You need fairness exposure for your child’s education
I have investments in traditional policies, post office recurring deposits (RD), Kisan Vikas Patra (KVP), fixed deposit (FD) and Public Provident Fund (PPF). I have no loans and have my own house. I have no equity exposure and don’t have a term cover. I have health covers for R5 lakh each for my spouse, child and myself. The worth of FDs and RD is about R82 lakh and PPF R15 lakh. I inherited R40 lakh ten years ago. I save about R7,000 per month. I get every month interest of R40,000 from FDs. I will get R20 lakh from traditional policies; KVPs will return R10 lakh in 2015 and R9 lakh in 2019. I need R75 lakh over 2021-2023 for my kid”s schooling. I need R1 lakh per month after retirement from 2025.
RD and KVP do not give the chance to participate in higher rate of interest cycles. Further, high inflation will be a dampener.
You ought to have some equity exposure. You could invest the income from FDs through a systematic investment plan. Equities are also recommended as your kid”s schooling is still ten years away. You can generate a basket of three-four money. You can think about large-cap money such as HDFC Top 200 and Birla Frontline Equity. From the multi-cap stable, you can go for HDFC Equity or Fidelity Equity. Finally, hybrid money such as HDFC Prudence and Birla Sun Life 95 Fund can be thought about.
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You have adequate health cover. Think about a term cover that is five-seven times your annual income.
You ought to revisit your retirement need. While you have factored in some increment, it needs to get further adjusted. To make positive, you fulfill all of your targets, you need to be proactive in managing your portfolio.
Source: [HT]
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