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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 10, 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

Asked by Anonymous - Jul 01, 2025Hindi

Hello sir I am 23 years old and my salary is 20000 month and my expenses are 8000 I want to start start small sip in mutual fund for my marriage and invest in stock market for future so suggest me a good financial planning so I can enjoy my life after my marriage

Ans: You have a great start. Time is on your side.

Let’s build your financial plan in a simple and detailed way.

Your Present Income and Expense
– Salary is Rs. 20,000 per month.
– Expenses are Rs. 8,000 per month.
– Your savings capacity is Rs. 12,000 monthly.
– That’s 60% savings rate. Very impressive.
– This will help build wealth faster.

You are already better than most young earners.

Step 1: Build Emergency Fund
– First step is creating safety buffer.
– Keep 4 to 6 months of expenses.
– That means around Rs. 40,000 to Rs. 50,000.
– Use savings account or liquid mutual funds.

Emergency fund protects you from job loss or medical needs.

Step 2: Get Health Insurance
– Check if you have health cover from employer.
– If not, take personal policy for Rs. 5 lakhs.
– Premium will be very low at your age.
– Health emergencies can destroy savings.

Always protect health first before investing.

Step 3: Start SIP for Marriage Goal
– Marriage is a 5 to 7 year goal.
– Use balanced or aggressive hybrid mutual fund.
– Start with small SIP of Rs. 2,000 to Rs. 3,000 monthly.
– Increase SIP every year by 10% minimum.
– Don’t stop SIP unless real emergency comes.

Mutual funds grow better than FD and give flexibility.

Step 4: Start Investing in Stocks Slowly
– You want to invest in stocks also.
– That is good for long-term growth.
– But don’t invest directly now.
– Stock market needs time and learning.
– Begin with mutual funds to understand market movement.
– Learn about equity investing side-by-side.
– Use paper trading for practice.

Don’t put marriage or safety money in direct stocks.

Step 5: Retirement Planning Must Start Early
– Even if you’re 23, retirement saving is smart.
– Start SIP in long-term equity mutual fund.
– Rs. 1,000 per month is enough to begin.
– Don’t withdraw this for any other goal.
– This builds long-term financial freedom.

Earlier you start, bigger your retirement wealth becomes.

Avoid Index Funds – Use Actively Managed Funds
– Index funds copy the market blindly.
– They fall badly in market crashes.
– Active funds are managed by expert fund managers.
– They protect downside and capture gains better.
– Use actively managed mutual funds only.

Avoid index funds for now. They are not good for goal-based plans.

Avoid Direct Plans – Use Regular Funds via CFP
– Direct plans may look cheaper.
– But you get no service or advice.
– You may choose wrong fund or exit in panic.
– Use regular plans with support from MFD with CFP tag.
– You get rebalancing, monitoring, and correction support.

Cost of mistake is bigger than cost of service.

Start with These SIPs (Illustrative Only)
– Rs. 3,000 monthly for marriage (balanced fund)
– Rs. 1,000 monthly for retirement (equity fund)
– Rs. 1,000 for future house or other dreams (hybrid fund)
– Rs. 1,000 for travel (short-term debt fund)
– Total: Rs. 6,000 monthly

You still save Rs. 6,000 more. Keep it for emergency.

Increase SIP Every Year
– Raise your SIP by at least 10% each year.
– As income grows, SIP must grow.
– This keeps you ahead of inflation.

Step-up SIP strategy creates big wealth slowly.

Track Goals Separately
– Keep one SIP for each goal.
– Don’t mix marriage goal with travel goal.
– Use different mutual funds for different targets.

This helps you stay focused and measure progress.

Avoid High Risk Shortcuts
– Don’t invest in crypto or penny stocks.
– Avoid fancy apps or YouTube tricks.
– Don’t take loans to invest.
– Don’t try to double money in 1 year.

Good money grows slowly and safely.

Track Your Net Worth Yearly
– Write down all your savings and investments.
– Make a list every year.
– Track how much you saved and where it went.

This habit makes you financially wise and aware.

Learn About Money and Finance
– Read one personal finance book every year.
– Watch good financial videos, not entertainment reels.
– Stay updated with budget and tax rules.

Learning now helps you avoid mistakes later.

Protect Future Income with Term Insurance Later
– No need to take term plan at 23.
– After marriage or dependents, take Rs. 50 lakh cover.
– Premium will be very low if taken young.

Life cover is important after responsibility begins.

Avoid Mixing Insurance and Investment
– Don’t buy ULIP or endowment for investment.
– These give poor return and high cost.
– Insurance must be pure protection only.
– Investment must be separate through mutual funds.

Mixing them spoils both investment and insurance.

Don’t Depend on Real Estate Later
– Many think property gives fixed income.
– But it has poor liquidity and maintenance cost.
– Don’t put retirement money into real estate.

Use mutual funds and EPF for long-term growth.

Start NPS from Age 25
– From age 25, start contributing to NPS.
– You get tax benefit and retirement pension later.
– Even Rs. 500 monthly adds value.
– Don’t ignore retirement even at early age.

Disciplined long-term planning builds confidence.

Tax Planning Comes Later
– For now, focus on savings and SIP.
– When income grows above Rs. 5 lakh yearly, start tax saving.
– Use PPF and ELSS mutual funds for that.

Right now, priority is building savings habit.

Set Financial Milestones for Yourself
– By 25: Emergency fund and SIP running
– By 28: Rs. 3–4 lakh mutual fund corpus
– By 30: Health cover, term insurance, marriage goal funded
– By 35: Retirement plan matured well

Early steps decide your long-term financial freedom.

Use Guidance of Certified Financial Planner
– A CFP helps you choose right SIP and plan.
– They protect you from emotional mistakes.
– You get full tracking and clarity.
– For long-term goals, this support is very valuable.

Don't do everything alone. Use expert support when needed.

Finally
– You are starting at the perfect age.
– Your savings habit is already strong.
– Build emergency fund and health cover first.
– Start mutual fund SIP for each goal.
– Avoid index funds and direct plans.
– Learn slowly about stocks.
– Don't mix insurance and investment.
– Keep investing consistently every month.
– Step up SIP every year.
– Use help from Certified Financial Planner.

You are on the right path. Just stay consistent and disciplined.

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

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