Stagger the financial goals
Since Srivastavas
want to buy a house, they will have to put their other goals on hold for
now.
Abhishek Srivastava, 31, works with a
private firm, while his wife, Niharika, 28, is employed in a bank, in
Bengaluru. They have high debt and want to buy a house, the two reasons that
their financial goals will have to be staggered after a rise in income. The
couple’s goals include saving for emergencies, a house, future child’s
education and wedding, and retirement. Financial Planner Pankaaj Maalde
suggests that they first repay their three, expensive personal loans worth 6.9
lakh so that they can invest for goals.
They can start by building an
emergency corpus of 3.7 lakh by using their cash of 1 lakh and investing it in
an ultra short-term fund. They will have to make up for the shortfall at the
earliest after a rise in income. The next big priority for the couple is buying
a house worth 80 lakh in five years. They want to make a down payment of 16
lakh, for which they will have to start an SIP of 20,000 in balanced funds for
the given tenure. For the remaining amount, they will have to take a loan for
25 years. The EMI at 8.5% will come to 51,535, which can be easily sourced from
the surplus after the loans have been repaid. For retirement, they will need ₹6.7 crore in 29 years, for which they can assign
their PPF and EPF corpuses. These will yield ₹1.6 crore and for
the remaining amount, they will have to start an SIP of ₹21,000 in a diversified equity fund. This can be
started in two years after the loans have been repaid.
For the child’s goals of education
and wedding, they will need 1 crore and 1.6 crore when the child is 18 and 25
years, respectively. For the former , they will need to start an SIP of 12,000
in an equity fund, and for the latter, they will have to start an SIP of ₹8,000 in an equity fund and 2,000 in the gold bond
scheme. However, lack of surplus means they can start investing for these goals
only after a rise in income.
For life insurance, Srivastava has
two traditional plans and Maalde suggests surrendering both. He should buy a
term plan of 2 crore instead. He has a health plan of 8 lakh but should raise
it to a 10 lakh family floater plan. He is also advised to buy a 25 lakh
critical illness plan as well as a 50 lakh accident disability plan for himself
