Hi Jinal, We both partner are 40 year old. These days after having second child (9 month old), I am bit worried about my both sons (Elder one 10 year) future. We couple currently earning 3.5 Lack per month together (In hand). I am investing 15 thousand in LIC SIIP (Last two year), 25 thousand in SIP (SBI, Last two year), and nearly 20 thousand in LIC per month (Last 10 years). I do invest 1.5 Lacks in PPF every year (Last 13 year). With all this investment can i reach a core plus of 60 Lac (For younger one education) by 2030 and another 1 Cr (For Elder one education and marriage) by 2040. I don't have to plan our retirement as we both are government employee and automatically investing in NPS as per government rules (Current value of NPS is 80 Lack combined). Is this investment is sufficient or i have to increase further for our sons education. One more thing I do investment in gold also (Physical) approximately 3 Lack per year from last 2 years.

Ans: It's wonderful to see your proactive approach towards securing your family's future. Let's delve into your financial planning:
• Comprehensive Investment Approach: You've adopted a well-rounded investment strategy by diversifying across mutual funds, PPFs, SSY, and NPS. This approach spreads risk and maximizes growth potential.
• Planning for Children's Future: Investing in PPFs, SSY, and NPS for your children's education and future needs is a prudent move. These instruments offer tax benefits and long-term growth potential, ensuring financial security for their milestones.
• Assessing Sufficiency: While your current investment allocation is commendable, it's essential to periodically review and reassess your financial goals and resources. As your children grow and educational expenses increase, you may need to adjust your investment contributions accordingly.
• Long-Term Perspective: With a diversified portfolio and disciplined savings habit, you're on the right track towards achieving your financial objectives. Keep a long-term perspective and stay committed to your investment plan.
• Professional Guidance: Consider consulting with a Certified Financial Planner periodically to review your financial plan, assess progress towards goals, and make necessary adjustments. A CFP can provide personalized advice based on your evolving needs and market conditions.
• Encouragement: Your proactive approach towards financial planning reflects your commitment to securing your family's future. Stay focused on your goals, continue to invest systematically, and remain adaptable to changing circumstances.
• Final Thoughts: By adopting a disciplined and diversified investment strategy, you're laying a solid foundation for your family's financial well-being. Stay consistent with your savings and investment habits, and you'll be well-prepared to meet your future financial needs.

Ans: It's commendable that you've been diligently planning for your family's future. Your commitment to securing your children's education and ensuring a comfortable retirement is truly admirable.

Considering your current investments, it's essential to evaluate if they align with your long-term goals. While your existing plans offer some protection and potential growth, diversifying your portfolio could provide added stability and growth potential. Have you explored avenues beyond traditional insurance policies and mutual funds?

Certified Financial Planners can offer personalized strategies tailored to your aspirations and risk tolerance. They can suggest options that balance growth potential with risk mitigation, guiding you towards achieving your desired corpus. Have you considered consulting one to fine-tune your financial roadmap?

Remember, the journey to financial security is not just about numbers—it's about ensuring peace of mind and enabling your loved ones to pursue their dreams. By proactively seeking guidance and exploring diverse investment avenues, you're laying a robust foundation for a fulfilling future. Keep nurturing your financial garden, and the seeds you sow today will bloom into a prosperous tomorrow.

Ans: Hi Karthick,

I appreciate you reaching out for financial advice. You’re in a strong position with your combined income and existing investments. Let's dive into how you can further improve your financial situation.

Current Financial Overview
Your combined monthly income is Rs 2.5 lacs. That’s a solid foundation. Your monthly obligations include:

Home loan: Rs 28,000 (till 2039)

Car loan: Rs 10,000

Your investments include:

Recurring Deposit (RD): Rs 5,000 per month

Sukanya Samriddhi Yojana (SSY): Rs 5,000 per month

Systematic Investment Plan (SIP): Rs 7,000 per month

Life Insurance Corporation (LIC): Rs 10,000 per month

Physical Gold Coins: 20 sovereigns

Both of you are covered under National Pension Scheme (NPS) with a maturity amount of Rs 28 lacs each. You anticipate Rs 4.5 crore as a lump sum and Rs 3.5 crore for monthly pension returns.

