Family Finance: Here is why Pune-based Sambhus are on track to achieve their goals

Himanshu and Monika Sambhus work in the IT sector and stay in Pune with their two-year-old son and Himanshu’s 62-year-old father. They bring in a combined monthly income of Rs 1.63 lakh and are left with a surplus of Rs 23,275.

They already own a house worth Rs 65 lakh, for which they have taken a Rs 20 lakh loan. They have also invested aggressively in mutual funds, PPF and EPF.

Their goals include saving for emergencies, child’s higher education and wedding, retirement, and buying a house.

Portfolio


Financial Planner Pankaaj Maalde suggests the couple build an emergency corpus equal to six months’ expenses, which amounts to Rs 6 lakh. They should also have a medical buffer of Rs 5 for the father. This can be done by assigning their cash and fixed deposit and investing it in an ultra short-term fund.

Cash flow


Next, they want to save Rs 44 lakh for their child’s education in 16 years. For this, they will need to start an SIP of Rs 8,000 in an equity fund. For higher education in 19 years, they will need Rs 1.8 crore and will have to start an SIP of Rs 21,000 in an equity fund. For the wedding in 23 years, they have estimated a need of Rs 2.3 crore, for which they will have to start an SIP of Rs 18,000 in an equity fund and Rs 3,000 in gold bonds.

How to invest for goals

Annual return assumed to be 12% for equity. Inflation assumed to be 7%.

The couple wants to buy a bigger house worth Rs 1 crore in three years. Maalde suggests they do so in six months since they can sell their existing house and make a down payment of Rs 45 lakh after repaying the loan. For the remaining amount, they can take a loan and the EMI will come to Rs 47,800 which can be paid from the surplus. For retirement in 26 years, they want to save Rs 7.85 crore, and can assign their PPF, EPF and mutual fund corpuses. They should also start an SIP of Rs 5,000 in a diversified equity fund and continue to invest Rs 1,000 a year in the PPF.

Insurance portfolio

Premiums are indicative and could vary for different insurers.

For life insurance, the couple has Rs 1 crore term plan for each and doesn’t need more cover. For health, they have a Rs 3 lakh plan by their employer and Rs 5 lakh family floater plan. They should raise this to Rs 10 lakh and also pick Rs 50 lakh accident disability as well as Rs 25 lakh critical illness plans for each.


(Financial plan by Pankaaj Maalde Certified Financial Planner)

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