Prema and Mohan were seeking professional guidance on their financial goals. Both are working in Bengaluru. Prema is working as a private school teacher, and Mohan is heading a business unit of an IT firm. They have two children, Ved (20), doing his Engineering in Bengaluru, and Vridhi (14), in Class IX.
Their goals are listed as below:
* To ensure adequate funds with liquidity based on their financial requirements.
* Ved’s higher education fund to be placed with appropriate instruments for better liquidity. He may need around ₹40 lakh for the two-year master’s course in Europe.
* Vridhi’s education goal is fluid at the moment. The parents intended to allocate a corpus sufficient to meet her education costs in India — for UG, excluding medicine.
* Mohan wanted to ensure the family and their financial goals are protected, including his retirement at age 55, 10 years away from now.
* Mohan wanted to ensure he builds a sizable wealth at the time of retirement. Prema and Mohan have inherited family properties and assets. One of their key objectives is to assess how much they can gift or transfer to their children after retirement without impacting their long-term financial independence.
Mohan has an aggressive risk profile, whereas Prema has a balanced risk profile. They currently have more than 70 per cent in equity asset class, including Mohan’s stock options.
Review and recommendations
* The family has adequate life and health insurance. Fixed deposits cover six months of lifestyle expenses and the liquidity available through other financial investments are adequate to cover for the liabilities as a contingency measure.
* They do not have surplus cash to manage additional expenses or savings and investments, due to their EMI commitments. They have committed to EMI in the recent past without allocating adequately for regular investments/savings towards their medium-term goals.
* If rental income is not received consistently or family expenses increase, the expected cash flow surplus may not materialise as expected.
* Ved’s education expenses may be met with funds allocated from existing investments. This will reduce the equity allocation to 60 per cent from over 70 per cent at current level in the financial assets. As Mohan is receiving stock options year on year, the allocation to equity will still be maintained at the desired allocation in the next three-four years. It was also recommended to continue the regular contribution in PPF and NPS by Prema.
* Since they intended to maintain the same lifestyle at retirement, the retirement expenses will start with ₹2.36 lakh per month in the next 10 years at 7 per cent inflation per annum. The family needs ₹7.3 crore to fund the retirement lifestyle for the next 35 years.
* Mohan and Prema’s EPF and the regular contribution of ₹40,000 per month, without considering any incremental addition over the years will fetch them ₹2.35 crore. The balance may be funded with Mohan’s current MF assets, with an expected return of 12-15 per cent per annum. Investments in PPF and NPS will provide sufficient cushion to bridge the gap, if any, at retirement.
* This leaves Vridhi’s education fund and the wealth accumulation goal. When Vridhi goes for college education, the family will have a surplus of ₹7 lakh, which is spent now for education expenses. Along with the funds available in stock options, Vridhi’s education goal may be funded well.
* The housing and car loan commitments are larger for their financial position and can be considered as the main factors affecting wealth accumulation. It is recommended that any available cash flow surplus, additional surplus after Ved completes his education in India, and future increases in income be allocated to make periodic loan prepayments.
Seeking professional guidance is a good decision but it also needs to be considered at important stages of life, like inheriting a property, committing to a higher EMI, relocating to another city or country. As these may significantly impact the overall finances, risk profiling and asset allocation need to be maintained through these important stages. That would ensure that the overall financial position does not look skewed towards one asset class or the risk profiling and asset classes don’t carry a mismatch or the assets are not found wanting in liquidity.
The author is the Principal Officer at Ploutus Asset Services LLP, a SEBI Registered Investment Advisory firm. https://ploutus.in
Published on August 1, 2026