How can I invest surplus of Rs 25,000 per month to meet my money goals?

I am 45. My annual CTC is Rs 35 lakh. I have four properties worth Rs 1.9 crore. My rental income is Rs 40,000 and EMI on housing loan is Rs 40,000. I have fixed deposits worth Rs 26 lakh. I have Rs 13 lakh in PPF and EPF. I pay LIC premium of Rs 4,000 per month. My Ulip and smart scholar plans have Rs 10 lakh. For these I pay a monthly premium of Rs 25,000. I also have investment of Rs 3 lakh in stocks and Rs 2 lakh in mutual funds. I have a Rs 1 crore term plan and Rs 10 lakh health insurance plan offered by my employers. My sons are in classes XI and VII. Currently I have a surplus of Rs 25,000 a month. How should I rearrange my investments?

Prableen Bajpai, Founder, Managing Partner, FinFix Research & Analytics replies, “The two major financial goals for you will be education of children and your retirement. You must quantify the amount of money for these goals by factoring in inflation. For example, if your current monthly expenses are Rs 50,000 (excluding debt), the same would be approximately Rs 1.2 lakh a month assuming a 6% inflation at 60 years. Considering a life span of 85 years, you would need a corpus of Rs 3.5–4 crore to earn an equivalent monthly income. Likewise, a decent sum would be required for your children’s education. In the present date, any college would have a basic fee of Rs 5–8 lakh annually, and the same would be higher for your younger son given the high education inflation. Thus, re-evaluation must be based on current investments, future plans and financial goals. Additionally, your life insurance cover seems insufficient as at your age, it should be 15–20 times of annual income. Ideally, the home loan amount should be covered as well. Do get a health cover in addition to the one provided by the company. Broadly, split your investments towards EPF/PPF and mutual funds, avoid insurance as an investment vehicle, and ensure sufficient insurance.”

My take-home salary is Rs 1 lakh a month. I have accumulated Rs 4 lakh in FDs since I started working last year. I contribute Rs 1.5 lakh annually to PPF and Rs 50,000 to NPS for Section 80C benefits. After expenses, I am left with a surplus of Rs 50,000 per month. However, these days I am saving around Rs 65,000 per month. How can I invest this money?

Naveen Kukreja, CEO and Co-Founder, replies, “Since you are a young earner, you should have a higher exposure to equities, especially for long-term goals. List your long-term financial goals and then invest your monthly surpluses accordingly in equity funds, preferably multicaps, through SIPs. You may consider any of these—Axis Multicap, ICICI Prudential Multicap or SBI Magnum Multicap. Opt for direct plans. Stay invested for at least seven years. In case of further market corrections, you can top up your SIPs by making lump sum investments in your selected funds.”

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