Need to raise investments
Bengaluru-based
Mohapatras will have to raise their equity exposure to realise their dreams.
Mohapatras
are young and, despite several goals, have plenty of time to achieve these.
Bhabani, 32, and Sub hashree, 27, bring in a combined monthly income of
`95,000. Of this, they spend `60,746, invest `5,000 and are left with a surplus
of `29,254. Besides building an emergency corpus, their goals include saving
for the education and wedding of their one-year-old son, their retirement,
buying a house and a car, and taking a vacation. The last two goals will have
to be put off for now due to lack of investible surplus.They have a meagre
portfolio of `9.16 lakh, made slimmer due to the debt of `7 lakh, which
includes a personal loan, credit card debt, and loan from a friend.
Financial
planner Pankaaj Maalde suggests they get rid of these loans using their cash
and proceeds from the sale of land.The EMIs of `17,600 thus saved can boost the
surplus to `52,229. They can start with contingency corpus by saving three
months' of surplus and investing it in a short-term debt fund. For their
child's goals, the couple will have to start fresh SIPs in equity mutual funds
(see How to invest for goals) for the given terms. For their retirement in 28
years, they need `5.65 crore and should assign their EPF and equity fund
corpuses. They will also have to start a fresh SIP of `13,500 in equity funds
to reach the goal. As for the house worth `50 lakh that they want to buy in 10
years, they don't have enough surplus. So they should start by saving `20,000
in a balanced fund for down payment, and can review this plan after five years.
Mohapatras
have three traditonal plans and one Ulip, but inadequate life cover.Maalde
suggests they stop paying the Ulip's premium, surrender one traditional plan
and continue with the remaining two (see Insurance portfolio). They should buy
term plans worth `1 crore and `50 lakh, as well as a `10 lakh family floater
plan. Both also need critical illness and accident disability plans worth `25
lakh each. The cost can come from the premium saved on the Ulip.
