High savings to help goals
Aggressive
investment by Mumbai-based Shuklas will ensure that they meet all their goals
with ease.
Chirag Shukla, 38, stays with his
wife, 36, two children, aged 10 and seven, and his mother, in Mumbai. While his
wife earns 15,000 a month, he also gets a monthly rental income of 38,000. He
has property worth 2.9 crore, which includes a self-occupied house worth 1.6
crore. He has no loans and his net worth is ₹3.5 crore. This
includes cash of 16 lakh, debt including 28 lakh of EPF and 22,000 in a post
office scheme, and equity worth 11.3 lakh in the form of stocks and mutual
funds. His goals include building an emergency corpus and a medical buffer for
his mother, taking a vacation, buying a bigger house, saving for his children’s
education and weddings, and for his retirement.
Financial Planner Pankaaj Maalde
suggests that Shukla begin by building a contingency corpus of 5.6 lakh, equal
to six months’ expenses, and 2.5 lakh of medical buffer. He can allocate a
portion of his cash and invest it in a liquid fund. Next, Shukla wants to buy a
house worth 2.5 crore in a year’s time. He can sell two of his existing
properties to meet this goal. To fund an 8 lakh vacation in a year’s time, he
can use the remaining cash.
To fund his children’s education in
eight and 11 years, he will need 51.5 lakh and 63 lakh, respectively. For these
goals, he can start SIPs of 35,000 in a hybrid equity fund and 23,500 in a
diversified equity fund. For the kids’ weddings in 15 and 18 years, Shukla will
need 1.3 crore and 1.6 crore, respectively. For the former, he can start an SIP
of 29,000 in a diversified equity fund and 3,000 in the gold bond scheme, while
for the latter, he can start an SIP of 24,000 in a diversified equity fund and 3,000
in the gold bond scheme. For retirement, Shukla will need 9.6 crore in 22
years. He can assign his stocks, mutual funds, EPF and property, besides
starting an SIP of 40,000 in a diversified equity fund to meet the goal.
For life insurance, Shukla has one
traditional plan and one term plan of 1 crore. Maalde suggests he continue with
the former and buy another term plan of 1 crore for 1,000 a month. For health
insurance, Shukla has a 4 lakh family floater plan, besides a 3 lakh plan
provided by his company. Maalde suggests he upgrade to a 5 lakh plan and buy a 15
lakh top-up plan with a 5 lakh deductible. This will cost him 1,917 a month. He
should also buy a 50 lakh accident disability plan for 667 a month.
