I am 39 , and my monthly income is Rs 2.8 lakh. My monthly expenses amount to Rs 80,000; the rest is surplus . My dependents are wife and two children.

Investments: I have invested in plots and its current market value is Rs 50 lakh. In PPF, I have Rs 10 lakh. There is a parental property worth Rs 50 lakh. I own gold worth Rs 20 lakh. Besides, Rs 5 lakh is paid as single premium in a pension plan, which will be completing five years in Jan 2014. I already have two cars and am planning to buy a third car for personal use, from my savings. I have an FD for Rs 6 lakh and two RDs where Rs 50,000 will continue to be paid monthly till April 2014; its present value is Rs 3 lakh. My bank balances will be Rs 20 lakh after buying the car. Since I have no time and don't understand equity investments I have invested in debt. Suggest good investment avenues as I can take investment risks. My family is covered by group health policy for Rs 5 lakh.

Goals:

I have twin daughters, six years old, studying in class one currently . For their education and marriage, I need Rs 1 crore.

In my employment I have no pension benefits. I wish to retire at 46, how much do I need to accumulate, if I live till 80 years? Post retirement my monthly expenses will be Rs 50,000 in present value. I wish to construct a house worth Rs 1 crore. — Kishor Varma

You have stated that you can stomach risks , yet, you have parked your investments in debt and gold. To fulfil your goals you should have proper asset allocation. Also, you may need to work for no less than 10 more years.

Education: It may be too early to predict the actual costs for your children's the higher education. But going by the current popular trend if your daughters study engineering, the present cost will be Rs 10 lakh each. If the cost is inflated at seven per cent, after 11 years, the total cost of education for both of your daughters would be Rs 42 lakh.

If you save monthly, a sum of Rs 18,300 for next 120 months you can easily reach the target.

For your daughters' marriages we have not factored gold, since you have already accumulated it. We peg the total cost of marriages at Rs 25 lakh present value . If you inflate the expenses at 7 per cent, in 18 years it will be Rs 84.45 lakh. Since you are going to work only for another ten years to meet your goals, you need to save monthly a sum of Rs 21,363 for the next 120 months and if you earn 12 per cent return, the accumulated value will be Rs 49.2 lakh.

Till 2030, invest maturity proceeds of Rs 49.2 lakh in debt investments that yield post tax return of seven per cent.

Retirement: Post retirement, the Rs 50,000 you need now will be Rs 98,360 .To meet your monthly income till 80, you should have a retirement corpus of Rs 2.81 crore after factoring your PPF. For the corpus to sustain till your life expectancy, your investment should earn one per over and above the inflation. You need to save a monthly sum of Rs 1,22,500 with a return of 12 per cent till 49.

House: Constructing a house without diluting existing investment will be a difficult task. Since you plan to work for a limited number of years, to reach your goals you need to save more . With limited resources and shorter tenure you will find it difficult to service a loan of more than Rs 28 lakh. You can utilise your FD and saving account balance to purchase a property. Still you may need an additional Rs 45 lakh. If you are not planning to construct in the existing plot, you can sell that to build a house worth Rs 1 crore.

Investment strategy: To reach the investment return of 12 per cent, you need to invest 60 per cent of the portfoio in equity, preferably through mutual fund. Your equity investment should earn 15 per cent return and the balance 40 per cent investment in debt should earn post tax return of 8 per cent. Of the equity investments, allocate 60 per cent to mid and small cap funds and rest to large caps.

Insurance: You need to take a term insurance for Rs 4 crore to protect your your financial goals. Purchase four Rs 1 crore policies for a ten year tenure.

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