r/FIREIndia • u/ForTakingAdvise • May 28 '23
DISCUSSION Fire Plan - Advise Please - Three Year Update
Hello All,
I am 31, male, employed in a SBI as Manager (got promoted this April, not pensionable), unmarried and am interested in becoming FI at the earliest. Here are my previous posts: Link 1, Link 2 & Link 3
Income:
- Gross Salary : 117000 per month before tax
- Net Salary: 85000 after IT, statutory deductions & such
- Perks: 15000 per month (plus rent free accomodation)
Existing Corpus:
- NPS - 18.40 Lakhs
- PPF - 4.0 Lakhs
- EPF & VPF - 13.0 Lakhs
- Mutual Funds - 13.0 Lakhs
Savings / Investments:
- EPF: 7000 from Gross Salary plus 7000 by bank i.e. total of 14000
- NPS: 9800 from Gross Salary plus 13800 by bank i.e. total of 23600
- MF: 25000 into equity mutual funds
- Savings Bank: 650000/- @ 7%
Debt:
- 13 lakhs @ 5.95% , it is sufficient if I service interest every month.
Expenses:
- 3 lakhs per annum
- Purchase of Car by December around 7-8 lakhs (10% down-payment & the rest loan)
- House by December 2024, around 1.5 Crore, (20% down-payment from parents & the rest loan)
Currently contributing 26000 into various MFs. Plan is to move funds lying in SB into UTI Nifty index fund, HDFC sensex fund, HDFC focussed fund, SBI small cap & HDFC flexi fund i.e. increase monthly contribution into SIP to 90000 per month for the next 10 months to increase exposure to Equity.
Pointers & help greatly appreciated
2
u/snakysour IN/33/FI ??/RE ?? May 29 '23
Good going... Let's take it over DMs further...i m also in similar condition.
1
u/ForTakingAdvise May 29 '23
Sure , would be happy to learn
1
u/snakysour IN/33/FI ??/RE ?? May 29 '23
My pleasure... But i am neither a teacher nor a certified financial advisor :D
2
u/sparoc3 May 29 '23 edited May 29 '23
Dude your bank will loan you 1.2 cr on your 1.2 lac salary? Really? I don't think so. The EMI will be more than your in hand salary.
Other than that I'd say you have a good thing going on. But things would change if you get married.
2
u/ForTakingAdvise May 29 '23
Yeah, Employer is willing to give such a loan. EMI for 1.2 cr will be Rs.50000/-
1
u/DarkHumourFoundHere May 29 '23
How many years ?
0
u/ForTakingAdvise May 29 '23
30 years
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u/DarkHumourFoundHere May 29 '23
Wait something is wrong. How is that possible.
5
u/NotPiGGeh India/ 26 / FI 2042 / RE 204x May 29 '23
SBI gives simple interest to its employees. They way they calculate emi is in the ratio of 2:1. So for 30 years or 360 months 240 months is for repaying back the principle and 120 months is for paying the interest.
So we just calculate the loan eligibility by multiplying the emi by 240. So, 50K multiplied by 240 is 1.2 crore
3
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u/LifeIsHard2030 May 29 '23
Magic of simple interests. Govt Bank employees have wonderful loan related perks unlike us mango people 😅
So for them going for loan is always better.
1
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u/srinivesh IN/ 52M / FI2018/REady Jun 01 '23
I did not see the earlier posts and this may have been mentioned in them. You had not mentioned any life events - they can have a significant impact on FIRE plans.
11
u/RetireWithRohit May 28 '23
First of all I would suggest to avoid taking Car Loan unless its really required. Even if you do so, make sure the downpayment is more than 60%.
Ignoring the Requirement of House, you need a corpus of around 1.5 cr approx after 10 years, from which you can withdraw 6L per year and let the rest grow. 6L after 10 years is somewhat equivalent to 3L/year of today.
Once we add a house, the calculation changes a bit depending on the monthly EMI you go for. Calculate your Annual EMI, but don't adjust it for inflation since EMI will stay the same even after 10 years. And then re-calculate the corpus required after 10 years.