So my networth is like 45cr but most of it almost 42cr are in real estate alone only 3cr are invested (liquid assets) and my monthly invome is 5-6 lakhs. I want to buy the mercedes eqb which costs around 80 lakhs so can i afford it?

Ans: Current Financial Strength

You have a net worth of Rs.45 crore.
Out of this, Rs.42 crore is in real estate.
Your liquid investments are only around Rs.3 crore.
Your monthly income is Rs.5–6 lakhs.
You are considering buying a car worth Rs.80 lakhs.

This gives us a good snapshot. Now, let us analyse further.

Real Estate Dominance in Portfolio

Over 90% of your wealth is in real estate.
This creates concentration risk.
Real estate is illiquid.
It cannot be sold quickly in emergencies.
Selling takes time, cost and negotiation.
Price discovery is also inconsistent.

It also lacks passive cashflow unless rented.
Maintenance cost, tax, and legal issues arise often.
This limits your flexibility to act on new opportunities.

So, while your net worth is high, most of it is not quickly usable.

Liquidity Analysis

Your investable assets are only Rs.3 crore.
This is your true financial flexibility.
Liquid investments can be easily accessed or rebalanced.
They provide freedom to act without pressure.

If Rs.80 lakhs is used for a car, Rs.2.2 crore is left.
That’s a reduction of more than 25% of your liquid corpus.

This needs serious thinking.

Income vs Lifestyle Costs

Monthly income is Rs.5–6 lakhs.
Annual income comes to around Rs.60–72 lakhs.
Buying an Rs.80 lakh car exceeds one year of income.

That’s a major financial outflow.

Luxury cars also have high maintenance costs.
Battery replacements for EVs are costly.
Insurance is higher for luxury models.
Road tax and registration alone will be several lakhs.

So, the car cost doesn’t end at Rs.80 lakh.
There are hidden and recurring costs too.

Should You Use Your Liquid Investments?

Using Rs.80 lakh from Rs.3 crore is unwise.
That reduces your emergency cushion.
It restricts future investment opportunities.

As a Certified Financial Planner, I suggest:

-- Don't disturb core liquidity for lifestyle assets
-- Liquid assets should serve emergencies and goals
-- Avoid asset depletion for depreciation-based items

How to Think About Luxury Car Purchase

Let us look at this from different angles:

Can you afford it technically?
Yes, if we go by net worth and income, you can.

Should you afford it now?
No, if it reduces your liquidity significantly.

Is it ideal to spend this way now?
No, not until you rebalance your portfolio first.

Better Financial Planning Approach

Before spending Rs.80 lakhs, consider these steps:

-- Rebalance your overall asset allocation
-- Reduce your real estate exposure gradually
-- Build a diversified mutual fund portfolio
-- Keep a strong emergency fund intact

Only then, allocate for aspirational spending like luxury cars.

Build a 360° Financial Plan First

-- Review and assess all insurance policies you hold
-- If you own ULIPs or traditional LIC policies, surrender them
-- Reinvest the proceeds in mutual funds via a CFP channel
-- Build separate goals-based portfolios
-- Maintain a buffer for retirement, family, and healthcare
-- Plan for tax-efficient withdrawals in future
-- Set aside a lifestyle upgrade fund

Then, if your lifestyle fund permits Rs.80 lakh, go ahead.

Disadvantages of Index Funds

If you’re considering index funds to build liquidity:

Index funds lack active risk management.
They follow the market blindly.
They do not beat the market, only mimic it.
In falling markets, they fall just as much.
You miss the chance to protect downside.
No flexibility to change strategy in tough times.
Sectoral risks are not filtered or controlled.

On the other hand:

Actively managed mutual funds bring expertise
Fund managers adapt based on market cycles
There is strategy, research, and flexibility
Long-term wealth creation is more disciplined

Always invest via Certified Financial Planner through regular plans.

Disadvantages of Direct Plans

If you’re thinking about investing in direct plans:

Direct plans may seem cheaper, but they lack support
You lose out on guidance and customised planning
You may over-diversify or under-allocate
Monitoring and rebalancing becomes your burden
Tax planning can be ignored unknowingly
Goal tracking becomes inconsistent
Emotional decisions may override logic

On the other hand, investing via MFD + CFP channel:
-- You get 360° advice
-- Holistic goal mapping
-- Portfolio reviews and rebalancing
-- Timely switches and corrections
-- Behavioural coaching to stay disciplined

Regular plans through CFP-guided MFDs are smarter long-term options.

Luxury Purchase and Depreciation

Cars are depreciating assets.
The moment it leaves the showroom, value drops 15–20%.
After 5 years, value drops over 50%.
There is zero resale appreciation.
This is different from an investment.

You must not fund a depreciating item by reducing appreciating investments.

Car Loan Option Evaluation

If you consider using a car loan:

Loan EMI for Rs.80 lakhs will be around Rs.1–1.2 lakh monthly
That is 20% of your income
Add insurance, fuel, service, etc.
Total monthly cost may touch Rs.1.5 lakh
That’s 25–30% of income. Very steep.

Loan EMI reduces your savings capacity.
It adds pressure during market downturns or income dips.

Avoid loans for lifestyle purchases.

Tax Efficiency Concerns

If you redeem mutual funds to buy the car:

Check if gains are long-term or short-term
LTCG above Rs.1.25 lakh is taxed at 12.5%
STCG is taxed at 20%
Add surcharge and cess as applicable

So, you may lose additional lakhs to tax.
This is another reason to preserve investments.

Recommendation: Defer or Rethink Purchase

Right now, buying the Mercedes EQB is not ideal.
It will reduce your liquidity and disturb your asset mix.
Focus on balancing your portfolio first.
Increase mutual fund investments through a CFP.
Allocate for lifestyle only from surplus gains.

This way, you buy luxury, but not at the cost of your future.

Final Insights

Your net worth is high, but flexibility is low.
Don’t equate wealth with free spending.
First, make your money truly work for you.
Build liquidity, not just asset value.
Let investments grow and generate more passive income.
Only then use part of surplus for luxury items.
Delayed gratification brings more financial security.

You are on a strong base. Let us make it even stronger.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment