Sanjeev Sharma, 40, lives with his
homemaker wife, 14-year-old child and mother, in his own house, in Gurugram. He
gets a monthly salary of Rs 1.5 lakh, and his portfolio includes property worth
Rs 80.5 lakh (includes a plot of land), cash of Rs 2 lakh, debt worth Rs 1.1
crore in the form of debt funds, EPF, PPF, NSC, POMIS, NPS, gold, fixed deposit
and insurance maturity value. His equity worth Rs 69.2 lakh is in the form of
stocks and mutual funds. He also has a home loan of nearly Rs 10 lakh, for
which he is paying an EMI of Rs 30,980. His goals include building an emergency
corpus, taking a vacation, saving for his child’s education and wedding, and
retirement.
Financial Planner Pankaaj Maalde suggests that
Sharma build an emergency fund of Rs 5.1 lakh, which is equal to six months’
expenses, and a medical buffer of Rs 10 lakh for his mother. He can allocate
his cash of Rs 2 lakh, fixed deposit of Rs 3.2 lakh and NSC corpus of Rs 10.2
lakh for this goal. He should invest the entire amount in a liquid or arbitrage
fund.
To fund his child’s education in
four years, Sharma has estimated a need for Rs 52.5 lakh. For this, he can
allocate his debt funds and no fresh investment is needed. For the child’s higher
education in seven years, he will need Rs 96 lakh. For this, he can allocate a
portion of his equity funds and insurance maturity value. He will also have to
start an SIP of Rs 50,000 in a hybrid equity fund. For the child’s wedding in
11 years, Sharma wants Rs 75 lakh and can assign his gold and equity
funds Besides, he needs to start an SIP of Rs 6,500 in the gold bond
scheme. For his retirement in 20 years, he will need Rs 3.5 crore. He will have
to allocate his stocks, equity funds, EPF, PPF, NPS corpuses, and plot of land.
He will also have to start an SIP of Rs 10,000 in a diversified equity fund. As
for the vacation worth Rs 10 lakh in four years, he can use his post office
scheme corpus to meet the goal.
Sharma has no life insurance and is advised to buy
a `1.5 crore term plan for Rs 1,667 a month. For health insurance, he has a Rs
5 lakh plan from his employer and a Rs 3 lakh independent family floater plan,
besides a Rs 5 lakh plan for his mother. He should continue with the latter and
increase the family floater plan to Rs 10 lakh, which will cost Rs 2,083 a
month. He should also buy an accident disability plan of Rs 50 lakh for Rs 666
a month.
