Home > Money > Question

Language:

Now in हिन्दी too

Need Expert Advice?Our Gurus Can Help

Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Aug 01, 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

Question by US on Jul 23, 2025Hindi

Hi! This is Surya, 35yrs male! I'm salaried with 18lac CTC, take home around 1.1lac, monthly PF 26K including employer contribution (current savings in pf 2.5lac). I have monthly 8k sip in nifty 50 & nifty next 50, 5k in TATA Ulip, 10lac family medical insurance personally and 5lac corporate family insurance from my company. Monthly expenses is 35k, plus school fees 15k, home loan emi 22k (16.5L loan), jewel loan outstanding 8lac. Let me know best option to diversify funds to close jewel loan + home loan in 40 yrs. Also some higher education funds for my 2 kids aged 5yrs and 2 yrs at 18yrs

Ans: » Your current income and lifestyle are quite stable

– You earn Rs 1.1 lakh monthly. That is a strong base to build on.

– Your expenses are well controlled. That gives room for planning.

– Provident Fund contribution is good. This adds retirement security.

– The Rs 10 lakh family health cover and company Rs 5 lakh cover is wise.

– Managing family, EMIs, and SIPs at this level is praiseworthy.

– You are already saving and investing. That is a good habit.

– Now, you need to improve the quality and direction of investments.

– You have young children. Planning early for their future is very smart.

– Loan management is also needed so that you are debt-free by age 40.

» Review and reconsider your current ULIP and index SIPs

– ULIP plans have high charges in early years. Returns are not efficient.

– ULIPs mix insurance and investment. It is better to keep them separate.

– You may consider discontinuing your ULIP after 5 years of lock-in.

– Instead, switch that SIP to mutual funds through a certified professional.

– Regarding index SIPs, they may look simple but have limitations.

– Index funds blindly follow index without expert management.

– They don’t protect from downside risk or bad market phases.

– They also cannot generate alpha or extra returns over index.

– In volatile markets, actively managed mutual funds do better.

– A certified financial planner can help you choose good active funds.

– Invest through regular plans with proper advice, not direct plans.

– Direct funds look cheap but lack personalised tracking and rebalancing.

– MFDs with CFP credentials ensure discipline, review, and corrections.

– This approach gives better outcomes and peace of mind long-term.

» Immediate priority should be to clear the jewel loan

– Jewel loan usually has high interest cost. That hurts long-term finances.

– At Rs 8 lakh, it is a burden and also blocks your mental space.

– You should target this loan repayment within 12 months.

– You can pause current SIPs temporarily and divert all surpluses.

– Your monthly EMI is Rs 22k. Monthly school fees is Rs 15k.

– Household expenses are Rs 35k. Total outflow becomes around Rs 72k.

– This leaves you with Rs 38k each month.

– You can also take a small amount from your PF if allowed.

– Or use part of any available bonus or annual payouts.

– Try repaying the jewel loan in 3–4 large chunks, not monthly bits.

– Once cleared, you can resume SIPs again with more focus.

» Continue your home loan with structured plan

– Your home loan is Rs 16.5 lakh. EMI is Rs 22k.

– This loan is not urgent to close. Interest is lower than jewel loan.

– Tax benefits on home loan also help in reducing tax liability.

– Your goal is to close this loan before age 40, i.e., in 5 years.

– That is possible with discipline and step-by-step planning.

– After jewel loan closure, use the Rs 8k ULIP SIP and Rs 8k index SIP.

– Total Rs 16k can be added as monthly prepayment for home loan.

– Additionally, if you receive annual bonus or hikes, add lumpsums.

– You may also shift EMI from 22k to 25–27k when salary increases.

– These methods will help you finish the loan in around 5 years.

» Rebuild SIPs once loans are cleared

– After clearing jewel and home loan, your surplus rises sharply.

– Your EMIs of Rs 22k plus paused SIPs can be reallocated.

– That time, start investing aggressively for kids’ education goals.

– At age 40, you still have 13 years for first goal, 16 years for second.

– That is enough to create strong corpus with proper SIP planning.

– Choose actively managed diversified funds, flexi cap and multi cap.

– Avoid index-only investing or sectoral risky options.

– Use regular funds through MFD with CFP guidance.

– Also plan debt-equity allocation with changing risk profile.

– You will need portfolio review every year with a certified planner.

– SIP step-up each year with salary hikes adds great value.

» Secure kids’ higher education with defined corpus goals

– Kids are 5 and 2 years old. Education need starts at age 18.

– That gives you 13 years and 16 years. Enough time to compound.

– School fees are now Rs 15k per month. That may go up each year.

– Higher education in India or abroad will be expensive.

– You can target at least Rs 35–40 lakhs per child at current cost.

– In future, cost may be double due to inflation.

– Divide your goal into two parts: short term and long term.

– Short term: use safe instruments for school fee reserve.

– Long term: use equity mutual funds via monthly SIPs.

– Start two separate SIPs—one for each child.

– You can also add lumpsums whenever extra cash is available.

– Avoid insurance policies for child education. Not efficient.

– Avoid gold or real estate for these long-term goals.

– Stick to mutual funds with risk-managed exposure.

– Choose regular route with expert guidance and fund comparison.

» Your PF should be kept for retirement only

– PF is a good tool for retirement corpus. Keep it untouched.

– It earns steady interest and is safe for the long term.

– Avoid dipping into it for loans unless absolutely needed.

– Use only in case of emergency or unavoidable needs.

– Otherwise, allow it to compound till retirement.

» Review your insurance coverage once in 2–3 years

– Your Rs 10 lakh personal health cover is good. Keep it updated.

– Rs 5 lakh company cover is an added support.

– Still, if budget allows, increase personal health cover over time.

– Consider super top-up policy instead of buying new base cover.

– If you have term insurance, ensure adequate sum assured.

– If not, buy a pure term policy. Avoid endowment or money-back plans.

– Life cover should be at least 12–15 times of yearly income.

– This protects your family if any mishap happens early.

– Recheck your nominee details once every 2 years.

» Create emergency fund in liquid form

– You should always keep at least 4–6 months expenses in emergency fund.

– Keep this fund in liquid mutual funds, not in savings account.

– Avoid using your PF or equity SIPs in emergency.

– That disturbs your long-term wealth building.

– Emergency fund gives peace of mind during crisis.

– Make it a separate plan from your investment portfolio.

» Build a clear budget for each financial goal

– Financial goals must be tracked, not just assumed.

– You can write down goals like loan-free life, child education, retirement.

– Note down time left for each goal and target amount needed.

– Assign monthly SIP or investment for each goal.

– This habit will keep you focused and balanced.

– Avoid emotional decisions in investment. Stick to plan.

– Review this plan every year with a certified financial planner.

– Small corrections each year will give big success later.

» Avoid direct funds and DIY investing mistakes

– Direct plans may look low cost but miss review and corrections.

– Without expert help, many people choose wrong funds.

– Or they forget to rebalance, stay overexposed to risky sectors.

– MFDs with CFP credentials offer long-term handholding and care.

– They understand your risk and match funds properly.

– Regular plans offer personalised strategy and peace of mind.

– Choose relationship over transaction. That creates wealth.

» Finally

– You are doing many right things already.

– Just need to fine-tune loans and investment direction.

– Focus first on jewel loan. Then close home loan before age 40.

– After that, invest full surplus for child education goals.

– Choose good mutual funds, avoid ULIPs, index, direct funds.

– Use certified planner support for better returns and risk balance.

– Make yearly review a habit. Stay consistent with small actions.

– That will help you reach all your goals peacefully and confidently.

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.