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Family finance: Aggressive investment will help Bhardwaj achieve all money goals with ease

Kuldeep Bhardwaj's goals include building an emergency corpus, buying a house, taking a vacation, saving for children’s education and weddings, and retirement.

, ET Bureau|
Last Updated: Mar 23, 2020, 09.30 AM IST
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Bhardwaj has a term plan of Rs 1 crore along with a Rs 50 lakh accident disability plan.
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Kuldeep Bhardwaj, 33, lives with his homemaker wife and two children, aged 4 and 1, in a rented house, in Noida. He gets a monthly salary of Rs 1.86 lakh and his portfolio includes cash of Rs 2 lakh, debt worth Rs 38.8 lakh in the form of fixed deposits, PPF and EPF, and equity worth Rs 50.4 lakh in the form of mutual funds and stocks.

His goals include building an emergency corpus, buying a house, taking a vacation, saving for children’s education and weddings, and retirement.

Financial Planner Pankaaj Maalde suggests that Bhardwaj begin by building a contingency corpus of Rs 5.8 lakh, which is equal to six months’ expenses. He can allocate his cash of Rs 2 lakh and fixed deposit of the same amount for this.

For the remaining amount, he should save till the corpus is amassed before starting investment for other goals. To take a vacation worth Rs 10 lakh in 10 years, he should start an SIP of Rs 5,000 in a diversified equity fund. In order to buy a house worth Rs 2 crore in 15 years, he should start an SIP of Rs 41,500 in a diversified equity fund.

Portfolio
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Cash flow
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To fund his older child’s education in 14 years, Bhardwaj has estimated a need Rs 64.5 lakh. For this, he can allocate 25% of his mutual fund corpus and start an SIP of Rs 9,000 in a diversified equity fund. For the younger child’s education in 17 years, Bhardwaj will need Rs 79 lakh. For this, he can allocate another 25% of his mutual fund corpus and start an SIP of Rs 6,000 in a diversified equity fund.

How to invest for goals
investing-for-goals


For the older kid’s wedding in 21 years, Bhardwaj will need Rs 1.4 crore. He should start an SIP of Rs 6,500 in a diversified equity fund and Rs 1,500 in the gold bond scheme. For the younger child’s wedding in 24 years, he needs Rs 1.7 crore and should start an SIP of Rs 4,500 in a diversified equity fund and Rs 1,500 in the gold bond scheme.

For retirement, he will need Rs 10.3 crore in 27 years. He will have to allocate his stocks, EPF and PPF to meet this goal. He should also continue investing Rs 500 in the PPF and Rs 12,000 in a diversified equity fund.

Bhardwaj has a term plan of Rs 1 crore along with a Rs 50 lakh accident disability plan. He is advised to buy another Rs 1 crore of term plan for a premium of Rs 2,250 a month. For health insurance, he has a Rs 6 lakh plan and an independent family floater plan of Rs 15 lakh. Maalde advises him to continue the same and not buy any more insurance.

Insurance portfolio
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Financial plan by Pankaaj Maalde Certified Financial Planner

Write to us for expert advice
Looking for a professional to analyse your investment portfolio? Write to us at etwealth@timesgroup.com with ‘Family Finances’ as the subject. Our experts will study your portfolio and offer objective advice on where and how much you need to invest to reach your goals.
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