Your Financial Plan

I am 40, working in the private sector. My wife, 38, is a home-maker. My elder son is in class 6 and younger son is 5 years old. My father is gifting me a house, so I am not looking at realty investment. I can take risk. Please suggest investment options.


Making investment moves late in life impacts one in many ways. But a prudent approach helps. For the children’s post-graduation fees, use the maturity proceeds of insurance. For the balance, opt for an education loan or if your income increases substantially invest for the goal.

Education: Your elder son’s graduation will cost ₹15 lakh in 2022 if inflated at 7 per cent. Invest ₹14,800 a month which should earn 11 per cent. Since you are new to equities, start with an asset allocation of 50:40:10 (equity mutual fund, debt and gold) and if they earn 15:7:7 per cent return respectively, your portfolio return will be 11 per cent. To earn 7 per cent return on debt, invest in short-term and income funds. For younger son’s graduation you need ₹22.5 lakh over the next 12 years. Invest ₹7,600 a month.

Retirement: The present monthly expenses of ₹20,000 will be ₹67,000, if inflated at 7 per cent. At retirement you need a corpus of ₹1.91 crore and it should earn 1 per cent return over and above inflation to support you till you turn 85.Your EPF kitty will be ₹80.6 lakh, if EPF continues to earn 8.5 per cent return. To meet the shortfall of ₹1.11 crore you need to invest ₹18,600 monthly. With your father gifting a house, you save the rental.

The writer is a SEBI-registered investment advisor and founder,

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