Hi, I'm an 18 year old male, recently turned on January of this year, the first thing I did was to open a bank account. I have saved around 1Lakh approx, to be specific 96-97K, from the past two and an half or so year. Currently I have no debt, I don't use credit card, currently no loan. I have a debit card which I use to purchase stuff, my spending is very frugale, except from needs. I have recently opened a demat account and invested around 26-27K in the Indian market, to get a gist of things actually work. I have divided the money into Index/ETF, mid cap and Large cap. Mostly the money is in Index. What should be my next steps to grow, and can you suggest me some demat accounts that are good to use, currently am using INDmoney. I also have plans to study abroad, especially do my bachelor's. I need an amout of around 40-45Lakhs, a safe side of 50Lakhs, if the duration of the study is 3-4years with 2 years extra of work visa what should I do to repay the loan and still have money to progress forward with my career.

Ans: Your current investment discipline is highly appreciated, current choice of investment funds is good considering long term investment horizon of at least 7-10 years. But we would like to highlight the RD aspect. You are suggested to maintain only 3-6 months of immediate expenses in RD/saving and rest should be diverted to more appreciating and diversified asset class.

We highly recommend consulting a certified financial advisor who can provide personalized advice based on your risk tolerance, financial goals, and specific circumstances.

Ans: Given your financial situation and aspirations, it's essential to devise a comprehensive retirement plan that addresses your income, expenses, investments, and retirement goals.

Starting with your income, considering your monthly salary of 29,484 after TDS, along with the additional support from your father and interest income from FDs and loans provided, you have a steady income stream.

Your investments, including RD, PPF, SBI pension investment, LIC endowment, and commercial property, provide a diversified portfolio. However, it's crucial to evaluate each investment's performance, risk, and suitability for your retirement goals.

Regarding your expenses, with an estimated monthly expense of 10,000, it's important to factor in inflation and potential lifestyle changes in retirement. Planning for contingencies and unexpected expenses is prudent.

To assess if your current investments are sufficient for retirement, consider your retirement goals, including travel expenses. With a target of 30 lakhs for travel over the next 5-6 years, it's essential to calculate the required investment amount to achieve this goal within the specified timeframe.

Since your salary varies due to the nature of your job, it's advisable to create a buffer or emergency fund to cover any income fluctuations or unforeseen expenses.

Consulting with a Certified Financial Planner can provide personalized insights and recommendations tailored to your financial situation, retirement goals, and risk tolerance. They can help you optimize your investment strategy, identify potential gaps, and create a roadmap for achieving your retirement aspirations.

Remember, retirement planning is a dynamic process that requires periodic review and adjustments. Stay proactive, monitor your investments, and make informed decisions to ensure a secure and fulfilling retirement.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Assessing Your Current Financial Situation

Before diving into financial planning, let's assess your current financial situation. You're 23, earning a substantial monthly salary of 1.12 lakhs before taxes. However, it seems you're facing some financial challenges, primarily due to your family's housing loan and previous business losses. Your EMI for the housing loan has increased to 45k/month after additional borrowing and a break in payments.

You've also mentioned various SIPs, monthly expenses of 10k, and repayment of other lenders amounting to 15k/month. Despite these commitments, you manage to save around 25-30k/month, which is commendable.

Setting Financial Goals

Your primary financial goal is to save 10-15 lakhs in the next 2-3 years for your marriage and family. Additionally, addressing the housing loan and building a secure financial future for your family are crucial objectives.

Creating a Financial Plan

Emergency Fund:
Start by building an emergency fund to cover unexpected expenses. Aim to save at least 6-12 months' worth of living expenses, considering your family's financial situation. Keep this fund in a liquid and accessible account.

Repaying High-Interest Debt:
Prioritize paying off high-interest debt, such as personal loans or credit card debt, to reduce financial burden and interest expenses. Since you're saving a significant portion of your income, allocate a portion towards accelerating debt repayment.

Optimizing Investments:
Given your medium risk tolerance, consider a balanced investment approach. Diversify your portfolio across various asset classes, including equity, debt, and possibly real estate.

Equity Investments: Since you have a relatively short investment horizon of 2-3 years, consider equity mutual funds with a blend of large-cap, mid-cap, and balanced funds. These can potentially offer higher returns while managing risk.

Debt Investments: Given the stability they offer, consider investing in debt mutual funds or fixed-income securities. These can provide steady returns and help balance the overall risk in your investment portfolio.

Real Estate: While you haven't mentioned real estate as an investment option, it's worth considering for long-term wealth accumulation. However, ensure thorough research and due diligence before investing in property.

Systematic Investment Plans (SIPs):
Continue with your existing SIPs, as they provide a disciplined approach to investing. However, reassess the funds you're investing in to ensure they align with your financial goals and risk tolerance. Aim for a diversified portfolio of SIPs to mitigate risk.

Budgeting and Expense Management:
Review your monthly expenses and look for areas where you can potentially reduce costs. Redirect the saved amount towards your savings and investment goals. Additionally, consider discussing financial responsibilities and budgeting with your family to collectively manage expenses.

Seeking Professional Guidance:
Consider consulting with a Certified Financial Planner to tailor a financial plan that aligns with your goals and risk profile. They can provide personalized advice and guidance to optimize your financial journey.

Conclusion

In summary, building a solid financial plan requires a systematic approach, goal setting, and disciplined execution. By focusing on building an emergency fund, repaying high-interest debt, optimizing investments, and managing expenses, you can work towards achieving your short-term and long-term financial goals. Remember, consistency and patience are key virtues in the journey towards financial security.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in