Invest in line with goals
Mumbai-based
Pande needs to cover his risks and speed up investment to reach his milestones.
IT
professional Sanjay Pande lives with his homemaker wife, Sanjana, and two kids,
in his own house in Mumbai. He brings in a monthly salary of `90,000 and is
left with a surplus of `40,833 after regular monthly expenses. Pande wants to
save for his retirement, children's goals, emergencies and upgradation of the
house.
Financial
planner Pankaaj Maalde suggests he begin by building a contingency corpus of
`2.8 lakh. For this, he can allocate his insurance surrender value. Pande also
wants to save for his kids' education in 6 and 13 years, for which he will need
`32 lakh and `55 lakh, respectively. For the former, he will have to start an
SIP of `30,000 in balanced funds. For the latter, Maalde has allocated his
mutual funds worth `11 lakh and the goal will not require any additional
investment.
For
retirement, Pande needs `2.9 crore in 21 years and will have to assign his EPF
and PPF corpuses for this. He will also have to start an SIP of `12,000 a month
in equity funds. To upgrade the house, Pande needs `50 lakh by next year.
However, he is advised to delay the goal by six years, after his first child's
education goal is reached. He can allocate his fixed deposit, investing it in
an arbitrage fund. For the remaining `40 lakh he will have to take a loan and the
resulting EMI of nearly `40,000 can be met by the SIP saved from education
investment and the rise in his salary. Since Pande doesn't have any surplus
left, he will need to postpone the investment for his kids' weddings till a
sufficient rise in his salary.
As for
insurance, Pande has one traditional plan. Maalde suggests he surrender this
and buy an online term plan worth `1 crore. He should also supplement the `3
lakh medical plan provided by his employer by buying a `10 lakh family floater
plan. He should also purchase critical illness and accident disability plans
worth `25 lakh each (see table).
