Let Your Dreams Come True With Mutual Funds

Pankaj Ladha 

Nivesh Guru 

 Dreams when turned into goals are achievable. With clearly, :PaidContentStart] defined goals all your dreams can be achieved within the set timeline by consistently working towards it, says Nivesh Guru Pankaj Ladha. 

Background 

Pritam, Vineeta and their two sons, Vedant aged 21 years and Parth aged 16 years lives in Kota, Rajasthan. Pritam is a practising Chartered Accountant with an experience of 24 years. He is also a passionate author and an international trainer. Vineeta on the other hand is a home maker. Being from the commerce background Pritam has made some of his financial goals, but is not sure how to reach them. 

Present assets 

Couple already has Rs 55 lakhs in Fixed Deposits which they plan to properly allocate for their goals. Till now they did not have confidence on other investment options therefore they invested in FDs only. 

Other than this, the couple has Real Estate worth Rs 1 crore which is kept as an emergency fund. 

Goals : I really feel happy when someone has already set their goals. A family typically has the following goals in mind – 

 They have a present monthly expenditure of around Rs 80,000 a month. They want to sustain the same till their retirement. Pritam is presently 45 years old. He plans to work till 70 years of age and has agreed to plan for retirement with a life expectancy of 85 years. Roughly a corpus of Rs 8 crore is what we have mutually agreed upon post calculating what will suffice our purpose. 

 The couple would be requiring another Rs 40 lakhs for higher education of their son Parth at around 4 years from today. 

 They would be requiring roughly Rs 40 lakh for Vedant’s marriage which will happen around 7 years from today and another Rs 50 lakh for Parth’s marriage which will happen 12 years from today. 

 They also aspire to buy a car worth Rs 30 lakhs 5 years from today. 

 Also, they aspire to buy a flat worth Rs 60 lakhs around 7 years from today. (Inflation assumed at 7% per annum) 

Financial goal plan by Nivesh Guru Pankaj Ladha 

Firstly for retirement, the couple will invest Rs 25,000 per month in equity mutual fund with targeted returns of 15% since the time horizon is over 15 years. Here we will be choosing growth-based aggressive mutual fund SIPs to meet our target. 

For Higher education, the couple will use higher education loan (Section 80 E). This will give additional benefit of deduction for the investor. 

For flat, Pritam will save Rs 26000 per month in a value-based fund majorly having a diversified portfolio with expected returns of 12% per annum. 

In all, they need to save Rs 51,000 from their current earning which is easily manageable for Pritam. 

The lumpsum of Rs 55 lakhs present in FD will now be properly allocation based on their goals. We will allocate 20 lakhs for Vedant’s marriage and 15 lakhs for Parth’s marriage in a Balanced mutual fund with our set expected return of 11%. And 20 lakhs, we will invest in a debt fund for the goal of car with an expected return of 8% annualised.

Insurance – Pritam will take Rs 2 crore (plus 2 crore accidental cover) of term insurance and Rs 10 lakh health insurance (family floater). 

This planning will help the couple meet their financial goals easily with their current earnings. The couple mainly needed the guidance to help them sail through and effectively move from traditional FD investment to mutual funds. Change is a bit difficult but reaps sweet results. 

Happy investing!