Hello We husband and wife together take home is around 2.44 lakh per month, currently together we have 70k home loan emil and 70k personal loan emi (principle amount of 30 lakh ), around 60k sip. Around 20 lakh in SIP. 3 lakh emergency fund. This personal loan emi was really bad and we are currently feeling clueless whether to repay that by using SIP. Please suggest further planning

Ans: Hello;

Home Loan repayment is being taken care through EMI. Claim IT deduction for the same as per tax provisions.

Now the excess investible fund you have should be deployed as follows:
MF SIP: 7 K per month + 3 K initial
NPS: 7 K per month+4.5 K initial
Rest amount should be divided equally between SSY and PPF as additional investment above 1 K per month currently.

If you get any lumpsum such as bonus then you may use it to prepay the home loan every year.

Happy Investing;

Ans: You are 36 years old and debt-free. You also have Rs. 16–17 lakhs ready. That gives you a strong base. Now, let us look at your decision between plot purchase and mutual funds from a full 360-degree view.

Present Financial Strength
You have no loans. That is a good position.

You are already in a better financial place than most peers.

You have Rs. 16–17 lakhs free. This gives you flexibility.

Being loan-free and liquid at 36 is a powerful place.

Now your next step needs proper thought.

Investment in Plot – Reality Check
A plot looks attractive. But it is not flexible.

Once you buy, you lock your full money into one asset.

A plot does not generate monthly cash flow.

Maintenance, tax and legal issues can arise with plots.

Selling it quickly is tough during emergencies.

Growth in land price is very slow in many cases.

Location may not always favour appreciation.

You may need to spend more to develop it later.

No regular return means wealth is just stuck.

Plot investment is emotional, not financial.

It is not suitable for all financial goals.

If you plan to build a house, that’s different.

But for investment, it is not ideal.

Mutual Funds – A Better Path
Mutual funds offer variety and liquidity.

You can start small or big, as per your plan.

You can invest for short, medium or long term.

You can also pause or withdraw if needed.

They are professionally managed.

They bring diversification across sectors.

You don’t need large capital to start.

You also don’t carry holding cost or legal worries.

Mutual funds offer long-term compounding benefits.

They have transparency and regular reporting.

You stay in control, always.

Understanding Active Funds over Index
You didn’t mention index funds. Still, a quick word.

Index funds just copy the market. Nothing more.

They don’t adjust to risks or themes.

They fall as much as market does.

Actively managed funds try to reduce downside.

Fund managers try to beat market returns.

Active funds give more flexibility in asset selection.

They also follow investment discipline.

For goal-based planning, active funds are better.

Direct Plans vs Regular Plans
You didn’t mention direct mutual funds. Still, let’s clarify.

Direct plans may save cost, but offer no guidance.

When markets fall, they leave you confused.

You may act emotionally and harm your goals.

A Certified Financial Planner adds behavioural support.

A good Mutual Fund Distributor with CFP will guide you.

This is more important than cost saving.

Regular plans include advisory support.

So invest through qualified professionals.

Financial Goal Alignment
Think clearly—what do you want from the money?

Do you have goals like retirement, home, child education?

If yes, mutual funds fit better than land.

Plots don’t match financial goals well.

They can’t be sold in parts to meet needs.

Mutual funds can be used goal-by-goal.

You can create multiple funds for multiple goals.

Emergency Readiness
Plot doesn’t help during emergencies.

It is not liquid and can’t be partly sold.

Mutual funds give access within 1–3 days.

Liquid funds and ultra-short-term funds support emergencies.

Always keep 6–9 months of expenses in these.

Plots have no role in your emergency fund.

Taxation Understanding
Plot sale attracts capital gains tax.

You also need to reinvest sale value to avoid tax.

Mutual fund taxation is clearer and easier.

Long-term equity fund gains above Rs. 1.25 lakh taxed at 12.5%.

Short-term gains from equity taxed at 20%.

Debt funds taxed as per your slab.

Payout and reinvestment are flexible.

Tax filing for funds is also simple.

Growth and Wealth Creation
Mutual funds grow gradually with compounding.

Even small SIPs grow big with time.

You can add more each year as income grows.

You can track and review performance every quarter.

A plot may not grow consistently.

Land markets have ups and downs too.

Many plots stay stagnant for years.

With mutual funds, value creation is more visible.

Psychological Comfort
A plot may feel tangible.

It feels safe because we can touch it.

But this is emotional, not financial.

Mutual funds feel boring but are efficient.

Wealth creation does not need emotional attachment.

Rational decision wins in the long run.

Mistakes to Avoid
Don’t invest in plot without a clear personal use plan.

Don’t put all Rs. 16–17 lakhs into one asset.

