First time investor – Financial Planning – Help please

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Q & A Forum › Category: Financial Planning › First time investor – Financial Planning – Help please
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vicky asked 10 years ago
Hello Sir, I have read some of your post and have been very helpful. Thanks for your wonderful service. I am a 30 year old engineering professional. I got married 2 years ago and have a 9 month old girl child. I have my mom and dad depending on me fully. My financial goals as of now are as follows.
  • 2 children college education requirements : after 18 years: 50 lakhs
  • 2 children wedding requirements : after 25 years: 1 crore
  • Retirement requirements: after 30 years: 3 crore
  • Recurring vacation requirements : every year: 2 lakhs
  • Recurring education requirements: every year: 3 lakhs
  • I have 5 lakhs as emergency fund as of now.
I have questions compiled under 3 sections below.
  1. I) Insurance: I have 3 life insurance plans enrolled by my parents without knowing the features and benefits 5 years back. Those are
  2. Money back policy 25 years – sum assured 5 lakhs
  3. Endowment assurance policy term 25 years – sum assured 2 lakhs
  4. Jeevan anand plan 25 years – sum assured 5 lakhs
I have the following question regarding the insurance.
  1. Do you see any need for additional insurance for me?
  2. What should I do for my baby, wife and parents in terms of insurance?
  3. ii) Lump sum investment: I currently have 40 lakhs with me to invest as a lump sum. I have been reading lot of stuff for the past 1 month educating myself on the mutual funds.
  4. How should I invest this in mutual fund? My risk profile is low to medium with this investment
Iii) SIP: I currently earn 1 lakh per month. I have an individual house for which I am paying monthly loan of 30K. I have to do this for 2.5 more years. My monthly expenses would be around 40k. I can save around 30 thousand a month.
  1. How should I invest the amount as SIPs given both my long term and short term goals?
Thanks for all your help!
1 Answers
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Sreekanth Staff answered 10 years ago
Hi, Thank you for your kind words! Appreciate your clear vision about your financial goals & objectives. Are you planning the finances for your un-boring kid too? Insurance:
  • Consider buying a Term plan with adequate life cover, sum assured of minimum 10 times of your annual gross salary.
  • Consider surrendering all your existing Traditional plans. The life cover provided by these plans may not be sufficient and at the same time they may not give you decent returns on maturity too.
  • Buy a stand-alone Personal Accident Cover with Temporary & Permanent Disability benefits.
  • Is your wife an earning member of your family?
Kindly go through the below articles; Do you (self, spouse & parents) have adequate health cover? Investments: Kindly note that it is not advisable to limit yourself as low or high risk investor. It all depends on your financial goals (goal amounts), time-frame & your existing/future income potential. If you have high goal amount targets (long term goals) then you got to take risk and invest in equity oriented investment options. With you current disposable income of around Rs 30k pm, you have to plan how much you can save/invest to meet your high priority goals like Retirement / Kid's education goals. Use the calculators in the below articles to arrive at approx figures to reach your goals and you may then revert to me with your analysis;
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