Need advice on my existing Investments & Financial Planning

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Q & A Forum › Category: Financial Planning › Need advice on my existing Investments & Financial Planning
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ursnandu asked 9 years ago
Hello Sreekanth, I'm a very loyal reader of your blogs and made some good decisions (I think) based on reading. Currently I have following investments:
  1. Mutual Funds (via FundsIndia based on your blogs):
  2. Reliance Small Cap Fund (G)- since past 23 months, current value- Rs 72000 (investment Rs 58000)
  3. Franklin India Prima Plus (G)- Since past 12 months, current value-Rs 19368 (Investment Rs 18000)
  4. UTI Equity Fund (G)-Since past 12 months, current value Rs 18887 (Investment Rs 18000)
 
  1. PPF (Via SBI)- From past 24 months (Current Value Rs 1.1 lakhs)
 
  1. LIC Jeevan Anand (Started from May 2011 with yearly Rs 13284)
 
  1. Term Insurance (PNB Metlife Mera term plan- taken for 40yrs, no riders only base for 1 crore)
Following Obligations:
  1. Home Loan (from Bajaj Allianz paying Rs 31020 from Aug-2015) 20 years term.
  2. Personal Loan (from Bajaj paying Rs 8801 from Feb-2016) 5 years term.
  3. Gold Loan ( 3lakhs)
Following Future plans:
  1. Build House in the above mentioned property (Rs 80 lakhs estimate) by 2025
  2. Reconstruct house at native (Rs 8 lakhs estimate) ASAP
  3. Need medical insurance for my mom (she is 59yrs old, no health issues as of now)
Kindly review my entire scenario and suggest what best can be done to improve. Regards, Nandeesh
4 Answers
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Sreekanth Staff answered 9 years ago
Dear Nandeesh, 1 - If you have adequate life cover through term plan, you may consider making Jeevan anand a PAID-UP policy. Kindly read: https://www.relakhs.com/how-to-get-rid-off-bad-life-insurance/ 2 - Do you have Personal accident insurance cover and health insurance for self & family? 3 - Suggest you to clear Personal loan at the earliest. 4 - Do you maintain an Emergency fund? 5 - You may get individual medical cover to your mother, do not postpone it.  Kindly read: https://www.relakhs.com/health-insurance-parents-senior-citizens/ https://www.relakhs.com/best-health-insurance-comparison-websites-portals/ 6 - Keep a track of UTI fund's performance, fund manager has been changed. The other two funds are fine. 7 - May I know if you are married and have dependents?  
ursnandu replied 9 years ago

Hello Sreekanth

Thanks for the reply.
1. The personal accident insurance is provided by my employer for Rs 35 lakhs. Isn’t it sufficient?
2. Health insurance is also provided by my employer
3. Yep, I am planning to close the personal loan ASAP.
4. No, I don’t maintain an emergency fund ?
5. The UTI is the bad performing fund. Since I finished 1year I can close it without an exit load.
6. Yes I’m married and have a young kid of 1.5yrs

ursnandu replied 9 years ago

Hello Sreekanth

Thanks for the reply.
1. The personal accident insurance is provided by my employer for Rs 35 lakhs. Isn’t it sufficient?
2. Health insurance is also provided by my employer
3. Yep, I am planning to close the personal loan ASAP.
4. No, I don’t maintain an emergency fund ?
5. The UTI is the bad performing fund. Since I finished 1year I can close it without an exit load.
6. Yes I’m married and have a young kid of 1.5yrs

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Sreekanth Staff answered 9 years ago
Dear Nandeesh, 1 - Advisable to have a stand-alone PA cover, independent of your employment.  Read : https://www.relakhs.com/best-personal-accident-insurance-policies-in-india-details-comparison/ 2 - Kindly get one stand-alone mediclaim policy. 3 - Start saving for your emergency fund, corpus can be around 3 to 9 months of your monthly expenses. You can consider Fixed deposits, Cash, small portion in Liquid funds / Arbitrage funds. Read : https://www.relakhs.com/list-of-best-investment-options-schemes-in-india/ 4 - UTI fund is not performing well, but you may give it some more time before switching out. Else, you may consider SBI bluechip fund. 5 - Kindly go through the articles listed inside below article, especially the ones on Kid's education and retirement planning.. https://www.relakhs.com/personal-financial-planning-articles-list/    
ursnandu replied 9 years ago

Is it sufficient if I continue the current investment trend and investment amount per month to meet my goals listed above?

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Sreekanth Staff answered 9 years ago
Hi, Did you go through Kid's education goal planning & Retirement planing articles, as suggested? Did you try checking the available calculators?  
ursnandu replied 9 years ago

Hello Sreekanth,

I did check the kids education goal and retirement planning articles and the outcome is as follows:
1. For Kids Education: I put Rs 6 lakh as current cost and since my kid is 1.5yrs it takes around 16yrs to get him in college. hence assumed the inflation to be 8% and expected rate of returns as 12% it showed an SIP of Rs 3500 is needed. I will plan for this.
2. Regarding the house construction plan in 2025: I put the expectation of annual return on investment (in percent, CAGR) as 10%. Do you think this is good return assumption?

In addition I would like to know below:
While choosing my mom’s heath insurance: Is there any such plan which covers travel insurance alongwith health insurance? This is needed because my mom will be in USA for 6 months and INDIA 6 months.

Kindly guide.

Thanks,
Nandeesh

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Sreekanth Staff answered 9 years ago
Dear Nandeesh, 1 - Expectation of 10% RoI is reasonable and realistic for a time-frame of around 8 to 9 y ears. 2 - Yes, some travel insurance plans do cover health related expenses too. But kindly go through the terms & conditions, sub-limits, policy wordings etc., You may check out 'coverfox.com' to compare Travel insurance plans.
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