Need Expert Advice?Our Gurus Can Help

Ramalingam Kalirajan |10874 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 30, 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 16, 2025Hindi

I turned 28 this may and started my first job earning 52500 per month with my little brother we combine save 65k per month , we need to save money and invest to early retirement pls give me an idea to save money and to grow wealth

Ans: You have made a strong start at a young age.
Saving Rs.65,000 monthly at 28 is truly powerful.
Early habits like these build future freedom.

Let us now look at a complete strategy for your early retirement goal.
This will cover saving, investing, protection, planning, and smart behaviour.

? Build a Clear Financial Roadmap for Early Retirement

– First, define what early retirement means for you.
– Note the age you want to retire by.
– Think about the lifestyle you want post-retirement.
– Estimate monthly expenses in today’s value.

– This number will grow due to inflation.
– Early retirement needs more savings than normal retirement.
– You need higher wealth in shorter time.

– With Rs.65,000 monthly savings, it is possible.
– But only if invested right and tracked regularly.

? Keep Fixed and Emergency Expenses Separate

– First step is creating an emergency fund.
– Set aside 6–12 months of monthly expenses.
– Use liquid mutual funds for this.

– Don’t mix this with long-term investments.
– Emergency fund is for job loss or sudden costs.
– This keeps your wealth plan undisturbed.

– Emergency fund is safety net.
– It gives peace of mind during setbacks.

? Create Clear Budget and Spending Discipline

– Write down all fixed and variable monthly expenses.
– Identify wasteful spending areas.
– Try to save minimum 40–50% of your income.

– Rs.65,000 monthly savings is a great base.
– Track it monthly and increase when salary grows.
– Avoid lifestyle inflation.
– Don’t upgrade habits just because income increased.

– Simplicity helps reach financial freedom faster.

? Use Mutual Funds for Long-Term Wealth Creation

– Mutual funds give better returns than savings or FDs.
– They are managed by expert fund managers.
– They invest in equity markets to create wealth.

– Avoid index funds and ETFs.
– Index funds blindly follow markets.
– They don’t protect capital in market fall.

– Actively managed funds give better downside protection.
– They aim to beat index, not follow it.

– Also, don’t invest in direct plans.
– Direct plans look cheaper, but carry higher risk.
– They lack expert correction and emotional support.

– Use regular plans through MFD with Certified Financial Planner.
– You will get hand-holding and strategy updates.

? Start with SIPs for Long-Term Goals

– Start SIPs in multiple mutual funds.
– Allocate to equity funds for retirement goal.
– Mix large-cap, mid-cap, and hybrid funds.
– This creates a balanced and growth-oriented portfolio.

– SIPs give power of rupee-cost averaging.
– They work better in volatile markets.
– You invest more units when market is low.

– SIPs build wealth slowly and steadily.
– Long-term SIPs reduce market risk.

– Link SIPs to goals like retirement, home, travel.
– This gives purpose to your investment.
– You won’t withdraw them early.

? Increase SIP Amount Every Year

– When your salary increases, raise SIP too.
– Even 10% yearly SIP hike gives big result.
– Don’t keep SIP same for years.

– Early retirement needs faster wealth building.
– Small yearly hike in SIP gives big compounding benefit.

– Also invest windfalls like bonus or gifts.
– Don’t spend all on gadgets or holidays.
– Allocate to long-term funds.

– Discipline today gives freedom tomorrow.

? Avoid Insurance-Cum-Investment Products

– Many people buy ULIPs or traditional plans.
– These look like saving and insurance in one.
– But they offer poor return and high charges.

– Don’t buy any LIC endowment or ULIP.
– They lock your money and give low growth.

– Keep insurance and investment separate.
– For protection, take term insurance.
– For growth, use mutual funds only.

? Take Pure Term Insurance for Protection

– Take term insurance of 15–20 times annual income.
– This will protect your family in case of absence.
– It is low premium, high cover.

– No returns, but full safety.
– Don’t skip this step.
– Even young earners must secure family’s future.

– It becomes cheaper when you buy at young age.

? Get Medical Insurance for Both Brothers

– Medical cost is rising fast.
– Don’t depend only on company insurance.

– Take separate health insurance for self and brother.
– Choose Rs.5 lakh to Rs.10 lakh cover.
– Add super top-up if affordable.

– This will protect your long-term investments.
– You won’t need to break SIP for hospital bills.

? Track and Review Your Plan Annually

– Review mutual funds every year.
– Remove underperformers.
– Keep only consistent and stable funds.

– Also rebalance asset allocation yearly.
– If equity has grown too much, shift small part to hybrid.
– This keeps portfolio risk in control.

– Check protection cover once a year too.
– Update nominee in all accounts.
– Keep records safe and shared with family.

– Track progress of retirement fund.
– Compare it with required value.

? Avoid Real Estate or Gold as Investments

– Real estate looks attractive but has many issues.
– High entry cost, low liquidity, legal trouble.

– Rental yield is low.
– Selling takes time and charges are high.

– It does not suit early retirement planning.
– Focus on financial assets only.

– Gold is not wealth creator.
– Use it for personal purpose only.
– Don’t invest heavily in gold schemes.

? Maintain Separate Investments for Each Goal

– Don’t mix retirement fund with house or travel goal.
– Keep separate SIPs for each dream.

– Label each SIP based on goal.
– This keeps your planning clear and focused.

– Don’t touch retirement SIPs for short-term needs.
– Build short-term fund in low-risk mutual funds.

– This separation protects long-term compounding.

? Track Taxation While Planning Withdrawals

– Equity mutual fund LTCG above Rs.1.25 lakh is taxed at 12.5%.
– STCG in equity is taxed at 20%.
– Debt fund gains are taxed as per your slab.

– Take help from Certified Financial Planner to optimise tax.
– Plan your redemption based on goal timing.
– Don’t withdraw randomly.

– Smart exit can save lakhs in tax.

? Work with a Certified Financial Planner

– You are on the right path.
– But financial journey needs course correction at times.
– A Certified Financial Planner will guide with changes.

– They will align portfolio with new life events.
– They offer emotion-free investment management.

– Regular funds via MFD and CFP offer much better support.
– Direct funds miss out this key advantage.

– Early retirement is possible, but only with disciplined action.

? Stay Consistent for Next 10–15 Years

– You have time, energy, and discipline.
– Don’t stop SIP even when market falls.
– That is the time SIP gives maximum benefit.

– Stay invested for long period.
– Don’t chase quick profits or tips.
– Stick to plan and track every year.

– Avoid financial noise from media or friends.
– Build wealth quietly and steadily.

– Early retirement is not luck.
– It is result of smart choices and consistent effort.

? Finally

– You both are on a strong path already.
– Rs.65,000 monthly saving is powerful for your age.
– Focus on SIPs in mutual funds.
– Avoid direct or index funds.
– Take protection through term and medical insurance.
– Avoid ULIPs and endowment policies.
– Don’t invest in real estate or gold.
– Keep goal-based SIPs and track them yearly.
– Work with Certified Financial Planner through regular plans.
– Stick to your plan for 10–15 years.
– You will achieve early financial freedom with peace.

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.