Hi Sree, I have been regularly reading & referring to your published articles, must say they are very helpful. Do keep up the good work.
I am based out of India & need your insights on my investment goals and the funds I'm looking to align for them,
Goal Current Value Target Years Funds
Emergency Funds 2-5 Lacs 3 Debt/Balanced Funds (Need your inputs on which funds to invest in)
Second Home 10 Lacs 5 Debt/Balanced Funds (Need your inputs on which funds to invest in)
Child's Education 10 Lacs 14 ICICI Prudential Banking and Financial Services Fund - Direct Plan - Growth - 4000 pm
Child Post Grad 10 Lacs 18 Reliance Growth Fund - 3000 pm
Child Marriage 15 Lacs 18 DSP BlackRock Micro Cap Fund - 3000 pm
Retirement Max possible 22 Franklin India Prima Fund - 8000 pm
SIP already running - Birla Sun Life Frontline Equity Fund - Direct Plan - Growth - 2000 pm
Kindly suggest if any changes need to be made & recommended funds for the above short/medium goals.
3 Answers
Hi,
Thank you for following my blog posts!
1 - Emergency Funds : Suggest you not to consider investing in Balanced funds.
Kindly read :
https://www.relakhs.com/emergency-fund-importance/
2 - Is Permanent Disability risk covered under your Term plan/rider?
3 - You may consider enhancing your Health insurance cover after some time ;
Kindly read :
https://www.relakhs.com/top-up-health-insurance-plans-super-top-up-india/
4 - May I know the time-frame for all the mentioned Goals ??
5 - Suggest you to go through below articles and you may revert to me with your analysis ;
https://www.relakhs.com/retirement-planning-calculator-3-easy-steps/
https://www.relakhs.com/calculate-kids-education-goal-amount/
https://www.relakhs.com/investment-planning-investment-plan/
https://www.relakhs.com/list-of-best-investment-options-schemes-in-india/
Great articles Sree, thanks for sharing them! I am happy to get very good knowledge from them & have definitely gained a wealth of information, especially on the estate planning & super health top up tips.
1. Emergency Funds - After your suggestions, I'll be investing a substantial amount every month say 20-30k in Savings AC, Online Bank FDs/RDs, Liquid/Ultra short term Debt funds. This will be in addition to the existing liquid savings already accumulated. The idea of the 2 emergency funds is also very good, will put that also in place.
Goal period - within next 12 months
Amount - 2 Lacs (will keep on adding to it as much as possible) 2. Yes, permanent disability cover is also there as an add-on rider to my term policy. 3. My health insurance renewal is due in the next 3 months, I will add a super top up cover to it (for 5-10 Lacs) & also look to increase the existing cover during renewal. 4. The time frame for all goals was mentioned in my initial post :) had also created an excel for financial planning with all details as indicated on one of your articles. Details are given below (All mutual funds will be direct growth & 1 or 2 for each goal, 3-4 good funds total & avoid fund overlap)
Please suggest if these are ok or any better options. Goal - Emergency Funds
Amount - 2 Lacs
Years - 1
Funds - Bank Savings/FD/RD/Liquid Debt Funds/Ultra Short Debt Funds Goal - Second Home Down Payment
Amount - 10 Lacs (FV 16 Lacs)
Years - 5
Funds - Balanced - Equity Oriented Funds (ICICI Pru Balanced Fund / HDFC Balanced Fund) Goal - Child Graduation
Amount - 10 Lacs (FV 29 Lacs)
Years - 14
Funds - Equity Banking Funds, Equity Small/Mid/Multicap Funds (ICICI Pru Banking and Fin Srvcs Fund - Direct G / SBI Magnum Multicap / Reliance Small Cap Fund (G) / Mirae Emerging Bluechip Fund (G)
SIP - 4000 pm Goal - Child Post Graduation
Amount - 10 Lacs (FV 39 Lacs)
Years - 18
Funds - Reliance Growth Fund / Principal Emerging Bluechip
SIP - 3000 pm Goal - Child Marriage
Amount - 10 Lacs (FV 24 Lacs)
Years - 20
Funds - DSP BlackRock Micro Cap Fund / Reliance Small Cap Fund
SIP - 3000 pm Goal - Retirement
Amount - 1.5 Cr (FV 4.3 Cr, estimating 50k monthly expenses for 25 years)
Years - 22
Funds - Franklin India Prima Fund / Reliance Growth Fund
SIP - 8000 pm 5. Have read all the given articles at least twice, and bookmarked all of them for future reference :) I will keep referring to these & newer articles as and when made available from your side.
