
Hi Sir,
I m 34 year old and 2 year old child only and have question on investment if I m going on right path or not
I have 8 mutual fund which is HSBC small cap (2000 monthly) parak parik flexi cap (1600 weekly) Canara blue chip (2000 monthly) uti nifty 50 index (5000 monthly) Motilal nifty microcap250 index (500 weekly) icici gold fund etf (400 weekly) Kotak emerging equity (4000 monthly) parak parik elss fund (2500 monthly) sip going on till date corpse become 11 lakh and i add more amount when market down.
I have 3lakh in ppf and add more for 15 year and had 3 policy 1 is with hdfc year premium 36000 for 10 year will mature in 15 year as per market performance and will add bonus yearly by company. Second policy is with Canara hsbc where 136000 premium every year for 10 year and will mature in 20 year and it give assured return around 3700000 this is for my child i keep it and last policy with tata smart sip 6000 monthly. I have also nps account 50k yearly. Living in parents house so no tension for it. Monthly expenses 20k around. Pls suggest
Ans: You are 34, have a young child, and your investment journey has already begun. That is an excellent sign. You are thinking long-term, which is good. Let us now assess your strategy carefully and help you move towards financial freedom and child’s future security.
We will look at every component—mutual funds, insurance, PPF, NPS, and expenses—and create a complete 360-degree strategy.
Understanding Your Current Financial Snapshot
Let’s break down what you have done so far:
You have 8 mutual fund SIPs.
You invest in PPF and NPS yearly.
You hold 3 insurance-cum-investment policies.
You live in a family house, hence no EMI burden.
Monthly expenses are only Rs. 20,000.
You are saving a major part of your income. That’s a big strength.
Mutual Fund Investment Review
You are investing across 8 different mutual funds through SIPs. Your total SIP amount is high. That is very positive. But diversification must also be meaningful.
Let’s assess category-wise:
Positive Observations:
SIPs are active and consistent.
You invest extra when market falls.
You have mix of small cap, flexi cap, ELSS, large cap.
Portfolio value already reached Rs. 11 lakhs.
This shows discipline and commitment.
Concerns Identified:
Two funds are index funds.
Gold ETF SIP is ongoing.
Portfolio has overlapping and extra schemes.
Let us now address these concerns.
Problem with Index Funds
You invest in a Nifty 50 index fund and microcap 250 index fund.
But index funds have these problems:
No active fund manager to protect in bad markets.
No personalisation or research.
No performance difference in up/down markets.
Very high correlation across all index funds.
No flexibility to exit weak sectors.
You are better off with actively managed funds.
Benefits of actively managed mutual funds:
Expert fund manager takes sectoral calls.
Avoids weak-performing stocks.
Better long-term return potential.
More flexible and smart stock selection.
Please stop new investments into index funds. Slowly switch to active large cap, flexi cap, or hybrid funds through a Certified Financial Planner.
Problem with Direct Mutual Funds (if applicable)
If you are investing through direct plans, then:
Disadvantages of Direct Funds:
No one to guide during market fall.
Easy to panic and stop SIPs.
No regular rebalancing done.
Wrong asset allocation possible.
Risk of too much in one sector.
Why Regular Funds via CFP are better:
You get annual review support.
Your risk profile is considered.
Asset allocation is planned.
Emotional decisions are avoided.
You get personalised, ongoing advice.
Switch your investments from direct to regular mutual funds through a CFP-led MFD.
This small step improves your entire portfolio efficiency.
Keep SIP Count Lean
You hold 8 SIPs right now. This is slightly more than needed.
Ideal number of SIPs for you:
1 large cap
1 flexi cap
1 mid or small cap
1 ELSS for tax saving
1 hybrid fund for balance
Too many funds lead to overlap and tracking issues.
You can merge similar funds gradually. Avoid adding new schemes unnecessarily.
SIP Frequency and Gold Fund
You invest weekly in few funds. Also, you invest in a gold ETF fund.
Issues with weekly SIPs:
Difficult to track and manage
No major benefit over monthly SIP
Makes portfolio too spread out
Gold ETF issue:
Gold is not a growth asset
It only protects value, not multiplies
Fund value fluctuates with global news
Doesn't suit long-term goals like retirement or child education
Stop weekly SIPs. Convert to monthly.
Limit gold exposure to not more than 5% of your overall corpus.
Insurance Policy Review
You hold 3 insurance-based investment plans. These are:
1 market-linked ULIP type with Rs. 36,000 yearly
1 child plan with Rs. 1,36,000 yearly premium
1 SIP-linked plan from a private insurer
These are not term policies. Hence, these are all investment-cum-insurance plans.
Why these are not good for long-term:
Very low returns (5–6%)
High charges in early years
Poor transparency
Not flexible like mutual funds
Maturity amount is taxable if premium exceeds 5 lakhs in total
These funds will not beat inflation in long run.
Action Steps on Insurance
Please consider these steps:
Surrender these policies only if minimum lock-in is completed
Reinvest the amount received into mutual funds via SIP
Start a pure term insurance with high cover (at least Rs. 1 crore)
Don’t mix insurance and investment going forward
For your child’s goal, use child-focused mutual funds or hybrid funds.
Do not depend on these traditional insurance-based policies.
PPF and NPS Review
You are contributing to both PPF and NPS. This is a balanced approach.
PPF Status:
Balance is Rs. 3 lakh
Regularly contributing for 15 years
Tax-free returns
Safe and stable part of portfolio
Keep doing this every year.
NPS Contribution:
Rs. 50,000 yearly
Helps in extra tax saving
Invested in equity and debt mix
Partial withdrawal allowed after 60
You can continue contributing. But remember:
NPS maturity amount is partly taxable
Limited liquidity
Compulsory annuity purchase not needed now, but evaluate later
Continue both PPF and NPS as part of safe allocation.
Lifestyle and Expenses Planning
You live in a family house. Monthly expenses are only Rs. 20,000.
That’s a big plus. You can invest aggressively.
However, lifestyle cost will go up as child grows.
Prepare for:
Child school, college, coaching
Health expenses
Travel and family goals
Build a monthly budget and target-based investments accordingly.
Future Financial Goals – What to Do Next
You are young. Time is on your side. Here’s how to move next:
For Child Education
Use mutual funds instead of insurance
Start one child-specific SIP
Use hybrid or flexi cap mutual funds
Review fund yearly with CFP
For Retirement
Let mutual fund corpus grow for 20+ years
Avoid early withdrawals
Maintain SIP discipline
Don’t depend on PPF/NPS alone
Build large corpus with SIPs and bonuses
For Emergencies
Keep 6 months of expenses in liquid fund
Don’t touch mutual funds for emergencies
Health insurance for you and child is must
Finally
You are on a good financial path already. Your savings habit is strong. But to maximise your wealth, optimise the instruments.
Key Steps to Take Now:
Stop investing in index funds
Shift from direct to regular funds via CFP
Merge overlapping mutual funds
Review insurance policies and exit non-term plans
Start proper term insurance cover
Focus on child and retirement goals separately
Continue PPF and NPS steadily
Create an emergency fund in liquid mutual funds
Review goals once every year with a Certified Financial Planner
With this structured approach, you will create long-term wealth with clarity.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment