Dear Sir, I am a NRI (46 years) just return and settling in India, so far my finance portfolio is cash in hand 3.5CR and asset of 4cr on land and agriculture which i know intention to sell as of now and i too start build house as to get passive income from our saving apart above, now my problem is currently we (my kids 10standard and 7 standard my wife) staying rental appartments and i have issue as i intent buy apartment and remaining put in FD but my wife refusing and makes so much decision with other people opnion to put all 3.5cr on land on industrial area...and the thing is i am so confused as she dont know anything last 20 years but once we in india all kind of thoughts she have and i cant able to make right decision and for info i am almost semi retire due to my health issue and i dont any insurance coverage , so please give guide line to follow

Ans: Thank you for sharing the details of your financial situation. I understand your goals and concerns, and I appreciate the effort you’ve put into securing your family’s future. Let's analyze your financial position and provide a comprehensive plan for your children's education, their marriage, and your retirement.

Understanding Your Financial Situation
Current Income and Assets
Monthly NRI Salary: Rs 5 lakhs
Upcoming Indian Salary: Rs 2.3 lakhs per month
Plot in Bangalore: 30x40
Active Agricultural Land: 5 acres
EPF Balance: Rs 30 lakhs
Bank Balance: Rs 10 lakhs
Sukanya Samriddhi Yojana: Rs 10,000 per month (Rs 4 lakhs in account)
Gold Jewelry: 750 grams (500 gm yours, 250 gm wife’s)
Agricultural Land (Wife’s name): 1.5 acres
Recent Stock Investment: Rs 1 lakh (wife’s name)
Current Family Expenses: Rs 1 lakh per month
Term Insurance: Rs 1 crore
Plan to Construct Home: Rs 1 crore (rent: Rs 40,000 per month)
Plan to Buy Car: Rs 15 lakhs (in less than 2 years)
Own Home in Village
Current Car: Old Santro
Financial Goals
Children’s education
Children’s marriage
Retirement corpus
Construct home and generate rental income
Purchase a car
Evaluating Your Assets
EPF Balance
Your EPF balance of Rs 30 lakhs is substantial but hasn’t been performing well. It’s crucial to reassess this investment and consider moving a portion to other instruments that may offer better returns.

Agricultural Land and Plot
Agricultural land and the plot in Bangalore are valuable assets. The agricultural land in your wife’s name has real estate potential, which can be considered for future use or sale.

Gold
Gold is a secure investment and can be used as a safety net in times of need. It’s good to have a portion of your assets in gold.

Stock Market Investment
Investing in stocks can yield high returns, but it’s also risky. Ensure you’re diversifying adequately to manage risk.

Planning for Children’s Education and Marriage
Education
Estimate Future Costs: Education costs are rising. Estimate the future costs for both your children’s education. Consider inflation and choose investments accordingly.

Investment Vehicles: SIPs in mutual funds are an effective way to build an education corpus. Diversify between equity and debt funds for balanced growth and safety.

Marriage
Estimate Marriage Expenses: Determine a realistic amount for marriage expenses considering current trends and inflation.

Long-Term Investments: For long-term goals like marriage, consider investing in PPF, Sukanya Samriddhi Yojana (for your daughter), and balanced mutual funds.

Retirement Planning
Retirement Corpus
Calculate Corpus Needed: Estimate the amount you’ll need to maintain your lifestyle post-retirement. Consider inflation and life expectancy.

Diversified Portfolio: A mix of mutual funds, fixed deposits, and pension schemes can help create a robust retirement corpus.

Monthly Contributions
Systematic Investments: Allocate a portion of your salary towards SIPs in mutual funds. Diversify between equity, debt, and hybrid funds for balanced growth and safety.

EPF and PPF: Continue contributing to EPF and PPF. They offer tax benefits and relatively secure returns.

Construction of Home and Rental Income
Construction Plan
Budget Management: Ensure the construction cost of Rs 1 crore is within your budget. Consider taking a home loan if necessary but ensure it’s manageable within your salary.

Rental Income: The expected rental income of Rs 40,000 per month will help supplement your monthly income. This can be allocated towards your children’s education or marriage fund.

Tax Benefits
Home Loan Interest: Utilize tax benefits on home loan interest under Section 24(b) of the Income Tax Act.

