I am 37 and self-employed. My wife, 36, assists me in my business. We have a three-year-old son and two-month-old daughter. I plan to quit doing business by 60. Please suggest an investment plan for me. I have health insurance for ₹3 lakh.

Navaneeth

With your current surplus you can comfortably reach your goals. But if revenue from your business declines it will make it difficult for you to meet financial goals.

Son’s education : The present value of ₹10 lakh, required for your son’s education, will be ₹29.5 lakh, if inflated at 7 per cent. To reach the target you must invest ₹5,230 monthly for the next 16 years. For his post-graduation, the present value of the sum required is ₹1.93 crore. To reach this target, you must invest ₹20,100 every month and the portfolio should earn a return of 11.8 per cent. Allocate about 60 per cent of the portfolio to equity mutual fund and 40 per cent to debt instruments. For your daughter’s graduation, you need ₹33.8 lakh, if the sum required is inflated at 7 per cent. You need to save ₹4,600 monthly for the next 18 years and for post-graduation you need ₹2.21 crore. Invest ₹18,000 every month till the goal is reached. If you reach the goal in advance, shift the entire corpus to debt instruments.

Marriage : Since you will retire earlier than the goal, accumulate the needed funds before you retire. To meet expenses of ₹1.62 crore, invest ₹13,000 for the next 23 years.

Retirement : You need ₹4.6 crore for monthly expenses. If you redeploy the fixed deposits in a portfolio that delivers 11.8 per cent it will be ₹3.9 crore by the time you retire. To meet the shortfall, you must save ₹5,900 every month. Increase your health insurance by ₹5 lakh and buy a term cover for ₹1.5 crore.

The writer is a financial planner and founder, myassetsconsolidation.com Send your queries to Blinefp@gmail.com

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