D. Raut, 53, lives in his own house in Hyderabad with his housewife wife and 20-year-old child. His monthly salary is Rs 3.27 lakh and his net worth is Rs 2.4 crore. His portfolio includes real estate Priced at Rs 80 lakh, equity of Rs 41.5. Lakhs in the form of mutual funds and stocks, debt of Rs 1.19 crore as EPF, PPF, fixed deposits and debt funds, and Rs 25,000 in cash. His goals include building a emergency fund, saving for a child’s higher education and marriage, buying a car and house, and retirement. For now, they will have to give up on car and home buying goals due to lack of investable surplus.

Financial planner Pankaj Malde has calculated an emergency fund of Rs 7.59 lakh, which is equivalent to three months’ expenses. For this, he has to allocate his debt funds and fixed deposits, which should be invested in ultra short-term or money market funds. The amount should be increased to the expenditure of six months at the earliest.

portfolio

Raut wants to save Rs 26 lakh for his son’s higher education in four years. For this they have to allocate one of the maturity amount of the traditional scheme and start SIP of Rs 20,000 in Equity Savings Fund. For his son’s marriage in eight years, he will need Rs 34 lakh and can allocate all the traditional insurance plans. No fresh investment will be required for this goal.

cash flow

For retirement in seven years, Raut will need Rs 4.1 crore, and he can allocate his stocks, mutual funds, EPF, PPF and some insurance schemes. To reach the target, he will have to continue investing Rs 500 annually in PPF, Rs 35,000 in diversified equity funds, Rs 10,000 in gold bonds/ETFs and start an SIP of Rs 5,000 every month in NPS. Malde also advised him to shift from stocks to a diversified equity fund.

how to invest for goals

Raut has made a mistake when it comes to life insurance, as he has invested too much money in buying a large number of expensive traditional plans, for which he is paying a premium of Rs 1.11 lakh per month. Malde suggests getting all the schemes reviewed by an expert, but for now keep them as the debt part of their portfolio. Raut also has a term plan of Rs 1 crore, which he should continue with. For health, he has two schemes worth Rs 32 lakh and should continue with them. He also has a critical illness plan of Rs 10 lakh, which he should retain, and purchases a Rs 50 lakh accident disability plan for Rs 667 per month.

insurance portfolio

Financial Planning by Pankaj Malde Certified Financial Planner

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