Invest in line with goals
Goa-based Shahapurkar will have to streamline his
investments to remain on track for the goals.
Ramesh Shahapurkar, 34, is in a private job and brings a salary of 69,600
a month. He stays in his own house in Goa, with his homemaker wife, and two
children, aged six and two. After considering household expenses of 15,850, 1,000
for children’s education, 10,000 as contribution to his parents, insurance
premium of 3,300, home loan EMI (for a 6.3 lakh home loan) of 7,287, and
investment of 32,000, he is left with a negligible surplus of 163. His goals
include building a contingency corpus, buying a car, saving for the education
and weddings of his children, and retirement.
Financial Planner Pankaaj Maalde suggests that Shahapurkar start by
building an emergency corpus of 5.9 lakh, which includes a medical buffer
amount of 3.5 lakh for his parents. He can allocate his fixed deposit to this
goal and invest the amount in an ultra short-term fund.
For his children’s education, Shahapurkar needs 36 lakh and 47 lakh in
12 and 16 years, respectively. The former can be achieved by assigning 2 lakh
of mutual fund corpus and starting an SIP of 9,000 in an equity fund. For the
latter, he can again allocate 2 lakh of mutual fund corpus and start an SIP of 6,000
in an equity fund. For the kids’ weddings, he has estimated a need of 18 lakh
and 24 lakh in 19 and 23 years, respectively. To achieve the former, he will
have to start an SIP of 2,000 in an equity fund and 500 in the gold bond
scheme. Similarly, for the latter, he should start an SIP of 1,500 in an equity
fund and 500 in the gold bond scheme. For retirement, he will need 3 crore in
26 years and can amass it by allocating his PPF and EPF corpuses, stocks and
mutual funds. He will also have to start an SIP of 5,000 in a diversified
equity fund. As for buying a car worth 5 lakh in two years, Maalde suggests he
push the goal to five years and start an SIP of 5,000 in an equity savings fund
and raise this amount with the increase in income.
Shahapurkar’s life insurance comprises a 50 lakh term plan. Maalde suggests he buy
another 50 lakh cover at 750 a month. As for health insurance, he has a 3 lakh family floater plan for his family and 1 lakh cover for his parents. Maalde suggests he
raise the family cover to 10 lakh and parents’ cover to 3 lakh at a cost of 2,917 a month. He should also pick a 25 lakh critical illness cover and a 25 lakh accident disability plan for 1,000 a month.
