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Ramalingam Kalirajan |10879 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on May 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
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 - May 14, 2025
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Hi sir iam 38 years old my monthly hand in salary is 75000 i have lic and gold loan of around 4 lakhs paying 3 lic policies worth 50000 yearly, completed 5 years need to pay another 10 years had own house worth 35 lakhs, and 2 plots worth 15 lakhs and gold worth 10 lakhs pf worth 4.9 lakhs my wife is housewife and have only one son 2 years how should i plan for his education
Ans: At 38, with a 2-year-old son, your focus on his education planning is timely and thoughtful. You already hold a house, land, gold, LIC policies, and PF. Let us now assess your current situation and create a structured, simple plan for your son's education.
This response is long and detailed, as it offers you a complete, 360-degree direction.
Let’s begin.
Current Financial Snapshot Review
You are 38 years old with a take-home salary of Rs. 75,000 per month.
You own a house worth Rs. 35 lakhs and two plots worth Rs. 15 lakhs.
You also have gold worth Rs. 10 lakhs and EPF worth Rs. 4.9 lakhs.
You are paying Rs. 4 lakhs as a gold loan and LIC premiums of Rs. 50,000 yearly.
Your wife is a homemaker, and you have a 2-year-old son.
You have completed 5 years of LIC policy payments, and 10 more years remain.
This is a fair beginning. But some important changes can give you more clarity and better wealth.
Understanding Your Son’s Education Goal
Your son is 2 now. Higher education starts around 17 or 18 years.
That gives you around 15 years to plan and invest.
Education inflation in India is rising very fast every year.
A basic UG degree at a good college today may cost Rs. 15 to 25 lakhs.
A PG or professional course in India or abroad may cost Rs. 20 to 40 lakhs.
If you plan early and smartly, you can reach this amount comfortably.
Why Your LIC Policies Need Review
Your LIC policies are costing Rs. 50,000 every year.
You already paid for 5 years and have 10 more years left.
These LIC policies are most likely traditional endowment plans.
Such policies give poor returns, usually 4% to 5% per year.
This return will not beat inflation, especially education inflation.
Insurance and investment should never be mixed in one product.
Please check their surrender value now.
A Certified Financial Planner can help calculate your surrender loss and maturity.
You can then shift the amount to mutual funds to grow faster.
Action Point: Surrender the LIC policies and reinvest into mutual funds
About the Gold Loan and Its Repayment
Gold loan interest rates are usually high – between 9% and 12%.
Try to repay this loan in the next 6 to 9 months.
You may use part of your gold (if unpledged) or bonus to repay it.
Avoid renewing or extending gold loans too long.
Clearing this liability early will reduce pressure.
Why Mutual Funds Should Be Your Core Investment Tool
You have 15 years to save for your son’s education.
Mutual funds can give inflation-beating returns over long periods.
Equity mutual funds have potential to grow at 10% to 14% returns.
This can help you build a large corpus over 15 years.
Start a monthly SIP of at least Rs. 10,000 right now.
As income increases, increase SIP amount every year.
Avoid index funds. They don’t beat market averages.
Use actively managed equity funds handled by experienced fund managers.
Why You Should Choose Regular Mutual Funds through CFPs
You might think direct mutual funds save costs.
But direct funds offer no guidance or human support.
Most investors make emotional mistakes without guidance.
Regular funds, via MFDs with CFPs, offer hand-holding and planning.
You need help in goal planning, rebalancing, and SIP monitoring.
Over 15 years, a small fee saves big mistakes.
SIP Ideas for Your Child's Education Plan
Start small with Rs. 10,000 monthly SIP.
Gradually raise it by 10% every year.
Use a mix of flexi cap, large cap, and mid cap funds.
Avoid small cap now. They are volatile.
Continue SIP for at least 15 years till child turns 17.
Don't stop SIP if market falls. Continue it.
Other Investments You Can Consider Later
You already have land worth Rs. 15 lakhs.
But land is not liquid. Don’t depend on it for child’s goal.
Try to avoid real estate further. It blocks large capital.
Gold is already worth Rs. 10 lakhs. No need to add more.
Instead, add mutual funds as your core growth tool.
Build an Emergency Fund Before Anything Else
Keep at least 6 months of expenses as emergency savings.
That is about Rs. 3 lakhs, given Rs. 50,000 average monthly costs.
Use bank savings or short-term debt mutual funds for this.
This will stop you from breaking your SIP during problems.
Secure Your Family with Term Insurance
LIC endowment plans are poor for insurance.
Buy a pure term plan of Rs. 50 lakhs or more.
Term insurance is cheaper and gives better cover.
Choose term insurance till age 60 or 65.
Add a health insurance policy too if you don’t have one.
Your PF Is Not Enough for Retirement
Rs. 4.9 lakhs PF is small for retirement planning.
