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I want to buy a house in three years

Dhirendra Kumar helps an investor draw a financial plan that also includes buying a house

I am 36 years and I have already invested in FD, Post Office Saving Schemes, PPF, EPF and NPS. My goals comprise doing a yearly holiday, planning for retirement and buying a new home in three years. Where should I start investing?
- Raghuvanshi

At the age of 36, you have already built all the foundational things required for investments. Fixed deposits, Post Office Saving Schemes and EPF are dominantly fixed income and are of the highest safety available in this country and hence, makes for a good foundation. Since you are 36 now, you still have a couple of years before you retire at 58, 60 or 62, depending on where you work or till when you can work. If for this duration you keep investing about Rs 2 lakh a year in NPS without touching it, then your retirement should be taken care of.

For buying a house in three years, check a few things. First, you should buy a house that will help you save on the rent. So, if you are living in rented accommodation, then you should think in terms of buying a house that will immediately or in a defined period should be able to help you save on the rental outflow. Secondly, you should have your down payment to an extent that EMI is not exceeding a third of your income. If these two things are in place, you should go ahead with buying your house. Otherwise, you should wait till the time you have down payment enough so that these rules are complied with. This will make sure that buying a house will not cause anxiety to you.

For annual holidays, you can do some recurring deposits or may use your bonus if you get some.

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