Dear Sir, i am query that i have given my saving money of 3.5cr to my own brother and he is good and well caring on my personnel life and giving every month interest of 10% (3.5L), and i am also doing a bit ok on equity stock also 1 year which is...

Dear Sir, i am query that i have given my saving money of 3.5cr to my own brother and he is good and well caring on my personnel life and giving every month interest of 10% (3.5L), and i am also doing a bit ok on equity stock also 1 year which is anyway bull market now and saving in MF, my question is right handle my money by him as he already got business to handle and i am also have some personnel problems (now and then use drink) which i am really not giving peace to him, i want move out since my family already some what away from me. but all i want make sure this saving grows steadily for my kids for next 5 to 7 years, house wise i have land/apartment but still staying with my parents which also happen next to my brother house. Basically i am back from oversea to india (22 years) spend outside India. Now if really i have to handle what is best way to plan this money as i no longer able to make that kind of money on this age onwards even though i working minimum for my brother company

Ans: Given your situation, it's essential to ensure the safety and growth of your savings while also addressing your personal challenges. Here's a suggested approach:

Certified Financial Planner (CFP): Consult a trusted CFP to assess your current financial situation and create a tailored investment plan considering your goals and risk tolerance.

Diversify Investments: Avoid putting all your savings with your brother. Diversify across various asset classes like equity, debt, and real estate to reduce risk.

Mutual Funds: Continue investing in mutual funds for long-term growth. Choose diversified equity funds and debt funds based on your risk profile.

Emergency Fund: Set aside an emergency fund equivalent to 6-12 months' expenses in a liquid fund for unexpected expenses.

Personal Well-being: Address your personal challenges like drinking by seeking professional help or counseling. Your well-being is crucial for making sound financial decisions.

Legal and Documentation: Ensure all investments and transactions are documented properly to safeguard your interests.

Review and Monitor: Regularly review your investments and make necessary adjustments based on performance and changing goals.

By following this approach, you can aim for steady growth of your savings while also addressing personal challenges and ensuring financial security for your kids.

Ans: You have built a strong base with good income, zero debt, and a solid investment portfolio. Your clarity in goals and discipline in investments is excellent. Let us now plan for your child’s future in a comprehensive way.

++Your Family’s Financial Position

– Monthly income from all sources is close to Rs 4.3 lakhs.
– Monthly expenses are around Rs 1.5 lakhs, which is well-controlled.
– Rs 2 lakhs invested monthly in shares and mutual funds is a very good habit.
– Additional Rs 1 lakh invested as lumpsum is a strong surplus deployment.
– Rs 1.85 Cr in stocks shows wealth creation focus, but it adds risk.
– Rs 15 lakhs in mutual funds is a good start, but needs expansion.
– Rs 10 lakhs FD as emergency fund is sufficient for your lifestyle.
– No loans or liabilities make the structure financially stress-free.

Your foundation is very strong and ideal to build your child’s future plan on.

++Child’s Future: Key Financial Goals

– You must focus on two major child-related financial goals.
– First is higher education corpus, usually needed after 15–17 years.
– Second is partial support for wedding or life setup corpus, if possible.
– Education corpus will require focused and disciplined equity allocation.
– You already invest in equity, but need to earmark a portion for the child.

++Ideal Approach to Education Planning

– Cost of higher education is rising 8–10% per year.
– A good Indian or international degree may cost Rs 50 lakhs to Rs 1 Cr.
– You need a focused goal-based fund for this, separate from other wealth.
– Start earmarking Rs 50,000–75,000 from your monthly investments for this.
– Prefer mutual funds instead of direct equity for this goal.
– Avoid investing in index funds. They lack flexibility during market cycles.
– Actively managed diversified equity mutual funds are more suitable.
– These funds are better aligned to dynamic economic changes.
– Fund managers take tactical calls to protect and grow wealth better.

++Avoid Direct Equity for Child’s Corpus

– Direct equity is more volatile and emotionally draining in the short term.
– You may panic-sell or over-invest during emotional market phases.
– Not all stocks create long-term value.
– For child’s future, consistent compounding matters more than high returns.
– Mutual funds ensure professional management and diversification.
– They are audited, regulated and more suitable for long-term goal-based plans.

++Regular vs Direct Mutual Funds for Child’s Goal

– Do not go for direct mutual funds for this goal.
– Direct funds lack personal guidance and review support.
– For goal-based planning, regular funds via a Certified Financial Planner are better.
– A CFP will guide you to track the goal, switch assets when needed, and rebalance.
– Regular plans are also useful to avoid emotional investing behaviour.
– Slight cost is worth the long-term discipline and alignment it brings.

