Financial planning: Malhar Majumder

I, 24, am working for two months. I earn Rs 35,000 pm. I do not have any dependent. My monthly expenses are Rs 15,000-Rs 20,000. The rest is saved. I also do not invest. I want to buy a car in six months (expected Equated Monthly Installment (EMI) is Rs 7,000-Rs 8,000), and save for a laptop worth Rs 60,000. How can I achieve this?
You have short-term goals. Freeze them now. Weigh each goal in terms of monetary aspect. Also, each goal should have priority and commitment. All this will pave a well-defined investment path.

My husband, 42, and I, 36, together earn Rs 60,000 pm. Our employer has given a home loan (EMI, Rs 5,000, 10 years). We earn Rs 11,000 from the home on this. In the past year, we invested Rs 4.5 lakh (monthly, Rs 38,000) in equity funds. Also, we have in PPF Rs 7 lakh, EPF, Rs 15 lakh, fixed deposit (maturing November), Rs 20 lakh. My husband has a term plan of Rs 20 lakh (single premium) and a Ulip (annual premium, Rs 83,200).
Our goals are:
a) Buying a car (Rs 7-10 lakh) in two years, on a Rs 5 lakh loan
b) Buying another house worth Rs 50-75 lakh in 3-4 years, partly on loan
c) Saving for 13 year old son’s higher education (Rs 30 lakh)
d) A retirement corpus of Rs 2 crores; we are eligible for pension
Do we need to rejig our portfolio to meet the goals?
Your portfolio is 80 per cent debt heavy. This is not helping the networth to grow at a fast pace. You, however, are right in investing big in equity mutual funds. But, if you take two more loans, due to the EMI, your potential to invest will grossly decrease. This may happen in the next 2-4 years. The cost of higher education (in 7 years) will also negatively impact wealth-creation. So, immediately get into a 50:50 debt-to-equity portfolio for faster growth.

Also, re-consider the plan on buying a house. Buy only after evaluating if you will be able to save enough for other goals, namely, retirement and child’s education.

The writer is a certified financial planner.