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How can I reach my financial goals with current investments

I am a Govt. employee age 29. My salary is 40000. My goal is 1 child education & make a home with corpus of 55 lack in next 15 years. My saving are EPF 7000, PPF 6000, RD 2000, LIC 2000 pm. I invest SIP SBI Magnum Midcap, SBI Blue-Chip, Franklin India Prima, Birla Sun Life Equity, ICICI Value Discovery each Rs 2000 is these are good, please suggest me?

Sep 5, 2017 by Ajay Joshi, Nainital  |   Mutual Fund

In your query you have mentioned about two future goals - Child education and Make a home. For making a home your thought is very clear as you need Rs 55 Lakhs after 15 years. However, for your child's education you have neither mentioned the goal amount nor number of years after which you would require the amount.

Please note that to reach the goal of 'Making a Home after 15 years' you will need to invest Rs 11,000 through monthly SIPs in equity mutual funds, based on assumption of 12% annual return on SIPs. You can check this tool - https://www.advisorkhoj.com/tools-and-calculators...

Currently, you are investing Rs 10,000 through monthly SIPs in 5 equity mutual funds (Rs 2,000 each). If you increase this investment by Rs 1,000 then the above goal can be achieved. Your scheme selection for SIPs is good.

The other suggestion would be to discontinue your monthly RD savings of Rs 2,000 and allocate that amount to mutual fund SIPs. SIPs in equity mutual funds could be the best way to create long term wealth for you as you are quite young.

You can continue with your PPF investment as you should have some exposure to fixed income investments too. This helps in saving taxes as well. With regards to insurance, more than the amount the life cover is important. You should have life cover of at least 10-12 times your annual earnings and this can be done by taking a term plan.

We think, you should now focus on saving for your child's education and seriously consider enhancing your life cover to protect the financial future of your family.

Hope the above is helpful.

Thanks for writing to Advisorkhoj.

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