++Suggested Strategy to Allocate Investments

– Dedicate Rs 75,000 monthly for child’s higher education goal.
– Out of this, Rs 50,000 in diversified equity mutual funds via SIP.
– Rs 25,000 to be kept flexible for tactical lump-sum during market dips.
– Don’t invest this corpus in real estate. Avoid physical gold also.
– Maintain allocation review once in 6–12 months with your CFP.

++For Child’s Wedding or Life Setup Goal

– This is optional and depends on your surplus and values.
– You may start a small SIP of Rs 10,000–15,000 for this goal.
– Allocate this to balanced advantage or equity savings category funds.
– This goal may not need high growth, but low volatility matters more.
– Continue for next 15–20 years without withdrawals.

++Insurance Coverage and Risk Protection

– Your current health insurance is employer-linked.
– It will lapse if you quit or retire from your job.
– You must buy a standalone family floater health insurance of Rs 15–20 lakhs.
– Include both parents, spouse and child in the plan.
– Consider super-top-up of Rs 25 lakhs for low cost, high cover.
– Also check if your parents need senior citizen plans separately.
– Take a term life insurance of at least Rs 1 Cr if not already done.
– This ensures that your child’s plan runs uninterrupted in your absence.

++Emergency Fund and Backup Liquidity

– Rs 10 lakhs in FD is a very good emergency fund.
– Do not touch this for investments or expenses.
– Keep it in joint names, with sweep-in FD option if possible.
– You may also explore liquid funds for slightly better returns.
– But keep at least 50% in FD for guaranteed liquidity.

++Rental Income and Asset Usage

– Rs 1.22 lakhs rental income gives excellent support.
– Do not use this income for monthly expenses.
– Consider this as a passive inflow to be used for child’s fund or parents’ care.
– If possible, invest part of this rental income into your child’s goal corpus.
– Avoid selling any of the flats or shop for this goal.
– Real estate exit is slow and lacks liquidity when needed for education.

++Mutual Fund Taxation Rules

– When you redeem equity mutual funds, gains above Rs 1.25 lakhs/year are taxed at 12.5%.
– If redeemed before 1 year, then taxed at 20%.
– For debt funds, all gains are taxed as per your income slab.
– Hence, keep your child’s education corpus in equity-oriented hybrid or equity funds.
– Time your redemptions across financial years to reduce tax.
– Plan in advance. Don’t wait till last year of college.

++Child's Name Investments – Pros and Cons

– You can invest in your name and tag goal as "Child’s Education".
– Or you can invest in child’s name using minor account with parent as guardian.
– Minor accounts require more documentation for withdrawal.
– Taxation is clubbed with parent till child turns 18.
– Keeping in your name makes tracking and management easier.
– Use goal tracking in app or spreadsheet to stay aligned.

++Retain Flexibility in Investment Style

– Avoid rigid structures like insurance-cum-investment policies.
– They give low returns and lock your money.
– If you already have ULIP or LIC endowment policies, consider surrendering them.
– Redeploy funds in mutual funds for higher growth.
– Keep your child’s corpus liquid, flexible and market-linked.
– Equity SIPs give compounding with full liquidity and no lock-in.

++Parental Wealth and Succession Planning

– Parents are financially independent. That is excellent.
– Do prepare a Will for both parents.
– Ensure shop and rental property rights are clearly documented.
– You may create a family trust if you want future income to go to child.
– Succession planning ensures your child benefits from family wealth smoothly.

++Education Inflation vs Investment Returns

– Education cost rises 8–10% per year.
– Mutual fund SIPs in equity give 11–14% CAGR over long term.
– You are beating inflation by a healthy margin.
– Maintain SIPs for 10–15 years to reach Rs 1–1.5 Cr easily.
– Avoid stopping SIPs in market corrections. That’s when wealth is created.

++Track, Review and Rebalance Regularly

– Tag all SIPs and investments clearly as per goal.
– Review once in 6 months or 1 year.
– Rebalance if any fund is underperforming consistently for 2–3 years.
– Avoid emotional decisions. Stay with plan even in volatility.
– Use Certified Financial Planner to guide you with regular reviews.
– Don’t follow market tips or YouTube noise for child’s goal.