Principal Repayment: Avail of tax deductions on the principal repayment under Section 80C.

Buying a Car
Budget Allocation
Down Payment and Loan: Decide on the down payment and the amount to be financed through a loan. Ensure the EMI is affordable within your post-return salary.

Savings Plan: Start a dedicated savings plan for the car purchase to avoid large financial strain at the time of purchase.

Maintaining Emergency Fund
Emergency Fund
Allocate Funds: Maintain an emergency fund equivalent to 6-12 months of your monthly expenses. This ensures financial stability in case of unforeseen circumstances.

Liquid Investments: Keep the emergency fund in liquid investments like savings accounts or liquid mutual funds for easy access.

Risk Management
Insurance
Health Insurance: Ensure adequate health insurance coverage for your entire family. Consider enhancing your current health insurance plan given the rising medical costs.

Term Insurance: Your Rs 1 crore term insurance is good. Reassess the coverage to ensure it meets your family’s needs.

Diversification
Diversified Portfolio: Diversify your investments across various asset classes to reduce risk and improve returns.

Regular Review: Regularly review your investment portfolio and rebalance it to align with your financial goals and risk tolerance.

Creating a Financial Plan
Setting Clear Goals
Specific Goals: Define specific financial goals for your children’s education, their marriage, and your retirement.

Timeframes: Set realistic timeframes for each goal to help in planning and tracking progress.

Monthly Budget
Income Allocation: Allocate your income towards various expenses, savings, and investments. Ensure you’re saving and investing a significant portion of your income.

Expense Tracking: Track your expenses to ensure you stay within your budget and can allocate more towards savings and investments.

Professional Guidance
Certified Financial Planner (CFP): Consult a CFP to help create a detailed financial plan tailored to your needs and goals.

Regular Monitoring: Regularly monitor and review your financial plan with your CFP to make necessary adjustments based on changing circumstances.

Final Insights
You have a solid foundation with various assets and a good income. By strategically planning your investments and expenses, you can comfortably achieve your financial goals. Focus on diversifying your investments, maintaining an emergency fund, and seeking professional advice. This will ensure your children’s education and marriage are well-funded, and you can enjoy a comfortable retirement.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

Ans: Financial planning is crucial for achieving long-term goals, especially when you aim to fund your child's education and purchase a home. With a combined monthly income of Rs. 1.5 lakhs and liabilities of Rs. 85,000, it’s essential to strategically manage your finances. In this comprehensive guide, I will help you plan for your child's future education expenses, buying your own house, and managing current liabilities.

Assessing Your Current Financial Situation
Income and Expenses
Your combined monthly income is Rs. 1.5 lakhs. Current liabilities are Rs. 85,000, including Rs. 15,000 for car EMI and Rs. 15,000 for rent. This leaves you with Rs. 65,000 for savings and other expenses.

Investments and Savings
You are already investing Rs. 12,500 in PPF and have an emergency fund created. These are excellent financial habits that provide a strong foundation for future planning.

Prioritizing Financial Goals
Child's Education Fund
You aim to fund your child's education, particularly a doctor’s course, in 20 years. Medical education costs can be substantial, so starting early is beneficial.

Purchasing a Home
You plan to buy a house worth Rs. 60-70 lakhs in the next 4-5 years, with the help of a loan. This goal requires a significant amount of savings and careful financial planning.

Budgeting and Expense Management
Creating a Detailed Budget
Develop a comprehensive budget that includes all income sources, fixed expenses (like EMIs and rent), and variable expenses (like groceries and utilities). This helps in tracking your spending and identifying areas where you can cut costs.

Prioritizing Expenses
Prioritize essential expenses and identify discretionary spending that can be reduced. This might include dining out, entertainment, and other non-essential expenditures.

Tracking Expenses
Use expense-tracking tools or apps to monitor your spending. Regular tracking ensures that you stay within your budget and can make adjustments as necessary.

Managing Current Liabilities
Car Loan
You have a Rs. 6 lakh car loan with a monthly EMI of Rs. 15,000, planning to repay it in 2 years. Focus on repaying this loan quickly to free up funds for other financial goals.

