Avoid unwarranted expenses for wealth accumulation.

I am a 45-year-old building contractor. My wife, 42, is a homemaker. My daughter is in class 1. In the past few years my business has slowed down and my income has been fluctuating. Please suggest how I can meet my daughter’s education and marriage expenses and lead a peaceful retired life.

Murthy

Going by your net-worth it is clear that you have not planned well in the early part of your career. You need to scrupulously avoid unwarranted expenses.

Education: The insurance policy along with ?2,300 monthly savings for 11 years, (11 per cent return) should meet the goal. Invest 50/50 in debt and equity mutual funds.

Marriage: Gold accounts for over half of the total wedding expenses of ?1.2 crore (if gold price and inflation increase at 7 per cent in the next 18 years); invest ?17,500 monthly, earning 11 per cent.

Retirement: Assuming ?25,000 a month for household expenses now, you need ?1.6 crore at retirement to meet expenses till you turn 80 and it should earn 1 per cent return over and above inflation. Save ?24,300 every month after your personal loan is paid off.

Be sure to invest more as income increases.

Buy a term insurance for ?75 lakh and increase your health cover to ?5 lakh.