Parveen Sequieira, 31, BPO worker: My take home salary is Rs 40,000 a month, my husband’s take home is Rs 90,000 per month. We own two houses and the total outstanding loan amount is Rs 40,50,000. EMIs for the two amount to Rs 42,282. We receive Rs 15,000 towards rent for our first home. My other monthly expenses include Ulips —Rs 7,300; parents — Rs 6,000; EMI — Rs 15,911, personal expenses — Rs 5,000; Total —Rs 34,211.
My mutual funds portfolio is scattered in 14 funds and accounts. My husband has a term life insurance of R40,00,000 and I have Rs 30,00,000. My questions are:
(1) I wish to take a sabbatical for a year and beginning January 2011 all expenses will be paid by husband. Should we discontinue the Ulips? (2) My husband’s portfolio is as scattered as mine in terms of the number of MFs and the total investment amounts to R5 lakh. Do we need to reorganise our MF investment and spread it across in better asset class and (3) Are we insured enough?
Halan: Parveen, first of all congratulations, I hope everything goes well. We are going to count your income now and see what you have. Current income coming (for) both you and your husband is R1.4 lakh, you have got expenses of about Rs 77,000 minus your income. Given your two home loans that are running, your investments, your insurance premiums, you still have R22,000 left per month. So there is no need to panic and get rid of any particular investment. You have (a) lot of funds and they are scattered. 14 funds is too much, bring it down to 4-5.
Your insurance question is essential. Now that your husband is going to be the principal breadwinner of the family for the next one year, you will have to bump up his cover to Rs 1 crore. Buy a term policy. What you can do is to break this term insurance into bits, which is equal to the home loan. So as those loans mature you will have that option of just stopping paying the premium for that amount.
Rajesh Ramaswamy, 40, working for a multinational corporation in West Asia: Based on the advice given on your show, I have started a SIP and am investing Rs 35,000 every month. I (would) like to know whether my portfolio is on right track. I am married and have a 10-year old kid. My annual income is roughly Rs 18 lakh. I have given (it) my house on rent for Rs 16,000. I own a house in Mumbai and the monthly EMI comes to Rs 25,000. The property is now valued at R75 lakh. The rent proceeds come to R15,000 a month. I have also bought land in Bangalore.
My portfolio is as follows: equity —Rs 5 lakh, mutual fund and SIP —Rs 3 lakh, fixed deposits —Rs 10 lakh. I pay an annual insurance premium of Rs 2 lakh. I plan to invest in the new pension scheme. I wish to retire by 50. By then, I would want to be financially well settled.
Natarajan: You need to bump up your SIPs.
You are well stacked on property... But your financial investments needs a big beefing up. Your goal should be: (a) to fund your child’s education (b) build a corpus of at least Rs 50 lakh for foreign education and Rs 25 lakh for Indian education, and you have 10 years to do all of that...