Don’t invest just because others are doing it.

Don’t ignore liquidity while chasing growth.

Don’t take emotional decisions with big money.

Don’t delay decision thinking market is high.

Don’t invest directly in mutual funds without guidance.

Better Way to Use Rs. 16–17 Lakhs
Keep Rs. 2–3 lakhs in emergency liquid fund.

Allocate rest in 3–4 mutual fund schemes.

Choose based on goals: 3, 5, 10 years and beyond.

Use goal-based buckets with SIP and lump sum both.

Invest through MFD or Certified Financial Planner.

Review and adjust your portfolio yearly.

Increase SIPs each year as income grows.

Role of a Certified Financial Planner
A CFP will align investments with goals.

They help track your financial life clearly.

They offer behavioural support in tough markets.

They plan for taxes, cash flow and risks.

They help you avoid emotional decisions.

They don’t just sell products—they build strategy.

They keep your financial plan on track.

If You Already Have LIC or ULIP
If you have investment-cum-insurance policies, check returns.

Most give poor returns of 3–5%.

Surrender them if lock-in is over.

Reinvest that amount into mutual funds.

It will help you reach goals faster.

Use term insurance for protection only.

Final Insights
You are 36 and debt-free. This is your strength. Rs. 16–17 lakhs is a big opportunity. A plot may look attractive but has many limits. It locks capital, has no returns, and poor liquidity. Mutual funds are flexible, diversified, and goal-focused. You can start small and build big. You can track progress and change anytime. You can manage risk better with professional help. Avoid direct and index funds. Use regular plans through MFDs with CFP credential. If you have LIC or ULIPs, exit smartly. Mutual funds give you more freedom, growth and control. Take your next step wisely.

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

Ans: Income, Expenses and Cash Flow

You earn Rs.?90,000 per month.

Your home loan EMI is Rs.?23,000 for 12 years.

Your car loan EMI is Rs.?22,000 for 5 years.

SIP investment is Rs.?12,000 monthly.

Other monthly expenses are around Rs.?15,000.

Total committed outflows: Rs.?72,000.

Remaining cash: Rs.?18,000 per month.

This surplus is a good starting point.

Great discipline on SIP and EMI commitments.

Home Loan Overview

Outstanding is Rs.?20?lakhs for 12 years.

EMI of Rs.?23,000 is reasonable.

Home loan gives tax benefit on interest under section?24.

It is a long-term debt; no need to prepay aggressively.

Better to maintain healthy cash flow for flexibility.

However, as surplus increases, a part can be used to prepay.

Car Loan Overview

Outstanding is Rs.?10?lakhs for 5 years.

EMI is Rs.?22,000 per month.

Car loan has higher interest and gives no tax benefit.

It reduces cash flow flexibility.

Prioritise early repayment to free up cash.

Consider using surplus to accelerate prepayment.

Once car loan finishes, funds can be redirected wisely.

Building an Emergency Fund

A core part of 360-degree financial planning.

Aim to keep 6 months’ expenses in safety net.

Your monthly expenses are around Rs.?50,000 (EMIs + other expenses).

Target emergency fund: approx. Rs.?3?lakhs.

Keep this in a liquid debt fund or a savings account.

This ensures you don’t dip into SIPs or take new loans for emergencies.

Use a portion of monthly surplus for this until fully funded.

Debt Repayment Strategy

Top priority: Car loan.

No tax benefit and high interest.

Use excess cash to pay ahead of schedule.

Aim to finish this within 2 years.

Second: Home loan.

Lower interest and tax benefit.

Continue regular EMI till surplus grows.

After clearing car loan, consider modest prepayment annually.

But keep at least one EMI cushion through savings.

Goal-wise Investment Planning

You have three key goals:

Short-term cushion (emergency fund).

Medium-term needs (vacation, asset upgrades, etc.).

Long-term wealth creation (retirement or child education).

Short-Term Goal (up to 2 years)

Continue building emergency fund with Rs.?8,000–10,000 monthly.

Keep it in liquid debt fund or savings bank.

This serves as your financial safety net.

Medium-Term Goal (3–7 years)

After emergency fund is complete, redirect funds here.

Consider actively managed balanced/hybrid funds.

Allocate Rs.?5,000–7,000 per month initially.

These help you build moderate-return corpus with controlled volatility.

Long-Term Goal (10+ years)

Retirement or child’s future plans.

You already invest Rs.?12,000 monthly in SIP.

Continue this and gradually increase when surplus grows.

Invest through actively managed equity mutual funds:

Blend of large-cap, mid-cap, flexi-cap for growth and stability.

Avoid index funds as they cannot hedge against down cycles.

