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POSTED BY ON July 10, 2012 2:50 pm COMMENTS (5)
Hi,
I graduated from engineering college in 2011 and started working in an IT firm.
I will complete 1 year coming August.
I am looking for investment plans but due to so many options, i am a little confused.
My financial profile is as follow:
Salary: Rs 54,0000 per month.
Have a Recurring acount: Rs 2000 per month (@9.25%)
Have a Fixed Diposit: Rs 25,000
Education Loan: Rs 3,20,000 remaining (Have paid Rs 80,000 so far. Currently paying Rs 10,000 per month.)
No Dependents.
I want to plan my investments for next 5 years.
Please guide me !!
Thanks
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Hi BanyanFA and Ashal
Just wanted to add that my company has a good contributory PF, Gratuity and Medical Insurance. Covers me for 10Lacs and my parents & brother for 3Lacs each.
Kind Regards,
KK
Hi Ashal,
My parents have cover plans. They have it done from me also. But as of now, i am not sure about what scheme they opted for my cover.
break up of your mly expenses:
Expenses over Home: Rs 10,000
Repayment of Loan : Rs 10,000
RD account : Rs 2,000
Miscelneous : Rs 5,000
=============================
Total : Rs 27,000
Made following declarations Under Section 80C:
5 Years of Fixed Deposit in Schedule Bank 80C : Rs 25,000 (Invested)
PPF : Rs 40,000 (Yet to Invest for 2012-13)
Repayment of Loan of higher Self education (under section 80E) : Rs 35,000
My PF amount per month: Rs 2970
I mentioned the time frame of 5 years because i had this idea of keeping the goal short for a better picture. But as you say 10 years is an ideal time frame to plan. I don’t have have any problem with that.
Since under section 80C, there is a max limit of 1Lac, and I already have 2 components (PF and FD) already running for almost Rs 60,000, should i invest PPF for 1Lac ? Because i will end up investing 1.6Lacs under 80C but only 1Lac will be considered for tax exemption.
Please suggest.
Kind Regards,
KK
Dear KK, please invest the bare minimum 500 Rs. in PPf & invest remaining amount in ELSS to cover full 1L Rs. limit of 80C. @ 27000 Rs. mly expenses & NMI of 54000 Rs. your current saving rate of 50% of your income is a healthy one.
Now is the time to go for heavy duty long term investment in Eq.
Please share your views.
thanks
Ashal
Along with what Ashal has mentioned, please take a Critical Illness cover as well.
May I also ask why have you given a term horizon of 5 years ? Can you make it to 10 years by any chance ? If that is possible, then you should start investing into Equity Mutual funds. As a thumb rule, you may want to invest minimum 25% of your savings (after expenses) into Equities for long term to get good returns.
One change which I may ask you to do is to invest into PPF instead of a RD. PPF is more tax efficient and a longer term investment option.
Regards
BanyanFA
Dear Kautuk, As you do not have any dependent, in my opinion you do not need term cover as of now. Yes Health cover should be there. Please go for a 3L policy as of now for self. In case your parents are not covered under any scheme be from their employer or from your employer, please purchase cover for them too, where you ‘ll be a proposer.
Please provide a break up of your mly expenses also to determine your saving potential.
Please do share, where you are investing as of now for that 1L Rs. limit of section 80C? What’s your PF amount on mly basis deducted from your salary?
Thanks
Ashal