Sir I'm 25 years old and I want my dream car Mercedes cost 75 lakshs in 10 years my monthly salary is 2 lakhs

Ans: It's great that you're planning ahead for your car purchase. Here's a strategy to help you achieve your goal:

• Define Your Goal: Start by determining the exact amount you'll need to purchase your car in five years. Consider factors like the type of car you want and any additional expenses such as insurance and maintenance.

• Calculate Required Investment: Once you have your target amount, calculate how much you'll need to invest monthly to reach your goal. Use an online investment calculator or consult a financial advisor to determine this amount based on your expected rate of return.

• Choose Suitable Investments: Since your investment horizon is relatively short-term (five years), focus on relatively low-risk investment options that offer steady returns. Consider investing in a mix of debt instruments such as fixed deposits, recurring deposits, and debt mutual funds. These options provide stability and liquidity while offering reasonable returns.

• Systematic Investment: Set up a systematic investment plan (SIP) where you contribute a fixed amount regularly towards your investment portfolio. This disciplined approach helps you accumulate wealth over time by harnessing the power of compounding.

• Review and Adjust: Periodically review your investment portfolio to ensure it remains aligned with your goals and risk tolerance. As you approach your target date, consider gradually shifting your investments to more conservative options to protect your capital from market volatility.

• Emergency Fund: While focusing on your car savings, don't forget to maintain an emergency fund to cover unexpected expenses or financial emergencies. Aim to have at least 3-6 months' worth of living expenses set aside in a readily accessible account.

• Seek Professional Advice: Consider consulting with a Certified Financial Planner (CFP) to develop a customized investment plan tailored to your financial goals, risk tolerance, and time horizon. A financial advisor can provide valuable insights and guidance to help you achieve your objectives.

By following these steps and staying disciplined with your savings and investment strategy, you can work towards accumulating the necessary funds to purchase your dream car in five years. Remember to stay focused on your goal and adjust your plan as needed along the way.

Ans: Congratulations on your impressive financial stability and well-thought-out future plans. Your situation reflects years of hard work and careful planning. Let’s assess whether you can comfortably buy a BMW worth Rs 50 lakh and still manage your other financial goals.

Current Financial Situation
You have a robust financial portfolio:

Monthly Salary: Rs 2.4 lakh post taxes
Savings: Rs 3 crore (including PF, fixed deposits, etc.)
Inheritance: Rs 1 crore in cash and approximately Rs 5 crore in property (house + land)
No current loans
Own house and car in good condition
Two children (ages 12 and 15)
Financial Goals
Buying a BMW worth Rs 50 lakh
Funding your children’s education
World travel
Evaluating Your Financial Goals
Buying a BMW
Your plan for purchasing a BMW involves:

Selling your old car for Rs 10 lakh
Using Rs 20 lakh from savings
Taking a Rs 20 lakh loan
Children’s Education
Your elder child will start engineering college in two years, which will require significant funds. Assuming your younger child will follow a similar path, it's essential to plan for these expenses.

World Travel
Traveling the world is a dream that will require a substantial budget, but with careful planning, it is achievable.

Financial Assessment
Buying a BMW
Given your financial situation, purchasing a BMW is feasible. Here’s why:

Down Payment and Loan: Using Rs 20 lakh from savings and a Rs 20 lakh loan is a practical approach. Your monthly salary can comfortably handle the EMIs.
Future Savings Impact: Even after spending Rs 20 lakh from your savings, you will have Rs 2.8 crore left, plus the expected inheritance of Rs 1 crore.
Children’s Education
Planning for Higher Education: Start an education fund for each child. Invest in a mix of safe instruments and equity for higher returns.
Estimate Costs: Engineering education can be expensive. Plan for tuition, accommodation, and other expenses.
World Travel
Budgeting for Travel: Create a travel fund. Decide on destinations, duration, and frequency of your travels. Budgeting will help you estimate the required amount.
Invest for Travel Goals: Allocate a portion of your investments specifically for travel. This ensures your travel fund grows over time.
Investment Strategy
Diversify Your Investments
Equity and Mutual Funds: Increase your equity and mutual fund investments. They offer higher returns over the long term, helping you grow your wealth.
Debt Instruments: Maintain some investments in fixed deposits, bonds, and other debt instruments for stability.
Education Fund
Systematic Investment Plan (SIP): Start SIPs in mutual funds dedicated to your children’s education. SIPs in diversified equity funds can help in accumulating a substantial corpus.
Education Loans: Consider education loans to spread out the financial burden. This can preserve your savings for other goals.
Emergency Fund
Maintain an Emergency Fund: Ensure you have an emergency fund that covers at least 6-12 months of expenses. This provides a safety net in case of job loss or other unforeseen events.
Earning More with BMW and World Travel
Leveraging the BMW
Business and Professional Use: Use the BMW for business purposes if applicable. It can enhance your professional image and possibly lead to more business opportunities.
Renting Out: Occasionally rent out your BMW for events or special occasions. This can help offset the maintenance costs.
World Travel
Travel Blogging or Vlogging: Share your travel experiences through a blog or vlog. Monetize your content through ads, sponsorships, and partnerships.
Freelancing While Traveling: If your job permits, consider freelancing or consulting while traveling. This can provide additional income and fund your travels.
Tax Considerations
Tax on Car Loan
Interest Deduction: Interest on a car loan is not tax-deductible. Factor this into your financial planning.
Tax on Investments
Capital Gains: Be mindful of capital gains tax on your investments. Plan your withdrawals and reinvestments to minimize tax liability.
Tax-Saving Instruments: Utilize tax-saving investments under Section 80C, such as PPF, ELSS, and NPS, to reduce your tax burden.
Conclusion
Based on your current financial situation and future plans, you can comfortably buy a BMW worth Rs 50 lakh and still achieve your other financial goals. Here’s a summary of the action points:

