Your Financial Plan

I am 50 and my wife is 43. We are both self-employed. I have a 22-year-old daughter and a son who is 15. My father is dependent on me. My daughter plans to do MBA. Is it a good idea to take a bank loan? I have medical cover for ₹5 lakh for my father and for my family.


Your monthly surplus is ₹50,000 but you need to invest ₹94,800 every month to reach all your goals. But if you are ready to sell the plots for retirement and daughter’s marriage, then it is possible to reach all the goals without too much difficulty.

However, once all your children’s needs are met, you can save the surplus to meet your retirement goal.

Education: You must allocate more to debt investment since this is a short-term goal. In such a portfolio, earning post-tax return of 10 per cent is possible. To reach ₹10 lakh in two years save monthly a sum of ₹37,800. For your daughter’s education, use up ₹2 lakh from your fixed deposits and take an education loan of ₹4 lakh.

Retirement: Since you live in your own house, you and your spouse might spend around ₹25,000 per month. The present value will be ₹69,000 if inflated at 7 per cent for the next 15 years. To meet the goal at 2031 you need to have a corpus of ₹1.82 crore and it should earn 1 per cent over and above the prevailing inflation.

Earmark the mutual fund for this goal and if the portfolio delivers 12 per cent at retirement it will account for ₹1.09 crore. To meet the shortfall save monthly a sum of ₹14,600 or invest ₹8,350 and increase it by 10 per cent every year till you reach the goal.

The writer is a financial planner and founder,

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