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Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 28, 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 chatgpt on Aug 28, 2025Hindi

Hello Sir, My age will be 35 this October.. I work in a psu.I have around 73 lakhs in Company PF,23 Lakhs in NPS,25 lakhs in MF,11 Lakhs in Stocks.. Home loan at simple interest like bank employee had of 65 lakhs.. salary in hand 1.2 lakhs and monthly loan emi of 34500 fixed till 24 years.. please review and suggest what changes i need to make.. investing 21k per month in MF and company invest around 16 k in nps and PF also contribution at 12 percent 16k from my side and 16k from company side.

Ans: You have built an excellent foundation at age 35. Having over Rs.1 crore already in PF, NPS, MFs and stocks shows strong discipline. Balancing loan repayment with continued investments is not easy. But you are managing it well with regular contributions. This itself proves you are serious about long term wealth creation. Let us now assess your entire financial picture from a 360-degree perspective.

» Present asset position
– Rs.73 lakhs in Company PF. This gives stable, low-risk growth.
– Rs.23 lakhs in NPS. This builds retirement security with some equity exposure.
– Rs.25 lakhs in mutual funds. This creates long-term wealth.
– Rs.11 lakhs in stocks. This is high-risk but high-return portion.
– Total assets are around Rs.1.32 crore. This is a strong start for 35 years.

» Liability position
– Rs.65 lakhs home loan. EMI is Rs.34,500 monthly.
– Since it is simple interest under employee scheme, repayment is lighter.
– EMI burden is less compared to income. This allows good surplus for investments.
– Loan is long-term (24 years). No urgency to close early. Instead, invest extra savings for higher return.

» Income and cash flow
– Salary in hand Rs.1.2 lakhs per month.
– EMI is Rs.34,500, which is well within capacity.
– PF contribution of 12% from your side and 12% from company side adds strength.
– Company adds Rs.16k monthly to PF plus Rs.16k from your side.
– Company also contributes Rs.16k in NPS.
– You are already investing Rs.21k in mutual funds monthly.

This cash flow shows good balance between loan repayment and investments.

» Mutual fund strategy
– Presently, Rs.25 lakhs already in mutual funds and Rs.21k monthly SIP.
– Continue with SIP discipline. It creates wealth faster than lump sum timing.
– Prefer regular plans with Certified Financial Planner support. Direct plans look cheaper but demand monitoring and research from your side. Wrong timing or poor fund selection can eat more return than saved cost. CFP-backed monitoring ensures right switches and allocation.
– Avoid index funds. Actively managed funds in India still beat index. Skilled fund managers protect during fall, unlike index funds that mirror every crash.

» Stock exposure
– Rs.11 lakhs in stocks is good but risky. Direct stocks need constant tracking.
– If stocks are not reviewed professionally, better shift gradually to mutual funds.
– Mutual funds provide diversification and professional management. That reduces unsystematic risk.
– Stocks can remain as satellite portion of portfolio, but not core.

» Retirement planning
– You have PF, NPS, mutual funds. This creates strong retirement base.
– At 35, retirement horizon is 25 years plus. So, equity allocation must dominate.
– PF and NPS already create debt portion. So, your mutual funds can focus more on equity growth.
– With long horizon, SIP compounding will multiply wealth significantly.

» Risk management
– First step is life insurance. Do you have pure term plan? If not, you must buy. Insurance should cover at least 12–15 times annual income. Avoid ULIP or endowment. They mix insurance and investment and reduce returns.
– Second step is health insurance. Employer policy may not be enough. Buy family floater health policy outside employer. It gives continuity even after retirement.
– Also, check personal accident and disability cover. These protect income earning capacity.

» Emergency fund
– Do you have at least 6 months’ expenses in liquid fund or savings? If not, build it.
– Emergency fund avoids breaking SIPs or selling long-term investments during crisis.
– This fund is like seat belt in car. Rarely used but always needed.

» Taxation perspective
– Your PF and NPS contributions are tax efficient. They save tax under 80C and 80CCD.
– Mutual funds are taxed differently. Equity fund long term capital gains above Rs.1.25 lakh are taxed at 12.5%. Short term gains are taxed at 20%.
– So, avoid frequent redemptions. Hold long term to benefit from compounding and lower tax.
– Debt mutual funds are taxed as per your income slab. Use them only for stability and short-term needs, not for high returns.

» Loan repayment vs investment
– Many employees feel urge to prepay home loan. But in your case, interest rate is low and simple. Investments in equity funds can beat loan rate easily in long run.
– So, continue paying EMI regularly. Do not rush to close loan by diverting SIP money.
– Use surplus for investments. Loan gives tax benefit on interest as well.

» Asset allocation assessment
– PF + NPS form large debt portion. This is already conservative.
– MF + stocks form equity portion. This gives growth.
– Present ratio is tilted towards debt due to heavy PF. At 35, higher equity allocation is suitable. So continue equity SIPs without fear. This balances overall portfolio towards growth.
– Equity growth will help counter inflation. PF alone will not be enough.

» Future SIP increase
– Your present SIP is Rs.21k. As income grows, step up SIP every year. Even Rs.2000–3000 extra yearly adds huge wealth later.
– Step-up SIP builds wealth faster than static SIP. Inflation and lifestyle costs will rise. Step-up ensures portfolio beats inflation.

» Goal clarity
– Link investments to goals. Retirement, children education, marriage, house upgrade – each has different horizon.
– Equity funds suit long-term goals (above 7 years). Debt or hybrid funds suit medium-term goals (3–7 years).
– Clear goal mapping avoids confusion later. It also helps choose correct withdrawal timing.

» Behavioural discipline
– Wealth creation is more about behaviour than products. You already show discipline in SIP and PF.
– Continue same patience. Do not panic in market falls. SIPs buy cheaper in downturns.
– Avoid frequent portfolio reshuffling. Review only once a year with Certified Financial Planner.

» Importance of CFP-backed monitoring
– Direct fund investors often make emotional decisions. They redeem when market is low.
– CFP-backed monitoring brings rational decisions. They analyse allocation, not just returns.
– They adjust portfolio when goals change or market shifts.
– Regular plans may look costly but this advice and correction create higher net wealth in long run.

» Avoiding common mistakes
– Do not invest in endowment, ULIP, or insurance-linked products. They give low return and lock money.
– Do not overtrade in direct stocks. Concentrate on SIPs.
– Do not stop SIPs during market crash. That is when they work best.
– Do not chase latest trending funds. Stick to planned allocation.

» Building wealth with peace of mind
– You already have good base of assets.
– Continue systematic investing.
– Protect with insurance.
– Build emergency fund.
– Increase SIP gradually.
– Review yearly.

This is the balanced formula for long-term wealth and family security.

» Finally
At 35, you are ahead of many peers with Rs.1.32 crore assets. Your PF and NPS build safety. Your mutual funds and stocks build growth. Your loan EMI is manageable. Continue SIPs, increase them with income, and keep patience. Do not rush to close home loan. Build term and health insurance. Keep emergency fund ready. Avoid direct plans and index funds. Use regular mutual funds with Certified Financial Planner support for guidance. Stay disciplined, and your wealth journey will be smooth and strong.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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