Don’t use PF for child’s education.
PF should grow quietly for your post-60 retirement needs.
You must build a separate corpus for retirement with SIP.
Don’t mix retirement and child goals together.
Monthly Budget and SIP Capacity
Your salary is Rs. 75,000.
Assume Rs. 15,000 goes towards household costs.
Rs. 4,000 is gold loan EMI and Rs. 4,000 LIC monthly cost.
You should still have Rs. 15,000 to 20,000 left per month.
Use Rs. 10,000 minimum for SIP in child plan.
Use another Rs. 2,000 to Rs. 3,000 for gold loan repayment.
What Happens If You Delay Starting Now?
Delay of 3 to 5 years means less compounding.
It will need double the SIP amount later.
Start now and let compounding do the work.
Don’t wait for bonus or extra cash. Begin with what you have.
Education Goal Can Be Met Without Pressure
A monthly SIP of Rs. 10,000 growing at 11% over 15 years can reach near Rs. 40 lakhs.
If you increase SIP every year, you can reach Rs. 50 lakhs easily.
This will be enough for UG and PG in India.
If abroad education is planned, increase SIP accordingly.
Don’t break the corpus mid-way unless urgent.
Keep Education Goal Separate and Clear
Open a separate folio for your son’s education plan.
Don’t mix it with other mutual fund goals.
Use goal-based SIPs with tracking.
Every year, review the fund performance with a CFP.
Shift from equity to hybrid or debt 3 years before goal.
Avoid These Common Mistakes
Don’t keep gold loan for years. Repay quickly.
Don’t expect LIC to give big money. Returns are too low.
Don’t stop SIP due to fear or temporary need.
Don’t depend on land for child education.
Don’t think PF or PPF will meet education costs.
Finally
You are on the right track with assets like land, house, and gold. But these assets won’t help much in your child’s education plan due to lack of liquidity and growth.
Mutual funds through SIP, guided by a Certified Financial Planner, will help you build a dedicated and inflation-beating education corpus for your son.
Start today. A small start is better than a perfect plan tomorrow.
Your son’s future deserves consistent investing and smart planning.
Let mutual funds work hard while you focus on your family.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
This response is long and detailed, as it offers you a complete, 360-degree direction.
Let’s begin.
Current Financial Snapshot Review
You are 38 years old with a take-home salary of Rs. 75,000 per month.
You own a house worth Rs. 35 lakhs and two plots worth Rs. 15 lakhs.
You also have gold worth Rs. 10 lakhs and EPF worth Rs. 4.9 lakhs.
You are paying Rs. 4 lakhs as a gold loan and LIC premiums of Rs. 50,000 yearly.
Your wife is a homemaker, and you have a 2-year-old son.
You have completed 5 years of LIC policy payments, and 10 more years remain.
This is a fair beginning. But some important changes can give you more clarity and better wealth.
Understanding Your Son’s Education Goal
Your son is 2 now. Higher education starts around 17 or 18 years.
That gives you around 15 years to plan and invest.
Education inflation in India is rising very fast every year.
A basic UG degree at a good college today may cost Rs. 15 to 25 lakhs.
A PG or professional course in India or abroad may cost Rs. 20 to 40 lakhs.
If you plan early and smartly, you can reach this amount comfortably.
Why Your LIC Policies Need Review
Your LIC policies are costing Rs. 50,000 every year.
You already paid for 5 years and have 10 more years left.
These LIC policies are most likely traditional endowment plans.
Such policies give poor returns, usually 4% to 5% per year.
This return will not beat inflation, especially education inflation.
Insurance and investment should never be mixed in one product.
Please check their surrender value now.
A Certified Financial Planner can help calculate your surrender loss and maturity.
You can then shift the amount to mutual funds to grow faster.
Action Point: Surrender the LIC policies and reinvest into mutual funds
About the Gold Loan and Its Repayment
Gold loan interest rates are usually high – between 9% and 12%.
Try to repay this loan in the next 6 to 9 months.
You may use part of your gold (if unpledged) or bonus to repay it.
Avoid renewing or extending gold loans too long.
Clearing this liability early will reduce pressure.
Why Mutual Funds Should Be Your Core Investment Tool
You have 15 years to save for your son’s education.
Mutual funds can give inflation-beating returns over long periods.
Equity mutual funds have potential to grow at 10% to 14% returns.
This can help you build a large corpus over 15 years.
Start a monthly SIP of at least Rs. 10,000 right now.
As income increases, increase SIP amount every year.
Avoid index funds. They don’t beat market averages.
Use actively managed equity funds handled by experienced fund managers.
Why You Should Choose Regular Mutual Funds through CFPs
You might think direct mutual funds save costs.
But direct funds offer no guidance or human support.
Most investors make emotional mistakes without guidance.
