Misras have built a strong asset base, will achieve goals with ease

By Sakina Babwani, ET Bureau | 22 Jul, 2013, 08.00AM IST

Not all skewed portfolios need an immediate overhaul. When NitinMisra, a 40-year-old architect, contacted us for help, the financial planner did not alter the portfolio drastically even though it overtly favoured real estate. This is because Nitin has been a prudent planner, investing carefully to achieve his financial goals. While most advisers would be alarmed at a lopsided portfolio, SumeetVaid of Ffreedom Financial Planners did not recommend major changes as each of his investments is aligned to a goal. Besides, Nitin has built an extremely strong net worth of Rs 2.25 crore. With zero liabilities and a high income, the Misras have little to worry. Nitin lives in Delhi with his wife, Swati, 33, and six-year-old daughter, Nysa. A year after Nitin approached us, his finances are being reviewed by Vaid to check if the family is headed in the right direction.

The original plan

On considering the Misras' finances, it was clear that they would have a smooth sailing, given his asset base, a high income of Rs 97,000 a month, and a saving rate of a little more than 50%. Nitin was, however, advised to start a few fresh SIPs to achieve his goals. "My investment in real estate will work in my favour as it will help me build a good corpus to meet my post-retirement expenses," says Nitin. A year ago, his portfolio had 88% invested in real estate, 8% in equity and 4% in gold.

The Misras' goals were relatively simple, including a corpus of Rs 22 lakh for Nysa's education in 12 years, and Rs 44 lakh for her marriage in 22 years. For their own retirement, they would need Rs 4 crore in 16 years.

Our suggestions

Nitin did not require life insurance as he had a strong net worth that would take care of his family's needs in case of an emergency. Nitin's family would need Rs 1.5 crore to meet their future expenses and his current net worth is Rs 2.25 crore, of which Rs 1.9 crore will be readily available to the family. This does not include their primary residence. However, Nitin was advised to buy individual health plans of Rs 3 lakh for himself and his family as he had been relying only on a family floater plan of Rs 3 lakh, which would not have been sufficient.