 3 diversified equity funds.
– Choose Flexi Cap and Large & Midcap categories.
– These give good mix of large and mid companies.
– Add a Balanced Advantage Fund for market stability.
– These funds shift between equity and debt automatically.
– You don’t need to monitor markets daily.
– Avoid sector funds, international funds, thematic funds.
– They are risky and not suitable for your stage.
– Don’t try to pick many funds.
– Few good funds are enough.

Over-diversification leads to confusion, not better returns.

? Allocate SIP amounts with simplicity
– You can start SIP of Rs.4,000 in Flexi Cap fund.
– Rs.3,000 in Large & Midcap fund.
– Rs.3,000 in Balanced Advantage fund.
– Total = Rs.10,000/month.

This is simple and powerful allocation.

? Increase SIPs every year
– Try to increase your SIPs by 5–10% yearly.
– If income rises, increase investments first before expenses.
– Even Rs.1,000 extra per year makes a big difference.
– Over 10 years, this boosts final corpus strongly.

Growth in SIP is more important than one-time investments.

? Keep equity investments long term
– Don’t withdraw before 10 years.
– Let the money grow through compounding.
– Equity markets have ups and downs.
– But they reward patient investors over time.
– If you panic in short term, you lose returns.

Time is your best friend in equity.

? Avoid investment-linked insurance policies
– Don’t mix insurance with investment.
– LIC policies, endowment plans, ULIPs give poor returns.
– They promise returns, but deliver less than inflation.
– Keep insurance separate and simple.
– Buy term insurance if not already taken.
– Premium is low, cover is high.

Investment-cum-insurance products dilute both goals.

? Review portfolio every year
– Fund performance must be tracked once a year.
– Change the fund if it underperforms for 2 years.
– Rebalance if one fund grows too big.
– Your Certified Financial Planner will help with review.
– Don’t switch funds often. Review, not react.

Long-term success comes from patience and planning.

? Understand tax impact of mutual funds
– Long Term Capital Gains above Rs.1.25 lakh are taxed at 12.5%.
– Short Term Capital Gains are taxed at 20%.
– For debt funds, both gains are taxed as per your tax slab.
– Plan your withdrawals smartly.
– Take help of your CFP before redeeming.

Tax planning can save you big money.

? Stay away from risky investments
– Don’t invest in stock tips or small companies.
– Don’t try F&O or day trading.
– Stay away from chit funds and ponzi schemes.
– Don’t follow friends or relatives blindly.

Stick to mutual funds with professional guidance.

? Stay consistent with your plan
– Don’t stop SIPs due to short-term events.
– Avoid taking emotional decisions based on news.
– Focus on your goals, not market noise.
– Investing is like growing a tree.
– Give time, water it regularly, don’t uproot.

Consistency builds wealth quietly and surely.

? Create financial discipline in your life
– Avoid unnecessary expenses.
– Track your income and spending.
– Set automatic SIPs.
– Pay off credit card bills fully.
– Don’t take loans for gadgets or travel.
– Start saving before spending.

Good habits support good investments.

? Finally
– You are starting at 46, but that’s not late.
– Many people don’t start at all.
– Rs.10,000/month for 10 years with right discipline is powerful.
– Focus on quality funds.
– Stick to your goals.
– Review annually.
– Stay invested with the help of a Certified Financial Planner.
– Avoid direct plans if you’re not hands-on.
– Avoid index funds.
– Build emergency fund first.
– Increase SIP yearly.
– Don’t stop investing.
– Your 10-year wealth plan is now in motion.

Let your money work quietly. You stay focused and calm.

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.

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