I am 42 and am engaged in the stationery business. My wife is 38. We have a daughter aged 13. My retired father is dependent on me. I have supplied to companies and the receivables are pending for more than six months. It has blocked my working capital and I am borrowing at a higher interest rate. Can I sell my jewels to raise ₹10 lakh to close the loan? I have Mediclaim for ₹3 lakh.

Saravanan

Since your cost of borrowing is high, it would be prudent to pledge gold rather than sell. Since you can avail loan for 75 per cent of the gold, you can raise up to ₹7 .5 lakh and your borrowing cost will come down to 12.5 per cent and EMI to ₹29,300.

Education : To meet the goal you ought to save ₹13,230 every month to earn 12 per cent return. Alternatively you can start with ₹12,180 and step up the savings by 10 per cent over the next three years. Earmark systematic investment and recurring deposits. Once you close the loan you can increase your savings by ₹7,200.

Marriage : Earmark insurance proceeds for this goal, it will account for ₹7.55 lakh. For target of ₹22.5 lakh in 10 years, invest monthly ₹9,755, earning 12 per cent return.

Retirement : Considering ₹20,000 as your monthly expenses, after 23 years it will be ₹94,800, if inflated at 7 per cent. At retirement, you need a corpus of ₹2.05 crore and it should earn inflation adjusted return of 1 per cent. To reach the target you need to save monthly a sum of ₹14,100 that earns 12 per cent return. If you are not able to reach the target, sell the plot during your retirement. Increase your medical cover by ₹2 lakh. Buy term insurance for ₹75 lakh.

The writer is financial planner and founder, myassetsconsolidation.com

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