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Ramalingam

Ramalingam Kalirajan  |9777 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 23, 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 - Jun 21, 2025Hindi
Money

How can somebody start investing from 18? I would be joining college this year and please somebody guide me.

Ans: Starting at 18 shows great foresight.

Time is your biggest friend now.

Small steps today grow into large gains later.

Understanding Your Cash Flows

Note every rupee that enters your pocket.

Include pocket money, part-time pay, gifts, internships.

List every rupee that leaves.

Cover food, books, data packs, outings, gadgets.

Keep this list simple and honest.

Aim for a clear monthly surplus.

Setting Clear Goals

Goals give direction to money.

Write short-term goals like laptop purchase.

Write medium goals like post-grad fees.

Write long goals like early home purchase.

Put rough target dates beside each goal.

Update goals each year without fail.

Building Right Money Habits

Pay yourself first each month.

Save before spending, not after.

Use separate bank accounts for spends and saves.

Track spends weekly for control.

Avoid impulse online buys.

Use cash or UPI, avoid credit traps.

Creating Emergency Cushion

Life throws sudden costs at everyone.

Keep at least three months expenses handy.

Use a simple savings account or liquid fund.

Build this fund before aggressive investing.

Refill the fund whenever you use it.

Learning Basics of Banking

Maintain one primary savings account.

Enable auto-debit for savings and SIPs.

Keep minimum balance rules in mind.

Avoid unnecessary account charges.

Use net banking for quick monitoring.

Insurance Protection First

Insurance shields wealth from shocks.

At 18, health cover matters more than life cover.

Join family floater if parents have one.

Otherwise, buy a student health policy.

Premium is low at your age.

Review cover size each year.

Understanding Tax Basics

Income below the basic slab pays no tax.

Grants and gifts from parents are generally tax free.

Investment returns can still attract tax.

Equity mutual fund gains above Rs 1.25 lakh yearly face 12.5% tax.

Short-term equity gains attract 20% tax.

Debt fund gains match your tax slab.

Keep digital records for all transactions.

File returns once you cross taxable income.

Choosing Simple Investment Vehicles

Avoid fancy products with long locks.

Stick to proven instruments first.

Equity oriented mutual funds

Suitable for goals beyond five years.

Start SIP as low as Rs 500.

Choose funds through a Certified Financial Planner.

Planner guides selection, risk match, and reviews.

Avoid do-it-yourself confusion at this stage.

Balanced hybrid mutual funds

Good for medium term goals.

Mix of equity and debt gives smoother ride.

Planner helps decide right allocation.

Recurring deposits

Ideal for short goals within two years.

Simple, safe, predictable returns.

Use bank app to open quickly.

Public Provident Fund (PPF)

Long term, tax friendly, government backed.

Lock-in of fifteen years suits retirement kitty.

You can deposit small sums anytime.

Skip real estate at this age.

Skip annuity plans completely.

Skip complex market linked insurance plans.

Using Power of SIP

SIP means Systematic Investment Plan.

Money auto-debited into mutual funds monthly.

Removes timing worries from investing.

Builds discipline without effort.

Top up SIP amount yearly with pay hikes.

Automating the Process

Create an auto rule for saving first.

Example: move 20% of income on salary day.

Schedule SIP two days after salary date.

Automation kills procrastination.

Monitoring and Review

Review portfolio every six months.

Check goal progress, fund performance, and risk level.

Talk with your Certified Financial Planner during review.

Do not panic sell on short term falls.

Stay the course for compounding magic.

Developing Investor Mind-set

Read one personal finance book each quarter.

Follow reputable finance podcasts.

Discuss money with mentors and parents.

Stay patient during market swings.

Remember: volatility is normal, panic is optional.

Avoiding Common Mistakes

Do not chase quick profits in stocks.

Do not borrow for investing.

Do not break emergency fund for gadgets.

Do not ignore small expenses; they add up.

Do not trust random tips from friends.

Building Credit Reputation Carefully

Student credit card can build early credit score.

Use card only for planned spends.

Pay entire bill before due date.

One missed payment hurts score badly.

Good credit score eases future loan approvals.

Creating Habit of Giving

Allocate small amount for charity.

Sharing builds healthy money attitude.

Even Rs 100 monthly builds empathy.

Leveraging Campus Opportunities

Many colleges host finance clubs.

Join and learn practical money skills.

Participate in mock trading contests for exposure.

Attend seminars by industry experts.

Balancing Studies and Earnings

Prioritise academics over earnings.

If time permits, pick skill-based freelancing.

Use freelancing income to boost investments.

Keep study schedule intact.

Role of Technology

Use budgeting apps for spend tracking.

Use investment apps from trusted AMCs only.

Enable two-factor security everywhere.

Keep passwords strong and unique.

Staying Compliant With Regulations

Complete KYC before opening investment accounts.

Use PAN and Aadhaar for fast verification.

Update contact details after any change.

Follow RBI and SEBI alerts for fraud prevention.

Power of Compounding Explained Simply

Money earns returns every year.

Returns then earn more returns.

Longer you stay, bigger the snowball.

Starting at 18 gives over 40 years runway.

Sample Timeline for First Three Years

Month 1: Open savings and demat accounts.

Month 2: Build Rs 5,000 emergency fund.

Month 3: Start Rs 500 SIP in equity fund.

Month 6: Emergency fund reaches one month expense.

Month 12: Raise SIP to Rs 1,000 using internship income.

Month 18: Emergency fund hits two months spend.

Month 24: Add Rs 500 hybrid fund SIP.

Month 30: Review goals with planner.

Month 36: Emergency fund complete at three months spend.

Importance of Regular Funds and CFP Guidance

Regular funds pay small trail fee to planner.

Fee keeps planner accountable and available.

Planner provides goal alignment and behavioural support.

Direct funds lack personalised guidance.

Wrong fund selection can lower returns heavily.

Money saved on fee may cost in wrong choices.

Handling Market Corrections

Markets fall every few years.

Continue SIP during falls.

You buy more units at low price.

This boosts long term returns.

Avoid stopping SIP out of fear.

Adapting Investment Mix Over Time

Risk tolerance changes with age and income.

Increase equity share in early years.

Add more debt instruments nearing goals.

Planner adjusts mix as goals approach.

Learning Tax-Efficient Withdrawals

Redeem equity funds after one year to lower tax.

Spread redemptions across financial years if gains high.

Use goal deadlines to plan redemption schedule.

Keep proof of purchase dates for compliance.

Income Enhancement Strategies

Focus on skill development for higher internships.

Certifications boost employability and pay.

Higher income accelerates investment capacity.

Peer Influence Management

Friends may chase flashy purchases.

Stick to your budget plan.

Share financial learning with friends if receptive.

Build group discipline instead of peer pressure.

Role of Parents in Early Investing

Discuss your plan with parents.

They may co-sign insurance or investments.

Parents can share practical money lessons.

Respect their experience but own your choices.

Staying Updated With Policy Changes

Budget announcements can affect tax and interest rates.

Follow reliable news sources for changes.

Adjust plan with planner whenever policy shifts.

Maintaining Financial Records

Keep soft copies of statements in cloud storage.

Organise files by year and instrument.

Records ease tax filing and goal reviews.

Protecting Against Fraud

Ignore unknown investment schemes promising huge returns.

Verify SEBI registration of intermediaries.

Report suspicious messages to cyber cell.

Balancing Fun and Finance

Allocate small fun budget each month.

Guilt-free spending prevents burnout.

Stay mindful yet flexible.

Using Windfalls Wisely

Birthday cash or scholarships can be sizable.

Allocate at least half to investments.

Use remainder for necessary purchases.

Continuous Education in Finance

Finance field evolves with technology.

Attend webinars and workshops regularly.

Subscribe to trusted finance newsletters.

Learning keeps mistakes minimal.

Preparing for First Job

Review salary structure with planner.

Optimise for tax efficiency.

Increase SIPs immediately as salary kicks in.

Final Insights

Starting at 18 creates unmatched compounding benefit.

Build habits before chasing returns.

Emergency fund, health cover, and budgeting give safety.

SIP in equity oriented mutual funds drives growth.

Guidance from Certified Financial Planner keeps you on track.

