Skip to main content

Implementation and regular review key to successful Financial Planning

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

Implementation and regular review key to successful Financial Planning

 

 


When it comes to planning finances, each family has its own unique problems. While some may face a cash crunch, others don't know what to do with their cash surplus. The Sangoi family belongs to the latter category. Parin (46) and Charmi (42), based in Mumbai, are working with a foreign firm. The couple has a daughter, Nehal (16) and a son, Kush (12). Parin is in the high-income bracket, can save 1/3rd of his monthly income and these savings can be properly channelized into investments to meet the family's financial goals.

The present situation

Their take-home monthly salary is Rs 1.99 lakh. Their monthly household expenses are Rs 71,000, another Rs 26,000 goes towards monthly insurance premium, and home loan EMI is Rs 51,000. Their monthly cash surplus is Rs 51,000.

The goals

For the Sangois, the financial goals are Nahal and Kush's education (between 7 and 10 years from now) and their marriage (10 and 14 years), a vacation (14 years), donation to NGO (14 years) and retirement (11 years). The total corpus they need for all these add up to about Rs 5.1 crore.

The solution

Parin has an individual health cover of Rs 8 lakh and a family floater of Rs 3 lakh. He also has a personal accident cover of Rs 90 lakh and Rs 10 lakh for his wife. In addition, Parin also has a critical illness cover of Rs 3 lakh.


Before the Sangois start investing for their goals, based on the human life value concept, Parin must get adequate term cover of Rs 1.57 crore for himself and Rs 15 lakh for Charmi. They were advised to discontinue the family floater policy because of the high premium they were paying. Instead, they were advised to opt for individual health covers of Rs 5 lakh each for Parin and Charmi, and Rs 3 lakh each for the children. Parin was advised to reduce his personal accident cover to Rs 50 lakh and get a critical cover of Rs 10 lakh. Since they had spent a good amount on the interiors of their house, they were advised to get a comprehensive content householder insurance. Parin also had Rs 4.21 lakh in sweep-in fixed deposits to take care of unexpected expenses, which was sufficient.


Parin's top priority is to fund the children's education. For Nehal's education, he will need Rs 20.46 lakh in 7 years, for which their stocks, mutual funds and insurance are likely to grow to Rs 10.36 lakh. For the balance, he has to invest Rs 8,500 per month through systematic investment plans (SIPs). For Kush's education, he will require Rs 27.23 lakh in 10 years, for which his gratuity and the child plan would together give about Rs 18.92 lakh. For the balance, they would need to invest Rs 4,300 per month.


The Sangois also plan to build a Rs 39.34 lakh kitty to fund Nehal's marriage, in 10 years. For this Charmi's gold jewellery has been aligned to grow at 10% annually to Rs 5.18 lakh by then. For the balance, they have to invest Rs 17,500 per month. And for Kush's marriage they will require Rs 51.57 lakh. Parin's gratuity and part of his EPF are likely to grow to Rs 44.14 lakh. For the balance, the target investment is Rs 2,400 per month.


The couple plans for a vacation to cost of Rs 12.89 lakh. For this, Parin has to invest Rs 4,100 per month. The family also has a noble aspiration to donate about Rs 26 lakh to an NGO working to promote girl child. They need to invest Rs 8,200 per month for this for the next 14 years.


Finally, for a comfortable retired life, the couple will need a corpus of Rs 3.31 crore in 11 years. For this Charmi's EPF and gratuity are likely to grow to Rs 21.29 lakh and Parin's balance EPF, superannuation, an endowment plan and secondary property are utilized. There is a marginal shortfall for which Parin needs to do an investment of Rs 6,000 per month.


