Managing INVESTMENTS and a LOAN | Money Matters Ep. 40 | Ankur Warikoo Hindi

"Shubham, at any point you should have three to six times this in the bank for the simple reason that if by chance your income stops, you leave your job or you get laid off or anything else like this, you should have a buffer period of three to six months in which you can still live your life and try to generate income in that."

"So, your first goal, in my opinion, should be to create an emergency fund of Rs 1 to 1.25 lakh."

"So, in your corporate, is your wife also included in your corporate? No sir, I have not included her yet, I am single, that's okay. Yes, because you had already joined the company. Okay, that's fine. And you have taken personal insurance for your mother. Yes sir, Okay, Okay, and the life insurance is from your company. Yes sir, Okay, and you have taken it for yourself. No sir."

"Okay, your corporate plan will work only till you are in this company. The day you leave this company, your plan will end and then you will join another company and get another plan, but all the benefits of continuing an insurance plan will continue. You will buy health insurance for your wife and yourself. And since you are in a city like Indore, it is not a very expensive city, at least compared to tier one cities, so if you take health insurance of even Rs 3 to 5 lakh, that should be enough and it will not be very costly."

"So it is very important, Shubham, that you should have life insurance because you are almost the Sole earner and at least the largest earning member of the entity. Life insurance is never enough; it is just for show. But you must get this life insurance."

"The good thing is that you are not yet 30 years old. You are just 27 years old. It is actually the perfect time to buy life insurance. Because if you take life insurance of Rs 1 crore and even till the age of 60, your expenses will be around Rs 8 to 10 crore per month. Sorry, to give you an insurance cover of Rs 1 crore. So, take term insurance in life insurance and take it till the age of 60 so that if something happens to your life between the age of 27 to 60, then your nominee will get this amount of Rs 1 crore."

"Do you have any idea right now which tax regime you are on? Yes sir, all tax regimes, all tax regimes, right, which is why you are going for this deduction as well, it can be in the form of ELSS, Shubham, and you will have to check very quickly. There are many good online calculators. It is possible that the new tax regime will be more beneficial for you because its tax rates It is at least in the slab where you are."

"So, the first thing that I would do is check the tax regime for you and if you are in the new tax regime, if you are in the new tax regime, then stop future ELSS. You don't need to go ahead and buy ELSS."

"ELSS has a lock-in period of one year, did you know this? Yes sir, I knew, but it doesn't mean that you have to invest for 3 years. It means that whenever you invest, whatever amount you invest, it remains locked in for 3 years. Yes sir, now if you feel that these ELSS funds are not performing as well as I could have got by investing in some other mutual fund or some other type of mutual fund or some other category of mutual fund, then you can stop this SIP. Why? Because you will not get any benefit from them if you move to the new tax regime."

"So what I would suggest is that if I had to replan your Rs. 15,000 again, then my suggestion would be that out of this Rs. 15,000, you should invest Rs. 15,000 in Nifty 50 or Nifty Next 50. Basically, invest in a large cap index, then around 4 or 5 in a flexi cap or mid cap index and then invest around 3 to 5 in a small cap index."

"You are not investing for one to two years. You are investing for 10 to 20 years. So what is most important is that you have taken this decision and congratulations on that. You have to continue with it so that you don't lose the momentum."

"So after six months prepay home loan by 5k every month and reduce it. My approximate calculation is not accurate. The approximate calculation is that if you give this 55000, then your 15 year loan will be repaid within about 6 to 8 years and that should be how you deal with your loan so that in about five to seven years you are completely loan free from those loans."

"But if you tell them that you will take this 5,000 rupees and reduce my tenure, not my EMI, then this is a big mistake. People make when they make a prepayment, the bank says, 'Sir, reduce the EMI.' And we all reduce the EMI. Why? Because we like reducing the EMI. We feel that we have saved money every month, but because of that, you are still paying the loan for 15 years."

"If you take a plan of Rs 1 crore till the age of 60, okay, it will cost you approximately Rs 10,000 per year, let's say Rs 10,000, we will pay it till the age of 60. You are 27 now, so over the period of this, you will pay Rs 63,000 total, okay, okay. Now, if you want the same thing, that the premium that I paid should be returned at the age of 60, then the same Rs 1 crore insurance, Shubham, is of about Rs 23 to 25,000, but year per year, so now Rs 23,000 in 60-27, you will now pay Rs 7,59,000, but you are saying that the entire Rs 7,59,000 will be returned, then this is very good, isn't it?"

"The work of insurance is to insure you. The work of insurance is not to increase your money, the work of insurance is to protect your life and your family."

"My actual salary which I told is 67 K in hand, in this sir, my TDS of Rs 4 K is deducted per month, which I file sir, then I will get it back, so if I put my money in then it can happen because if you have a home loan, you get its benefit and if you do EIL then you get its benefit, so it is possible that the old tax regime is still beneficial for you and if So please continue with ELSS. If not, you can stop ELSS and move to the new tax regime."

"Sir, it is not what is happening that is happening, but because of what is happening, I am losing what could have happened. So, it could be that you are able to increase your salary in the old tax regime, but because of that, you have to invest in ELSS, which does not have that much return. So, if you do that math, even if my salary reduces a little in the new tax regime, but instead of ELSS, I will be able to invest in a mutual fund that will give me better returns. So, over a period of time, what will be more beneficial for me?"