Patience and discipline beat market noise.

Review goals and portfolio regularly.

Stay consistent, stay informed, and stay humble.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Samraat Jadhav  |2387 Answers  |Ask -

Stock Market Expert - Answered on Jul 12, 2024

Asked by Anonymous - Jun 06, 2024Hindi
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How to start investing in stocks and trading, can you give a basic 101 guide to 18 year old ?
Ans: • Categorize stocks as Cyclical, Growth or Defensive Cyclical
• Investing in cyclical stocks — cement or steel, requires an understanding of the economic scenario.
• An active involvement is required in order to reap the maximum benefits of swings in economic cycles over time.
• The stock prices are likely to move through extreme highs and lows, and the ability to time entry and exit will be necessary.
• Categorize stock as Cyclical, Growth or Defensive Growth
• Growth investing is investing in sectors where the future direction is clear for the medium term – such as technology.
• Timing is key, the stock may do nothing for a long time as momentum builds up and then move sharply thereafter.
• Categorize stock as Cyclical, Growth or Defensive Defensive
• Defensive investing is done from a long term perspective.
• It is investing in sectors that grow consistently and on a sustainable basis over time, such as Pharmaceutical
• Appreciation may, at times, not be as dramatic as cyclical or growth stocks. However, stocks that constitute defensive investments are expected to grow steadily over longer time periods.
• Check market activity
• Being able to sell is as important as buying. The liquidity of a stock is very important in taking an investment decision.
• Look at the price volume relationship for a stock.
• If a stock price is moving up or down on high trading volume, it is more likely that there is real interest in that price movement than if there is very little volume supporting the price move.
• Know the business you buy
• The performance of each stock is linked to the underlying business, and the market’s perception of the future prospects for that business.
• Study the future potential in terms of demand & supply and the company’s competitive position in the industry.
• The business model of the company should have the ability to sustain growth and momentum well into the future.
• Study the company’s performance
• Look at the year-on-year growth in the company’s performance.
• Look at the price earnings (P/E) for arriving at comparative valuation.
• Finally, look at return on equity (ROE), which is the year’s earnings divided by the net worth of the company.
• ROE compared to the cost of capital allows the investor to gauge the company’s wealth creating ability.
• Set a price target
• Set expectations, by identifying a target price, and re-evaluate the stock when this target is reached.
• If there is a loss on a stock and does not show potential to rise, sell.
• By not selling out of low return stocks to get into higher return stocks, you miss out on opportunities.
• Tracking your investment
• Tracking your investment is as important as buying it.

..Read more

Ramalingam

Ramalingam Kalirajan  |9777 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 13, 2024

Asked by Anonymous - Jun 09, 2024Hindi
Money
I am 44 years old with annual income of 12 lakh pa, I have a 8 year old daughter whose annual school fees is 1,35000/- how do I start investing and how much should I invest and where for future education and other expenses
Ans: Congratulations on your annual income of Rs. 12 lakh. Your daughter, aged 8, has a school fee of Rs. 1,35,000 per year. You have taken a crucial step by planning for her education and other future expenses. Let's break down the approach to create a robust financial plan for you.

Assessing Current Financial Situation
Income and Expenses: Your annual income is Rs. 12 lakh. Deducting your daughter's annual school fee of Rs. 1,35,000, you are left with Rs. 10,65,000 for other expenses and savings.

Monthly Breakdown: This translates to Rs. 88,750 per month. Your daughter's school fee equates to about Rs. 11,250 per month, leaving you with Rs. 77,500 for other expenses and savings.

Future Education Planning
Estimating Future Costs: The cost of education is rising rapidly. To estimate, we can assume an annual increase of 10% in education costs. This means by the time your daughter reaches college, the fees could be significantly higher.

Investing for Education: You should consider investing in a mix of debt and equity instruments. This balanced approach will help manage risk while aiming for good returns.

Recommended Investment Options
Mutual Funds: Actively managed mutual funds are a good choice. They provide professional management and can outperform the market. Avoid direct funds as they require extensive knowledge and constant monitoring. Instead, invest through a Mutual Fund Distributor (MFD) with a Certified Financial Planner (CFP) credential. Regular funds through MFDs offer valuable advice and ongoing support.

