Major goals within sight
Vilas is an engineer, who stays in Bengaluru with
his homemaker wife and a two-year-old child. He earns a monthly salary of
`66,000 and after expenses and investment, he is left with a surplus of
`17,867. His goals include saving for emergencies, child's education and
wedding, a car and retirement. Vilas has also taken a home loan, for which he
is paying an EMI of `13,300. Financial Planner Pankaaj Maalde suggests that he
shift to another lender as the existing interest rate is high and a lower rate
will help bring down the EMI to `7,800.
Vilas can begin by building an emergency corpus of
`2.2 lakh. He can do so by allocating his cash and fixed deposit, which should
be invested in an ultra short-term fund. For the child's education in 16 years,
he wants to build a corpus of `59 lakh and can do so by starting an SIP of
`10,000 in an equity fund. For the child's wedding in 23 years, he has
estimated a need of `95 lakh and will have to start an SIP of `7,000 in an
equity fund and `1,000 in gold bonds.
For retirement in 27 years, he will need `4 crore.
He should assign his plot of land, PPF, and mutual fund corpus, which will
yield `1.5 crore. He should also contribute `3,000 in the PPF till retirement.
Besides these, he will need to start an SIP of `10,000 in an equity fund. As
for buying a car in a year, Vilas should put off the goal till a further rise
in income.
As for life insurance, Vilas has one offline term
plan and one traditional plan. Maalde suggests that he retain the traditional
plan and buy an online term plan of `1 crore for 30 years. This will come for
`2,500 a month, which can be sourced from the surplus.He should also close the
offline plan as it is expensive. Since Vilas doesn't have any health insurance,
Maalde suggests the couple buy a family floater plan of `10 lakh and this will
cost `2,083 a month. Vilas should also pick up an accident disability plan of
`25 lakh, which will cost him `334 a month.
