Plan for the children

POSTED BY R ON June 19, 2013 2:11 pm COMMENTS (5)

I work for a salary of Rs 1,25,000 per month after tax deductions.
I have two kids studying in Class V & Class I. 
I have 16 more years in service
My total monthly expenses are as follows
Household        25,000
Home loan        19,000    (Still 11 yrs left & the total loan left over is 16,00,000)
Personal loan    12,000    (Still 3 years left & the total loan left over is 3,50,000)   
Gold Loan          10,000    (Still 2 years left)
Local chit          25,000   (This amount on maturity is planned to buy asset like plot, land etc.,)
Credit card        20,000
Education            7,000
Total                1,18,000
My annual expenses are as follows
Term Insurance  (1 Crore)   35,000 (Still 20 years)
LIC (13 lacs)                         65,000 (Still 15 years for maturity worth 13 lacs)
ULIP (5 lacs)                         50,000 (Still 7 years left for maturity worth 5 lacs)
Medical Insurance               15,000  (4 lacs policy for family)
PPF                                        20,000 (Still 8 years left for maturity, present worth 2 lacs)
My assets are as follows
2 BHK Flat worth 35 lacs i
1500 sq.ft plot worth 20 lacs
1200 sq.ft plot at a village worth 2 lacs
Apart from the above I don’t have any other saving or assets
I had not invested anything in Mutual funds or equities as I don’t know the ABC about it
My immediate plan is to go for car loan car worth around 8 lacs to buy a car.
Kindly help me know how to make a plan for my kids education, marriage and for my retirement life

5 replies on this article “Plan for the children”

  1. Dear R, as 2 people have already advised you to look for paid advices/planning, what’s your take?

    Do you still want free lunch? If yes, here it goes. Sell your Gold. Surrender all old LIC policies. Close the PL from Surrender amount. Please sell the Village plot & use the same as base capital for your retirement. Please sell the other plot also & divide it 50-50 for retirement & children goals.

    P.S. – As I’m giving it free of cost to you, please use your own brain to decide what’s the best in your interest?



  2. I second Ashish’s advice. A paid financial planner will cost you 10-15K. For someone with your net worth and salary this should hardly be an issue. This is the best way to secure financial peace.

  3. Ashish Garg says:

    Dear R,

    I feel you need services of a paid financial planner to reach your goals. Your current portfolio is completely in Real Estate and nothing else. With 3 loans running concurrently and other expenses, a financial planner would be able to help you.

    As far as I can understand, you should look at making your LIC policy paid up and increase your Term insurance by another 50-75L at least using any online term plan. Try to close loans which are eating your money in form of interest – Personal and Gold Loan.

    With so much of real estate already in your portfolio, you are still thinking of putting your proceedings from chits into real estate. I think you need to look beyond real estate. I am not saying immediately start investing in MF / Equity etc. but start gaining knowledge about these without loosing any further time.


    1. R says:

      Thank You Mr. Ashish, Please suggest me the best funds for children’s education & marriage

      1. Ashish Garg says:

        Dear R,

        I have a child who is 4 years old. I have not taken any child plan / policy. I have opened a PPF account and investing money in it regularly. Apart from this I have been using SIP in Franklin India Bluechip and HDFC Prudence Fund for his education and other future requirements. I have insured myself using term plans so that in case of any unfortunate thing happens to me, family gets enough to survive.

        The idea is, whenever I realign my portfolio in future (by redeeming some part from equity), I will move the money to PPF to safeguard.

        I have gained good knowledge through queries shared here and have aligned my investments accordingly, looking at various suggestions.


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