Systematic Investment Plans (SIPs): SIPs in equity mutual funds can help you build a substantial corpus over time. Start with an amount you are comfortable with, gradually increasing as your income grows. This disciplined approach ensures regular savings and benefits from compounding.

Debt Instruments: To balance your portfolio, include debt instruments. Public Provident Fund (PPF) and Fixed Deposits (FDs) are reliable options. They provide stable returns and safety of capital, which is crucial for short-term goals.

Building a Comprehensive Plan
Emergency Fund: Ensure you have an emergency fund equivalent to 6-12 months of expenses. This will provide a cushion in case of unexpected events, preventing you from dipping into your investments.

Insurance: Adequate insurance is vital. Ensure you have a term plan covering at least 10-15 times your annual income. This will secure your family's future in your absence. Additionally, health insurance is essential to cover medical expenses.

Diversification: Diversify your investments across various asset classes. This reduces risk and ensures you are not overly dependent on one type of investment.

Detailed Investment Strategy
Equity Mutual Funds: Allocate a significant portion to equity mutual funds. Choose funds with a good track record and consistent performance. Avoid index funds, as they merely replicate the market index and lack the potential for higher returns through active management.

Debt Mutual Funds: Complement your equity investments with debt mutual funds. They provide stability and lower risk. Short-term and medium-term debt funds are suitable, considering the time horizon for your daughter's education.

Gold: Allocate a small percentage to gold. Gold acts as a hedge against inflation and market volatility. Gold ETFs or Sovereign Gold Bonds are preferable to physical gold due to better liquidity and no storage costs.

Education Fund Target
Goal Setting: Calculate the amount needed for your daughter's education. Consider her future aspirations, such as undergraduate and postgraduate studies. Adjust the target amount considering inflation.

Regular Review: Periodically review your investments and goals. Ensure they are aligned and make adjustments as needed. Stay informed about market conditions and economic changes.

Other Future Expenses
Lifestyle Needs: Beyond education, consider other future expenses like weddings, family vacations, and retirement. Factor these into your financial plan to ensure a comfortable lifestyle.

Retirement Planning: While focusing on your daughter's education, don't neglect your retirement. Start a retirement fund if you haven't already. The earlier you start, the more time your money has to grow.

Implementing the Plan
Consult a CFP: Engage a Certified Financial Planner for personalized advice. They will help you create and execute a detailed plan, ensuring you stay on track to meet your goals.

Regular Investments: Commit to regular investments. Automate your SIPs to ensure consistency. Regular contributions, even if small, accumulate over time and create substantial wealth.

Stay Informed: Educate yourself about financial markets and products. Understanding where your money is invested helps you make informed decisions and increases confidence in your plan.

Benefits of Actively Managed Funds
Professional Management: Actively managed funds are handled by professional fund managers who make informed decisions. They actively seek opportunities to outperform the market.

Potential for Higher Returns: Unlike index funds, actively managed funds aim to beat the market index. This potential for higher returns can significantly boost your investment corpus over time.

Risk Management: Fund managers actively manage risk by diversifying the portfolio and making strategic adjustments based on market conditions.

Disadvantages of Index Funds
Limited Returns: Index funds aim to replicate the market index. They do not seek to outperform, which can limit your potential returns.

Lack of Flexibility: Index funds have a fixed composition based on the index they track. This lack of flexibility can be a disadvantage in volatile markets.

No Active Management: Index funds do not benefit from professional management. In times of market downturns, active fund managers can make strategic decisions to protect your investments.

Final Insights
Creating a robust financial plan is crucial for securing your daughter's future. Start by understanding your current financial situation and setting clear goals. Diversify your investments across equity and debt instruments, ensuring a balanced portfolio. Engage a Certified Financial Planner to guide you through the process and provide personalized advice.

Regularly review and adjust your investments to stay aligned with your goals. Avoid direct funds and index funds, opting instead for actively managed funds through a reputable MFD. This approach leverages professional management and the potential for higher returns.

