Need to speed up investment
Noida-based
Singhs need to correct the skew in their portfolio and link investments to
goals.
Sandeep
Singh, 35, is salaried and lives in his own house in Noida with his wife,
Rajneet, 30, and six-year-old son. Singh gets a monthly income of `1.2 lakh and
spends `42,833 on household expenses, `10,000 on the kid's education, and
`41,625 as home loan EMI. After investing `2,667 in a mutual fund and the PPF,
he is left with `22,875 as surplus. Financial planner Pankaaj Maalde suggests
he raise his surplus by shifting the home loan to a lender that offers lower
interest and longer tenure.It will increase the surplus by about `9,000.The
goals include saving for emergencies, son's education and wedding, retirement,
vacation and a car. However, he will have to defer the last two goals due to
lack of surplus and focus on the primary goals.
Singh can
build a contingency corpus of `5.4 lakh by allocating his cash and fixed
deposit, and saving the surplus amount for six months. He can start investing
for other goals after this period. For his son's education and wedding, he can
start SIPs of `15,000 and `9,000, respectively, in the suggested equity funds
and gold bond. For retirement, he will need `5.37 crore in 25 years and will
have to allocate his PPF and EPF corpuses, equity fund corpus, and the sale
proceeds from another property that is under construction. The sale will also
help correct the real estate skew in his portfolio. Besides this, he will have
to start an SIP of `5,000 in equity funds.
Singh
doesn't have any insurance except a health cover of `5 lakh from his employer.
Maalde suggests he buy a term plan to cover his life for `2 crore, which will
cost `2,000 a month. For health, he should pick a family floater plan worth `10
lakh, at `1,667 a month. He also needs to buy critical illness (`25 lakh) and
accident disability (`50 lakh) plans, at a cost of `1,250 a month. All these
additional covers can be funded from the surplus.