All the monthly SIPs put together add up to Rs 51,000, which can be taken care of from their monthly surplus. The Sangois have a doable plan in place. All they need to ensure is the implementation part and review it every year to ensure that it's on track.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

All about "Derivatives"

What are derivatives? Derivatives are financial instruments, which as the name suggests, derive their value from another asset — called the underlying. What are the typical underlying assets? Any asset, whose price is dynamic, probably has a derivative contract today. The most popular ones being stocks, indices, precious metals, commodities, agro products, currencies, etc. Why were they invented? In an increasingly dynamic world, prices of virtually all assets keep changing, thereby exposing participants to price risks. Hence, derivatives were invented to negate these price fluctuations. For example, a wheat farmer expects to sell his crop at the current price of Rs 10/kg and make profits of Rs 2/kg. But, by the time his crop is ready, the price of wheat may have gone down to Rs 5/kg, making him sell his crop at a loss of Rs 3/kg. In order to avoid this, he may enter into a forward contract, agreeing to sell wheat at Rs 10/ kg, right at the outset. So, even if the price of wheat falls ...
Read more

Zero Coupon Bonds or discount bond or deep discount bond

A ZERO-COUPON bond (also called a discount bond or deep discount bond ) is a bond bought at a price lower than its face value with the face value repaid at the time of maturity.   There is no coupon or interim payments, hence the term zero-coupon bond. Investors earn return from the compounded interest all paid at maturity plus the difference between the discounted price of the bond and its par (or redemption) value. In contrast, an investor who has a regular bond receives income from coupon payments, which are usually made semi-annually. The investor also receives the principal or face value of the investment when the bond matures. Zero-coupon bonds may be long or short-term investments.   Long term zero coupon maturity dates typically start at 10 years. The bonds can be held until maturity or sold on secondary bond markets.
Read more

Mutual Fund MIPs can give better returns than Post Office MIS

Post Office MIS vs  Mutual Fund MIPs   Post office Monthly Income Scheme has for long been a favourite with investors who want regular monthly income from their investments. They offer risk free 8.5% returns and are especially preferred by conservative investors, like retirees who need regular monthly income from their investments. However, top performing mutual fund monthly income plans (MIPs) have beaten Post Office Monthly Income Scheme (MIS), in terms of annualized returns over the last 5 years, by investing a small part of the corpus in equities which can give higher returns than fixed income investments. The value proposition of the mutual fund aggressive MIPs is that, the interest from debt investment is supplemented by an additional boost to equity returns. Please see the chart below for five year annualized returns from Post office MIS and top performing mutual fund MIPs, monthly d...
Read more

Benefits Of Repo Rate & CRR Rate Cut On Consumers

  How Reduction In Repo Rate & CRR Affects Customers Finally  RBI announced slashing of repo rate by 25 basis points (bps ) and cash reserve ratio (CRR) by 25 bps which industry experts believe will fuel the economic growth to some extent. Although experts were expecting higher rate cut this year. This lowering of the rate cuts has taken place for the first time in nine months. Now let's see how reducing the repo rate (defined in economic term as the rate at which RBI lends money to the banks) relates to the following individuals and sectors: Banking:   Lowering of repo rate directly reduces borrowing costs of a bank. Banks in turn reduces interest rates on different types of loans such as home, auto, business etc. Similarly trimming down of CRR allows banks to unlock money for lending to the customers i.e. with 0.25 rate cut banks are estimated to lend more than INR. 17 Crores. Consumers:   Lower repo rate does not necessarily benefit existing loan borrowers but new loan se...
Read more

NRI Corner: The process of remittances abroad

The process of remittances abroad, and back, is cumbersome. Here’s how you can wade through without hassles Approach The Right Place Outward remittances or the process of sending money abroad is governed by many regulations. In India, outward remittances are made mainly through banks. At the outset, you need to remember that you just cannot trust any individual or a financial firm with the responsibility of sending your money. Experts recommend that you should always try to choose a bank with an international footprint, which will make your job easier. Choose Mode Of Transfer The next step is to choose the mode of transfer. One option is to get a Foreign Currency Demand Draft ( FCDD ). This draft will be denominated in foreign currency and should be drawn in favour of the recipient/ beneficiary. The beneficiary does not necessarily need to have an account with the same bank. The other option is to send money via wire transfer. Do not be puzzled if the bank official uses the word SWIFT ...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now