Remember, financial planning is a continuous process. Stay informed, disciplined, and committed to your investment strategy. Your dedication will ensure a bright future for your daughter and a comfortable lifestyle for your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9777 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 02, 2024

Asked by Anonymous - Jun 19, 2024Hindi
Money
Hi Im a 18 year old & i want to start investing but I do not havd much idea about it. I plan to invest around 50k , how shall i invest & where?
Ans: It's great that you're thinking about investing at such a young age. Let's break down the key points to get you started on your investment journey in a simple and straightforward way.

Understanding Your Starting Point
Firstly, it's commendable that you're considering investing at 18. This is the perfect time to start. Investing early gives you the benefit of time, allowing your investments to grow and compound. Starting with Rs 50,000 is a good beginning, and you can build on it as you learn more.

Importance of Financial Goals
Before jumping into the "where" and "how" of investing, it's essential to understand "why" you're investing. Your goals can shape how you invest. Are you looking to save for higher education, buy a vehicle, travel, or simply grow your wealth? Knowing your goals can guide your investment choices and time horizon.

Risk Tolerance and Investment Horizon
At 18, you have the advantage of a long investment horizon. This allows you to take on more risk compared to someone closer to retirement. However, understanding your risk tolerance is crucial. Are you comfortable with the ups and downs of the market, or do you prefer stability? Your risk tolerance will determine the kind of investments suitable for you.

Basics of Diversification
Diversification is a key principle in investing. It means spreading your investments across different assets to reduce risk. By not putting all your money into one investment, you protect yourself from potential losses. A diversified portfolio typically performs better in the long run.

Exploring Different Investment Options
Now, let's talk about where to invest your Rs 50,000. Here are some avenues you can consider:

Mutual Funds: A Good Starting Point
Mutual funds pool money from many investors to invest in stocks, bonds, or other assets. They are managed by professional fund managers who make decisions on behalf of investors.

Advantages of Mutual Funds:

Professional Management: Experienced fund managers handle your investments.
Diversification: Funds typically invest in a variety of assets.
Accessibility: You can start with a small amount and invest regularly.
Disadvantages of Direct Funds:

Direct funds might seem appealing as they have lower costs. However, without the guidance of a Certified Financial Planner (CFP), you might not make the best decisions. Regular funds, managed by a CFP, offer professional advice that can enhance your returns and align investments with your goals.

Actively Managed Funds vs. Index Funds
You might have heard of index funds. These funds track a market index, like the Nifty 50, and are passively managed. While they have lower fees, they also have some drawbacks:

Less Flexibility: Index funds can’t adjust to market changes as they strictly follow the index.
No Expert Guidance: They lack the active decision-making of a fund manager, which might miss opportunities or risks.
On the other hand, actively managed funds involve a team making decisions to outperform the market. They adapt to market conditions, potentially offering better returns despite higher fees.

Public Provident Fund (PPF): Safe and Reliable
The Public Provident Fund is a government-backed savings scheme offering tax benefits. It’s a long-term investment option with a lock-in period of 15 years, suitable for risk-averse investors looking for a secure, stable return.

Advantages:

Tax Benefits: Contributions and returns are tax-free.
Safety: Government guarantees ensure your investment is secure.
Regular Returns: Fixed interest rate provides predictable growth.
Fixed Deposits: Simple and Secure
Fixed deposits (FDs) are another low-risk investment. You deposit money for a fixed period and earn interest. While they don't offer high returns, they are stable and secure.

Advantages:

Security: Your principal is protected.
Predictable Returns: Fixed interest rates give certainty.
Stocks: High Risk, High Reward
Investing in individual stocks can offer significant returns but comes with higher risks. As a beginner, this might be more challenging and requires in-depth research and understanding.

Advantages:

Potential for High Returns: Stocks can provide substantial growth.
Ownership: You own a piece of the company.
Disadvantages:

Volatility: Stock prices can fluctuate significantly.
Research Intensive: Requires time and knowledge to pick the right stocks.
Debt Instruments: Lower Risk, Stable Returns
Debt instruments like bonds and government securities offer lower risk and provide regular interest payments. They are suitable for those who prefer stability over high returns.

Advantages:

Lower Risk: Generally safer than equities.
Regular Income: Bonds pay periodic interest.
Gold: A Traditional Choice
Gold is often seen as a safe-haven asset. While it's not a growth asset, it can provide stability in times of economic uncertainty. Investing in gold can be done through physical purchase, gold ETFs, or sovereign gold bonds.

Advantages:

Stability: Holds value during market downturns.
Hedge Against Inflation: Maintains purchasing power over time.
Balancing Risk and Reward
Given your age and the ability to take on more risk, you might lean towards a balanced approach. A mix of equity (stocks and equity mutual funds) and debt (PPF, FDs) can offer growth potential while maintaining some stability.

The Role of a Certified Financial Planner
A Certified Financial Planner (CFP) can provide invaluable guidance. They can help tailor an investment strategy based on your goals, risk tolerance, and financial situation. Their expertise ensures your investments align with your long-term objectives, providing peace of mind.

Avoiding Common Investment Pitfalls
As you start your investment journey, be mindful of common mistakes:

Chasing Quick Returns: Investing is a marathon, not a sprint. Avoid schemes promising high returns quickly.
Lack of Research: Always understand where you’re putting your money.
Ignoring Costs: Be aware of fees and charges, as they can impact your returns.
Setting Up a Systematic Investment Plan (SIP)
Consider starting a SIP with mutual funds. It allows you to invest a fixed amount regularly, taking advantage of rupee cost averaging. This approach reduces the impact of market volatility and builds a disciplined investment habit.

Monitoring and Reviewing Your Investments
Investing isn’t a one-time activity. Regularly review and monitor your investments to ensure they align with your goals. Adjustments might be necessary as your life circumstances and market conditions change.

Embracing Financial Education
Continuous learning is crucial in investing. Read books, follow financial news, and consider online courses to enhance your understanding. Being well-informed helps you make better decisions and feel more confident about your investments.

Final Insights
Starting your investment journey at 18 with Rs 50,000 is a fantastic decision. You have the gift of time, and with careful planning and education, you can build a solid financial foundation. Diversify your investments, seek professional guidance, and stay committed to your goals. The road to financial independence begins with small steps, and you’re already on the right path.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9777 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 28, 2025

Asked by Anonymous - Apr 15, 2025
Money
Hello sir. I am a 23 year old student, currently doing my MBA right now. I want to start saving up, for the future, while clearing my loan (~20 lakh, 7.5% interest). An average placement in our college will be around 12-13 LPA in hand. I want some guidance on how to start the habit on investing, best areas to invest in and grow a portfolio (save up for major event, marriage, home, car, vacations) . I am more on a conservative side of investing. Please guide.
Ans: Starting to save and invest during MBA is a very good decision.

Thinking about loan repayment and investment together shows maturity and responsibility.

Planning early for life goals like marriage, home, and vacations is the right way forward.

It is very rare at 23 years to think about financial freedom, so you are on the right path.

You are planting the seed of a beautiful financial future today.

Understanding Your Current Financial Situation
You are 23 years old and pursuing MBA right now.

You have an education loan of around Rs 20 lakh at 7.5% interest.

Your future income is expected to be around Rs 12-13 lakh in hand.

You are a conservative investor by nature, preferring safety with some returns.

You want to build savings for marriage, house, car, and vacations.

You want to build the habit of investing from now itself.

Importance of Clearing Loan First
Your education loan has a high interest of 7.5% per year.

Any investment you do must beat 7.5% returns after tax to make sense.

Otherwise, it is better to repay the loan early to save on high interest.

Clearing loan gives peace of mind and improves your financial freedom.

It is better to first build an emergency fund and then partially focus on loan closure.

Emergency Fund Must Be Your First Step
Before investing anywhere, build an emergency fund for 6 months expenses.

Keep this fund in liquid mutual funds or simple bank fixed deposits.

Emergency fund gives you safety if job placement is delayed or salary is less.

Emergency fund must be untouched unless there is a real financial emergency.

This simple step protects you from taking unnecessary loans later.

How to Approach Loan Repayment and Investment Together
Allocate 70% of your first year salary towards clearing the education loan.

Allocate 30% towards building your emergency fund and starting investments.

