Kaushal Sharma lives in his own house in Gurugram with his housewife wife and two children aged four and seven. Sharma brings monthly salary of Rs 1.45 lakh and his portfolio This includes immovable assets of Rs 97 lakh, equity of Rs 34.6 lakh. Lakhs in the form of mutual funds, and a loan of Rs 57.5 lakhs in the form of EPF, PPF, NPS, debt funds, Sukanya Yojana and gold. He has Rs 50,000 in cash and his aim This includes building an emergency fund, saving for your children’s education and weddings, and retirement.

portfolio

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Financial planner Pankaj Malde has calculated an emergency fund of Rs 6.84 lakh, which is equivalent to six months’ expenses. This requires Sharma to allocate his cash and a part of his debt funds, and invest it in the ultra short-term or Pennies market fund.

How to Investment for goals

Sharma wants to save Rs 63 lakh for the education of his eldest child in 11 years. For this, he will have to allocate 33 per cent of his equity fund and start an SIP of Rs 9,000 in a diversified equity fund. For the education of a young child in 14 years, he will need Rs 77 lakh. He can allocate 33 per cent of his equity fund and start an SIP of Rs 5,000 in a diversified equity fund. He needs Rs 84.5 lakh for the marriage of an older child in 18 years and can allocate a part of the Sukanya Yojana and gold investments. He will also have to start an SIP of Rs 8,500, but due to lack of surplus, he can start with Rs 2,500 in gold bonds/ETFs. Similarly, for the marriage of the younger daughter, she would need Rs 1 crore in 21 years. He can allocate the rest of the gold and Sukanya corpus and start a SIP of Rs 9,000, but due to lack of surplus, he can start with Rs 2,500 in gold bonds/ETFs.

For retirement in 20 years, Sharma will need Rs 5 crore, and can allocate his remaining equity funds, EPF, PPF and NPS corpus. To reach the target, he will have to continue investing Rs 500 annually in PPF apart from starting an SIP of Rs 12,000 in a diversified equity fund.

Insurance portfolio

He has a term plan of Rs 2 crore for life insurance and does not need any other cover. For health, he has taken a family floater plan of Rs 10 lakh from his employer and himself has bought a plan of Rs 10 lakh. Malde advised him to buy a top-up of Rs 15 lakh with a deduction of Rs 5 lakh, which would cost him Rs 625 per month. He also has a critical illness plan of Rs 20 lakh and an accidental disability plan of Rs 40 lakh for his life insurance. Malde suggests that he continue with the plans.

Financial Planning by Pankaj Malde Certified Financial Planner


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