9 replies on this article “Financial planning required”

1. Ashal Jauhari says:

   May 15, 2013 at 7:48 pm

   Dear H M, it’s plain maths nothing else. @ 7 times cover, how much mly income can your family receive from a simple product bank FD & how much @ 15 times cover?

   Please do calculate with your own nos. & come here again. We ‘ll discuss it in detail.

   Thanks

   Ashal

   Reply
2. Ashal Jauhari says:

   May 15, 2013 at 7:20 pm

   Dear Dev, first purchase the new term cover & then only close these old policies. Once close, this 2500 Rs. mly prem. can also be diverted to pure investment.

   Regarding Term plan, please opt online plans of Aegon Religare or Aviva or HDFC or KOTAK or Bharti.

   Thanks

   Ashal

   Reply
3. Dev says:

   May 15, 2013 at 1:31 pm

   Thanks for the replies,.

   1Cr. Rs. term cover. Which policy i need to choose. LIC is trust name and but the premium is too costly. Where as i can go for other private players offering online policy.

   And also another query , can i close the all the existing moneyback/Jeevan Anand policy which cost me 31K per year. and opt for term insurance.
   Please help me to select the term insurance,

   Reply
4. Ashal Jauhari says:

   May 15, 2013 at 12:46 pm

   Dear Dev, 70K mly translates into 8.5L Rs. yly income. So 15 times of your yly income ‘ll be 1.3Crore Rs. Please adjust the value of 2nd house from it & purchase that much term cover. So you may opt roughly 1Cr. Rs. term cover. Regarding goals for retirement & Child related, please invest through SIPs in Eq MFs.

   Please start with 2 funds as of now.

   Franklin india Bluechip
   Quantum Long Term Eq.

   Please purchase adequate health cover for you & your family also.

   Out of the 10L Rs. FD, please switch at least 60% amount into Quantum Liquid fund if you don’t need the interest income. FDs are not tax friendly. Please read & use dear Pattu’s FD v/s debt fund comparator.

   Thanks

   Ashal

   Reply
   1. H M says:

      May 15, 2013 at 7:31 pm

      Hi ashal,

      Sorry to interrupt & hi jack somebody else’s question. I had a doubt what you suggested above, why do we need 15 times yearly net income as a cover for term insurance.

      I was always under the impression that a 6-7 times the yearly net income should be good enough.

      Thanks & sorry for the inconvenience this might have for others.

      Reply
5. Dev says:

   May 15, 2013 at 9:44 am

   Ashal
   My current value of 2nd home is around 25 lacs(approx).

   Free Financial Calculators ,

   Travel expense is eating nearly 14000 pm. If i retire hope the overall expenses will be comes around 20K.

   For long term investment do i need to go for Equity funds alone or Debt funds also should be there in portfolio.

   Because i have around 10L in FD already. so i believe that Debt part is sufficient and i am getting around 8k as monthly interest.

   Reply
   1. Free Financial Calculators says:

      May 15, 2013 at 11:30 am

      8K monthly on 25L property is decent I guess.

      Its a pity 14K is spent on travel. Its a necessary evil.

      Assuming you retire by 60 you will need to invest in 60% of what you can save in equity. Use EPF for debt part.

      Choose cumulative option for FDs. I guess you are in the 20% tax slab. You could consider shifting part of the 10L to debt funds for better post-tax returns.

      Reply
6. Ashal Jauhari says:

   May 15, 2013 at 7:04 am

   Dear Dev, what’s the current value of 2nd home which is earning you a rental income?

   Thanks

   Ashal

   Reply
7. Free Financial Calculators says:

   May 15, 2013 at 5:24 am

   1. you will need pure term life insurance policy.

   Use this Child planner to know how much insurance you need. You can also use it for your childrens goals

   http://freefincal.wordpress.com/comprehensive-child-planner/

   2. Even without liabilities your expenses are 40K out of 70K. Find out how much of this 40K will not be there when you are retired. Use a retirement planner and find out how much you need to save.
   My feeling is you need to reduce your expenses to accommodate all your goals.

   3. Focus on retirement. Childs education can be funded with a loan or by selling your second house (which is paying very very low rental income anyway)

   4. Start investing in a MF like Franklin India Blue Chip. Learn more about MFs and then you can add one more fund to this.

   Reply

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