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| Capitalstars Investment Advisor |
Since Bhardwaj was in a high-paying foreign job for several years, he managed to build a big portfolio without loans but returned to India a few years ago. His goals include building an emergency corpus, saving for his children’s education, weddings.
Manish Bhardwaj is an engineer and gets a salary of Rs 1 lakh a month. He stays in his own house, in Pune, with his homemaker wife and two children, aged seven and nine. Besides the Rs 1 crore self-occupied house, he has a plot of land worth Rs 1 crore, taking the total worth of property to Rs 2 crore.
He has no liabilities and his portfolio of Rs 3.2 crore includes real estate, equity worth Rs 60 lakh in the form of mutual funds and stocks, the debt of Rs 6.6 lakh in the form of insurance value, and cash of Rs 55 lakh.
Since Bhardwaj was in a high-paying foreign job for several years, he has managed to build a big portfolio without any loans, but returned to India a few years ago and is now based here. His goals include building an emergency corpus, saving for his children’s education and weddings, and an early retirement within five years.
The financial planning team from Fincart suggests that Bhardwaj build a contingency corpus of Rs 4.2 lakh, which is equal to six months’ expenses, by allocating a portion of his cash. This should be invested in a liquid or an ultra short-term fund. For his first child’s education goal in nine years, he needs Rs 47.1 lakh and can build the amount by allocating his cash of Rs 18 lakh and putting it in a hybrid fund. For the second child’s education in 11 years, he wants to amass Rs 57.06 lakh and can invest Rs 18 lakh of cash in an equity fund.
For the wedding of the first child in 17 years, Bhardwaj wants to amass Rs 53.8 lakh, which can again be achieved by allocating cash of Rs 8 lakh and investing it in an equity fund. For the second child’s wedding in 20 years, he wants Rs 32 lakh and can do so by investing Rs 5 lakh in an equity fund. Finally, for his early retirement in five years, he needs Rs 1.7 crore. For this, he will have to assign his plot of land, mutual fund corpus, stocks, and remaining cash. He does not need to make any fresh investment for the goal.
For life insurance, Bhardwaj has a traditional plan of Rs 2.5 lakh, for which he is paying a monthly premium of Rs 917. Fincart suggests he continue with it and does not recommend any term plan for him as he will be retiring in the next five years. As for health insurance, Bhardwaj has a family floater plan of Rs 10 lakh, for which he is paying a premium of Rs 2,500 a month. Fincart suggests he continue with it and does not recommend any fresh medical plan.