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vinodkpr asked 8 years ago

Hi, First of all thank you for your blogs which are really an eye openers and educates everyone in personal finance. I am 43 yrs old salaried employee. Currently I have the following assets ,liabilities and investments. Can you suggest options to better manage my finance?

Flat in Bangalore (outstanding principal is 1.5 lakhs, loan ends in Sept 2018) - Current Flat value 68 L. Monthly rental income from flat is 23k
Newly constructed independent house ( Loan of 85 Lakhs / outstanding principal is 83 Lakhs) - Current Value 1.2 Cr. Home loan rate is 8.5 % floating, total tenure 19 years.
Residential Land ( no loan) - bought in 2003 for 6.5 Lakhs , current value is 62 lakhs. I couldn't sell it after demonotization.
Term Insurance of 50 lakhs ( ICICI Prudential)
Jeevan Saral Policy - Sum assured 5.5 L, premium paid for 11 years, total tenure is 20 years. Annual premium is 24k
Jeevan Anand - Sum assured 1 L, premium paid for 11 years, total tenure is 20 years. Annual premium is 8k
ICICI Pru Cashbak - Premium paid for 15 years, total tenure is 20 years. Annual Premium is 11 k
LIC 25 year new money-back policy with profits + acc. benefit - Sum assured 1 L, premium paid for 15 years, total tenure 25 years. Quaterly premium Rs.1600
ICICI Balanced Fund - Monthly Dividend - Investment of Rs. 2 Lakhs [ from June 2017]
Aditya Birla Small & Midcap Fund Growth-- Monthly SIP - Rs.2000 [ from June 2017]

Basically I want to know what assets/policies/investments should I sell/discontinue / surrender and where I should divert the money. Appreciate your time. Thanks, Vinod K

2 Answers

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Sreekanth Staff answered 8 years ago

Dear Vinod, 1 - You may kindly consider making all your existing Life Insurance Traditional plans (except Term plan) as PAID UP ones. Kindly read : https://www.relakhs.com/traditional-life-insurance-plan/ https://www.relakhs.com/how-to-get-rid-off-bad-life-insurance/ 2 - Re-assess your life cover requirements and if you believe that you are under-insured, can enhance life cover by buying one more term insurance plan. 3 - Do you have Personal Accident insurance and Health insurance covers? 4 - Both the Mutual fund schemes are decent ones. However, any specific reason for selecting Dividend option for balanced fund? 5 - May I know more details about your Investment goals, objectives and time-frame??

vinodkpr replied 8 years ago

Thanks Sreekanth for your quick response. I will make the traditional LIC plans as paid up.

#2. I am planning for one more term insurance ( LIC) for 50 lakhs for 18 years
#3. I have employers health insurance and motor insurance which covers personal accident insurance
#4. I took dividend option so that there is a return on a monthly basis. No specific reason
#5. My goal is to save 1 Cr at the end of 2028 and repay existing home loans. Objective is to retire from current employment by 53 years . I have a residential land which is worth 62 lakhs, I want advise on (1) whether to repay my existing home loan or (2) partly repay home loan and some part to be invested in MF/equity.

Thanks,
Vinod K

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Sreekanth Staff answered 8 years ago

Dear Vinod, 1 - Kindly do not depend entirely on Employer provided group insurance covers. https://www.relakhs.com/employer-based-health-insurance-plans-vs-individual/ 2 - Post Budget 2018 proposal, Dividend option in Mutual funds is not a great choice. https://www.relakhs.com/10-ltcg-tax-equities-budget-2018/ https://www.relakhs.com/budget-2018-ltcg-tax-funds-implications/ 3 - Retirement planning, you may kindly go through below article ; https://www.relakhs.com/retirement-planning-calculator-3-easy-steps/ 4 - Considering the low lending rates that are prevailing now and your investment-time frame, you may continue with normal EMI payments and invest additional sums in MF/Equities for your long term goals. Kindly read : https://www.relakhs.com/investing-mutual-funds-paying-home-loan/

vinodkpr replied 8 years ago

Thank you Sreekanth. Appreciate your time.