Once loan becomes small, reverse the ratio to 30% loan and 70% investments.

Discipline and patience are your biggest friends here.

Always try to prepay at least once every 6 months.

You will save a lot of interest by small extra prepayments regularly.

Choosing the Right Investment Options for You
As a conservative investor, focus on balanced and diversified products.

Invest in a mix of conservative hybrid funds and multi-cap mutual funds.

Choose only actively managed mutual funds and not passive index funds.

Index funds just copy the market and give average returns only.

Active funds, managed by expert fund managers, aim to beat the market.

Certified Financial Planners can guide you to select right funds through trusted MFDs.

Investing through regular plans via MFDs helps you get proper reviews and service.

Direct funds miss this regular portfolio review and personalised hand-holding.

Regular review is needed at least once every 6 months.

It is better to pay a small fee for expert guidance and stay on track.

How Much to Invest Initially
Start small with Rs 5000 to Rs 8000 per month while studying.

Once you get placement and steady salary, increase it to Rs 20,000 monthly.

You can aim for 30% of your in-hand salary to go towards investments.

If salary is Rs 1 lakh per month, target Rs 30,000 SIP after loan reduces.

Gradual increase in SIP amount every year with salary hike is very important.

This method is called 'Step-up SIP' and helps wealth grow faster.

Best Investment Areas for Your Goals
For marriage and car goals (2-5 years), invest in conservative hybrid funds.

For home purchase (7-10 years), invest in balanced advantage and multi-cap funds.

For vacations (2-3 years), invest very conservatively in short duration funds.

Always match your investment type with your goal’s time horizon.

Short term goals = safer products, long term goals = slightly aggressive products.

Taxation Awareness from Beginning
Equity mutual funds gains above Rs 1.25 lakh in a year are taxed at 12.5%.

Short term capital gains (holding period less than 1 year) taxed at 20%.

Debt mutual funds taxed as per your personal income tax slab.

Always invest knowing about tax rules to avoid surprises later.

Plan redemption smartly to minimise tax outgo and maximise returns.

Importance of Setting Goals Clearly
Write down each goal separately with approximate time and cost today.

Adjust the cost for 6%-7% inflation per year.

Goals must be divided into short, medium and long term.

Short term = next 3 years, medium term = 4 to 7 years, long term = 8 years+.

Clarity about goals will help you stay disciplined during market ups and downs.

Why Not to Invest in Real Estate Now
Real estate needs big capital and high maintenance cost.

Liquidity is very poor and selling property is not easy.

Loan for real estate will again create financial pressure.

In early career stage, it is better to stay flexible and liquid.

Mutual funds and SIPs give liquidity, diversification, and better growth potential.

Importance of Insurance Coverage
Once you get a job, buy a term insurance for Rs 1 crore at least.

Premium will be very low because of your young age and good health.

Take a simple term plan only, without any investment component.

Also buy a health insurance policy independent of employer’s coverage.

Having good insurance protects your wealth from unexpected emergencies.

Building the Habit of Saving and Investing
Start SIPs in mutual funds on salary day itself.

Make investment automatic so that you never miss it.

Track your expenses monthly and cut wasteful spending.

Increase SIP amount every year at least by 10%-15%.

Stay invested for long periods without withdrawing for small needs.

Investing is a slow and steady process, not a lottery ticket.

Emotional Discipline is Very Important
Markets will rise and fall many times in next 15 years.

Never stop your SIP during market falls.

In fact, during market fall, you should increase SIP if possible.

Time in market is more important than timing the market.

Stay connected with a Certified Financial Planner for guidance and motivation.

Regular reviews of your investments are necessary to stay aligned to goals.

Special Tips for You as a Beginner
Read basic finance books to increase your knowledge.

Avoid chasing fancy stocks, crypto, and unknown investment schemes.

Stick to simple, proven mutual fund strategies for wealth creation.

Save first, spend later should become your habit.

Enjoy life but without compromising on savings.

Start early, stay consistent, and let compounding do the magic.

Action Plan for You
Build Rs 1 lakh emergency fund in liquid mutual fund first.

Start SIP of Rs 5000 to Rs 8000 monthly till MBA completion.

