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 Rs 2.5 lakh, and after considering all expenses and investment, they are left with a surplus of Rs 1.2 lakh.
Their portfolio comprises a plot of land worth Rs 25 lakh, debt worth Rs 89,600 in the form of EPF and NPS, equity worth Rs 1.75 lakh in the form of mutual funds, and Rs 2.1 lakh of cash. They also have to repay Rs 70,000 of credit card dues, for which they are paying an EMI of Rs 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 Rs 8.7 lakh by allocating Rs 1.4 lakh of cash and about Rs 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 Rs 1 crore in a year and can put in Rs 25 lakh as down payment by selling their land. For the remaining Rs 75 lakh, they can take a loan for 20 years at 8%, which will result in an EMI of Rs 62,733. This can be sourced from the surplus. They also want to buy a car worth Rs 30 lakh in six years. For this, they will have to start an SIP of Rs 40,000 in a balanced advantage fund.
How to invest for goals
Next, they want to save Rs 1 crore for the education of their future child in 20 years, and will have to start an SIP of Rs 14,000 in a diversified equity fund. For the child’s wedding in 27 years, they want Rs 1.6 crore. They can start an SIP of Rs 10,000 in a diversified equity fund and Rs 2,000 in the gold bond scheme.
For retirement, they will need Rs 15 crore in 31 years and can assign their EPF, NPS and mutual fund. Besides, they will have to start an SIP of Rs 32,000 in a diversified equity fund and continue to invest Rs 3,000 a month in the NPS.
For life insurance, Shilpa has a Rs 1 crore term plan and two traditional plans. They should surrender one traditional plan, continue the other and buy a Rs 2 crore term plan for Ojus at Rs 2,000 a month. For health insurance, Shilpa has a Rs 6.5 lakh cover from her employer. Maalde suggests they buy a Rs 10 lakh family floater plan at Rs 1,000 a month. They should also buy a Rs 25 lakh accident disability plan for Shilpa and Rs 50 lakh plan for Ojus at Rs 1,000 a month.