Child's Education and Marriage Planning
Your primary goal is to plan for your daughters' education and marriage. Here’s how you can streamline and enhance your investment strategy to meet these goals:

Enhancing Existing Investments
1. Systematic Investment Plan (SIP)

You are currently investing Rs 7,000 per month in SIPs. Consider increasing this amount. SIPs offer the benefit of rupee cost averaging and compound interest. Diversify your SIPs across different funds to balance risk and returns.

2. Sukanya Samriddhi Yojana (SSY)

SSY is a good investment for your daughters’ future. It offers tax benefits and attractive interest rates. Ensure you continue this until it matures to maximize benefits.

Evaluating Insurance Plans
1. Life Insurance (LIC)

Evaluate your current LIC policy. Traditional LIC policies offer lower returns compared to mutual funds. If your LIC policy is an investment-cum-insurance plan, consider surrendering it and redirecting the funds into higher-yielding SIPs. Pure term insurance is more cost-effective for life coverage.

Increasing Your Investment Corpus
1. Increasing SIP Contributions

With your substantial monthly income, consider increasing your SIP contributions. SIPs in actively managed mutual funds can potentially offer better returns than other investment options. Avoid direct funds due to the complexities in managing them. Regular funds with guidance from a Certified Financial Planner (CFP) ensure professional management and better performance.

2. Recurring Deposits (RD)

RDs are safe but offer lower returns. Gradually reduce RD contributions and redirect funds to SIPs. This shift can significantly improve your overall returns over time.

Retirement Planning
1. National Pension Scheme (NPS)

NPS is a good retirement tool, providing tax benefits and a decent corpus. Ensure you continue contributing to it regularly. For better retirement planning, also consider other retirement-focused mutual funds which can offer higher returns.

Gold Investments
1. Physical Gold

You hold 20 sovereigns of gold. While gold is a safe investment, it does not generate regular income. Consider holding a portion of your gold in more liquid forms like Gold ETFs or Sovereign Gold Bonds. These forms offer better liquidity and sometimes interest income.

Emergency Fund
1. Establishing an Emergency Fund

Ensure you have an emergency fund covering at least 6-12 months of living expenses. This fund should be in a highly liquid and safe investment like a savings account or liquid mutual fund. This will provide a financial cushion against unexpected expenses or loss of income.

Diversification and Risk Management
1. Diversify Investments

Diversification reduces risk. Spread your investments across different asset classes such as equity, debt, and gold. This balance ensures stability and growth in your portfolio.

2. Risk Assessment

Regularly assess your risk tolerance. Your risk tolerance will change with age, financial goals, and responsibilities. Adjust your investment strategy accordingly.

Tax Planning
1. Efficient Tax Planning

Utilize tax-saving instruments under Section 80C, 80D, and others. Investments in ELSS funds, PPF, NPS, and health insurance can help reduce your taxable income. Efficient tax planning increases your investable surplus.

Children's Education Fund
1. Education Fund

Open a separate education fund for your daughters. Regularly invest in a mix of equity and debt mutual funds. Start early to benefit from the power of compounding. Monitor and adjust the fund based on market conditions and your financial situation.

Children's Marriage Fund
1. Marriage Fund

Similar to the education fund, start a dedicated marriage fund. Invest systematically in a mix of equity and debt instruments. Consider the time horizon and risk tolerance while planning.

Monitoring and Review
1. Regular Monitoring

Regularly monitor your investments. Ensure they align with your financial goals. Adjust allocations based on performance and changing goals.

2. Annual Review with CFP

Conduct an annual review with a Certified Financial Planner. This review will help in assessing your financial health, adjusting strategies, and ensuring you are on track to meet your goals.

Final Insights
You have a solid foundation with a good income and diverse investments. By increasing SIP contributions, evaluating insurance policies, diversifying investments, and efficient tax planning, you can significantly enhance your financial health. Regular monitoring and professional advice are key to staying on track.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in