Align investing with goals
Existing resources and fresh investments will help
Pune-based Siroyas achieve their goals with ease.
Hitesh and Shweta Siroya bring in a
combined monthly income of 1 lakh. They stay in their own house in Pune with
their two children, aged 11 and three. Their portfolio, worth 92.2 lakh,
comprises 60 lakh of real estate, 2 lakh cash, equity worth 19.6 lakh and debt
worth 10.6 lakh in the form of PPF, EPF, fixed deposit, debt funds and gold.
Their goals include building an emergency corpus, saving for kids’ education
and weddings, buying a car, taking a vacation and creating a retirement corpus.
Financial Planner Pankaaj Maalde
suggests they build the emergency corpus of 4.2 lakh, which is equal to six
months’ expenses, by allocating their cash, fixed deposit and debt fund corpus.
This should be invested in an ultra short-duration fund. For the education
expenses of their first child in seven years, they need 16 lakh and can build
this by starting an SIP of 13,000 in a hybrid fund. For the second child’s
education in 15 years, they need 40 lakh and can build the corpus by allocating
40% of their mutual fund corpus to the goal. As for the kids’ weddings in 14
and 22 years, they will need 26 lakh and 66.5 lakh, respectively. The couple
can split their gold investment of 2.4 lakh equally for the two goals. In
addition, they will have to start an SIP of 5,000 in a diversified equity fund
and 500 in the gold bond scheme for the first child’s goal. For the second kid,
they will have to start an SIP of 4,500 in a diversified equity fund and 500 in
the gold bond scheme.
For retirement, the couple will need 2.7
crore in 21 years, and can assign their PPF, EPF, stocks and equity fund
corpus. Besides, they will have to continue the SIP of 5,000 in a diversified
equity fund and 500 a year in the PPF. They will have to forgo their car and
vacation goals for now due to lack of surplus.
For life insurance, Hitesh has two
term plans and two Ulips worth 1.8 crore. Maalde suggests he continue with the
term plans and stop paying the premiums for the Ulips. He can review the plans
after a couple of years. As for health insurance, he has a 3 lakh family
floater plan provided by his employer. Maalde advises him to retain it, but
also buy an independent family floater plan of 10 lakh. This will cost him 1,667
a month in premium. Besides, he should buy a 25 lakh accident disability plan
for himself, which will come for 333 monthly premium.
