Rakshith Query regarding Financial Planning

November 3, 2011   ·   0 Comments


http://stockssavvy.comIt has been long since I updated People Queries section. Here is a Query from a person, who wants to starts his financial planning. It is really remarkable to see people showing appetite for learning how & where to invest for their secure future.

Rakshith asked:

Sir i’m 22yrs old . my CTC is 6lacs p.a.. getting about 5 lacs on hand. I’m not aware of all mutual funds., got to know that HDFC is the best one for tax saving as well as NAV hike.. Please let me know which all mutual funds are best suited for me???


You need to take care of Insurance as well as investment when it comes to financial planning.

You should buy a term insurance plan preferably from LIC. Invest a part of your money in mutual fund for your long term goals such as retirement planning, children education & children marriage. And part of your money should be invested to meet your short term goals such as Buying a car, home etc.
I will be able to guide you better & come with financial plan once i come to know about your financial goal such as Home Planning, retirement planning, Car planning & your monthly savings. Once done with that, we can zero on the funds with which you can kick start the investment
I will advise you to invest through a financial planner. This will help you to keep track of your money in a much efficient way…If you want, once we finalize your investment strategy, i can send you the required forms to kick start your investments.

Rakshith asked:


I took LIC policy under table 149 for a sum assured rs.5lacs payin a premium of rs.25684/- p.a.

In the upcomin F.Y. ‘m going to take another LIC policy which is not term policy., ill get my amount after 40yrs about 40.3lacs, premium is around rs.24000/- p.a for 25yrs.

we are residin in a flat here in vijayawada, but it doesnt have a lift, my parents are aged 45 & 43 yrs old respectively. So one of my goal is to get a new home either my sellin away this or through my savings.


Coming to purchasing car, i want to buy after 3-4yrs.

I’m bachelor yet & my parents will get me married in 1 & half to 2yrs.

Guess u can understand me now & could advice much better.

I know there are many kinda mutual funds but was never interested, as i’ve always seen people loosing in it & when they used to come to me for suggestions , I’d ask them to prefer metals which has good returns as well as easily convertible into cash.


Hi Rakshith,

Table 149 is Jeevan Anand Policy.Do you know the amount which you will get after the end of this policy? If you want to know, i ll need more info of the policy details & can get you the details that how much money you will get.   I think you are planning to take another Jeevan Anand policy for next 40 years. You insurance cover should be increased & should be in the range of 70 – 80 Lac Rs.

You can consider Retire & Enjoy Plan from LIC which offers an excellent insurance cover with a return of around 9 %.

Highlights of sample Retire & Enjoy for 35 year policy:

Let a 25 year old person take a policy for 35 years & take a 10 year retirement pension after the retirement:


Monthly Premium 4,000 Rs.
Yearly Premium 48,000 Rs.
Investment in 35 years 16,80,000 Rs.
Insurance Cover at the start of the Policy 21,50,000 Rs.
Insurance Cover at the end of the Policy 1,10,00,000 Rs.
Pension received per year 13,60,000 Rs.
Pension received in 10 years 1,36,00,000 Rs.
Amount received at the death of demise 21,50,000 Rs.
Total Amount received 1,57,50,000 Rs.
Effective Rate of Return 9.00 %

You should start a SIP with 3 funds. Start with IDFC Premier Equity Fund & Birla Sun Life Dividend Yield Plus with 3,000 Rs SIP each. Even if i consider 15% rate of interest for next 30 year time frame, your corpus will grow to almost 4.2 Crore Rs. which should be enough for your Retirement planning & for securing children future.

Apart from this, you should start saving 4,000 Rs in balanced fund preferable HDFC Balanced fund which will take care of your short term goals of Car planning, Home planning in coming years. This fund will give you liquidity option. We could add more in this funds as your savings increase with time.

I want my clients to make informed decision. Please feel free to reach out if you have any query.

Rakshith Asked:


I’m truly unaware of SIP in mutual fund, i mean how it works n gives us return.

Same is with HDFC plan which u suggested.

can u elucidate??

I could understand ur retirement plan of LIC, it was havin a nominal return., which is quite good.




SIP is systematic Investment Plan. There are different kinds of mutual funds. Equity Mutual Funds which invest in stock market, Debt mutual funds which invest in Bonds, Fixed deposits & Balanced Fund which is combination of both Equity & Debt & have different proportion. Equity funds should be invested for longer tenure more than 7 years ideally. They outperform Debt funds in terms of return. There are SIP in some mutual funds which have given close to 27% return in the last 15 years. One can expect 20% return on consistent basis if one invest in them systematically. On very conservative basis, while planning we assume a return of only 15%. Even sensex has given 17% return annually from the inception.

If one invest 1,000 Rs every month systematically for 30 years with only 15% interest, then his corpus will grow to 70 Lac Rs. For 6,000 Rs, i told your retirement corpus to be 4.2 crores. whereas if you invest in Debt funds having 10% return, your return will be only 22 Lac Rs.

I will advise you to start your investment in a planned way so that you get money at every important juncture of your life.

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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