Rent
Your monthly rent is Rs. 15,000. As you plan to buy a house in 4-5 years, continue to manage this expense while you save for a down payment.

Savings and Investments
Systematic Investment Plans (SIPs)
Consider starting SIPs in mutual funds. SIPs allow regular, disciplined investments that can grow over time. Choose funds that align with your risk tolerance and financial goals.

Diversified Investment Portfolio
Create a diversified investment portfolio, including mutual funds, fixed deposits, and other safe instruments. Diversification helps in managing risks and optimizing returns.

Benefits of Actively Managed Funds
Actively managed funds have professional fund managers who make investment decisions to outperform the market. These funds can provide higher returns compared to index funds, despite higher fees.

Avoiding Direct Funds
Direct funds require investors to manage their investments, which can be challenging without expertise. Investing through a Certified Financial Planner ensures professional management and better financial planning.

Planning for Child’s Education
Education Fund
Start a dedicated education fund for your child. Regular contributions to this fund will ensure you are financially prepared for their higher education.

Education Savings Plans
Consider education savings plans that offer tax benefits and long-term growth. Consult with a Certified Financial Planner to choose the right plan for your needs.

Systematic Investment Plans (SIPs) for Education
Utilize SIPs to build the education fund over time. SIPs offer the advantage of rupee cost averaging and the power of compounding, making them ideal for long-term goals.

Planning for Home Purchase
Saving for Down Payment
To buy a house worth Rs. 60-70 lakhs, save for the down payment, typically 20% of the property value. This requires disciplined saving over the next 4-5 years.

Home Loan Planning
Research home loan options and choose one with favorable terms. Look for low-interest rates, flexible repayment options, and minimal processing fees.

Loan Eligibility and Repayment
Ensure your credit score is good to qualify for a home loan. Plan your EMI payments so that they are manageable and do not strain your finances.

Long-term Financial Planning
Retirement Planning
Start planning for retirement early. The earlier you start, the more time your investments have to grow, ensuring a comfortable retirement.

Retirement Funds
Invest in retirement-specific funds like the Public Provident Fund (PPF) or Employees’ Provident Fund (EPF). These funds offer long-term growth with tax benefits.

Health and Life Insurance
Ensure adequate health and life insurance coverage. These protections are crucial for safeguarding your family’s financial future in case of unforeseen events.



Your commitment to saving and planning for your family’s future is admirable. Balancing current liabilities while planning for significant future expenses shows great financial discipline.


Managing finances while supporting a family and planning for the future can be challenging. Your proactive approach to financial planning is commendable and will benefit you in the long run.

Practical Steps for Implementation
Regular Financial Reviews
Conduct regular reviews of your financial plan. Adjust your budget and investments based on changes in income, expenses, and financial goals.

Professional Guidance
Engage a Certified Financial Planner to help you create and manage your financial plan. A CFP provides expert advice, ensuring your financial decisions align with your goals.

Family Involvement
Involve your spouse in financial planning. A collaborative approach ensures that both partners are on the same page and can work together towards common goals.

Final Insights
Balancing current liabilities with long-term financial goals requires careful planning and disciplined execution. By creating a detailed budget, prioritizing expenses, and making strategic investments, you can manage your finances effectively. Start early with your child’s education fund and retirement planning to ensure you meet these goals comfortably.

Engaging a Certified Financial Planner ensures you receive professional guidance tailored to your unique situation. Your dedication to your family’s future and financial well-being is commendable. With the right strategies and support, you can achieve your financial goals and secure a prosperous future for your family.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Assessing Your Current Financial Situation
Income and Savings
Your combined monthly take-home income is Rs. 2 lakhs. Your current savings include:

Mutual Funds: Rs. 85 lakhs
Public Provident Fund (PPF): Rs. 18 lakhs
Employees’ Provident Fund (EPF): Rs. 32 lakhs
Other Investments (FD, Savings, Shares): Rs. 25 lakhs
Your monthly savings distribution is as follows:

SIP in Mutual Funds: Rs. 75,000
PPF: Rs. 18,000
EPF: Rs. 25,000
You live in a rented house with a rent of Rs. 14,000 per month.

Evaluating the Decision to Buy a New Flat
Current Housing Situation
Living in a rented house at Rs. 14,000 per month is relatively affordable, especially given your high monthly income. Renting provides flexibility and lower maintenance costs compared to owning.

