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Ramalingam Kalirajan |10879 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 15, 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 15, 2025Hindi

Hello Sir, I am 38 years old married (Wife not working )and a daughter of 3 years, with 2L in hand salary, I have active loans 1. 14L home loan @ 7.9% 2. 33L top up loan @8.1% 3. 1L Credit card loan @13% 8 months remaining EMI 4. 2.4L loans against Stocks 10.75% Total EMIs : 63K I have Monthly SIPs of 40K I save in the form of chits as well 45K per month . Currently my assets are 70L flat 22L plot 1 28L plot 2 7L plot 3 MF 11L Stocks 13L EPF 27L PPF 1.2L NPS 65K NPS ( vatsalya for daughter) 50K My wife EPF : 15L Mutual Funds: 5L Savings of 10L given to family. Due to uncertainty in jobs I want to lessen by burden and also prepare for the worst. At the same time I want to make sure my daughter has some continuous income when she is 18 years . What can I do here? Note: my wife is looking out for job and we live Salary to salary after our expenses and savings Please provide me a plan to follow.

Ans: You have been managing many things at once, and that's not easy. Let us look at your situation step by step from a 360-degree perspective and create a plan that gives you clarity, relief, and future security.

? Current Financial Position

– You are 38 years old, married, with one daughter aged 3 years.
– Your wife is currently not working but looking for a job.
– You have Rs.2 lakh in hand right now.
– You are paying Rs.63,000 as total EMI every month.
– You invest Rs.40,000 through SIPs monthly.
– You contribute Rs.45,000 in chits every month.
– You live almost paycheck to paycheck after EMI, SIPs, and chits.

Let us assess your assets next.

? Assets Owned Till Now

– Residential flat worth Rs.70 lakh.
– Three plots worth Rs.22 lakh, Rs.28 lakh, and Rs.7 lakh.
– Mutual fund investments of Rs.11 lakh in your name.
– Stock portfolio of Rs.13 lakh.
– EPF corpus of Rs.27 lakh in your name.
– PPF of Rs.1.2 lakh.
– NPS of Rs.65,000.
– Daughter’s NPS (Vatsalya) of Rs.50,000.
– Wife’s EPF corpus of Rs.15 lakh.
– Wife’s mutual funds worth Rs.5 lakh.
– You’ve given Rs.10 lakh to family as financial help.

These are strong asset levels. You’ve done well so far.

? Active Loans and EMI Burden

– Rs.14 lakh home loan at 7.9% interest.
– Rs.33 lakh top-up loan at 8.1% interest.
– Rs.1 lakh credit card loan at 13%. 8 months left.
– Rs.2.4 lakh loan against shares at 10.75% interest.
– Total EMIs: Rs.63,000 per month.

Your EMI outflow is high. Close to 30–35% of take-home pay.
With job uncertainty, this puts pressure.
Some loans are high cost and need urgent attention.

? Immediate Actions to Reduce Financial Stress

– First, close the credit card loan in 8 months as planned.
– Second, aim to clear loan against shares next.
– Sell part of stocks if needed.
– Interest of 10.75% on stock loans eats into equity return.
– Avoid pledging stocks or mutual funds again.

If still short, temporarily pause chit contributions.
Chits are informal, less liquid, and carry group risk.

– Consider pausing SIPs for 6 months if needed.
– Use this freed-up cash to finish high-interest loans.
– Resume SIPs after clearing credit and stock loans.

This improves monthly surplus and gives peace of mind.

? Home and Top-Up Loans Strategy

– Together, these loans are Rs.47 lakh.
– Interest is under control for now.
– Don’t prepay aggressively while other goals are pending.
– Keep paying regular EMI.
– Try one extra EMI per year if possible.

Avoid top-up loans for other needs. They increase burden long term.

? Evaluate Real Estate Holdings

– Flat and plots total to Rs.127 lakh in value.
– That’s nearly 50% of your net worth.
– Real estate is illiquid and doesn’t give regular income.
– Don’t consider buying more.
– Avoid holding too many unused plots.
– If income is tight, consider selling one plot.
– Use the money to reduce loan or boost daughter’s fund.

Property doesn't generate cash flow. It's not helpful during job loss.

? Managing SIPs and Investment Strategy

– Rs.40,000 SIP monthly is a strong habit.
– Mutual fund corpus has grown to Rs.11 lakh.
– Continue SIPs once loan pressure is low.
– Prefer actively managed mutual funds.
– Index funds do not offer downside protection.
– In falling markets, index funds fall sharply.
– Active funds have managers who take timely decisions.
– This improves growth and reduces risk.

Also, don't invest in direct mutual funds on your own.
Direct funds don’t come with personal advice or guidance.
Wrong choice or lack of review can cause losses.
Use regular funds through a Certified Financial Planner and MFD.
They offer fund selection, tracking, rebalancing, and handholding.

This adds long-term value over just low expense ratio.

? Emergency Fund and Protection Cover

– You haven’t mentioned emergency savings.
– With job uncertainty, this is urgent.
– Build 6–9 months of expense fund in liquid mutual funds.
– Include EMIs also in this amount.
– Don’t use real estate or PPF for emergencies.

Review your insurance also.

– Take term insurance of at least 15 times your annual salary.
– Buy family floater health insurance of at least Rs.10 lakh.
– Don’t depend on office cover only.
– Check if you have accidental cover. Add if not.

These steps give confidence during tough times.

? Cash Support Given to Family

– Rs.10 lakh given to family as support is generous.
– If it was a loan, try to recover it gradually.
– Avoid giving large sums again unless very urgent.
– In your stage, self-protection should be top priority.

? Planning for Daughter’s Future Income

– She is 3 now. You want income stream when she turns 18.
– That is 15 years from now.
– You need to build an education corpus and later income flow.

Here’s a plan to consider:

– Start a dedicated mutual fund SIP for her now.
– Keep it in your name but tagged to her goal.
– Invest in diversified, actively managed funds.
– Increase SIP yearly by 10–15%.
– Avoid ULIPs, child plans, or endowment policies.
– They offer poor returns and lack flexibility.

By age 18, shift part of corpus to monthly income funds.
This will give steady income for her use.
Also, you can open a minor PPF in her name for safety.
Use it only as a small part of her portfolio.
Don’t rely only on NPS (Vatsalya). It’s too restrictive and long-term.

This layered approach ensures she gets funds at 18, and beyond.

? Wife’s Career and EPF Planning

– Your wife has Rs.15 lakh EPF and Rs.5 lakh in mutual funds.
– If she starts earning again, that will reduce pressure.
– Encourage her to take up a job or side income options.
– Her EPF is safe. Let it grow.
– Avoid using it for current needs.
– Add her SIPs too if possible after income resumes.

Both husband and wife contributing creates double strength.

? Debt vs Investment Rebalancing

– Don’t invest when high-cost debt is pending.
– Finish credit card and stock loans first.
– Then build emergency fund.
– Resume SIPs gradually after that.
– Don’t take new loans for investing.
– Stay away from personal loans or chit borrowings.

A Certified Financial Planner can help with rebalancing.
They will guide asset mix based on goals, risk, and stage.

? Long-Term Retirement Vision

– At age 38, you still have 20 years for retirement.
– EPF and PPF are safe options already in your plan.
– NPS can be increased slowly.
– But don’t go overboard with locked-in options.
– Mutual funds offer flexibility and better return.
– Keep increasing SIPs towards retirement as EMI goes down.
– Separate your retirement and daughter’s goals clearly.
– Mixing them leads to confusion and shortfalls later.

In the last 5 years before retirement, shift to low-risk options.

? Smart Use of Surplus Funds

– Bonuses, incentives, tax refunds – use all wisely.
– Don’t spend on unnecessary lifestyle upgrades.
– First use to repay loans.
– Then build emergency fund.
– Then increase SIPs for long-term goals.

This step-by-step use of money builds strong future.

? What to Avoid Now

– Don’t buy more plots or property.
– Don’t use chits for long-term investing.
– Don’t depend on index funds for wealth creation.
– Don’t invest in direct funds without professional help.
– Don’t mix daughter’s fund with other savings.
– Don’t use ULIP, traditional LIC policies.
– If already taken, consider surrendering and reinvesting in mutual funds.

These decisions help avoid hidden losses and regrets.

? Finally

– Your commitment to savings and family is excellent.
– You are doing many things right already.
– You just need to reduce loan stress and create balance.
– Focus on daughter’s secure future and your peace of mind.
– Prioritise debt clearing, emergency fund, and protection.
– Resume investments steadily once loans reduce.
– Real estate need not be increased further.
– Mutual funds through CFP-backed advice offer better control and growth.

Stay consistent. Review plan every year.
Be prepared for the worst, but plan for the best.

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

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