All goals within easy reach
By utilising his
existing resources and securing risks adequately, Shravan can ensure a smooth
journey.
Shravan I. is a 32-year-old software
engineer from Tamil Nadu and gets a monthly salary of 89,500. He stays with his
homemaker wife in a rented house. After considering his household expenses,
rent and insurance premium, he is left with a surplus of 32,308. His portfolio,
worth 1.8 crore, comprises real estate in the form of three plots of land worth
60 lakh, debt worth 40.6 lakh and equity worth 83 lakh. His goals include
building a contingency corpus, buying a car and a house, taking a vacation, saving
for his future child’s education and wedding, and his retirement.
Financial Planner Pankaaj Maalde
suggests he build an emergency corpus of 3.6 lakh for the couple and a medical
buffer of 3.5 lakh for his parents. This can be done by allocating a portion of
his cash, fixed deposit and P2P loan, which should be invested in an ultra
short duration fund. Shravan wants to buy a car worth 8.5 lakh after three
years and can amass the amount by starting an SIP of 30,000 in an equity
savings fund. For his goal of taking a 3.5 lakh vacation in five years, he can
invest his cash holding of 2 lakh in a short duration fund. No existing
resource has been allocated to both these goals. Shravan also wants to buy a
house worth 70 lakh in five years, for which he can sell his plots to get the
desired amount.
For the education of his future child
in 18 years, Shravan has estimated a need of 1.7 crore. For this, he can assign
a portion of his mutual fund corpus, which will help amass the required amount
in the specified time. For the child’s wedding in 25 years, he wants 2.7 crore,
and can allocate the remaining mutual fund corpus for this goal. For
retirement, he will need 8.3 crore in 23 years as he wants to retire at 55
years. For this, he can assign his PPF, EPF, PMS and remaining mutual fund
corpus. No fresh investment is needed for this goal.
Shravan has no life insurance, and a 7.5
lakh family floater plan for health insurance, which has been provided by his
employer. Maalde suggests he buy a 1 crore term plan, which will cost him 833 a
month in premium. For health insurance, he should buy a 10 lakh family floater
plan, which will cost him 1,000 a month in premium. He should also purchase a 25
lakh accident disability plan at a monthly premium of 333. This should take
care of his insurance needs.
