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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Sep 22, 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

Question by Suman on Sep 21, 2025Hindi

Hello sir. I am 37 years old. Have a 70 lakh home loan jointly with my husband. Emi is around 70k. I have an OD of Rs.6.25 lakhs and one car loan of Rs. 1.4 lakhs with emi of 5k, household expenses of about 40k. PPF has Rs. 16lakhs, nps balance of around 20 lakhs. My net salary is 80k monthly. My husband salary woul be Rs. 1lakh. I want to start investing in mutual funds SIPs but due to weak financial condition could not start earlier. Please guide how can i start investing in sip and which funds will be good for me for a period of 10-15 years.

Ans: Managing loans, expenses, and investments together is a real challenge. Your desire to start SIPs despite financial pressure shows great optimism. This attitude is the first step for building financial strength and long-term wealth.

» Overview of Your Current Financial Position
– Combined salary of Rs 1.8 lakh gives steady cash flow.
– Home loan of Rs 70 lakh with Rs 70k EMI is a major monthly commitment.
– Overdraft (OD) of Rs 6.25 lakh and car loan of Rs 1.4 lakh with Rs 5k EMI add pressure.
– Household expenses Rs 40k monthly leave limited free money.
– PPF Rs 16 lakh and NPS Rs 20 lakh are good long-term wealth cushions.

» Prioritising Financials Before Starting SIPs
– Focus on reducing expensive debts first to free up cash flow.
– Consider tackling overdraft swiftly as interest may be high.
– Clearing some debt lowers EMI burden and emotional stress.
– Having Rs 16 lakh in PPF and Rs 20 lakh in NPS is a strong safety net.
– Avoid adding new debt; use surplus money systematically for investments.

» How to Begin SIP with Limited Cash Flow
– Start SIP with small amounts like Rs 2,000 to Rs 3,000 per month initially.
– Use auto-debit to build habit and avoid missing instalments.
– As debts reduce, increase SIP amounts gradually.
– Combining gradual SIP increase and debt reduction creates a strong financial base.
– Remember, even small monthly SIPs grow significantly over 10-15 years.

» Selecting Mutual Funds for 10-15 Year Horizon
– Focus on diversified equity funds for long-term growth potential.
– Flexi-cap, large and mid-cap funds spread risk and opportunity well.
– Avoid sector-heavy or theme funds which can be more volatile.
– Actively managed funds provide expert portfolio management and adaptability.
– Do not rely on index funds, as they cannot adapt to market changes actively.

» Why Actively Managed Funds Are Better
– Fund managers identify strong companies and exit weak ones.
– Active funds handle market changes better than passive index funds.
– In India’s emerging market, active funds tend to outperform benchmarks.
– Index funds simply follow the market without trying to beat it.
– Active management helps protect your investment in down markets.

» Role of PPF and NPS in Your Portfolio
– PPF balance of Rs 16 lakh grows risk-free and tax-free.
– Continue contributing Rs 1.5 lakh yearly to maximise returns.
– NPS adds retirement savings with tax benefits and market exposure.
– PPF and NPS offer stability; mutual funds provide growth.
– Together, they form a balanced retirement wealth strategy.

» Managing Household Expenses and Loans
– Track expenses carefully to find small savings each month.
– Avoid lifestyle inflation until debt is manageable.
– Use any bonuses or extra income to prepay loans.
– Prepayment of home or car loan reduces overall interest payments.
– Consider consolidating loans for better interest rates if possible.

» Emergency Fund Is Essential
– Keep at least 6 months of expenses in a liquid fund or savings account.
– This fund prevents disruptions during job loss or emergencies.
– Do not use your SIP or investment corpus for emergencies.
– A ready emergency fund boosts confidence for long-term investment.

» SIP Investment Strategy Recommendations
– Start SIP in 2-3 diversified equity mutual funds to spread risk.
– Allocate around 60-70% equity and 30-40% debt-hybrid or balanced funds initially.
– Gradually increase equity allocation as debt reduces and cash flow improves.
– Regularly review and rebalance portfolio once a year.
– Avoid frequent switching; long term stability yields the best rewards.

» Avoiding Common SIP Mistakes
– Do not stop SIP when markets fall; fall is buying opportunity.
– Avoid chasing last year’s top-performers; focus on consistent track records.
– Do not invest lump sums when starting; systematic small SIPs build habits.
– Direct plans may save fees but lack expert advice; regular plans with certified planners add value.

» Taxation Aspects to Consider
– Equity mutual funds LTCG over Rs 1.25 lakh taxed at 12.5%.
– Short-term gains taxed at 20%.
– Debt fund gains taxed as per your income slab.
– Hold for long term to reduce tax burden and enhance returns.

» Psychological and Emotional Insights
– Starting investments despite debt shows courage and hope.
– Investment is a long-term game needing patience and discipline.
– Don’t be discouraged by short-term market movements or debt burdens.
– Regular small steps widen your wealth path over years.

» Using Technology and Tools
– Use online platforms and apps to track investments and SIPs.
– Set reminders for SIP dates and review alerts.
– Use digital dashboards to view portfolio performance easily.

» Leveraging Professional Support
– Regular mutual fund investments via MFD with CFP guidance is beneficial.
– Certified Financial Planners help monitor, review, and reduce mistakes.
– CFP credential ensures your investment plan is holistic and goal-oriented.
– Avoid direct funds without a professional as mistakes can be costly.

» Family Communication and Financial Planning
– Discuss your financial situation openly with your husband.
– Make joint plans to manage expenses and debt repayments.
– Coordinate SIP investments to align with family goals.
– Transparency builds confidence and reduces money stress.

» Long-Term Vision for Wealth Growth
– Starting with tiny amounts today grows substantially over 10-15 years.
– Plus, reducing debt releases funds for future investments faster.
– Remember, compounding works best when investments are consistent and long-term.

» Final Insights
– Your financial situation is tough but not impossible to improve.
– Start small SIPs in actively managed diversified equity funds.
– Prioritise reducing high-interest debts like overdraft and car loan.
– Maintain PPF and NPS as safe retirement pillars.
– Build emergency fund of 6 months household expenses.
– Increase SIP gradually as debt burden lightens.
– Use expert guidance from Certified Financial Planner for best results.
– Keep disciplined, patient, and hopeful for 10-15 year journey.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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