Hello i am a homeopathic doctor aged 27 still doing my MD( final year) I have a evening clinic started newly i earn about 45-50k per month and as get stipend i nearly get 40k per month i have a 6 months old daughter and i have 14 lakhs savings of own 10 lakhs in equity 60k gold bonds ,1.2lakhs in US equity and 50k in corporate bonds and 2.5lakhs in savings account apart from this i have 24 lakhs in hybrid mutual fund ( this i got after my fathers death)may be in couple of months i will be getting another 90 lakhs by selling a property my future biggest expense will be my daughters education as i have a desire to send her to abroad for her UG itself my biggest question how to manage 90 lakhs for my secured future

Ans: Hello Mr. Kumar Shashi Raj,

It's great that you're actively planning for your financial future and your children's education. Let's address your concerns step by step:

A. Planning your finances ahead:

With a corpus of 1 crore and diversified investments like MFs, PPF, NSC, stocks, and FDs, you're on the right track.
Consider reviewing your investment portfolio periodically to ensure alignment with your financial goals and risk tolerance.
Continue your SIPs and monitor the performance of your equity investments.
Explore options for retirement planning to secure a steady income post-retirement. You can consider instruments like NPS or annuities for this purpose.
B. Your daughter's education:

Since your daughter aims to pursue medicine, it's crucial to plan for the substantial expenses associated with her education.
Estimate the cost of her medical education and explore education loans, scholarships, or other funding options to supplement your savings.
Consider investing in instruments like mutual funds or fixed deposits specifically earmarked for her education expenses.
C. Medical insurance:

Your existing medical policy covering 26 lakhs for a family of four is a good start.
However, considering rising healthcare costs and the possibility of unforeseen medical emergencies, it's advisable to assess if this coverage is adequate.
Evaluate the premium versus coverage benefits and consider topping up your existing policy or purchasing an additional policy for enhanced coverage.
D. Retirement planning and leading a comfortable life:

Determine your desired post-retirement lifestyle and estimate your retirement expenses, including healthcare, travel, and other essentials.
Calculate the corpus required to generate a steady income stream post-retirement, considering factors like inflation and life expectancy.
Aim to build a retirement corpus that can sustain your lifestyle without relying on your children's financial support.
Maximize contributions to retirement-oriented schemes like NPS or voluntary provident fund to boost your retirement corpus.
Regularly reassess your financial plan and make adjustments as needed to stay on track towards your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

Ans: Firstly pay off your existing loans. We suggest that please do not commit to any of the additional investments options. If you to invest, just do a lumpsum investment on a quarterly basis with whatever excess amount you have saved.

Ans: Assessing Your Current Financial Situation
You have a robust portfolio with diversified assets. Let's look at your current holdings:

Mutual Funds: Rs 1.7 crore
Shares: Rs 1.6 crore
Properties: Rs 1.6 crore
Land: Rs 35 lakh
Rental Income: Rs 45,000 per month (Rs 25,000 and Rs 20,000)
Guaranteed Return from Insurance: Rs 27 lakh
Life Cover: Rs 1.25 crore
Gold and Liquid Assets: Rs 15 lakh
Monthly Expenses: Rs 75,000
Monthly Savings: Rs 20,000 in Mutual Funds
Planning for Your Child’s Education
Your daughter is 14 years old, and higher education expenses are approaching. Here's a structured plan:

Guaranteed Insurance Return: The Rs 27 lakh guaranteed return will be a significant help when she starts her graduation. This ensures you have a secured fund for her education.

Mutual Funds and Shares: Continue to monitor and adjust your investments in mutual funds and shares to ensure they align with her education timeline. You can consider a systematic withdrawal plan (SWP) from mutual funds when required.

Building a Retirement Corpus
To ensure a comfortable retirement, let's outline your strategy:

Rental Income: Continue to utilize the Rs 45,000 monthly rental income. Consider renting both properties if selling is not a viable option. The rental income can supplement your monthly expenses post-retirement.

Mutual Funds and Shares: With a total of Rs 3.3 crore in mutual funds and shares, ensure a balanced allocation between equity and debt. As you near retirement, gradually increase the proportion of debt to reduce risk.

Monthly Savings: Increase your monthly savings if possible. If you can increase your investment in mutual funds from Rs 20,000 to Rs 50,000 per month, it will significantly boost your retirement corpus.

Liquid Assets and Gold: Keep a portion of your assets liquid for emergencies. You can also leverage gold if needed during retirement.

