Aggressive saving to help
Mumbai-based Sahu needs to streamline his existing
resources and align them with his goals.
Sanjay Sahu, 46, stays with his
homemaker wife, 39, and two children, aged 12 and four, in his own house in
Mumbai. He earns 91,667 a month, and combined with a rental income of 15,000,
his total income comes to 1.06 lakh. Sahu has invested aggressively in property
(1.9 crore), equity (19.9 lakh) and debt (59.5 lakh), resulting in a portfolio
worth 2.54 crore. This, after discounting a home loan of 24.5 lakh, for which
he is paying an EMI of 38,770. His goals include building an emergency corpus,
saving for his children’s education and weddings, buying a house and creating a
retirement corpus. He can achieve these goals with the help of his existing
resources.
Financial Planner Pankaaj Maalde
suggests he build the emergency corpus of 5.5 lakh, which is equal to six
months’ expenses, by allocating his cash. He can invest this in a
short-duration debt fund and increase the corpus at the earliest. For the
higher education expenses of his first child in six years and second child in
14 years , he has estimated a need of 45 lakh and 75 lakh, respectively. For
the first goal, he can allocate his fixed deposit of 25 lakh, while for the
second one, he can assign his stocks and insurance maturity value. He doesn’t
need to make any fresh investments for these goals.
As for the kids’ weddings in 13 and
21 years, Sahu will need 72 lakh and 1.2 crore, respectively. He can split and
allocate his mutual fund corpus equally for the two goals and also start SIPs
of 10,000 and 5,000, respectively, in diversified equity funds. As for
retirement, for which he will need 3.4 crore in 14 years, he can assign his
property, NPS, EPF and PPF corpuses. These will yield the desired corpus in the
specified time frame. Sahu also wants to buy a house worth 50 lakh in six years,
but Maalde suggests he avoid this due to the heavy real estate skew in his
portfolio.
For life insurance, Sahu has a 2
crore term plan, seven traditional plans and two Ulips. He should continue the
term plan, and surrender one traditional plan, while retaining all the other
policies. As for health insurance, he has a 5 lakh family floater plan and
Maalde advises him to retain it. He should also purchase a 15 lakh top-up plan
with a 5 lakh deductible, for 1,303 a month. Besides, he should buy a 50 lakh
accident disability plan, for 667 a month.
