Raise equity investment
Ashish and Ashwini Paygude stay with their two-year-old child in Pune and get a combined sala ry of `1.52 lakh. On adding the rental income of `8,500, the total comes to `1.6 lakh. After expenses and investments, they are left with a surplus of `14,892, which they need for an emergency corpus, kid's education and wedding, retirement, house and a car. According to Financial Planner Pankaaj Maalde, they will have to forgo the last goal due to lack of surplus.
They
should start by repaying their car loan of `3.8 lakh with the cash in bank. For
contingency fund, they can allocate the remaining bank balance of `3.2 lakh.
Next, they can save for their child's education expenses of `51 lakh in 16
years by starting an SIP of `8,000 in an equity fund. For the wedding needs of
`88 lakh in 23 years, they can start an SIP of `5,000 in an equity fund and
invest `1,500 in sovereign gold bonds. For their retirement, they will require
`8.8 crore in 26 years. Maalde has assigned their PPF, EPF and equity fund
corpuses for this goal. Besides these, they will need to invest `1,000 in the
PPF every year and start an SIP of `25,000 in a diversified equity fund.
As for
the house worth `1 crore in three years, Maalde suggests they cut the amount to
`90 lakh and save for a down payment of `30 lakh. For this, they can sell their
existing house worth `52 lakh and repay the home loan of `23.5 lakh. Add to it
the fixed deposit of `1.5 lakh. For the remaining amount, they will have to
take a home loan and the EMI of `49,000 can be sourced from the surplus as they
will save on rent and existing loan EMI.
The
couple needs to boost their insurance by surrendering their one traditional
life cover and buying two term plans of `1.5 crore and `1 crore for Ashish and
Ashwini, respectively. They should pick a family floater plan of `10 lakh,
besides critical illness and accident disability plans of `25 lakh and `50 lakh
for both of them.
