How do I optimize my portfolio to buy a house, start a family?
My monthly salary post-taxes is ₹1.95 lakh. I have SIP (systematic investment plans) of ₹15,000 in Axis Bluechip, ₹15,000 in Canara Robeco Small Cap, ₹15,000 in Parag Parekh Flexi Cap since two years and my investments are currently valued at ₹6.83 lakh. Besides, I have direct stock investments valued at ₹6.6 lakh. This also includes ₹47,000 in sovereign gold bonds.
Since the last five years, I have been depositing ₹10,000 every month in public provident fund (PPF). My PPF balance stands at ₹7 lakh. I have been investing ₹50,000 annually in national pension scheme (NPS) for the last three years.
I have a health insurance for me and my wife and also my parents. Now, we want to buy a house, which we expect to cost around ₹1 crore. We also plan to start a family next year. Do we need to tweak our portfolio to take care of the expenses coming our way?
—Name withheld on request
You have built a good, diversified portfolio. So far, you have accumulated close to ₹22 lakh. Out of this, ₹7 lakh is in PPF, so it most likely has a lock-in period. You will have to rely on a home loan to buy the house. If we consider a loan of ₹1 crore for 20 years then the equated monthly instalment (EMI) for the same could be approximately ₹87,000 at an interest rate of 8.5% p.a.
Based on your take-home salary, you will be eligible to get this loan amount. If you would like to take a lesser loan then you should try to save more from your monthly income. Practically, a reasonable amount would also go into your monthly mandatory expenses but you still have the potential to save more. These additional savings can be accumulated in your bank account to reduce the loan amount.
A goal amount for your child’s education will help you build that corpus
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