++Final Insights

– Your financial base is very strong. That gives you a big advantage.
– Now, add structure and discipline around your child’s future goal.
– Use mutual funds with SIP, not direct equity or real estate.
– Keep portfolio flexible, liquid and tax-efficient.
– Avoid insurance-linked investments and direct funds.
– Involve a Certified Financial Planner for personalised guidance.
– Protect your family with proper term and health insurance.
– Tag, track, review, and stay invested with patience.
– In 15 years, your child’s future will be fully secured.

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

Ans: You’ve shown amazing commitment and effort in your financial journey so far.
Balancing family needs, loans, investments, and responsibilities is never easy.
You’ve done it well and deserve appreciation.

Now let's assess your complete financial life in detail.
We will review each element and provide a 360-degree view.
Focus will be on strengthening your retirement and children's education goals.

» Income, Savings and Current Commitments

– Your monthly post-tax income is Rs.3.33 lakhs.
– Household expenses including rent are Rs.90,000.
– You support parents with Rs.17,000 monthly.
– Two personal loan EMIs total Rs.1.05 lakhs.
– Chit fund also takes outflows monthly.
– Remaining income is under pressure due to these fixed costs.

Even though income is strong, actual investible surplus is low.
This can impact long-term wealth building.
We need to create breathing room in monthly cash flow.

» Loan Strategy Needs Immediate Action

– You are paying EMIs of Rs.1.05 lakhs per month.
– Interest rates are above 10%.
– These are personal loans, not secured by assets.
– These are very expensive loans.
– They eat a big portion of your income every month.

Suggestions:

– Use surplus or bonuses to part-prepay these loans.
– Repay the costlier one first, or the one with smaller balance.
– Do not increase investments till at least one loan is cleared.
– Avoid parallel new loans for any purpose till these close.

Freeing up this EMI burden is the first big win for your future goals.

» NPS – Retirement Benefit, But With Limits

– You contribute Rs.17,000 monthly in NPS.
– This gives you tax benefit under Sec 80CCD(1B).
– It helps build long-term retirement fund.

However:

– NPS has lock-in till age 60.
– Partial withdrawal is restricted.
– 60% corpus is tax-free, rest must be used for pension.
– Pension from annuity is fully taxable.

NPS is helpful but should not be your only retirement plan.
You need more flexible and high-growth options like mutual funds.

» Mutual Funds – Increase Investment Over Time

– You currently hold Rs.5 lakhs in mutual funds.
– This is a good start but not enough for your goals.
– Especially with two children and long-term plans.

Recommendations:

– Avoid investing in direct plans.
– Direct plans do not offer professional guidance.
– Without a Certified Financial Planner, mistakes can reduce gains.
– Regular plans give expert advice, rebalancing, and support.
– Investing through CFP helps you align funds with goals.

Increase investments step-by-step as you clear your loans.
Start with child education goals, then retirement.

» Avoid Index Funds – You Need Better Risk Management

– Index funds invest blindly in the whole market.
– They do not filter bad companies or falling sectors.
– There is no fund manager to protect downside.
– In a market crash, index funds fall fully.
– They also don’t outperform – they just match the index.

Your goals need outperformance, not matching returns.
Actively managed funds offer:

– Smarter stock selection
– Risk control
– Fund manager experience
– Dynamic adjustment

Always go with actively managed funds via regular plan with Certified Financial Planner support.

» Direct Stocks – Keep It Limited

– You hold Rs.3.6 lakhs in direct equity.
– Equity investing needs deep research and regular tracking.
– You also need risk control and diversification.

If you don’t have time to track stocks:

– Reduce exposure over time.
– Shift to mutual funds with active management.
– Let professionals handle your equity allocation.

Don’t add more capital to direct stocks unless you are an experienced investor.

» PPF and EPF – Stable Support for Long-Term

– You have Rs.3.7 lakhs in PPF and Rs.12 lakhs in EPF.
– Both are safe, long-term, and tax-free options.
– EPF will grow through your salary contribution.
– PPF maturity can be aligned to your retirement or kid’s education.

These are low-risk parts of your portfolio.
But returns will be slower than mutual funds.
Don’t rely fully on them to meet large future goals.

