Family finances: Manjras should repay his personal loan using the FD bank


Samir and Kajal Manjra live with their children, aged 11 and 6, in their own home in Ahmedabad. While Samir is employed, Kajal is self-employed and the two report a combined income of Rs 1.05 lakh per month. Their portfolio includes real estate worth Rs 1.45 crore (two properties, one of which is independent), equity worth Rs 12.2 lakh in the form of mutual funds and ‘Ulips, a debt worth Rs 11.37 lakh in the form of PPF, EPF and fixed deposit, and Rs 55,000 in cash.

They also have a personal loan of Rs 3.05 lakh for which they pay an NDE of Rs 36,006. Their goals include building an emergency corpus, saving for their children’s education and marriage, and their own retirement.

Financial planner Pankaaj Maalde suggests they start by building up an emergency corpus of Rs 3.06 lakh, equivalent to six months of spending, allocating money and part of the fixed deposit. This must be invested in a liquid fund. Maalde also suggests that they pay off their expensive personal loan with the remaining fixed deposit amount.


Cash flow


Then they want to save Rs 43 lakh for the education of their older child in eight years. For this, they can allocate Ulips and start a SIP of Rs 5,000 in diversified equity funds. For higher education in 11 years, they will need Rs 52.5 lakh and can allocate mutual funds for the same.

They will also have to start a SIP of Rs 12,000 in diversified equity funds. For the education of the second child, they will need Rs 56 lakh and Rs 69 lakh in 12 and 15 years, respectively. For these objectives, they will have to start SIPs of 17,500 and 14,000 in diversified equity funds. For child marriages in 14 and 21 years old, they will need Rs 82.7 lakh and Rs 1.08 crore, and will need to start SIPs of Rs 16,500 and Rs 12,500 in equity funds. In the absence of surpluses, however, they will have to invest in them after an increase in their income.

How to invest for goals

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For retirement in 22 years, the couple will need Rs 3.4 crore and will be able to allocate their PPF and EPF corpus, as well as a property. They should also continue to pay Rs 5,000 per month to the NPS to achieve the goal.

For life insurance they have two Ulips worth Rs 15 lakh and two term plans of Rs 1.05 crore. They should continue with these and buy a Rs 30 lakh futures plan for Kajal for Rs 333 per month. For health, they have Rs 4 lakh insurance from Samir’s employer, a Rs 5 lakh family floating plan and a complementary plan of Rs 10 lakh. Maalde suggests that they continue with these. They should, however, choose a Rs 25 lakh accident disability plan for Samir, which will cost him Rs 333 in monthly premium.

Insurance portfolio

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Financial Plan by Pankaaj Maalde Certified Financial Planner

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