family finance

16 The Economic Times Wealth September 23-29, 2019

All goals within

easy reach
By utilising his existing resources and securing risks
adequately, Shravan can ensure a smooth journey. SHRAVAN I. & RADHIKA, 32 & 29 YEARS, SALARIED, TAMIL NADU

by Riju Mehta
How to invest for goals
Portfolio

S
hravan I. is a 32-year-old soft- INVESTMENT
FUTURE COST (`) / RESOURCES
ware engineer from Tamil Nadu GOAL NEEDED
CURRENT VALUE TIME TO ACHIEVE USED
and gets a monthly salary of ASSET (`/MONTH)
(`)
`89,500. He stays with his home-
maker wife in a rented house.
Emergency fund 7.1 lakh Cash, FD, P2P loan -
Real estate 60 lakh
After considering his household expens-
Buying a car 8.5 lakh / 3 yrs - 30,000
es, rent and insurance premium, he is left Cash 2.8 lakh
with a surplus of `32,308. His portfolio, Vacation 3.5 lakh / 5 yrs Cash -
Debt
worth `1.8 crore, comprises real estate in
the form of three plots of land worth `60 PPF 17.5 lakh Buying a house 70 lakh / 5 yrs Real estate -
lakh, debt worth `40.6 lakh and equity
worth `83 lakh. His goals include building
EPF 16.9 lakh Future child’s
1.7 crore / 18 yrs Mutual funds -
a contingency corpus, buying a car and education
Fixed deposits 3 lakh
a house, taking a vacation, saving for his Future child’s
future child’s education and wedding, and Others (P2P loan) 3.2 lakh 2.7 crore / 25 yrs Mutual funds -
wedding
his retirement. Equity Mutual funds,
Financial Planner Pankaaj Maalde sug- Retirement 8.3 crore / 23 yrs -
Direct equity 44.4 lakh PMS, EPF, PPF
gests he build an emergency corpus of `3.6
lakh for the couple and a medical buffer of Investible surplus
PMS 38.6 lakh 30,000
`3.5 lakh for his parents. This can be done needed
by allocating a portion of his cash, fixed Total 1.86 crore Annual return assumed to be 12% for equity and 8% for debt funds. Inflation assumed to be 7%.
deposit and P2P loan, which should be
invested in an ultra short duration fund.
Shravan wants to buy a car worth `8.5
LIABILITIES CURRENT VALUE (`)
Insurance portfolio
lakh after three years and can amass the
Home loan -
EXISTING SUGGESTED
EXISTING
amount by starting an SIP of `30,000 in an Total liability - MONTHLY MONTHLY
INSURANCE COVER SUGGESTIONS
equity savings fund. For his goal of tak- PREMIUM PREMIUM
(`)
ing a `3.5 lakh vacation in five years, he (`) (`)
can invest his cash holding of `2 lakh in a Net worth `1.86 crore
Life insurance
short duration fund. No existing resource
has been allocated to both these goals. Term plan - - Buy `1 crore plan 833
Shravan also wants to buy a house worth
`70 lakh in five years, for which he can sell Traditional
- - - -
plan
his plots to get the desired amount.
For the education of his future child in
Cash flow Ulips - - -
18 years, Shravan has estimated a need EXISTING SUGGESTED
of `1.7 crore. For this, he can assign a por- (`) (`) TOTAL - - `1 crore 833
tion of his mutual fund corpus, which will
help amass the required amount in the Income 89,500 89,500 Health insurance
specified time. For the child’s wedding
in 25 years, he wants `2.7 crore, and can Employer’s 7.5 lakh 2,025 - -
Outflow
allocate the remaining mutual fund cor-
pus for this goal. For retirement, he will 1,000
Household Buy `10 lakh family
need `8.3 crore in 23 years as he wants to 55,167 55,167 Own - - + 2,025
expenses floater plan
retire at 55 years. For this, he can assign (existing)
his PPF, EPF, PMS and remaining mu- Insurance 2,025 4,191 TOTAL 7.5 lakh 2,025 `17.5 lakh 3,025
tual fund corpus. No fresh investment is premium
needed for this goal. Critical illness Buy `25 lakh
Shravan has no life insurance, and a Investment - 30,000 & accident - - accident 333
`7.5 lakh family floater plan for health disability disability plan
insurance, which has been provided by Total outflow 57,192 89,500 TOTAL - - - 333
his employer. Maalde suggests he buy a
`1 crore term plan, which will cost him Insurance cost - 2,025 - 4,191
`833 a month in premium. For health in-
Surplus 32,308 142
Premiums are indicative and could vary for different insurers.
surance, he should buy a `10 lakh family
floater plan, which will cost him `1,000 a
month in premium. He should also pur-
FINANCIAL PLAN BY
Write to us Looking for a professional to analyse your investment
portfolio? Write to us at etwealth@timesgroup.com with
chase a `25 lakh accident disability plan
at a monthly premium of `333. This should
PANKAAJ MAALDE for expert ‘Family Finances’ as the subject. Our experts will study
your portfolio and offer objective advice on where and
take care of his insurance needs.
CERTIFIED FINANCIAL PLANNER
advice how much you need to invest to reach your goals.