Regular funds, via MFDs with CFPs, offer hand-holding and planning.
You need help in goal planning, rebalancing, and SIP monitoring.
Over 15 years, a small fee saves big mistakes.
SIP Ideas for Your Child's Education Plan
Start small with Rs. 10,000 monthly SIP.
Gradually raise it by 10% every year.
Use a mix of flexi cap, large cap, and mid cap funds.
Avoid small cap now. They are volatile.
Continue SIP for at least 15 years till child turns 17.
Don't stop SIP if market falls. Continue it.
Other Investments You Can Consider Later
You already have land worth Rs. 15 lakhs.
But land is not liquid. Don’t depend on it for child’s goal.
Try to avoid real estate further. It blocks large capital.
Gold is already worth Rs. 10 lakhs. No need to add more.
Instead, add mutual funds as your core growth tool.
Build an Emergency Fund Before Anything Else
Keep at least 6 months of expenses as emergency savings.
That is about Rs. 3 lakhs, given Rs. 50,000 average monthly costs.
Use bank savings or short-term debt mutual funds for this.
This will stop you from breaking your SIP during problems.
Secure Your Family with Term Insurance
LIC endowment plans are poor for insurance.
Buy a pure term plan of Rs. 50 lakhs or more.
Term insurance is cheaper and gives better cover.
Choose term insurance till age 60 or 65.
Add a health insurance policy too if you don’t have one.
Your PF Is Not Enough for Retirement
Rs. 4.9 lakhs PF is small for retirement planning.
Don’t use PF for child’s education.
PF should grow quietly for your post-60 retirement needs.
You must build a separate corpus for retirement with SIP.
Don’t mix retirement and child goals together.
Monthly Budget and SIP Capacity
Your salary is Rs. 75,000.
Assume Rs. 15,000 goes towards household costs.
Rs. 4,000 is gold loan EMI and Rs. 4,000 LIC monthly cost.
You should still have Rs. 15,000 to 20,000 left per month.
Use Rs. 10,000 minimum for SIP in child plan.
Use another Rs. 2,000 to Rs. 3,000 for gold loan repayment.
What Happens If You Delay Starting Now?
Delay of 3 to 5 years means less compounding.
It will need double the SIP amount later.
Start now and let compounding do the work.
Don’t wait for bonus or extra cash. Begin with what you have.
Education Goal Can Be Met Without Pressure
A monthly SIP of Rs. 10,000 growing at 11% over 15 years can reach near Rs. 40 lakhs.
If you increase SIP every year, you can reach Rs. 50 lakhs easily.
This will be enough for UG and PG in India.
If abroad education is planned, increase SIP accordingly.
Don’t break the corpus mid-way unless urgent.
Keep Education Goal Separate and Clear
Open a separate folio for your son’s education plan.
Don’t mix it with other mutual fund goals.
Use goal-based SIPs with tracking.
Every year, review the fund performance with a CFP.
Shift from equity to hybrid or debt 3 years before goal.
Avoid These Common Mistakes
Don’t keep gold loan for years. Repay quickly.
Don’t expect LIC to give big money. Returns are too low.
Don’t stop SIP due to fear or temporary need.
Don’t depend on land for child education.
Don’t think PF or PPF will meet education costs.
Finally
You are on the right track with assets like land, house, and gold. But these assets won’t help much in your child’s education plan due to lack of liquidity and growth.
Mutual funds through SIP, guided by a Certified Financial Planner, will help you build a dedicated and inflation-beating education corpus for your son.
Start today. A small start is better than a perfect plan tomorrow.
Your son’s future deserves consistent investing and smart planning.
Let mutual funds work hard while you focus on your family.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Asked on - May 24, 2025 | Answered on May 24, 2025
Tq sir will repay my gold loan in 8 months and I don't have idea how to invest in mutual funds
Ans: To start investing in mutual funds:
Begin a monthly SIP through a trusted Mutual Fund Distributor with CFP support.
Avoid direct plans. Choose regular plans for guidance and monitoring.
Get in touch with the MFD + CFP like us. You can reach us through our website in the signature.
Start with Rs. 10,000 SIP in 2–3 good actively managed equity funds.
As income increases, increase your SIP every year by 10–15%.
Keep this SIP only for your son’s education. Don’t withdraw midway.
Review fund performance once a year with your CFP.
Let compounding do the rest.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Begin a monthly SIP through a trusted Mutual Fund Distributor with CFP support.
Avoid direct plans. Choose regular plans for guidance and monitoring.
Get in touch with the MFD + CFP like us. You can reach us through our website in the signature.
Start with Rs. 10,000 SIP in 2–3 good actively managed equity funds.
As income increases, increase your SIP every year by 10–15%.
Keep this SIP only for your son’s education. Don’t withdraw midway.
Review fund performance once a year with your CFP.
Let compounding do the rest.
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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