How much corpus will you need for higher education? Expert answers

It depend on how much will you be able to accumulate

I am 18 years old. My mother gave me Rs 10,000 for my 18th birthday. I want to study in the US after three years, once I have completed my graduation. What is a good investment option for me? I have read about peer-to-peer lending and the stock market. My friend, who is older than me, says I should invest in equity mutual funds.
 
Investing in the stock market is always a great idea because it definitely creates wealth over the long term. In your case, investing the money you have received will not be adequate to finance your education. It might at most help you buy your air ticket.

 
Peer-to-peer investment is basically a money-lending scheme, but from an organised and licensed platform. You get a much higher rate of return (12-18 per cent or more) than you would from a fixed deposit, but you also carry the risk of default by the borrower. It is an unsecured loan.
 

I am a 40-year-old software professional. I have around 45 mutual funds with SIP of Rs 500 in each. Is my portfolio okay?
 
Your portfolio is not okay. You should not have more than seven-eight schemes. Have one or two schemes belonging to each of these categories—large-cap, mid-cap and small-cap, and perhaps one or two sector funds. Diversification and professional management are the reasons for investing in mutual funds, but 45 funds amount to overkill. 

 
 
I live in south Mumbai in my parents’ house. I want to buy a house of my own, but I can't afford one in South Mumbai. I have a budget of Rs 40 lakh. I want to buy for tax saving and to have a holiday home. I am the only child and will inherit the South Mumbai house. What do you suggest?
 
I do not see any desperate need for you to buy a house. Tax benefits should never be the reason for investing. You should only invest if there is merit in the investment. A holiday home is like maintaining a white elephant. Invest the money you have, make profits out of it, and use that money to travel to various locations around the world. Live in serviced apartments while on holiday so that you feel you are truly in a holiday home.

 
I am 40 and my son is seven. I have been investing Rs 12,000 in equity funds for six years. I received Rs 1 lakh in December 2020 from a previous investment, which I need to reinvest. How much corpus will I need for his higher education by the time he turns 18?
 
The question really is how much will you be able to accumulate for your son over the next 11 years. You must have around Rs 12-14 lakh from your investments over the past six years. I assume you will continue investing Rs 12,000 per month in equity funds. So, my estimate is that you will be able to build a corpus of about Rs 1 crore over the next 11 years.

 
My husband recently has been posted to Belgium. I shall get a dependent visa. I make Rs 45 lakh a year. We are a double-income, no-kids household. Together we make around Rs 80 lakh a year. Now with the transfer, his salary will be around Rs 65 lakh in Indian rupees. Should I move on a dependent visa right now, or wait for a year? We also have a house that will give us a rental income.
 
Everything seems to be going well for you. There is no certainty at the moment about your income in Belgium. Your life can be comfortable with your husband’s earnings and rental income from India. You will get time to explore new possibilities there. I do not know your entire net worth. However, if you feel compelled to have more savings, then perhaps you should go to Belgium a little later.

 
The writer is director, Transcend Consulting. The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in