I am a 34-year-old software professional and my wife is 33. We have grandparents and parents as dependants. We also have two children (3 years and below one year). I have a ₹2 crore term insurance. I have also taken health insurance for my parents of ₹3 lakh each. I have planned a contingency fund for expenses worth three months. We have a take-home salary of ₹3 lakh per month. We save almost ₹1.6 lakh. Our goals are building a retirement corpus as per our current lifestyle (after 26 years); higher education of both the children (after 18 and 22 years); and buying a house after 3 years (current value ₹1.25 crore). Please suggest a plan for each goal with equity (large-cap, mid-cap and small-cap) and debt allocation percentage. I have been investing in mutual funds for the last 11 years and I am a high-risk investor.
—Rinkesh Modi
You have a saving potential of ₹1.60 lakh per month or ₹19.20 lakh per annum. You can achieve your financial targets but ensure that you increase your savings every year by at least 5%. Your financial goals are all long term except purchase of house. For that, you can consider giving a down payment of 20% or ₹25 lakh and the balance of ₹1 crore can be taken as loan for a 15-year tenure which at 9% comes to an EMI of ₹1,01,427. The corpus to be saved for this goal can be invested in a short-term debt fund for which you can start an SIP of ₹65,000.