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Ramalingam Kalirajan |7103 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jun 04, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more

Question by Mrunal on Jun 03, 2024Hindi

I am 51yr old dr and have a monthly income of approximately 3lakh and have 2kids want to have 3cr for their marriage and 2cr for their education one is 17 and one is 13 and 5 cr for our retirement how much monthly premium should be paid

Ans: Securing Your Family's Future: A Doctor's Guide to Financial Planning
I understand you're a 51-year-old doctor with a monthly income of Rs. 3 lakh and two wonderful children (aged 17 and 13). You're aiming to accumulate a significant corpus for their education (Rs. 2 crore each) and marriage (Rs. 3 crore each), along with Rs. 5 crore for your retirement. That's a fantastic goal, and with careful planning, it's achievable!

Here's a breakdown to help you navigate this financial journey:

Understanding Your Goals:

Education & Marriage: Your children's education needs will come first (13 and 17 years old). Then, there are the marriage expenses in a few years.

Retirement: You have around 10 years until retirement (considering the average retirement age for doctors in India). Planning for a comfortable retirement income is crucial.

The Power of Time:

The good news is you have time on your side! The earlier you start investing, the more time your money has to grow through compounding (earning interest on your interest).

Let's Talk Numbers:

While I can't give you an exact monthly investment amount without a detailed financial assessment, here's a framework to consider:

Corpus Needed: Add up your goals: Rs. 2 crore (Child 1 Edu) + Rs. 2 crore (Child 2 Edu) + Rs. 3 crore (Child 1 Marriage) + Rs. 3 crore (Child 2 Marriage) + Rs. 5 crore (Retirement) = Rs. 15 crore.

Investment Time Horizon:

Education (13-year-old): 5 years (assumed graduation age)
Education (17-year-old): 1 year (assumed graduation age)
Marriage (both): Let's assume 10 years for each child (considering potential higher education and career establishment before marriage).
Retirement: 10 years (assuming retirement at 60).
Investing for Different Time Horizons:

Based on the time horizon, we can explore different investment options:

Child's Education (Short Term):

Aggressive Balanced Actively Managed Funds: These offer a mix of equity and debt, with a potential for higher growth than pure debt options but with some risk.
Child's Marriage (Mid Term):

Balanced Actively Managed Funds: These offer a balance between growth and stability, suitable for mid-term goals.
Retirement (Long Term):

Multi-Cap Actively Managed Funds: Invest across large, mid, and small-cap companies, offering diversification and growth potential for the long term.
Remember: Actively managed funds have the potential for higher returns than passively managed options like index funds, but they also carry more risk.

How Much to Invest?

Several factors influence your investment amount:

Current Savings & Expenses: Analyze your monthly income, expenses, and existing savings.

Risk Tolerance: How comfortable are you with potential market fluctuations? Higher risk tolerance allows for potentially higher returns.

A CFP Can Help:

A Certified Financial Planner (CFP) can create a personalized plan considering all these factors. They can:

Calculate Investment Amount: Using financial tools and considering your goals and risk tolerance, a CFP can recommend a suitable monthly investment amount.

Factor in Inflation: Inflation erodes the purchasing power of money. A CFP will factor in inflation to ensure your goals are met despite rising costs.

Review and Rebalance: Your financial situation and goals might change over time. A CFP will monitor your progress and adjust your investment plan as needed.

Beyond Monthly Investments:

Here are some additional strategies to consider:

Utilize Employer Benefits: Explore tax-saving investment options offered by your employer (if applicable).

Review Existing Investments: If you have any existing investments, a CFP can assess their suitability for your goals.

Remember, this is a general overview. Consulting a CFP is crucial to create a tailor-made plan that considers your specific financial situation and risk tolerance.

Taking Charge of Your Future:

You've taken a great first step by planning for your family's future. By starting early, investing wisely, and seeking professional guidance, you can achieve your financial goals and secure a bright future for yourself and your loved ones.

Don't hesitate to take action! Schedule a consultation with a CFP to get started on your financial planning journey.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

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