Insurance and Risk Management
Your current life cover of Rs 1.25 crore is substantial, but review your insurance needs periodically to ensure it remains adequate. Health insurance is also crucial, especially as you age.

Investment Strategy
Mutual Funds: Continue investing in diversified mutual funds. Consider consulting a Certified Financial Planner (CFP) to evaluate the performance of your current funds and explore better-performing options.

Equity Investments: Stay invested in high-quality stocks. Periodically review your portfolio to ensure it is well-diversified and aligned with your risk tolerance.

Key Recommendations
Increase Savings: Aim to save and invest more than Rs 20,000 monthly if possible. This will help you reach your retirement goals faster.

Rental Income: Consider renting out both properties if feasible. This can provide a stable income stream during retirement.

Education Fund: Utilize the guaranteed return from your insurance policy for your daughter's education expenses.

Balanced Portfolio: Gradually shift from equity to debt as you approach retirement to reduce risk.

Final Insights
Your financial foundation is strong. With careful planning and adjustments, you can achieve your retirement goals and provide for your daughter's education. Regularly review and rebalance your portfolio to stay on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: You are 37 years old with a steady income of Rs. 26,000 per month. Your monthly expenses are Rs. 11,000, leaving you with some surplus for savings and investments. You have already started investing in a recurring deposit (RD), two mutual funds, and life insurance policies for your family. You also have a significant loan of Rs. 8,80,000. Your financial goals include saving for your daughter’s education, her wedding, and your retirement.

Let's evaluate your current situation and create a plan to achieve your goals.

Evaluating Your Current Investments
Recurring Deposit (RD): You are investing Rs. 650 per month in an RD. RDs offer secure returns but may not be sufficient for long-term goals due to lower interest rates.

Mutual Funds: You are investing Rs. 1000 each in HDFC Balanced Advantage Direct Growth Fund and HDFC Defence Fund. These funds offer good growth potential but make sure to regularly review their performance.

Life Insurance Policies: You have eight life insurance policies. While insurance is essential, too many policies may dilute the benefits and increase premium costs. Consider if these policies are providing adequate coverage and returns.

Sukanya Samriddhi Yojana (SSY): This is a good investment for your daughter’s future, with tax benefits and decent returns.

Key Areas to Focus On
Debt Repayment

Your priority should be to pay off the Rs. 8,80,000 loan. This will free up funds for investments and reduce interest costs.

Allocate a portion of your savings to clear this loan systematically.

Optimising Insurance Policies

Evaluate your current life insurance policies. Consider if they provide sufficient coverage or if there is an overlap.

If these policies are endowment or money-back plans, they may offer lower returns. You might consider surrendering or reducing the number of policies, depending on their maturity dates and surrender values. Invest the freed-up amount in better-performing avenues like mutual funds.

Investment in Mutual Funds

Continue with your SIPs in mutual funds but consider increasing the amount gradually as your income grows.

Ensure a diversified portfolio by adding funds across different categories, such as large-cap, mid-cap, and hybrid funds. Actively managed funds are generally better for long-term growth than index funds.

Review your mutual fund portfolio annually to ensure it aligns with your goals.

Daughter’s Education and Wedding

Start a dedicated SIP for your daughter’s education and wedding. Choose equity mutual funds for long-term growth.

Increase contributions to her SSY account to take full advantage of the scheme's benefits.

Retirement Planning

Begin investing in a retirement corpus immediately. Even small monthly contributions can grow significantly over time.

Consider investing in a mix of mutual funds and PPF for a balanced approach to growth and security.

Recommended Steps Forward
Budgeting and Savings: Track your expenses and create a budget to ensure you have a clear picture of your finances. This will help you find additional savings that can be redirected toward investments.

Emergency Fund: Build an emergency fund with at least six months’ worth of expenses. This will give you a financial cushion in case of unforeseen events.

Loan Repayment Strategy: Prioritize paying off your Rs. 8,80,000 loan. Use any bonuses or extra income to reduce this liability faster.

Increasing SIPs: As your financial situation improves, gradually increase your SIPs in mutual funds. Start with small increments to avoid straining your budget.

Insurance Review: Conduct a thorough review of your life insurance policies. If you find policies that are not serving their purpose effectively, consider consolidating or switching to term insurance for better coverage.

Long-Term Investments: Consider shifting a portion of your RD investment into mutual funds for higher returns. This will help in achieving your long-term goals.

Final Insights
Your current financial discipline is commendable. With focused planning, you can achieve your goals of securing your daughter’s future and your retirement. Prioritize debt repayment, optimize your insurance portfolio, and invest consistently in mutual funds for long-term growth.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in