Financial planning: Gaurav Mashruwala

I am a 34-year-old unmarried man. I have a few investments, but mostly in fixed deposits (Rs 1 lakh over three years), and two unit-linked insurance plans (Ulips). I am planning to purchase a property in Mumbai as an investment, and will take a loan of Rs 50 lakh. My father also wants to buy a plot (worth Rs 4 lakh) from a construction company in Uttar Pradesh. The company said we could build a house on the plot and sell it back to them, if we wish to later. Is it a good investment? Also, I keep Rs 5 lakh at home for any emergency, and have saved Rs 4 lakh for medical expenses. Is it necessary to maintain a separate corpus for both?
From the available information, we recommend the following: Do not hold such a large amount of cash at home. It should be deposited in a bank. At present, in India, Ulips are expensive. However, it is assumed that these are purchased with some goal in mind. Else it is advisable to re-look and make the necessary modifications. Please note that there may be tax implications if the Ulips are discontinued abruptly.

Real estate investments are illiquid and immovable in nature. The process of investing is also cumbersome. Besides, it is difficult to maintain and liquidate the property in crisis. If the property is being purchased for self-consumption, it is justifiable. Else it is not advisable to have an additional property. In the absence of complete information, it is assumed that the construction company has a strong financial background and titles to the property are clear. Otherwise, it can be risky. Lastly, it is good that you have created a separate corpus for medical expenses. It should be over and above the health insurance cover. Having a corpus in lieu of health insurance is not advisable.

I have been working in Bahrain for the last four months. My monthly income is Rs 60,000. I want to finance my higher studies on my own. As I have no responsibility at present, I can invest up to 80 per cent of my income. I want to invest in instruments, which would earn me high yield over the next two years. I am willing to invest in high-risk instruments. What options can I consider to fulfil my goal?
Meaning of risk in investment parlance means accepting the probability of losing the money without any hesitation. I am not sure whether you are willing to lose 80 per cent of your income every month. If your goal for higher education is two years away, choose debt as an asset class. If funds are required in India, remit money to the country and choose an appropriate debt instrument. However, if your higher education is likely to be in any other country, since you have the option of investing across the globe, preferably deploy the funds in the country where they will be utilised.

The writer is a certified financial planner. Send your queries to yourmoney@bsmail.in