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Let's Talk Money Team

Your queries have been answered by our expert Tejasvi Mohanram, CEO, Rupeepower.com

Q 1) Nitin Kumar

(37 year old, plan to save
20K pm)


First and foremost, you need
to get a life insurance cover which should ideally be 7-10 times your current
CTC. The more scientific way to decide on sum assured for life insurance, is
that the sum assured should be roughly 15 times the amount that you are
contributing towards your family and they will not be able to do without if
something unfortunate were to happen to you.

Assuming that you will be
able to save 20K per month (Rs 2.4 L pa) you could choose to divide the savings
for health insurance, mutual fund and more importantly retirement corpus. Given
your age the focus should be more on retirement corpus and health insurance for
yourself and your spouse.

Considering that your present
annual expense is 5L, and that you plan to retire at 60 (and your life
expectancy is 75). A modest 4% inflation would see to it that to continue with
present lifestyle post retirement the corpus required would be approximately
1.5 crores which translates into a monthly saving of over Rs 14K.

For health insurance you could
opt for a floater policy; the coverage will depend on the budget and the
anticipated need. A standard Rs 5-lakh family floater policy would cost between
Rs 5,000 and Rs 8,000 every year.
after buying health insurance, it is essential that you set aside some part of
your savings for health-related expenses as the product inherently has some
limitations that you should be aware of when planning for the future.

Also you could have at least 3 months of
expenses in your savings account.


2.  You
have already invested Rs 96 K and depending upon your outlook for the fund, you
can decide to continue or surrender. You should be careful w.r.t to the lock in
period.  You could ideally continue for
one more year and then if you surrender the surrender value would be 100% of
the fund value.




Q 2) Abraham



You could probably opt
for 65% investment in equities in 35% in debt instruments.
According to Morningstar India, a mutual fund
tracking entity, small- and 
delivered an average three-month return of 19.71%, a little higher than
large-cap mutual funds' 14.86%. Small- and mid-cap schemes can boost overall
returns of a portfolio. 


Apart from
the traditional debt and equity products, mutual funds offer a plethora of
innovative products including index funds, exchange-traded funds, fund of funds
and arbitrage funds. Depending on your risk tolerance, goals and investment
horizon, you can balance the risk reward ratio by adjusting exposure to
numerous asset classes.

Equity and
real estate have shown to beat inflation and yield attractive returns when held
over a long duration. Adding the right funds to your portfolio basket today
will make the returns attractive in the longer run. If you have a low risk
appetite, you should concentrate on debt mutual funds that invest in high-rated
debt paper and government securities. On the contrary if you have a higher
threshold for risk you can invest in diversified equity funds or small and
mid-cap funds

Further, a systematic investment plan (SIP) provides an easy way out. Apart from becoming a disciplined
investor, the benefit of rupee cost averaging is the prime advantage. While investing
through a 
SIP, you buy
more units when the price is low and fewer units when the price is high. These
market fluctuations are averaged over the investment tenure and the average
cost of investment comes down.



Q 3) Afshan

Jeevan Nidhi;  Jeevan Akshay; Jeevan Dhara, New Jeevan
Suraksha, LIC Pension Plus



With the kind of investment that you have made
and the ones proposed it seems that you are well placed in your financial

If only you could have stated the maturity
dates of the policies, which I am sure will mature at the time you need the
money for your child’s education and marriage.

Given the Rs 5 crore target that you have set
for retirement, your present investment is balanced. Assuming a 6 % inflation
in the long run and an annual expense of 12L , a monthly saving of 69K would
give a 5.45 cr corpus.


Q 4) D.V. Ravi


Given your annual income, it is advised that
your insurance coverage should be Rs 60 L (10 times your current CTC).

Your savings portfolio should be a mix of debt
and equity (70 % equity and 30 % debt) and you could choose a MF depending upon
your risk appetite. You could also opt for index fund and ETF.

would require a good amount of money for your child’s education after 16-17
years and opting for a child insurance plan (HDFC, Kotak, and LIC) would be a
good idea.

For the car loan, banks would generally pay
75- 100% of the value. In that case you need to be prepared to pay upfront
money, a max of 1.25 L. Thereafter depending on the tenure of the loan (say 7
years and interest rate say 12 % you will have to shell out approx 7000 as

Purchasing a house depends on when you want to
purchase the house, the city and the type. In most of the case you will need to
pay 20-30% upfront and you can home loans for the remaining amount. You can choose
the tenure of the loan, since you have age on your side you could extend it to
20 years. In such a case the EMI would not be burden.




7 years ago

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About The Anchor: Manisha Natarajan

Manisha Natarajan is Executive Editor Business and Real Estate at NDTV. She currently hosts the daily prime time real estate programme 'The Property Show' and a weekend personal finance show ‘Let's Talk Money’.

Manisha learnt the ropes of television journalism as a reporter for BBC World's 'Moneywise' and 'India Business Report'. She has anchored over 1000 hours of live business news, including key events such as the Union Budget, Economic Survey, Credit Policy and Tax Roundtables.

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