It’s all about a bright future

There has been a subtle shift as far as financial planning is considered. As early as a decade back, long-term financial planning revolved around building a house and and conducting a daughter’s marriage. Retirement was normally taken care of by pensions and provident funds while children’s education was more of a peripheral expenditure. So what has changed in the last one decade? We will have a detailed discussion on it in some future posts.

Planning your child’s future has become more critical in the light of the rising costs and higher education. According to conservative estimates, a parent would be spending anywhere in the region of Rs. 25 lakhs to Rs. 30 lakhs by the time the child completes professional graduation degree. The expenditure on a Master’s or a Doctorate degree, in your home country or abroad, could take your total cost anywhere in the region of Rs. 50 lakhs to Rs. 1 crore.

Any plan for your child’s future should be broadly based on a few key guiding principles. Let me reiterate here that consistency, security and discipline need to take precedence when you embark upon the journey of planning the children’s future.

Asset Allocation for Married & have kid ►►► Age above 60 yrs

At this stage in your life you are in the verge of retirement and your children are well settled. You just need to enjoy your retirement. Your asset should be allocated as follows : 

► You have probably fulfilled all your major responsibilities. You can go in for accumulation of property for your children by investing your money to the extent of 40%. If you think this is too much, then you can think of keeping a lesser amount in property for your children. It can be 30% or 25% then.

► You don’t need to have more than 20% of your money in savings accounts.

► Keep 20% in fixed interest bearing securities like debentures and bonds. If you have put 30% in property for your children then consider putting 30% in debentures and bonds too. And if you have put 25% in property for your children then consider putting 35% in debentures and bonds.

► Keep a small amount of money nearly 15% in equity.

► Keep 5% in Gold too.