Financial Impact of Buying a New Flat
Purchasing a new flat would involve a significant financial commitment, including a home loan, maintenance costs, property taxes, and other associated expenses. This would reduce your investable surplus and potentially impact your ability to meet your financial goals.

Comparative Analysis: Rent vs. Buy
Renting: Offers flexibility, lower upfront costs, and avoids long-term debt.
Buying: Provides stability and potential appreciation in property value but requires a large financial commitment and ongoing expenses.
Long-term Financial Goals
Target: Rs. 15 Crores by Age 60
To achieve your target of Rs. 15 crores by age 60, you need to focus on maximizing your investments' growth while maintaining a balanced risk profile.

Current Investments and Growth Potential
Mutual Funds: Your Rs. 85 lakhs in mutual funds can grow substantially with continued SIPs and market performance.
PPF and EPF: These provide stable, long-term growth with tax benefits, contributing to your retirement corpus.
Other Investments: FDs, savings, and shares add diversification but should be reviewed for optimal growth potential.
Investment Strategy
Enhancing SIP Contributions
Continuing and potentially increasing your SIP contributions will leverage the power of compounding. Focus on a mix of equity and debt funds to balance growth and risk.

Recommendation: Consider increasing your SIP by a percentage each year to keep pace with inflation and maximize returns.
Diversification and Rebalancing
Ensure your portfolio is diversified across various asset classes to minimize risk and optimize returns. Periodically review and rebalance your portfolio to stay aligned with your financial goals.

Recommendation: Include large-cap, mid-cap, and multi-cap funds for equity exposure. Balance with debt funds for stability.
Utilising Tax-efficient Investments
Maximize your contributions to tax-efficient instruments like PPF and EPF. These not only provide stable returns but also offer significant tax benefits.

Recommendation: Continue maximizing your PPF contributions and ensure your EPF contributions are optimized.
Emergency Fund Management
Maintaining a robust emergency fund is crucial. Your current Rs. 25 lakhs in FD and savings can be used to cover unexpected expenses.

Recommendation: Keep at least 6-12 months of living expenses in easily accessible liquid assets.
Estate Planning and Insurance
Life and Health Insurance
Ensure adequate life and health insurance coverage for your family, especially considering your elder son's needs. This will protect your family's financial stability in case of unforeseen events.

Recommendation: Opt for a comprehensive health insurance plan and term insurance for sufficient coverage.
Estate Planning
Create a comprehensive estate plan, including a will, to ensure your assets are distributed according to your wishes and your family is taken care of.

Recommendation: Consult a legal expert to draft a will and set up any necessary trusts.
Education and Future Planning for Children
Special Needs Planning
Given your elder son's Down syndrome, consider creating a financial plan that ensures his long-term care and support.

Recommendation: Look into setting up a special needs trust and explore government schemes and benefits available for children with disabilities.
Education Fund for Younger Son
Start a dedicated investment plan for your younger son's education. This can include child-specific mutual funds or education-focused investment plans.

Recommendation: Allocate a portion of your monthly savings towards an education fund.
Final Insights
Given your strong financial position and disciplined saving habits, you are well on your way to achieving your long-term goals. However, buying a new flat at this stage might not be the best financial decision if it significantly impacts your investment capacity.

Focusing on growing your investment portfolio and maintaining a balanced, diversified approach will help you accumulate the desired Rs. 15 crores by age 60. Ensuring adequate insurance coverage and planning for your elder son's special needs will further secure your family's future.

Stay disciplined with your investments, periodically review your portfolio, and make adjustments as needed to stay on track. Consulting with a Certified Financial Planner can provide personalized advice and help optimize your financial strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Considering that you are already employee of a bank and can get better interest rates I recommend you go ahead and invest in the property.

Both of you are earning which is positive because even if major part of your income goes towards loan repayment you have back up for regular expenses and PPF/NPS/SSY investments.

Retain that 7 Lac as your emergency fund. Add to it so as to cover 8-10 months of expense coverage.

Surely you have group health cover but consider having a separate personal family floater cover which comes in handy during job switch and any unexpected medical need arises.

I am sure you both have adequate term life cover.

All the best!!