Need to focus on main goals
Hyderabad-based
G. Mahesh may have to wait for a rise in income to reach some of his minor
goals.
G Mahesh stays in Hyderabad with his homemaker wife and a month-old
baby. He brings in a monthly salary of 80,000 and after household expenses of 26,667,
5,000 contribution to his parents, insurance premium of 16,000 and investment
of 9,500, he is left with a surplus of 22,833. He has bought land and property
worth 30 lakh, but is living in a rented accommodation, paying 8,200 as monthly
rent. His portfolio comprises real estate, 3.5 lakh in cash, 8 lakh in the EPF,
and equity in the form of stocks worth 5 lakh as well as mutual funds worth 3
lakh. His goals include saving for emergencies, child’s education and wedding,
retirement, buying a house and a car, and taking a vacation.
Financial Planner Pankaaj Maalde suggests Mahesh first build the emergency
corpus of 3.7 lakh by allocating his cash worth 3.5 lakh and increasing the
amount by 20,000 at the earliest. This should be invested in an ultra
short-term fund. Mahesh wants to buy another house worth 65 lakh in a couple of
years, but Maalde advises him to do it in six months by selling his property
and using it for down payment. For the remaining 35 lakh, he can take a loan
and the EMI will come to 30,500. This can be sourced from the surplus and rent
saved, but Mahesh should make sure he shifts to a constructed house. He will,
however, have to put off his goals of buying a car worth 6 lakh in one year and
taking a vacation worth 5 lakh in two years due to lack of surplus.
For his child’s education expenses of 67 lakh in 18 years, he will need
to start an SIP of 9,000 in an equity fund. For the kid’s wedding in 25 years,
Mahesh will need 1 crore. He will have to start an SIP of 6,000 in an equity
fund and 1,500 in the gold bond scheme, but due to lack of surplus, he will
have to invest after a rise in income. For retirement in 25 years, Mahesh will
need₹4.1 crore, and will have to
allocate his EPF, stocks and mutual fund corpus. He will also have to start an
SIP of 7,500 in a diversified equity fund.
For life insurance, Mahesh has a 1.5 crore group term plan and doesn’t
need any more cover. As for his three traditional plans worth 25 lakh, Maalde
suggests he surrender all. For health, he should buy a 10 lakh family floater
plan despite a 5 lakh plan from his company. Besides these, he should pick an
accident disability plan worth 25 lakh at 334 a month.