» LIC Policies – Need to be Reviewed and Rationalised

You have three LIC policies:

– Money back policy – Rs.6.2k yearly
– Jeevan Anand – Rs.27k yearly
– Jeevan Labh – Rs.5.5 lakhs yearly premium, 10-year payment

LIC plans give:

– Very low returns, usually 4% to 5%
– Poor liquidity
– Poor goal alignment
– High premiums reduce investment capacity

Action Plan:

– You can continue money back and Jeevan Anand till maturity due to low premium.
– But Jeevan Labh is absorbing huge premium.
– Even though it says Rs.1.2 crore by 2035, the return is low.
– Surrender the Jeevan Labh policy now.
– Reinvest surrender amount into mutual funds via regular plan.
– Your Certified Financial Planner can guide you.

This change will boost your returns and improve liquidity.

» Agricultural Land and Plots – Treat Them as Passive Holdings

– Your land gives Rs.65,000 income yearly.
– Two plots are held for long term.

Please remember:

– Land and plots do not give regular cash flow.
– They need maintenance, records, and legal tracking.
– Selling them is not easy in emergencies.
– They don’t fit well into financial planning goals.

Don’t count land/plots for education or retirement goals.
Treat them as passive holdings.
Build your core financial strength around mutual funds.

» Villa Purchase and Home Loan – Balance It Carefully

– You have booked a villa worth Rs.1.10 crore.
– Paid 20% down payment.
– Remaining will be on home loan.

Suggestions:

– Keep EMI below 40% of your income.
– Include this EMI only after clearing personal loans.
– Home is a lifestyle decision, not an investment.
– Avoid overcommitting if other goals are pending.

Plan this with your Certified Financial Planner to ensure cash flow is balanced.

» Chit Fund – Limited Use Only

– You have joined a 10 lakh chit.
– Already paid 4 rounds.

Keep in mind:

– Chits are not regulated like mutual funds.
– Default risk is high if organiser is not trusted.
– Do not increase chit exposure in future.

Complete the current chit but don’t depend on it for long-term goals.

» Children’s Education Planning – Act Now

– Your children are 9 and 3 years old.
– You have around 9-15 years before they need college funds.

Steps to take:

– Start SIP in child-focused mutual fund via regular plan.
– Invest in actively managed equity-oriented funds.
– Use SIPs to build corpus over years.
– Avoid ULIPs and child plans from insurance companies.
– They give poor returns and lack flexibility.

A Certified Financial Planner can create a goal map for both kids.
This helps avoid future education loans.

» Retirement Planning – Build Your Corpus Slowly and Steadily

– You are 38 now.
– You have around 22 years to retire.
– EPF and NPS are good supports.
– But they are not enough.

You must create a parallel retirement fund using:

– Diversified mutual funds
– Regular contribution via SIP
– Proper asset allocation
– Tax-efficient withdrawal planning

Start small now and increase every year.
Don’t delay this till your 40s.
Your retirement must be independent of children or property.

» Insurance – Good Start, But Needs Layering

– You have Rs.15 lakh personal health insurance.
– Your company offers Rs.8 lakh coverage.
– Parents have Rs.6 lakh insurance.

Recommendations:

– Buy term life insurance if not already done.
– Ensure cover is 10-15 times your annual income.
– Don’t mix insurance with investment.
– Avoid ULIPs or endowment for new policies.
– Check if parent’s health cover is sufficient based on age.

A Certified Financial Planner can assess insurance adequacy for the whole family.

» Cash Flow and Emergency Fund – Strengthen Liquidity

– Monthly fixed outflows are very high.
– Limited buffer is visible.
– You must have at least 6 months of expenses saved.

Build emergency fund using:

– Liquid mutual funds
– Bank sweep-in account
– Recurring deposits (for short-term)

This will protect you in job loss or sudden expense.

» Tax Planning – Use All Allowed Sections But Avoid Over-Focus

– NPS gives benefit under 80CCD(1B).
– EPF and PPF cover 80C.
– Home loan will give deduction under 80C and 24(b).
– Health insurance premiums also reduce tax.

But don’t over-focus on tax-saving only.
Focus on wealth creation and goal fulfilment.
Don’t buy poor-return products for tax saving alone.

» Finally

– You have built a strong base.
– Income is good, and responsibilities are well managed.
– But you must shift focus from debt to wealth.
– Clear personal loans first.
– Surrender unproductive insurance plans.
– Increase mutual fund investments via regular plan and CFP.
– Protect family with right insurance.
– Avoid index funds, direct funds, and real estate overexposure.
– Track children’s education needs step by step.
– Balance villa loan carefully with other goals.
– Stay disciplined with long-term investing.

A Certified Financial Planner will guide you with goal tracking, fund selection, and review.
This approach will give peace of mind and wealth creation both.

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