Personal Finance

Earmark specific asset class for each goal

SURESH PARTHASARATHY | Updated on October 13, 2012 Published on October 13, 2012


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I am 48 years old and my wife, 45, is a home maker. I will be working as a consultant with a fixed remuneration of Rs 75,000 for the next five years. I have two children. My daughter is in the first year of her engineering course, while my son is studying in class seven. My monthly expenses are Rs 25,000 and I also pay an EMI of Rs 20,000 towards my home loan. The balance tenure of the loan is seven years and the outstanding is Rs 11 lakh. My monthly surplus is Rs 25,000.

I have invested in aggressive stocks, but the portfolio is down 50 per cent. The current portfolio value is Rs 15 lakh. I have invested Rs 5 lakh in mutual fund schemes.

My other investments are:

Rs 5 lakh in PPF and Rs 9 lakh in NCDs (interest rate 10 per cent), which will mature in 2015. I have fixed deposits worth Rs 20 lakh, a majority of which will mature in 2015. The interest rate of the deposits is at 8 per cent.

During my stay abroad, I have taken two term insurance policies. One was for $90,000 in my name and another $40,000 in my wife’s name. They were single premium products and I have the cover till 2024. Is this cover sufficient?

I have a floater policy for Rs 3 lakh.

My concerns are:

I need Rs 20 lakh for my daughter’s higher education in 2016 and Rs 15 lakh in current value for her marriage in 2020.

For my son’s graduation, I may need Rs 5 lakh and for his post-graduation I would require Rs 20 lakh in 2021.

I need to build a corpus for my retirement in 10 years. How much do I need to save monthly so that it is sufficient till I turn 80.


Continue with your current asset allocation.

You can reach the goals, if your direct equity delivers 15 per cent return and mutual funds manage 12 per cent. However, in the eventuality of not meeting the desired return and also to create a buffer, invest your surplus through SIPs in mutual funds.


For your daughter’s education earmark your fixed deposit. Your deposit maturity will be Rs 29 lakh. Invest the surplus of Rs 9 lakh at 12 per cent return to meet your daughter’s marriage expenses.

For your son’s education, earmark your NCDs. Deploy the surplus at 12 per cent return. To bridge the short fall of Rs 2.3 lakh for his post-graduation, save Rs 1,500 for the next 96 months.


The current monthly expenses of Rs 20,000 will be Rs 39,000 at 58, if the inflation is seven per cent. You should have a corpus of Rs 93 lakh and it should earn one per cent return over and above inflation. Earmark your direct equity, MF and PPF proceeds for this purpose.

Term Insurance

Buy a term insurance cover for Rs 30 lakh and increase your health insurance cover.

(The author is CEO, >

Published on October 13, 2012
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