A high income is no guarantee of financial stability. Sukrit and Chhavi need to organize their finance and plan for their goals or they may not achieve them
14-Dec-2016 •Research Desk
Sukrit and Chhavi are in their late 30s. Both have good jobs in the advertising industry and have a total post-tax income of Rs 3 lakh per month. However, as much as they work hard to earn their money, they love to spend it on living the good life for themselves and their 10-year-old daughter. Not only do they save only minimally, they generally carry over-substantial outstandings on their credit cards (currently about 250,000). They live in a rented apartment.
What They Have:
What They Want:
What They Should Do:
They should build up an aggressive portfolio with the following distribution:
|Type of Fund||Percentage of Portfolio|
|Mid and Small cap equity funds||50|
|Large and Mid Cap equity funds||40|
|Ultra Short Term-Debt||10|
They should invest through SIPs and try not to time the market. In order to finance their home purchase, they should consider a home loan since this also carries tax benefits for interest and principal repayments under Section 80C. They should factor home loan EMIs into their expenses going forward. However rent will no longer be part of their expenses allowing their finances to adjust more easily.