Planning for an Apartment, required planning help

POSTED BY RV ON March 31, 2013 7:03 pm COMMENTS (8)

Hi All,
I would like your astute inputs for me to plan my finances in a correct direction.

I’ve gone through some of the tips and recommendations you’ve provided and it looks to me that I too would find a good advise.

Below is my current portfolio:

  1. Salary 60k
  2. PF: Accumulated amount around 6.2 lacs
  3. Investment in UTI Adv Series-I 5k
  4. RD 4k for 1 year, maturing in July 2013
  5. FD 20k maturing in April 2013
  6. Shares 30k just going OK
  7. LIC 59340.00 p.a. basically on Jeevan Anand
  8. Montly Expenses 35k including Credit Cards etc including the RD
  9. Zero Loans/Debts
  10. Dependents: Mother – 69 yrs and Wife. Health cover: 15k pa standard one + 2 lacs for mother + company for myself and spouse.

Wife portfolio

  1. Earning: 20k
  2. Saving: 7k pm
  3. PF: 1 lac unclaimed, still at PF office since 2 years.
  4. LIC 5,300 quarterly (Money Back and Jeevan Anand)
  5. Expense: 12k, misc spending on house 1k sometimes

Please advise, I know I’m on basic low yield savings hence looking for a better options with good returns. Presently in April 2013 I’m planning to open another RD for 25k hence required your advise before I commit on this RD.

Thanks in advance,

8 replies on this article “Planning for an Apartment, required planning help”

  1. Dear RV, please read my earlier reply again, Out of 80K combined income 47K expenses i.e. nearly 60% of your income is too much. You do not have room for opting a loan as your other goals ‘ll suffer.

    Thanks

    Ashal

  2. Dear RV, combined income for both of you = 60+20 = 80K

    Combined mly investment = 35+12 = 47K that means, your effective cash surplus is 33K only. For a 30L Rs. loan for next 20Y term, how ‘ll you service loan, save for your retirement, save for your kids’ education & career…… As & when there is increase in family size, what about wife’s income?

    So many questions to you & too little answers from you. In your last reply, life insurance is enough to you. May I know how did you come to know this conclusion? Any calculation or just your imagination?

    Thanks

    Ashal

    1. Dear RV, there is an typo error – Please read – Combined Mly expenses in place of mly investment.

      Thanks

      Ashal

      1. RV says:

        Hi Ashal,
        I just did one calculation in Moneycontrol, and it said Insurance is fine. Anyways, combined with my profile and wife’s profile can you please guide a better way to control the expenses and save.

        I’m here for you guys guidence since I know I’m missing somewhere and dont want to do the same and face crisis.

        Please advise

  3. RV says:

    Thanks,
    I though of RD as I may probably go for an apartment next year hence it would give me around 3 lacs + as return and also the Gold + some help from In-laws would amost come up to 12 lacs for Downpayment.

    Next which mutual fund would you suggest, since myself and my spouse dont have any debts currently therefore either one of us can plan to buy 5k MF every month. Presently she is investing the same 5k on Chit fund.

    Life insurance, I guess we have sufficient as I stated above in my question. + my company also covers around 4 lacs for myself and wife.

  4. The title of your post and content seem different!

    RDs are for short term investments typically for less than 3 yr requirements

    The future direction depends on your goals.
    1. determine how much life and health insurance you want and get them.
    Keep emergency fund equal to 6-12 months expenses
    Pure term life insurance only
    2. List the goals down. Keep retirement as goal no 1. use calculators and find out
    3, Align your assets to your goals.

    If the apartment is for living and you are on rented accommodation now you can go for home loan provided
    your emi is only 30% of take home
    you are able to reasonably save for most of your goals
    your salary will increase in future to make up for goal savings
    if you are going for joint loan and intend to have children in future you cannot depend too much on wifes earnings.

    Start emergency fund, get life and health insurance and then list your goals and take it from there.

    You can then evaluate if you really need the Jeevan anand and other investments

    1. RV says:

      Thaks for the reply,
      Would you advise me to invest 25k every month on RD or there are any better options that would return a good sum in 1 year.

      I’ve started looking for an apartment for living, my range would be between 40 lacs to 45 lacs only anything more would be more commitment.

      Would you suggest me the option for emergency fund. Currently my savings are too less. Somewhere around 2 lacs and some 4 lacs worth of Gold ornaments.

      1. Invest in the RD only if you want it for sure in a year. dont use it for long term investments
        You could also invest in a liquid fund like quantum liquid. tax-wise that is better but RD should do

        Try to reduce you home loan emi as much as possible.
        if the 4 lacs of gold ornaments can be encashed then keep aside 6-12 monthly expenses aside and use the rest for house down payment

        You need to start thinking about mutual fund investments and life insurance and list your goals. without this there can be no direction

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