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POSTED BY ON February 17, 2013 2:11 pm COMMENTS (5)
Hi,
Please let me know where can I invest more? or
Do I need to correct any of my exsiting investment.
Age – 27
Marital status – Married
Children – No
House – Rent free
Investment –
1. ULIP (4200 p.m.) Since March 2009
2. Mutual Fund SIP (ICICI pru bluechip focused equity growth) (2000 p.m.)
3. Interest less investment – 2000 p.m. for 1 year
4. Misc FD – Rs15,000 (1 yr) , Gold Coin 10gm
Liability – Home Loan EMI 7296 , Loan remaining 6.15 Lakhs, ROI 11.25 p.a. DHFL
Total Cash in hand every month – Rs 57,000
Monthly Expenditure – Rs30,000 (4200 (ULIP),7296(EMI),2000(MF),2000,15,000(Misc exp)
I am planning to withdraw money from ULIP once 5 years are ocmpleted and
pay for the home loan. Is it okay to do that ?
First target/priority is to finish the home loan.
I dont want to invest for long.
Thanks,
Narinder
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Suggest, first you shift your home loan to some other financial institution with lower interest rate say 10% or 10.25% (check DHFL should not charge the pre-payment charge once you shift from them). Lower RoI will reduce your tenure with almost same EMI or consider increasing your EMI to reduce tenure, which means lesser interest.
Buy an online term plan for about 50-75 lakh now and later add one more plan depending on your annual income, to cover your life and protect your family from any unfortunate event.
Look for a mediclaim insurance for yourself and family.
Continue investing in MFs, choose 1-2 more scheme and invest via SIP.
Dear Narinder, if you die tonight, How ‘ll your wife & family survive?
Thanks
Ashal
but dont you think paying unnecessary interest on home loan is simply a wastage where as I can close it with the money in hand (which i will be getting from ULIP surrender) ? and more over it will be a big peace of mind….
If your emi was very high then yes. Instead of closing if you invest as much as you can now and don’t touch whatever has compounded so far, you utilize time and maximize effect of compounding and create more wealth. The point is, down the line, salaries will increase and inflation will bring down the ‘value’ of your EMI (in-spite of rate fluctuations). So it is not a bad debt to have.
Instead of closing it one shot, you can reduce your loan burden by making periodic payments like bonuses.
There is no need for your to close your home loan in a hurry. Your EMI is quite low. Focus on your goals. List them down and start investing methodically.
Calculate your insurance needs and get pure life term insurance. Make sure you have own mediclaim in addition to your employers cover. Have contingency amt for about 6-12 months monthly expenses.
Stop the interest less investment and invest in MFs
You can use your ULIP like a balanced mutual fund. So you could continue investing in it as the monthly prem. is quite small. Allocate it for a financial goal