Family finance: Paliwal can achieve most money goals, but needs to secure risks better – Economic Times

Yogesh Paliwal lives in Pune with his homemaker wife and two children, aged eight and two. His monthly salary is Rs 1.1 lakh and he has a house worth Rs 35 lakh and a plot of land worth Rs 32 lakh. He also has a credit card debt of Rs 66,000 for which he is paying an EMI of Rs 11,000. His goals include building an emergency corpus, taking a vacation, buying a car and a bigger house, saving for his children’s education and weddings, and his retirement.

Financial Planner Pankaaj Maalde suggests that Paliwal first repay his credit card debt using his cash. The remaining amount can be used to build an emergency corpus of Rs 4.2 lakh, which is equal to six months’ expenses. He also needs to add his fixed deposit to this corpus, which should be invested in an ultra short-term fund. Paliwal also wants to take an Rs 8 lakh vacation in four years, for which he can allocate his postal scheme and one of the traditional insurance plan’s maturity amount. He wants to buy a house worth Rs 3 crore in 16 years, for which he will have to sell his house and plot, and start an SIP of Rs 17,000 in a diverified equity fund. However, due to lack of surplus, he will have to start after a rise in income.


For his kids’ education in 10 and 16 years, he will need Rs 49 lakh and Rs 74 lakh, respectively, and should start SIPs of Rs 11,000 and Rs 5,000 in diversified equity funds. For their weddings in 17 and 23 years, he will need Rs 63 lakh and Rs 95 lakh, respectively. For the older child, he should allocate 25% of the equity mutual fund corpus, and start an SIP of Rs 9,000 in a diversified equity fund and Rs 2,500 in the gold bond scheme. For the younger kid, he should assign another 25% of the mutual fund corpus and start an SIP of Rs 6,000 in a diversified equity fund and Rs 2,500 in the gold bond scheme. For retirement in 21 years, he will need Rs 4.8 crore, and can assign his EPF, PPF, insurance and mutual funds. He should also start a monthly investment of Rs 4,000 in the NPS and deposit Rs 500 a year in the PPF. As for his goal of buying a car worth Rs 51 lakh, he will have to put it off and reduce the goal value.

How to invest in goals

For life insurance, he has a term plan of Rs 1 crore and three traditional plans. He should retain two plans and surrender one. For health insurance, he should buy a Rs 10 lakh independent family floater plan, which will cost Rs 1,667 a month. He should also buy a Rs 25 lakh accidental disability plan for Rs 333 a month.

Insurance Portfolio

Financial plan by Pankaaj Maalde

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