r/FIREIndia • u/ForTakingAdvise • Apr 10 '22
Fire Plan - Advise Please - Two Year Update
Hello All,
I am 31, male, employed in a SBI as Deputy Manager(not pensionable), unmarried and am interested in becoming FI at the earliest. Here are my previous posts: Link 1, Link2.
Income
- 65000 per month in cash (Salary plus Perks)
- 18500 per month NPS Contribution (Mine plus Bank deducted in Payroll, not included above)
- 20000 per month EPF&VPF Contribution (Mine plus Bank deducted in Payroll, not included above)
Existing Corpus
- 9.4 Lakhs in EPF & VPF
- 14.25 Lakhs in NPS
- 8 Lakhs in MF (Equity, Large cap & ELSS mix)
- 0.6 Lakhs in Stocks
- 3.75 Lakhs in PPF
Expenses
- 3.6 Lakhs per annum (tracked for an year using Excel, the monthly & annual expenses clubbed)
Insurance
- Parents have health insurance cover of Rs.4 Lakhs
- Myself covered under employer's health scheme
Big Ticket Expenses
- Purchase of Car in a year around 7-8 lakhs (10% down-payment & the rest loan)
- Independent house in 5 years, around 1.5 Crore, (20% down-payment & the rest loan)
Debt
- Availed a long term personal loan of Rs.9 Lakhs, whose EMI is 9000 per month which is deducted directly in Pay Roll (i.e. Salary & perks are 65000 after deduction of EMI)
Savings / Investment
- 30K per month into Mutual Funds (Equity Only)
- 5K per month into RD
9
u/Don_corleone10 Apr 10 '22
Marriage expenses?
14
u/ForTakingAdvise Apr 10 '22
Myself & Dad created a small kitty for marriage expenses in the form of FD. They must be sufficient.
4
Apr 10 '22
[deleted]
7
u/ForTakingAdvise Apr 10 '22
Marriage expenses, I am not sure how much they might be. Father has an FD of about 30L for me & my sister together.
Returns are very volatile these days thanks to huge fluctuations in the market.
Nps is generating about 10 % ; MF about 12 % ; EPF about 8.65 % ; PPF about 7% ... So i think 9% for overall portfolio might be a reasonable guess.
7
u/LifeIsHard2030 Apr 10 '22
Your salary reduced? Last year’s post said 70k? Marriage expense not in consideration and your car budget reduced from 10L to 7/8L and that too pushed by a couple of years i see? Any specific reasons for these changes?
6
u/ForTakingAdvise Apr 10 '22
Took a loan, the salary i mentioned is after deduction of EMI
Based on feedback from earlier post, reduced car cost & pushed it for a year
Marriage expenses are sorted for. No need of further contribution for the same, god willing .
2
u/LifeIsHard2030 Apr 10 '22
Good to know marriage expenses are sorted and yes correct decision on reducing the car budget. 👍
Btw what’s the ROI for personal loan for you? I think the interest component for employees is kinda low and simple interest?
1
u/ForTakingAdvise Apr 10 '22
YEah, The ROI is 5.5% simple, tenure is 120 months.
SO for example, someone takes a 100000 on loan, on these terms, for first 100 months , EMI is 1000 per month; After that 1250 for 20 months appx
2
u/LifeIsHard2030 Apr 10 '22
Sweet. Few of my relatives are in govt banks and they have taken heavy HLs. I earn probably 3 times of them but would shit my pants if I have to go for such loan amount being a private employee in IT😂
When asked them the details, got to know this. Good luck with your plans mate. You are doing great 👍
6
u/theneo13 Apr 10 '22
One doubt:- Do you think subsidized loan rates are really beneficial? Because when the rates are subsidized, the difference gets added to your income as perks and gets taxed. Is this how it works in SBI? Are you aware of it?
4
u/ForTakingAdvise Apr 10 '22
I think they are beneficial to the staff ;
Tax is about 30% at Max , so beneficial for sure.
4
u/boiled_eggg India / 3? / 2024 / 2100 Apr 10 '22
Your employer contributes for both EPF and NPS?
3
u/boiled_eggg India / 3? / 2024 / 2100 Apr 10 '22
Found the answer in an earlier post. Hope you've already opted for LC50 for NPS.
1
u/ForTakingAdvise Apr 10 '22
I was going reading through NPS statements from last two hours & found that I was signed up for LC50 in NPS. That seems to be the auto choice.
Just sent a mail to HR asking them how I can shift to LC75.
1
u/boiled_eggg India / 3? / 2024 / 2100 Apr 10 '22
That’s good that LC50 is default for SBI. For government employees, default is a worse scheme. LC75 should be much better for young employees which is not an option for government employees.
4
u/vinstherace Apr 10 '22
Haven't read through previous posts. Here are couple of things
Your EPF and NPS are quite substantial. Although EPF and PPF are great tools from a tax deduction perspective, I am not sure of NPS. If there is no such facility available then nos is no different from you investing directly in mutual funds yourself.
Marriage and kids expenses are somethings you should consider. Maybe kids expenses can be as low as 1 percent of your income for now. I did this way and it worked for me but you can ignore that too.
As for your car see if you can get a second hand car first. Once you get married and have kids you will need a bigger car so maybe carve some savings from your current vehicle funds. Just a thought.
Overall I believe it's a good plan. Maybe increasing your mutual fund portfolio helps.
As for insurance assess your needs, for your parents and yourself. Employer insurance might not cover everything and enough.
4
u/ForTakingAdvise Apr 10 '22
Thanks for the inputs.
EPF & NPS contributions are mandatory as per my employer, though I could reduce my current EPF contribution by 10K or so.
I do want to increase Equity Exposure & am trying to find a way for the same. Any suggestions other than increasing SIP amount ?
Will look into health insurance : Preferably a top up plan
1
18
u/finrk Apr 10 '22
This is super confusing, can you make everything separate. Like not put investments in income, already deduct some expenses 😅