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Ramalingam Kalirajan |10881 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 08, 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 07, 2025Hindi

Hi Im 41yr old, with take home salary of 3L, current SIPs of 80,000. Homeloan of 80L. Monthly expenses of 1L. I have kids aged 9yr & 6yr. Also,occasionally investing in Stock Markets. I want to create a huge corpus for retirement for comfortable luxurious living & kids higher education & marriage& other expenses Have medical Insurance of 10L Kindly guide me for investing & saving better.

Ans: You are 41 years old with Rs. 3 lakh monthly income.
You invest Rs. 80,000 per month in mutual funds.
You have an Rs. 80 lakh home loan.
Your household expense is around Rs. 1 lakh monthly.
You have two kids, 9 and 6 years old.
You also invest sometimes in stock markets.
You have Rs. 10 lakh health insurance cover.
You want to build a large corpus for retirement, children’s education, marriage, and more.
Let us now create a 360-degree financial action plan for you.

First, Understand Your Present Financial Strength
You have high income and good savings habit.

SIP of Rs. 80,000 is very impressive.

You are balancing loan, SIP, and expenses well.

This discipline will create long-term wealth.

You have taken health insurance.

This is also a strong and responsible move.

But more structure is needed in your investments.

Map Your Key Life Goals First
You have four clear long-term goals:

Retirement corpus – From age 60 onwards

Child 1 higher education – in 8 to 10 years

Child 2 higher education – in 11 to 13 years

Marriage for both kids – in 15 to 20 years

You also want:

A comfortable and luxurious retired life

To manage all future lifestyle expenses

These goals are all heavy on future money needs.

Allocate Your Rs. 80,000 SIP Properly
You are investing Rs. 80,000 monthly in SIP.
But the right allocation is more important than the amount.
Break this into 3 goal-specific buckets.

Bucket 1: Retirement (Rs. 40,000/month)
This is your longest-term goal.

So, it can take the highest equity exposure.

You can invest in:

Flexi Cap Fund

Large & Mid Cap Fund

Aggressive Hybrid Fund

Use at least 3–4 fund categories.

Focus on growth-oriented funds.

Retirement needs steady SIP for 15–18 more years.

Increase SIP every year by at least 10%.

Bucket 2: Child Education (Rs. 30,000/month)
Split this between both kids.

You have around 8–12 years for this.

Use mix of safety and growth funds.

Choose:

Flexi Cap Fund

Balanced Advantage Fund

Short Duration Fund (closer to goal)

In last 2–3 years, shift funds to safer options.

Don’t keep 100% in equity during college start.

Bucket 3: Marriage & Lifestyle Fund (Rs. 10,000/month)
These goals are 15–20 years away.

So, can be fully equity focused.

Choose:

Mid Cap Fund

Flexi Cap Fund

Aggressive Hybrid Fund

Also usable for travel, luxury, business, or future dreams.

Avoid Investing Randomly in Stocks
Direct stock investment needs full-time research.

You may buy high and sell low unknowingly.

One wrong stock can wipe out 10 right ones.

Keep stock exposure limited to 5%–10% only.

Don’t rely on tips or social media stock advice.

Use stocks only after you finish all SIPs for goals.

Mutual funds are safer, flexible, and professionally managed.

Do Not Go for Index Funds
Index funds only copy market, not actively managed.

They cannot protect when market crashes.

You ride full ups and full downs.

No human brain involved in decision making.

Better to invest in actively managed funds.

Skilled fund managers will adjust portfolio wisely.

Use proven funds with consistent track record.

Avoid Direct Funds – Choose Regular Plans
Direct mutual funds look cheaper but come with no service.

You will have no advisor to help or guide.

Portfolio may become unbalanced or underperform.

Regular funds give you service via MFD with CFP.

They help with asset allocation and yearly review.

They guide during corrections and market shocks.

Their cost is small, but value is very high.

Always work with MFD who is also a CFP.

Plan for Home Loan Management
Rs. 80 lakh loan is large.

Don’t rush to close it fully.

Keep EMI comfortable within your cash flow.

You can prepay slowly after building emergency fund.

First focus should be on funding your goals.

Don’t sacrifice retirement to close loan early.

If interest rate is below 9%, continue paying EMI.

Create an Emergency Fund Now
Your monthly expenses are Rs. 1 lakh.

So, keep Rs. 6 lakh to Rs. 9 lakh for emergencies.

Use FD, liquid fund, or sweep-in account.

This is only for job loss or health issues.

Don’t mix it with investment goals.

Review Your Health and Life Cover
Rs. 10 lakh medical insurance is good, but may not be enough.

Medical inflation is 12–15% per year.

Add a top-up health cover of Rs. 20 lakh.

Buy it early while you are healthy.

Also, take pure term insurance for Rs. 1.5 crore to Rs. 2 crore.

This protects your family in case of sudden death.

If You Hold LIC, ULIP or Endowment Policies
Check your current insurance-cum-investment plans.

See past 5-year return, often less than 5%.

These products are low-return and high-lock-in.

If no lock-in now, surrender the policy.

Reinvest into mutual funds for better growth.

Buy pure term cover instead of combo policies.

Yearly Review of Portfolio is Important
Don’t forget your SIPs after starting them.

Review all funds once a year.

Replace only if underperforming for 3 years or more.

Rebalance between equity and debt if needed.

Take help from your MFD with CFP every year.

Avoid investing emotionally or based on market news.

Understand Tax Rules for Future Withdrawals
Equity fund profit over Rs. 1.25 lakh taxed at 12.5%.

Short-term equity gains taxed at 20%.

Debt and hybrid funds with

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