Active funds let experienced managers shift strategy.

This improves your long-term outcomes significantly.

Why Actively Managed Funds Are Your Best Bet

They adapt to market changes quickly.

They protect against big shocks like sudden market falls.

They often outperform passive funds in India.

They align better with goal-based investing.

They offer flexibility in allocations across sectors and styles.

Their returns are worth the small cost difference.

Your current SIP approach is heading in the right direction.

Why Regular Plan via MFD + CFP Is More Suitable than Direct

Direct funds give no guidance during tough markets.

CFP monitors portfolio and provides timely advice.

He helps rebalance and track goals effectively.

Regular plans include small distributor fee but give value-add.

Guidance helps avoid emotional errors during volatility.

Phantom costs are small compared to long-term benefits.

Asset Allocation Strategy

Here is a sample structure tuned for your age and risk:

Emergency Fund: 6 months of expenses (liquid allocation)

Medium-Term: About 40–50% in debt/hybrid instruments

Long-Term Equity: 50–60% in actively managed equity funds

This mix balances growth potential with safety.
You can fine-tune percentages as goals and risk tolerance evolve.

Leveraging Surplus After Loan Repayments

After car loan is cleared, you will get Rs.?22,000 back.

Use this to:

Build medium-term goal fund

Boost long-term SIPs

Consider modest prepayment towards home loan.

This ensures each Rupee is used purposefully towards your goals.

Insurance and Protection Coverage

Health insurance: at least Rs.?5–10?lakhs for family.

This covers hospitalisation and emergencies.

Term insurance: coverage at least 10–15 times annual income.

Protects your family in case of tragedy.

Stay away from ULIP, endowment, money-back products.

They have poor returns and high charges.

If you hold LIC, ULIP, or investment-cum-insurance, surrender them.

Re-direct proceeds into goal-based SIPs.

Use pure term + health insurance for protection needs.

Tax Planning Considerations

Home loan interest gives deduction under section?24.

Principal repayment gets covered under section?80C.

Be mindful of LTCG tax on equity mutual funds (above Rs?1.25?lakh taxed at 12.5%).

STCG taxed at 20%.

Debt fund gains taxed as per your slab.

Plan SIP redemptions smartly to avoid large tax hits.

Stagger withdrawals over years when needed.

Discipline and Habit Formation

Treat savings as first monthly commitment.

Automate transfers to SIP and emergency fund first.

Only spend what remains.

Avoid using EMI for small purchases.

Cancel subscriptions you don’t use.

Track spending 1–2 weeks every month for leaks.

Keep lifestyle aligned with your income, not peer pressure.

Monitoring and Rebalancing

Review your portfolio every 6 months.

Check progress of emergency fund and loan pay-off.

Track SIP returns and performance.

Rebalance if equity mix drifts significantly.

Replace underperforming funds.

Adjust SIP amounts annually as your income rises.

Benefitting from Income Growth

When salary hike or bonus arrives:

Increase SIP contributions by 10–15%.

Pay off loans faster.

Bolster emergency or medium-term funds.

Avoid lifestyle inflation; channel incremental income to goals.

Family Involvement and Communication

Discuss finances with your family.

Shared understanding creates discipline.

Teach them value of saving and budgeting early.

Joint decisions reduce impulsive spending.

Checklist for Your Financial Journey

Build emergency fund: Rs.?3?lakhs target.

Pay off car loan early.

Maintain home loan EMI.

Continue SIP Rs.?12,000 monthly.

Start hybrid fund SIP once car loan is done.

Increase long-term equity SIP step?by?step.

Hold term and health insurance.

Review goals and portfolio semi?annually.

Redirect any saved cost or bonus into SIPs.

Avoid ULIPs, index-only plans, or direct mistakes.

Finally

Your disciplined approach already shows foresight.

With strategic reallocation, you’ll be stronger.

Emergency fund brings financial safety.

Car loan repayment will improve your flexibility.

Equity SIPs will build wealth over time.

Own term and health insurance for security.

Regular CFP guidance will keep you aligned to goals.

With small changes, your financial future will be stable.

You are on the right path to financial well?being.

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

Ans: Hi,
First of all congratulations on building a strong foundation. You are doing good by diversifying your capital amongst different assets.
With the current situation, it would be better for you to increase your SIP first. Then prepay loan. Prepaying loan in initial years is beneficial as most of the interest outflow happens in initial few years. If your loan is not that old, can start prepaying that as well.

Along with it, make sure to have an emergency fund, ample health and term insurance as well.

Also plan for your kids higher education. You should start dedicated SIP for each kid for minimum 15k per month solely for higher education.

Share loan details with me for me to calculate if you should focus on prepaying that or not.

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/