Early start will ease investing
Bengaluru-based
Rawats should put their high surplus to work to achieve all their goals.
Shilpa Rawat, an engineer, and her
husband, Ojus, who is in the merchant navy, stay in Bengaluru. Both bring in a
combined monthly salary of 2.5 lakh, and after considering all expenses and
investment, they are left with a surplus of 1.2 lakh. Their portfolio comprises
a plot of land worth 25 lakh, debt worth 89,600 in the form of EPF and NPS,
equity worth 1.75 lakh in the form of mutual funds, and 2.1 lakh of cash. They
also have to repay 70,000 of credit card dues, for which they are paying an EMI
of 8,800. Maalde suggests they repay this at the earliest by using a portion of
their cash. Their goals include building a contingency corpus, buying a car and
a house, saving for their future child’s education and wedding, and their
retirement.
Financial Planner Pankaaj Maalde
suggests they build an emergency corpus of 8.7 lakh by allocating 1.4 lakh of
cash and about 6 lakh of insurance maturity amount. The shortfall can be built
by saving the excess surplus for 3-4 months. This should be invested in an
ultra short duration fund. The couple wants to buy a house worth 1 crore in a
year and can put in 25 lakh as down payment by selling their land. For the
remaining 75 lakh, they can take a loan for 20 years at 8%, which will result
in an EMI of 62,733. This can be sourced from the surplus. They also want to
buy a car worth 30 lakh in six years. For this, they will have to start an SIP
of 40,000 in a balanced advantage fund.
Next, they want to save 1 crore for
the education of their future child in 20 years, and will have to start an SIP
of 14,000 in a diversified equity fund. For the child’s wedding in 27 years,
they want 1.6 crore. They can start an SIP of 10,000 in a diversified equity
fund and 2,000 in the gold bond scheme. For retirement, they will need 15 crore
in 31 years and can assign their EPF, NPS and mutual fund. Besides, they will
have to start an SIP of 32,000 in a diversified equity fund and continue to
invest 3,000 a month in the NPS.
For life insurance, Shilpa has a 1
crore term plan and two traditional plans. They should surrender one
traditional plan, continue the other and buy a 2 crore term plan for Ojus at 2,000
a month. For health insurance, Shilpa has a 6.5 lakh cover from her employer.
Maalde suggests they buy a 10 lakh family floater plan at 1,000 a month. They
should also buy a 25 lakh accident disability plan for Shilpa and 50 lakh plan
for Ojus at 1,000 a month.
