At 28, I am juggling between ULIPs, MFs, and a car loan a" what's the best wealth strategy in current market?

Published in Business and Finance on Thursday, August 28th 2025 at 8:48 GMT by Business Today
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“At 28, I’m juggling ULIPs, MFs and a car loan – What’s the best wealth strategy in the current market?”

The headline of BusinessToday’s latest piece is a snapshot of a growing reality for India’s millennial investors: juggling multiple financial products while trying to keep an eye on the future. The story follows 28‑year‑old Priyanka (name changed for privacy) who is investing in a Unit Linked Insurance Plan (ULIP), a handful of mutual funds, and simultaneously repaying a car loan. Her questions—what to do with the money, which investments to prioritize, and how to align everything with her goals—are ones many of us ask, especially as the macro‑environment gets more complex.

Below is a distilled summary of the article, enriched by the additional context provided by the links the author follows.

1. The Three Pillars of Priyanka’s Finances

Product	What it does	Why it matters
ULIP	Combines life insurance with equity‑linked investment	Offers tax savings under Section 80C & 10(10D) but is heavily fee‑laden
Mutual Funds (MFs)	Pooled funds investing in equities, bonds, or balanced assets	Low entry cost, diversified, potentially higher returns
Car Loan	Ongoing debt with a fixed interest rate	High‑interest liability that eats into disposable income

Priyanka’s financial snapshot shows a classic mismatch: she’s spreading her money across a high‑fee insurance product, a set of equity‑focused funds, and a debt instrument with a comparatively high interest rate. She wonders whether her strategy is optimal in the face of rising inflation, an uncertain equity market, and a potentially tightening monetary policy.

2. The ULIP Conundrum

The article spends a few paragraphs unpacking why ULIPs may not be the best choice for a young investor:

Hidden Charges – Premium Allocation Ratio (PAR) and policy fees can erode returns by 2–4% annually.
Low Liquidity – Redemption before the policy term can trigger surrender charges that wipe out gains.
Tax Efficiency vs. Returns – While ULIPs offer tax exemption on the maturity amount, the tax‑benefit advantage is often offset by the comparatively lower net returns.

A linked reference to BusinessToday’s guide on “Why ULIPs May Not Be Worth It” reinforces the point: for investors whose primary objective is wealth creation, a simple equity‑oriented mutual fund often outperforms ULIPs after fees.

3. Mutual Funds: The Power‑House

The article highlights the benefits of mutual funds, especially systematic investment plans (SIPs):

Cost‑Effective – Expense ratios for equity funds can be as low as 0.5–1%.
Diversification – A single fund can hold hundreds of stocks or bonds, reducing idiosyncratic risk.
Liquidity – Redeeming a SIP is usually a matter of a few days, unlike the long lock‑in period of ULIPs.

The article quotes a portfolio manager from HDFC Mutual Fund who says, “For a 28‑year‑old with a medium to high risk tolerance, a 60‑40 equity‑debt mix, rebalanced annually, can deliver an average annual return of 12–15% over the long run.”

4. Tackling the Car Loan – Debt First or Debt Second?

A significant portion of the article deals with whether Priyanka should continue the ULIP and MFs or shift focus to paying off her car loan. The consensus, echoed in a BusinessToday piece on “Car Loan Interest Rates & How to Manage Them,” is:

Prioritize High‑Interest Debt – Car loans in India usually carry 9–12% APR.
Pay Off Early – Even a small extra payment each month can cut the loan term by a year and save several lakh rupees in interest.

The article explains that a disciplined debt‑repayment plan frees up cash that can be redirected into higher‑yielding assets. It also suggests that Priyanka could refinance the car loan at a lower rate, given that her credit score has improved since she first took it out.

5. The “Best” Wealth Strategy According to the Experts

Combining the insights above, the article outlines a step‑by‑step plan:

Build an Emergency Fund – 6–12 months of living expenses in a high‑interest savings account or a liquid mutual fund.
Pay Off the Car Loan – Use any surplus or a portion of SIP contributions for extra payments.
Re‑evaluate the ULIP – If the premium does not align with your insurance needs, consider terminating it early (watch for surrender charges) and re‑invest the lump sum in a low‑cost equity fund.
Continue SIPs in Mutual Funds – Prefer balanced or equity funds based on your risk profile; consider tax‑saving ELSS for long‑term capital appreciation.
Plan for Retirement – Even at 28, start contributing to the National Pension System (NPS) or a Public Provident Fund (PPF).
Regular Portfolio Review – Rebalance once a year, especially after major life events or changes in market conditions.

The article also stresses that this strategy should be “dynamic.” If market conditions change—say, a sudden spike in interest rates—Priyanka might need to adjust her asset mix or accelerate debt repayment.

6. Market Outlook – Why Timing Matters

The BusinessToday article ties Priyanka’s individual plan to the broader macro‑environment:

Rising Inflation – Keeps the Reserve Bank of India (RBI) cautious about rate hikes, but the equity market remains resilient.
Equity Volatility – Short‑term swings may tempt you to sell, but a disciplined SIP approach can smooth out rupee‑risk.
Interest Rate Forecasts – If the RBI raises rates to tame inflation, the cost of new debt could increase, further highlighting the importance of paying down existing high‑interest loans.

An expert from ICICI Prudential commented that “the key is not to time the market but to time your investments: start early, stay disciplined, and adjust only when fundamental goals change.”

7. Practical Take‑aways

Cut the Fees – If you’re paying high charges on a ULIP, consider terminating or rolling it into a cheaper plan.
Automate – Set up automatic SIP contributions that are redirected into debt repayment when extra cash becomes available.
Use Tax‑Efficient Instruments – ELSS, PPF, and NPS can reduce your tax burden while building wealth.
Track Your Goals – Maintain a spreadsheet that tracks debt balances, investment growth, and goal timelines.
Stay Informed – Regularly read credible financial news and revisit your strategy at least once a year.

8. Conclusion

Priyanka’s story is a microcosm of many millennials’ financial journeys: juggling insurance, mutual funds, and debt, all while yearning for a secure future. The BusinessToday article, enriched by expert commentary and supplementary links, offers a clear, actionable roadmap: pay off high‑interest debt first, cut unnecessary fees, and then allocate the freed‑up money into diversified, low‑cost equity mutual funds. By balancing debt management with disciplined investing, Priyanka—and readers in her shoes—can chart a wealth strategy that is resilient, tax‑efficient, and aligned with long‑term goals.

Read the Full Business Today Article at:
[ https://www.businesstoday.in/personal-finance/investment/story/at-28-i-am-juggling-ulips-mfs-and-a-car-loan-whats-the-best-wealth-strategy-in-current-market-491460-2025-08-28 ]

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