To build an emergency fund Plan, we recommend investing in liquid or ultra-short mutual fund schemes.
My wife and I, both 34 years old, currently live in our hometown with my parents in a flat. We took a joint home loan of ₹30 lakh to purchase the flat for my parents, with a 30-year tenure and monthly EMIs of ₹25,000. We utilized our emergency fund to repay the loan in just four years. We each have a net monthly salary of ₹1.2 lakh.
We allocate ₹3,000 individually for our daughter’s education and our retirement. We plan to rebuild our emergency fund in the next six months. We are also considering investment options to grow this fund. Additionally, next year, we will be relocating to a rented accommodation in a metro city as we return to our office.
Our long-term goal is to accumulate ₹1 crore to purchase another house in a metro city within the next 10-15 years.
For our emergency fund, we recommend investing in liquid or ultra-short mutual fund schemes. Arbitrage schemes may also be considered as they provide the benefit of equity taxation. It’s generally advisable to have an emergency fund that covers six months’ worth of expenses.
To work towards our goal of amassing a ₹1 crore corpus for buying a house in the next 10-15 years, we should invest in equity mutual fund schemes across various categories through monthly SIPs (systematic investment plans).
Also Read: What a car loan costs you
Here are some key assumptions:
- We will initiate a monthly SIP of ₹20,000 each, with a 5% annual increase.
- Expected returns are assumed to be 10% annually, which is a conservative estimate based on historical equity performance.
Under these assumptions, we can reach our goal of ₹1 crore within the next 10 years. If we increase our investment amount or achieve higher returns on our investments, we might reach our goal even earlier. Please keep in mind that these calculations are based on the information and assumptions provided. Consulting with a financial advisor for personalized advice is recommended.
“Exciting news! Nyreadtime is now on twitter Channels 🚀 Subscribe today by clicking the link and stay updated with the latest news insights!” Click here!