I am 31 years old and my take home salary is 80,000. My wife is a homemaker and my son is one year old. I have systematic investment plans (SIPs) in Sundaram Select MID Cap ( 1,000), ICICI Pru Tax Savers ( 2,000), HDFC Equity ( 5,000) and HDFC Top 200 ( 2,000). I pay 42,000 and 16,000 annual premiums for two traditional plans. I have a term plan of 50 lakh and a floater health cover of 3 lakh. I contribute 8,000 per month in Public Provident Fund (PPF) and have a recurring deposit (RD) of 11,000 per month. I have a home loan; the outstanding is about 12 lakh. The monthly rent from my present house should be 6,000. I can increase my investments in a month or two. My goals are: a foreign trip with family after six-seven years, a bigger car in three years and a bigger house in five years. I need a corpus for my child’s education and medical expenses for my ageing parents. I want to build a retirement corpus, too.


You have been doing most things right. You have a life insurance that covers five times your annual income and you also have a health cover. There are two traditional insurance plans. In case the option exists to surrender them without any charges, the same can be considered, but typically these options are not available. In that case, continue with them.

As far as investments are concerned, currently you have four SIPs running. You have exposure to multi-cap, large-cap, mid-cap and equity-linked saving schemes. Your scheme selection is good and you can continue with them. However, you don’t have exposure to a hybrid fund. You can consider that as it will add balance to your portfolio. You can pick among funds such as HDFC Prudence, HDFC Balance, and Birla Sunlife 95 funds.

You can also look at having a small exposure to gold exchange-traded funds via the SIP route; the total exposure in gold shouldn’t be higher than 5-10%. This can be funded by the increase in savings you are planning.

It’s not clear why you have an RD. Is it meant for providing liquidity to your corpus? If yes, you can consider alternatives such as liquid funds. Further, decide how much exposure you want to have in this asset class. A higher exposure may dent your long-term returns; at the same time, a lower exposure may pose additional risk.

Currently, you are saving close to 50% of your net income. If you continue with this rate or even increase it a bit, it will help you in creating long-term wealth. As far as individual goals are concerned, you can create baskets of savings for each goal and dedicate specific investments for each basket. Make sure that all long-term goals have reasonable exposure to equity and wherever there is fixed maturity—PPF and insurance plans—the maturity matches with the financial target’s timeline.

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