High savings to help meet goals
While aggressive
investment in equity will help, it needs to be aligned to goals for a smoother
journey.
Nishit and Dipti Dalal are both
employed and bring in a combined monthly salary of 1.68 lakh. They stay in
their own house in Ahmedabad and have bought another house worth 60 lakh as an
investment. They have taken a home loan of 12 lakh and a car loan of 5 lakh,
and are paying EMIs of 26,900 for both. The couple’s portfolio includes 1 lakh
of cash, 1 lakh of gold, equity in the form of mutual funds (15.9 lakh) and
stocks (1.4 lakh), as well as debt in the form of PPF (5 lakh), EPF(2.5 lakh)
and debt funds (1.5 lakh). The couple’s goals include saving for emergencies,
buying a bigger house, future child’s education and wedding, and their
retirement.
Financial Planner Pankaaj Maalde
suggests they build the emergency corpus of 3 lakh by assigning their cash,
debt funds and surrender value of insurance policies. This should be invested
in an ultra shortterm fund. The couple also wants to buy a bigger house worth 1.75
crore in five years and they can allocate their two properties for the goal,
which will help fund 1.4 crore. Since they want to make a down payment of 1.52
crore, the remaining 12 lakh can be amassed by investing 15,000 a month in
balanced funds. For the shortfall of 22.7 lakh, they can take a loan and the
EMI of 22,400 can be furnished from the surplus and increase in salary.
For the future child’s goal of
education in 18 years, the couple wants to save 1 crore. For this, they can
assign a portion of mutual funds and continue the SIP of 10,000 in an equity
fund. For the wedding, they want to save 1.1 crore in 25 years and again a
portion of their mutual fund corpus can be assigned to the goal. In addition
they can start an SIP of 2,500 in an equity fund and 500 in the gold bond
scheme. For retirement, the couple will need 4.25 crore in 18 years, and should
allocate their stocks, mutual funds, PPF and EPF corpuses. They should also
continue with an SIP of 38,000 in a diversified equity fund.
As for life insurance, they have six
traditional plans worth 21.5 lakh and Maalde suggests they surrender all the
plans. Nishit should buy an offline term plan worth 1 crore at 3,750 a month.
As for health insurance, the couple has a 5 lakh family floater plan, and
Maalde advises them to buy a top-up plan of 15 lakh at 833 a month. Nishit
should also buy an accident disability plan of 50 lakh at a monthly premium of 667.
