I am 30 years old and earn around 27 lakh per annum. My rental income is 14,000 per month. I pay 35,522 equated monthly instalment (EMI) for a house and the outstanding due is 28 lakh. I pay EMI of 21,350 for another home loan and the outstanding is 13.3 lakh. Towards car loan, the EMI is 36,000 and outstanding is 11.5 lakh. My household expenses are around 80,000 per month. I have mutual fund (MF) investments in HDFC Equity, Franklin Templeton Nifty Index, ICICI Prudential Discovery, Sundaram Select Mid Cap, Birla Sun Life Frontline Equity A. I invest 5,000 in Franklin Templeton Short Term Income Plan per month. I buy one unit of Gold BeES every month. I have 10 lakh in fixed deposit. I deposited 60,000 last year in Public Provident Fund (PPF). I have invested 50,000 in stocks and 40,000 in MFs . I have a health insurance of 2 lakh for myself and 2 lakh for wife and a floater plan of 5 lakh. I have a traditional policy for 3 lakh and a unit-linked insurance plan (Ulip) of 3 lakh but I stopped paying the premiums after three years. I plan to take a traditional plan for 1crore. I don’t have any dependants and I am saving for the long term. In the short term, I plan to go for a foreign holiday for which I want 3 lakh every year. Is the investment mix alright?

-Srikant Das

Overall, you are doing a good job. There are some chinks in the plan. You have acknowledged a few of them and propose to rectify.

Housing loans prima facie appear tax efficient. However, make sure the rate of interest is as per the market rate. There is no harm in checking regularly from your loan provider the rates for new and existing customers.

You have a good mutual funds portfolio. Start systematic investment plans as you already have a monthly cash flow surplus. As far as your asset mix is concerned, you are overweight in real estate and underweight in equity. With no dependants, you can currently consider building an equity portfolio. Hence you can invest in equity funds that you already hold.

Your fixed deposit of 10 lakh looks a little on the higher side. Limit the deposit to 5 lakh and the balance 5 lakh can remain in debt and can be added to the Templeton Short Term Fund. PPF is the investment you should continue every year. The annual limit is 70,000.

While you have not made a huge investment in direct stocks, you should be continuing the same only if you are actively managing the same.

Your insurance portfolio needs to be aligned. You need to go for a term insurance. As far as your Ulip is concerned, you need to evaluate the value of the policy as there are monthly charges which you are paying to hold the same which will have an impact on the overall value of the fund. The rationale is to make sure that the fund value does not depreciate further.

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