Primary goals within reach
Delhi-based Pals need to continue with
aggressive investments to be able to achieve all milestones.
Dipankar Pal is a banker and stays with his wife and sixmonth-old child,
in Delhi. He brings home a monthly salary of 94,000 and is provided government
accommodation, which means he doesn’t have to pay rent. With household expenses
of 54,167, insurance premium of 1,417, and an investment of 33,000, he is left
with a surplus of 5,416. His portfolio comprises 50,000 in cash, debt
investments worth 30.3 lakh, and 3 lakh in equity funds. His goals include
saving for emergencies, kid’s education and wedding, buying another house and a
car, as well as retirement.
Financial Planner Pankaaj Maalde suggests Pal build an emergency corpus
of 3.96 lakh, which is worth six months’ expenses. He can allocate his cash,
fixed deposit and debt fund, and invest the amount in an ultra short-term fund.
For his child’s education in 17 years, he has estimated expenses of 47 lakh. To
achieve this, Maalde has assigned 25% of Pal’s equity fund corpus, besides
advising him to continue with an SIP of 6,500 in an equity fund. For the
child’s wedding in 24 years, he will need 1 crore, which can be built by
assigning another 25% of the equity fund corpus. In addition, Pal should start
an SIP of 6,000 in an equity fund and invest 1,000 in the gold bond scheme.
For retirement, Pal will need 7 crore in 25 years, and shoud allocate
his PPF, EPF, NPS and 50% of the equity fund corpus. Besides, he will have to
start an SIP of 14,500 in a diversified equity fund and invest 1,000 in the PPF
every year. Pal also wants to buy a car worth 6 lakh after a year, for which he
should take a loan from his employer at a discounted rate, with an EMI of 5,200.
This can be easily sourced from the surplus. As for the house worth 45 lakh he
wants to buy in three years, Maalde suggests he push it to six years. He can
invest 10 lakh of fixed deposit in a balanced fund via an STP to amass a down
payment of 18 lakh and can review the situation after six years.
For life insurance, Pal has a 6 lakh plan from his employer and a 3 lakh
traditional plan. Maalde suggests he continue with the plan and buy a 2 crore
term plan at 1,917 a month. He should also pick a family floater plan of 10
lakh for 1,667 despite the unlimited health plan from his employer. Besides, he
should buy a 25 lakh critical illness plan and a 50 lakh accident disability
plan for 1,332 a month.