Goal period - within next 12 months
Amount - 2 Lacs (will keep on adding to it as much as possible) 2. Yes, permanent disability cover is also there as an add-on rider to my term policy. 3. My health insurance renewal is due in the next 3 months, I will add a super top up cover to it (for 5-10 Lacs) & also look to increase the existing cover during renewal. 4. The time frame for all goals was mentioned in my initial post :) had also created an excel for financial planning with all details as indicated on one of your articles. Details are given below (All mutual funds will be direct growth & 1 or 2 for each goal, 3-4 good funds total & avoid fund overlap)
Please suggest if these are ok or any better options. Goal - Emergency Funds
Amount - 2 Lacs
Years - 1
Funds - Bank Savings/FD/RD/Liquid Debt Funds/Ultra Short Debt Funds Goal - Second Home Down Payment
Amount - 10 Lacs (FV 16 Lacs)
Years - 5
Funds - Balanced - Equity Oriented Funds (ICICI Pru Balanced Fund / HDFC Balanced Fund) Goal - Child Graduation
Amount - 10 Lacs (FV 29 Lacs)
Years - 14
Funds - Equity Banking Funds, Equity Small/Mid/Multicap Funds (ICICI Pru Banking and Fin Srvcs Fund - Direct G / SBI Magnum Multicap / Reliance Small Cap Fund (G) / Mirae Emerging Bluechip Fund (G)
SIP - 4000 pm Goal - Child Post Graduation
Amount - 10 Lacs (FV 39 Lacs)
Years - 18
Funds - Reliance Growth Fund / Principal Emerging Bluechip
SIP - 3000 pm Goal - Child Marriage
Amount - 10 Lacs (FV 24 Lacs)
Years - 20
Funds - DSP BlackRock Micro Cap Fund / Reliance Small Cap Fund
SIP - 3000 pm Goal - Retirement
Amount - 1.5 Cr (FV 4.3 Cr, estimating 50k monthly expenses for 25 years)
Years - 22
Funds - Franklin India Prima Fund / Reliance Growth Fund
SIP - 8000 pm 5. Have read all the given articles at least twice, and bookmarked all of them for future reference :) I will keep referring to these & newer articles as and when made available from your side.
Hi,
Appreciate your analysis and efforts to plan your finances.
Kindly understand that Sector oriented funds have high risk profile, nothing wrong in having them in portfolio but you may give lower allocation (amount) to them.
I believe that there are better alternative to Reliance Growth. Also, kindly note that Reliance small cap has very high standard deviation (returns can be very volatile).
DSP fund has temporarily suspended new investments in their Micro cap fund. Franklin Smaller cos fund can be considered.
You have given higher preference to mid/small cap funds, thats fine for longer period investment time-frame. But you may allocate some amount to multi-cap and balanced funds for each long term goal.
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Hi Sree, just to add some details missed out earlier, hope these help.
PPF Savings till date – 12 Lacs
Bank FDs – 2 Lacs
Sukanya Samriddhi – Just started one for my daughter, will be investing 12k annually
Equity Stocks – 1 Lac, invested in HDFC Ltd, getting to know it a little better before venturing further
Standalone Health Insurance – Apollo Munich Easy Health Floater Standard for family, cover of 2 Lacs per member
Term Insurance – 1 Cr cover – HDFC Life Click 2 Protect Plus with double sum assurance accidental cover + disability rider