Hello Sir,
I am 29 yrs old, unmarried in hand salary is around 1.34 lakhs. I am planning to get married to my partner in hand salary around 1.60 lakhs.
Luckily we dont have liability /loans. Only have a high housing rents of 23000 and 26500 per month.
I have an fd of valutaion around 9 lakhs. My partner has around 13lakhs in stocks fd etc. We both have emergency funds of around 3-3.5 lakhs in liquid.
Currently i am investing 30000 in sip each month and he is investing 30000 in elss.
Both invest around 10000-15000 in stocks on and off.
Could you kindly suggest some investing advise our goals are to buy a house in the next 5 yrs and buy a mid range car.
We also want to have some savings for future for kids.
Ans: Your current financial situation is strong. You both have good salaries, no liabilities, and substantial savings. Here’s a comprehensive plan to achieve your goals.
Current Investments and Expenses
High Rent: Rs. 23,000 and Rs. 26,500 per month are high. Consider if there are ways to reduce this.
Emergency Funds: You both have Rs. 3-3.5 lakhs in liquid emergency funds. This is excellent and should be maintained.
Fixed Deposits: You have Rs. 9 lakhs, and your partner has Rs. 13 lakhs in stocks and FDs.
SIP Investments: You invest Rs. 30,000 in SIPs monthly, and your partner invests Rs. 30,000 in ELSS.
Stock Investments: Both invest around Rs. 10,000-15,000 in stocks on and off.
Goals
Buy a House in 5 Years
Buy a Mid-range Car
Save for Future Kids
Investment Strategy
House Purchase Plan
Down Payment Savings: Aim to save for a down payment of at least 20% of the house cost. For a house costing Rs. 1 crore, you’ll need Rs. 20 lakhs.
Increase SIP Allocation: Increase your SIP investments to Rs. 40,000 per month if possible. Focus on large-cap and hybrid funds for stability and growth.
Short-term Debt Funds: Invest some money in short-term debt funds or recurring deposits. These are less volatile and offer better returns than savings accounts.
Car Purchase Plan
Car Fund: Decide on a budget for your mid-range car. For a car costing Rs. 10-15 lakhs, start a dedicated savings plan.
Recurring Deposit: Open a recurring deposit for car savings. Monthly contributions will help build this fund over 3-5 years.
Future Kids Savings
Child Education Fund: Start investing in child education funds or balanced mutual funds. SIPs of Rs. 10,000 per month in diversified equity funds can grow significantly over the long term.
Sukanya Samriddhi Yojana (SSY): If you have a daughter, invest in SSY. It offers attractive returns and tax benefits.
Review and Adjust Investments
Review Current SIPs
Diversify Portfolio: Ensure your SIPs are diversified across large-cap, mid-cap, and small-cap funds. Add some balanced or hybrid funds for stability.
Regular Stock Investments
Systematic Investment in Stocks: Consider a more systematic approach to stock investments. Regularly invest fixed amounts in strong, fundamentally sound companies.
Utilize Fixed Deposits
Partial Liquidation: Consider partially liquidating FDs and investing in mutual funds for better returns. Keep some FDs for security and liquidity.
Tax Planning
Utilize ELSS Funds: Continue investing in ELSS for tax benefits under Section 80C. Aim to maximize the Rs. 1.5 lakhs limit.
Insurance
Health Insurance: Ensure you both have adequate health insurance coverage. Consider a family floater policy post-marriage.
Life Insurance: Opt for term insurance plans. Ensure the coverage amount is sufficient to cover future liabilities and responsibilities.
Final Insights
Balancing your current savings with your future goals requires disciplined investing. Increase your SIPs, focus on diversified and balanced funds, and ensure regular contributions to short-term and long-term goals. Regularly review your investments and adjust based on performance and changing goals. By following this structured approach, you can achieve your dreams of buying a house, a car, and securing your future family’s needs.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in