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Background

First job youngster

Wish to invest early

Confused about investing options

Observations
  • There are no major loans on Mr. X’s name, since he had completed his higher education in the city itself and didn’t have to take an education loan for college.
  • There are no additional benefits or incentives like Employee’s Provident Fund, Health Insurance or Mediclaim provided to him in his current job. He gets his fixed pay credited every month without any deductions.
  • He does have unplanned expenditures every month, like going out for dinner with friends, contributing towards friends’ and family’s birthday and wedding gifts, ordering in food at house parties, etc. These expenses averages up to Rs.4,000.
  • There are various other unaccounted cash expenses like having tea and snacks at roadside stalls with colleagues, paying for someone’s order with the promise of getting paid back later, etc.
  • Currently, he ends up saving about Rs. 3000 per month after deducting all his expenses.
  • He has life insurance in his name, but it was taken by his father back when he was a kid. The quarterly premium for the same is Rs.3,000.
  • He aspires to buy a car for himself, probably by taking a vehicle loan. And hence, requires a decent sum on hand to put down while purchasing a car.
  • Any good sedan would cost him Rs. 7 to 8 lakhs, hence he needs to plan well.
Results
 Proper Asset Allocation

10-12% returns

Investing in ELSS & Mutual Funds through SIPs will give him returns of up to 12%

 Proper Asset Allocation

4 years to buy car

To save up for his car, he will have to continue investing till at least 4 years.

 Proper Asset Allocation

Fallback plan

With at least 3 months’ worth of savings on hand, he can switch to a higher paying job eventually, instantly.