Financial Planning: Malhar Majumder

I am 52, and have recently sold my business, the proceeds from which I want to invest. My children are in their final years of school. So, my priority is to plan for their future . I also have two commercial properties, which I have not let out. I have two life insurance policies, for which I pay Rs 72,000 annually. Please help.
Estimate the annual cash outflow for your children’s education and marriage. Also, as they would go to colleges soon, you can take risks in investing for college goals. However, marriage funds can be invested in a mix of bonds and stock-based mutual funds. You may refrain from investing further in real estate. You should plan for effective utilisation of your properties. In case you have retired, you need to take care of your retirement needs, too. I strongly recommend you take proper advice from a financial planner.

My investments leave me with little cash every month. I earn Rs 1 lakh a month, of which I invest Rs 25,000 in three mutual funds (two equity diversified funds and one infrastructure fund). These investments are for my son’s higher education and a house. I have kept Rs 15,000 in a recurring deposit for my parent’s healthcare and other emergencies (if any). And, I put Rs 15,000 in an endowment plan, spend Rs 35,000 on household expenditure and son’s school-related expenses. How do I free up some cash?
You are earning Rs 1 lakh and spending Rs 90,000 (Rs 25,000 in mutual funds, Rs 15,000 in recurring deposits, Rs 15,000 in endowment and Rs 35,000 for household expenses). I assume you are earning Rs 1 lakh after taxation. Therefore, careful tax planning like investing in instruments approved under Section 80C of the Income Tax Act and buying health insurance policies (for your parents and yourself) would release cash. If you need more cash, you may consider stopping your endowment policy and taking a pure term plan of proper coverage.

The writer is director, Gliese Consulting. Views expressed are his own. Send your queries at yourmoney@bsmail.in