Dear Sreekant,
First of all Thank you very for responding to all my queries even on FB chat, I owe you :)
My sister wanted to start saving of 10000 rupee / month for her daughters higher education/marriage. Her daughter age is 9 years and 3 years so she has 10 and 15 years time frame.Could you please help in few query
1) How much % should be divided among both girls future should it be 6500 and 3500 or 6000 / 4000 ?
2) Should it be better and safer to invest in ULIP plans like "Bajaj Aliance Goal Assure" where they offer tax free income under (10)(10)D and tax benefit under section 80 C along with free insurance + zero preminum allocation charges ?
3) If answer to question 2 is no, which mutual fund I should I select for long term investment, should be be complete equity or should I go for balance fund with (60, equity and 30 debt)
Thank & Regards
Ashish Shrivastava
3 Answers
Dear Ashish,
Thank you for being a loyal blog reader!
1 - For approximate calculations on how much to save for the Kids' higher education goals, suggest you to kindly go through below article, you may share these articles to your Sister as well ;
https://www.relakhs.com/calculate-kids-education-goal-amount/
2 - Personally, I prefer to investing in Equity mutual funds to ULIPs for long term goals.
Bajaj Aliance Goal Assure, has Policy Adiministration charges (Rs 400 pa inflating at 5% pa) Fund Management charges (around 1.25% for Equity funds).
This plan do charge Mortality charges, but they are returned to the policy holder on maturity date. Let's not forget that there is no free lunch in this world. If the insurer is returning this amount means they would have built-in the premium rate accordingly.
The defined portfolio strategies that this plan offers may not work out and not advisable to opt for.
I have highlighted the pros and cons of MFs Vs ULIPs in my latest article, suggest you to kindly go trough it and revert to me if you have more queries on this topic ;
https://www.relakhs.com/mutual-funds-vs-ulips-budget-2018/
3 - If you are convinced with my views, you/your sister can consider opting for a combination of a diversified fund + Balanced fund for these goals. In case, she can afford to take little more risk, can add one Mid-cap fund as well.
Hello Sir,
Thank you !!
1) I’ll ask her to go with mutual fund instead of ULIP plan.
2) Actually she is saving money for marriage so she has almost 15 years and 20 years respectively and amount should be divided 6000 for 15 years and 4000 for 20 years
3) We are ready to take risk and I believe in long term say 15 years or 20 years risk is minimum.
4) Could you please suggest best mutual fund for investment purpose also how much should I divided into each suggested MF.
Thanks & Regards,
Ashish Shrivastava
Hello Sir,
Also how is the NJ MARS option for selection of fund. As a brief summary MARS automatically select top performing fund and assess it's return in 6 month and if required switch fund.
Do you see MARS as good investment option ?
Thanks & Regards
Ashish Shrivastava
Also how is the NJ MARS option for selection of fund. As a brief summary MARS automatically select top performing fund and assess it's return in 6 month and if required switch fund.
Do you see MARS as good investment option ?
Thanks & Regards
Ashish Shrivastava
Dear Ashish,
I am not aware of NJ mars facility.
However, anything which is automatic, lets stay away. Not advisable to churn a portfolio frequently, especially for long-term goals.
She allocate higher amount say Rs 6k to the goal which is 15 years away and Rs 4k for the goal which is 20 years away.
She can have two portfolios withe two diversified funds and two mid-cap funds (I am not considering balanced funds, as time frame is long term and you are willing to take risk now.)
Ex :
Birla Equity fund + Franklin Prima fund
Franklin High Growth Cos fund + Mirae Emerging bluechip fund (20 year goal).
Related articles :
https://www.relakhs.com/best-mutual-fund-scheme-risk-ratios/
https://www.relakhs.com/mutual-fund-portfolio-overlap-comparison-tools/
https://www.relakhs.com/200-day-moving-average-dma-mutual-funds/
Dear Sir,
Thank You Sir for response
Following is the link for MARS overview, if you are interested in knowing more about it
http://www.njwebnest.com/esaathi/index.php/nj-mars
Thanks & Regards
Ashish Shrivastava
Please login or Register to submit your answer