I am 32, living with my husband and daughter in a company-provided accommodation and earning Rs 52,000 a month. I contribute Rs 15,000 to the monthly household expenses, the rest is taken care of by my husband. We have booked a flat on loan and, I have a pension plan from ICICI Pru Life Stage Assure, a LIC Jeevan Anand Policy and medical insurance with Rs 2 lakh cover provided by my employer. I am investing Rs 15,000 every month into nine mutual funds; DSPBR Top 100 Equity, HDFC Balanced, HDFC Equity, HDFC Mid-Cap Opportunities, ICICI Pru Discovery, ICICI Pru Dynamic, IDFC Premier Equity Plan A, Quantum Gold Savings and Reliance Regular Savings Equity. I also have lump sum investments in Reliance Gold Savings and ICICI Pru Focused Bluechip Equity Direct Plan. I also have NSC and gold coins. My objective is to accumulate Rs 1.20 crore by 2025. Is my present allocation sufficient to achieve this goal?
— Abhilasha Bolia
We strongly believe that investors are better off when they keep things simple. So, for that reason alone, we feel you should reduce your mutual fund holdings to a manageable level which can be easily tracked. Where you score, however, is on the front that you have defined your financial goal, which is 12 years to go and you are making an effort to save and invest for the same. The habit of regular savings and investments will help you achieve your financial goal. You should consider collectively planning for the future along with your spouse, for easy management.
Basics
You have made a good beginning by investing about 30 per cent of your income, but there is a lot more that you can save than just this sum.
* Your life is insured for Rs 6 lakh, which is just a bit less than your annual income
* You are under-insured and should consider taking a term insurance plan which cost less and are pure risk covers. A Rs 50 lakh term plan would cost about Rs 7,000 annual premium
* The pension plan that you have is not the best selection. Considering retirement is another 28 years to go at least, you should consider opening an account in the National Pension Scheme (NPS)
* You have a health insurance cover from your employer, which you should continue and at some point consider a plan for yourself 
Savings
Your savings in PPF and NSC are to save taxes, but it also means you have a fairly high allocation to debt, which is avoidable at your age.
* Consider setting aside about six months' household expenses in a liquid fund or a fixed deposit to meet any contingencies
* Instead of PPF and NSC, consider investing in ELSS to benefit from tax savings and exposure to equity to build wealth
* Your savings in gold coins make sense if you are doing so for your daughter's wedding in the future
Investments
There are just too many investments across 12 fund schemes including the nine monthly and two lump sum investments.
* While you have selected good funds, except Reliance Regular Savings Equity, there is a lot of overlap in fund categories
* You had investments in the dividend option of HDFC Top 200, something that you should avoid because a dividend option is beneficial only if you are looking for a regular dividend income, as that is not your need, you should stick to the growth option
* Diversification is not achieved by numbers; you need diversification in style as well as category of funds with the right investment allocation that will achieve long-term wealth creation
* You have age on your side and a goal that is 12 years away; we are recommending an aggressive growth portfolio with 90 per cent equity allocation
* All the suggested funds have a proven track record and performance history. However, make sure you regularly track the performance of these schemes
* Continue investing regularly through SIPs in the growth option of the suggested schemes
Financial goals
It will be easy for you to accumulate Rs 1.2 crore in the next 10 years. Currently, you have a surplus of Rs 35,333 every month which you should consider investing proportionately in the suggested portfolio. 
This article was originally published on May 02, 2013.
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