POSTED BY December 15, 2010 12:29 pm COMMENTS (14)ON
I WANA SECURE FAMILY INSURANCE AND CHILD EDUCATION AND RETIREMENT BY INVESTING IN NEXT 5 YEARS. RIGHT NOW I HAVE 4.5K MIP WITH RELIANCE AND 5.5 K SIP WITH HDFC TOP 200 JUST STARTED LAST MONTH. DON HAVE ANY INSURANCE PRODUCT. I AM WORKING AT ABROAD.
I WANA UTILIZE MY NEXT 5 YR FOR SECURING THE SAVING AFTER 20 TO 25 YRS.
WHERE AND HOW I SHOULD INVEST/PLAN SO I CAN ACHIEVE MY GOAL?
ANY FEEDBACK.COMMENTS ARE MOST VALUABLE
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14 replies on this article “SECURE FUTURE BY NEXT 5 YR”
I have trust on CFP and ok with his planning. No doubt about it but i learnt and heard on this site only that it is always better to do research from our side. It is also good for our personnel knowledge and that is very much true that jagoinvestor.com is a bundle of informations and knowledge. perfect platform for rising any of our doubt. so i also raised my query.
Manish, so far i am not looking for any paid services. I am in interest of the maximum knowledge sharing that you are doing fantastically.
In that case its great 🙂 . Always better to double check !
Can you tell me what is the reason you are having second thoughts about the suggestions given by the CFP you hired ? It is not a good thing that you hired some one you actually do not trust ?
Sorry, did not know that.
I have updated my profile! 🙂
BDW FORUM POLICY SAYS:
Please do not leave your qualification, email or phone number in comments section, UNLESS AND OTHERWISE ASKED BY SOMEONE. :):):)
Thanks a lot for your valuable input
MIP is a predominantly debt plan with a small amount of equity (5-15-25%).
1. Over a long period of time, it provides the “relative safety” (due to debt) and “relative kicker return” (due to equity). So it is a better return product over a longer period of time. Good for people who in retirement need better than pure debt returns.
1. No guarantee of safety. In short term, can give negative returns (worst for 1 year, HDFC MIP LT -13.6%, Reliance MIP -2%).
2. Over long period of time, provides much less return than equity products. So it is not the best for growth also.
You need a product which gives you the highest growth, so that why MIP do not work for you.
Giving personal ID is against the forum-policies. 😉
Thanks Ramesh for your valuable inputs. if you can send me your personnel id , sure i would like to have second thought on planning.
Why you said MIP is not a good tool? can you please eloborate on that? i adopt it as need low but safe investment.
Well, if you have asked, then I thought you were having second thoughts about the plan from your CFP. 🙂
1. 20k per month * 5 years = about 12 lakhs principal over 5 years. Putting it in an all-equity plan, calculating at 11% per annum for 25 years will give you about 1.6 crores. Considering a 25 year inflation rate of 5% per annum (=3.38). The value of that 1.6 crores will be about 48 lakhs in today’s values.
So do you think that 48 lakhs is sufficient for your retirement + your children’s educational expenses + other expenses (like marriage of your children, etc).
If you think that money is very less, you either need to increase the amount per month or increase the duration of accumulation.
2. Putting money in MIP does not make any sense. There is no security and no long term growth.
3. KISS. Get term insurance + contingency fund. Rest put in an all-equity portfolio (2-3 equity funds). Get term insurance duration according to the number of years you plan to work. If you only plan to work for 5 years, get a 10 year plan (minimum possible, I suppose) and so on. Do not go for any complicated plans / funds (includes ULIPs).
Hope this helps you.
What is that KISS funda. I heard the same in any one of blog on this site earlier too.
KISS= it is an acronym for “Keep it Simple Stupid!”. the simpler a strategy/plan is, the simpler is to implement it. That also means that avoid complex things!!
@) sharing a plan here means i am not following the plan by CFP :)):)):))
well i have 20k per month for complete planning.
My questions was different but. how much i need to save in next 5 years if i need to have required educational expense ,retirement after 20 years.
It will be a good thing, if you can tell the proposed plan of your CFP. Then, it will be easier and better. 🙂
Also, how much are you planning to invest?
IN ADDITION I ALREADY CONTACTED CFP. AND ABOVE MF INVESTMENT IS PART OF THE PLAN EXECUTION. JUST CAUSE OF THE NEW ULIP RULES I AM IN DIELMA TO SELECT TERM+MF OR ULIP.
ALSO THIS IS THE PLATFORM WHERE I CAN GET MORE OPTIONS AND THEN I CAN RETHINK ABOUT THE PLAN SUBMITTED BY CFP.
REGARDS TO ALL