Buy the BMW: Use Rs 20 lakh from savings, sell your old car, and take a Rs 20 lakh loan.
Plan for Education: Start dedicated education funds for your children through SIPs in mutual funds.
Build a Travel Fund: Allocate a portion of your investments for world travel.
Diversify Investments: Balance between equity and debt instruments for growth and stability.
Maintain an Emergency Fund: Ensure you have enough savings to cover unforeseen expenses.
Your disciplined approach to savings and investments, combined with careful planning, will help you achieve financial independence and fulfill your dreams. If you need personalized advice or assistance in structuring your investment portfolio, feel free to reach out. I’m here to help you optimize your investments and achieve your financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: ou have a strong financial base with liquid investments of about Rs. 13.6 crores and an excellent monthly income, so you are on a good wicket. Let's see if buying a luxury car makes sense.

Present Financial Situation
Monthly Income
You have a monthly income of Rs. 8 lakh, which shall definitely ensure a comfortable lifestyle.

Investments

Mutual Funds: Rs. 8 crore
PMS: Rs. 4 crore
Provident Fund: Rs. 1 crore
Stocks: Rs. 50 lakh
Cash: Rs. 10 lakh
Assets

Home: Rs. 1.5 crore
Car: Kia Seltos SUV
Insurance Coverage

Term life insurance of Rs. 1 crore each for all family members and parents.
Comprehensive medical insurance of Rs. 1 crore each.
Retirement Planning
Target Corpus
You aim for a corpus of Rs. 20 crore in 5 years. Given your current investments and SIP, this target is achievable.

Monthly SIP
You are investing Rs. 5 lakh monthly. This disciplined approach is excellent.

Luxury Purchase Consideration
Mercedes-Benz Purchase
You plan to buy a Mercedes Benz for Rs. 65 lakh.

Financial Impact

Depreciation: Cars are a depreciating asset. The value of the car will reduce over time.
Maintenace: Luxury cars are expensive to maintain.
Opportunity Cost: This money, if invested, will yield a substantial return over time.
Can You Afford It?
Current Assets
You have ample assets and no liabilities. Your liquid investments are as high as Rs. 13.6 crore alone.

Future Goals
You want to have Rs. 20 crore in 5 years. Your current savings and investments are on track to reach this goal.

Income Stability
Rs. 8 lakh per month gives you a great deal of financial stability. This income can sustain your current lifestyle as well as a whole host of future goals.

Analytical Insights
Gimme Some Luxury
Your sound financial position gives you the wherewithal to splurge a bit, but keep an eye on its impact on the future.

Needs vs. Wants Balance

Needs: Securing retirement and your child's future
Wants: Living life's good life without any financial insecurity
What the Expert Says
As a Certified Financial Planner, I will ask you to consider benefits against costs. You will have to consider the depreciation and maintenance expenses of the car.
Reinvest the Amount
Now, think of reinvesting Rs 65 lakh. It can generate better returns and provide additional security to your retirement corpus.
Balanced Approach
You can also look at a balanced approach. Part of the amount can be used for luxury and the rest for investments.

Final Insights
You have built up a robust financial foundation. With assets and no liabilities, you can afford to buy a luxury car. But do consider the long-term impact on your finances. The balancing act between luxury and financial security will give you a comfortable future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in