Repay education loan aggressively after getting a job.

Gradually increase SIP to Rs 20,000 and later to Rs 30,000 monthly.

Stay invested for minimum 7-10 years for major goals.

Keep reviewing with a Certified Financial Planner once every year.

Finally
You are at the best age to build wealth safely and steadily.

Early action multiplies your wealth power hugely later.

Clearing your education loan fast should be your top priority now.

Saving and investing must become a habit, not a one-time thing.

Diversified mutual funds will help you balance safety and growth smartly.

Protect yourself with proper term and health insurance at the earliest.

Avoid distractions like real estate, direct stocks, crypto at early stage.

Focus on discipline, patience and simplicity in financial life.

15 years later, you will thank yourself for the seeds you plant today.

Wishing you a financially prosperous and peaceful journey ahead!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

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Latest Questions
Dr Nagarajan J S K

Dr Nagarajan J S K   |1875 Answers  |Ask -

NEET, Medical, Pharmacy Careers - Answered on Jul 18, 2025

Sunil

Sunil Lala  |218 Answers  |Ask -

Financial Planner - Answered on Jul 18, 2025

Money
Dear Sir, I am 40 year old, my take home is 1.41 lacs per month. I have 11 year old daughter and 3.5 year old son. I am investing 12.5k per month in SSY (27 lacs in total) and 12.5k per month in PPF (6 lacs in total). Investing around 4k in SIP in index fund (1.2 lacs) and I have around 30 lacs in FD. I have taken 1cr term insurance and have 10lakhs health insurance for family. FD is not giving me satisfactory returns and not beating the inflation. I am planning to invest 25 lacs in buying a site. I don't have any loans and don't have major commitment other than children education. I request you to guide me on future investments, I would like to get a constant income of 1-1.5 lacs PM after 5-6 years.
Ans: Hi Ajay, understand the SSY and PPF are also not givin you enough returns, your SIP in index funds and FD all are ineffecient return making assets. Buying a site will not ensure liquidity when you will need it the most, and 10L health insurance for a family of 4 is low as well.
Having a constant income of 1-1.5L p.m. means annually 12-18L of income, and to have a passive income like that, your corpus should be 15-16x of the annual income --> which means we are looking at 1.8Cr to 2.7Cr of corpus in the next 5-6 years.
There are a lot of flaws in your investment strategies because at one place you are wanting to lock in money at a site, in SSY and PPF and on the other you are looking to earn 1-1.5L p.m. which is possible through liquid investments.
I would love to help you out, but to me it feels like there is a gap in the knowledge about investments and personal finance. If you are wanting to have a detailed conversation about your investments and where you can park your money to grow it to have the monthly income you want after a certain number of years, visit my website www.slwealthsolutions.com

...Read more

Sunil

Sunil Lala  |218 Answers  |Ask -

Financial Planner - Answered on Jul 18, 2025

Money
I m a 44 yrs old . My salary 85k net per month. Rent income 1.20 lakh per month. Fixed deposit 46 lakh PPF 21.35 lakh Lap loan 46.50 lakh OD loan 6.50 lakh. Mutual funds 2.75 lakhs Shares 3.25 laks Property in Noida, jewar, dwarka , Rohini and faridbad. My wife is earning 50k per month but not contributing in assests we spend his salary on vacations and foods and cloths as she don't want to save. According to her it is my responsibility to provide foods and investment. At this age I m going to lose my jobs. I can manage all things with rental but how can I build up financial assets from here on and my triple source like salary, rental and interest helps me a lot in past. I m simple man with basic needs no extra expenses on me. But kids are in college in class 9 how can I build assests and ensure their good education
Ans: Hello Sanjiv, you have a lot of money parked in debt instruments like FD, PPF and not-liquid assets like properties as well. I would advise you to calculate your income from each asset on a yearly basis in % terms. I think that will give you a true picture of what you are earning as of now vs what you can earn in equity mutual funds which are managed by professionals.
We can have a detailed conversation around your situation and I can help you understand what re-shuffling can be done in your asset portfolio (with continuing rental+interest income) with greater capital appreciation, visit my website www.slwealthsolutions.com if you are interested

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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