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Ramalingam Kalirajan |10881 Answers |Ask -Follow

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

Hi Team, Currently I am earning 1 lakh earning and only earner in family. My current expenses is childern fees 11000 monthly, House' Emi 30000 Home Loan 18.50 lakh pending No Savings due new home purchased left.Current Investment - 10800 purchased from Policy Bazaar recently BSE 500 Value 50 index axis Max current Nav - 9.98 payment terms 5 years and another Policy purchased 7006 ClicktoInvestwithADB+Atpd fund Name - nifty Alpha 30 fun booked on 29 th July 2024 and payment terms 5 years. One more 3000 monthly booked on 2021 hdfc payment terms 5 years. PF Amount 4 lakh and Gratuity 4.5 and Pf total deduction 15k monthly and Nps 7000 started last year and term insurance have 70 lakh. Next Year I am thinking to pay 5 lakh rupees to my Homeloan NO EMERGENCY FUND Available Please advice any more fund I can take.

Ans: You have shared very clear details about your financial life. I appreciate your commitment towards family security and regular investing even with EMI and expenses. That shows discipline. You are balancing responsibility and growth. Let me give you a 360-degree view with structured guidance.

» Present Income and Expense Structure
– Your income is Rs. 1 lakh monthly.
– Children’s fees are Rs. 11,000 monthly.
– EMI of Rs. 30,000 for home loan.
– This means nearly 40% of income goes to fixed outgo.
– No emergency fund is currently available.
– This creates financial stress in case of sudden expenses.

» Home Loan Management
– Outstanding home loan is Rs. 18.5 lakh.
– EMI is manageable but still high share of income.
– You are thinking to pay Rs. 5 lakh lump sum next year.
– Prepayment reduces tenure and interest burden.
– That step is good, but it should not compromise safety buffer.
– Emergency fund should come first before part prepayment.
– Keeping at least 4 to 6 months’ expenses in liquid form is safer.
– After that, extra money can be used for prepayment.

» Emergency Fund Creation
– Emergency fund is most urgent need in your case.
– Without it, any medical or job issue can break stability.
– You should target minimum Rs. 4 to 6 lakh in safe liquid option.
– It should be accessible but separate from normal savings account.
– This fund ensures peace of mind and prevents loan dependency later.

» Insurance Protection
– You already have Rs. 70 lakh term insurance.
– For one earning member, coverage should be higher.
– Ideally 10 to 12 times annual income is safer.
– That means minimum Rs. 1.2 crore coverage.
– So you can consider enhancing term insurance.
– Health insurance for family is also very important.
– If only company cover is available, add personal family cover.

» Existing Investments Review
– You started with few policies through online platforms.
– One is Rs. 10,800 monthly in BSE 500 value 50 index.
– Another is Rs. 7,006 in a Nifty Alpha 30 fund.
– One more Rs. 3,000 since 2021 in HDFC fund.
– All are tied with 5-year payment terms.
– They are structured like ULIP or long lock-in schemes.
– ULIPs have high charges, limited flexibility, and moderate growth.
– They reduce long term wealth creation compared to mutual funds.

» Disadvantages of Index Based Funds
– Index funds just copy market index.
– They do not use professional research.
– They give average returns, never better than market.
– In volatile times, they fall without control.
– Actively managed funds use research, selection, and risk control.
– That improves long term wealth potential.
– You already invested in index based options.
– Better to avoid fresh money in such products.

» Problems with Direct Platforms
– Direct platforms like Policy Bazaar look cheap but lack full guidance.
– They don’t review suitability for your personal goals.
– No customised plan, only generic products.
– Regular mutual fund through Certified Financial Planner gives advice.
– CFP also monitors portfolio, rebalances, and supports tax planning.
– Cost difference is small, but value of expert support is huge.
– It avoids mis-selling and saves mistakes over long term.

» PF and Retirement Savings
– PF balance is Rs. 4 lakh now.
– Gratuity entitlement is Rs. 4.5 lakh.
– PF contribution is Rs. 15,000 monthly.
– NPS contribution is Rs. 7,000 monthly.
– Retirement savings foundation is already good.
– These will give you long term retirement security.
– But you also need flexible wealth for medium goals.

» New Investments Planning
– First priority is emergency fund.
– Second priority is insurance adequacy.
– Third priority is systematic mutual fund investment.
– You already pay high EMIs.
– So keep new investments limited till emergency fund is built.
– Once fund is ready, start monthly mutual funds of Rs. 10,000–15,000.
– Choose actively managed diversified funds.
– Invest through Certified Financial Planner for review and monitoring.
– Avoid locking money in ULIPs or index products again.

» Child Education Planning
– Children’s fees are ongoing.
– But future higher education costs will be high.
– You should start an education goal fund separately.
– Even Rs. 5,000 monthly in growth mutual funds can build corpus.
– Keeping education money separate avoids using it for other needs.

» Debt Versus Investment Choice
– You asked about using Rs. 5 lakh for loan.
– If you have no emergency fund, don’t prepay yet.
– If emergency fund is created first, then prepayment is fine.
– Loan EMI will end naturally in some years.
– Wealth growth requires longer compounding period.
– Balance both steps: create buffer and invest systematically.

» Cash Flow Control
– Track monthly expenses carefully.
– Try to save at least 20% of income after EMI.
– Small lifestyle control can release Rs. 10,000–15,000 monthly.
– This saving can go into investments for future goals.
– Without expense control, new investments become difficult.

» Tax Efficiency
– PF and NPS are tax efficient already.
– Mutual funds also give tax advantage.
– Long term equity gains up to Rs. 1.25 lakh yearly are tax free.
– Gains above that taxed at 12.5%.
– Debt fund gains taxed as per income slab.
– Plan redemption carefully with help of Certified Financial Planner.

» Mistakes to Avoid
– Don’t invest in too many products without clarity.
– Avoid mixing insurance with investment again.
– Avoid index funds for future allocations.
– Don’t keep money idle in savings account.
– Don’t ignore emergency fund again.

» Step by Step Roadmap
– Step 1: Build Rs. 5–6 lakh emergency fund in next 12–18 months.
– Step 2: Review and enhance term insurance cover to Rs. 1.2 crore.
– Step 3: Add health insurance if not done.
– Step 4: After buffer, start Rs. 10,000 monthly in actively managed mutual funds.
– Step 5: Keep separate child education fund with Rs. 5,000 monthly.
– Step 6: Consider prepayment of loan only if surplus above these.
– Step 7: Review all existing ULIP and policy investments after 5 years.
– Step 8: After lock-in, consider surrender and shift into mutual funds.

» Final Insights
– You are already disciplined and responsible.
– Right now your biggest gap is emergency fund.
– Insurance adequacy is second gap.
– After filling these, wealth growth becomes smooth.
– Your PF, gratuity, and NPS will secure retirement.
– Your home loan will get lighter over years.
– With systematic planning, you can protect family and grow wealth.
– Certified Financial Planner guidance ensures review and correction.
– Avoid random online products in future.
– This way your family will remain safe and secure.

Best Regards,
K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

Asked on - Sep 10, 2025 | Answered on Sep 10, 2025

Hi Ramalingam, Could you please share some good mutual fund sip fund where I can put the more fund for wealth creation. Currently I have recently also invested two more fund 2k each fund Quant Small fund Growth and Nippon India Nifty 150 midcap index fund via Angel Broker Firm

Ans: For selecting the right mutual funds for SIP, it is always best to get personalised guidance. Each investor’s goals, risk capacity, and time horizon are different. Please contact a Certified Financial Planner or reach out to me directly through the website link given below for a customised solution.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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

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