How can I reach my various financial goals

I had started three SIP's last June of INR 2000 each comprising of Franklin India Smaller Companies Fund, HDFC Balance Fund and ICICI Value Discovery Fund (all Direct plans). From this month onwards, I have increased each SIP amount to INR 2200. My investment goals are: 1) I have an one year old daughter for whom I would require 7 lacs in say 5 years time for school admission etc.? 2) I would require INR 29 lacs in 17 years time for her higher education? 3) Current monthly expenses are around 81k which includes home loan EMI of 28k which would end in 15 years time; considering these I would need to build a post retirement corpus assuming I work till 60 years (current age 36). I have considered inflation of 6.5% for the first two goals. Please suggest on how to go about the above goals; is my portfolio and the SIP amount good enough; I assume not; then what would be a suitable portfolio and the corresponding SIP amount that I need to follow?

Jul 31, 2017 by Jay, New Delhi | Mutual Fund

Let us first know how much you need to save for each of the goals -

1. Rs 7 Lakhs after 5 years for school admission - Monthly savings required is Rs 8,200 for next 5 years based on assumed annual return rate of 12%

2. Rs 29 Lakhs after 17 years for higher education - Monthly savings required is Rs 4,400 for next 17 years based on assumed annual return rate of 12%

3. Retirement corpus after 24 years - Your current monthly expenses is Rs 53,000 (Rs 81,000 - Rs 28,000 home loan EMI) or annual Rs 6.36 Lakhs and you will retire after 24 years. With inflation of 5% your monthly expenses would be Rs around Rs 20.52 Lakhs per annum after 24 years. To have this amount annually you need a corpus of around 3 Crores assuming you can earn 7% return from safe investments.

How much to save to create a corpus of Rs 3 Crores after 24 years - You need to save Rs 19,000 monthly for next 24 years (assumed rate of return 12%).

Your current monthly SIPs is only Rs 6,000 and therefore, it can help you achieve only one goal, i.e. of Rs 29 Lakhs required after 17 years for your daughter's higher education.

As you can see, you need to save aggressively to reach the rest two goals. The earlier you start the better it is.

Hope the above suggestions were useful to you. Thanks for reaching out to Advisorkhoj.

View All Queries

You haven't found the answer for your queries? Do post your queries to us.
POST A QUERY