Living on 70 Lakhs Post Tax in India | Fix Your Finance Ep 38 #Finance

In today’s episode of Fix Your Finance, we’ll meet a guy who has 4 home Loans worth 2.5 crores. He has a Profitable business along with a

job and the family earns more than 70 lakhs per year. In this CashNews.co, we’ll discuss Loans, Insurance and many other things. So watch till the end and to support the channel, press the like button right now. Hello and welcome to a new episode of Fix Your

Finance. Today, we have Narayan Singh. He’s 34 years old. He’s a software developer. And he lives in a villa near Bangalore. How are you? I’m very good. So what do you do,

Narayan? I work in software engineering and UI in my company. Okay. And what does your company do? It’s a car rental company. It’s a premium car rental company. So who all are there in your family? Here, me, my wife and my child. The three of us live here. What’s your

Income? Our collective household Income including our small business is 1 cr plus. This is in hand, you’re saying? No, no. This is overall around 50L. You said you have a small business, right? I have a small business called Eat Healthy Floor Mill. This is an

on-demand flour mill service. You order now. We select grains for you right now. We grind it at that time. The flour reaches you within 4 hours. And how is this business margin wise? It has 30% gross and 10% net Profit. So you, your wife and this side business have an annual take

home pay of 50 lakhs. Yes. Which is around 4 lakhs per month. Sometimes the company gives lump sum money. Twice a year. There’s a bonus once. Sometimes our collective household Income in hand reaches 70 a year. So when you get this lump sum amount, what do you generally do?

Do you invest it somewhere? I think that’s the right thing. I try to park it in the property. Otherwise, I put it in mutual funds. So this is your Income. Now let’s talk about your expenses. First of all, your villa. Have you purchased it? No, I live on rent. Its

expense is 32,000. You must be travelling. Yes. You go to the office. Considering this place is like 30-40 kms from your office. 30. So on a monthly basis, how much are you projecting? The good thing is that I go to the office for only 2 days. Maybe less than 3 tanks which is around 9000. After

that you said you have a baby, right? So to take care of that baby, is there any caretaker or any help? No, no, no. Thanks to Work From Home. How much do you spend on groceries? Our groceries are covered by our own business. We get flour from our own business. Dal, rice, sugar. Everything comes

from our own business. Wow. And we don’t have a cook. So you cook yourself? My wife cooks. And do you have a maid? Yes, we have a maid. Okay. 3000 rupees is the expense. What I can see is that in housing, travel and food, Your total expense is less than 50,000. But my monthly expense is

around 1 lakh. Where do you spend this? We take a trip once a month. Okay. Nearby. So sometimes we spend around 20,000. So on a monthly basis, in 3-4 months average, how much are you spending? 1 lakh. Now let’s come to your Liabilities. Do you have any Loans

as such right now? I have a couple of them. I have purchased 2 flats in Bangalore. So there are 2 Loans. Okay. First Loan is flat 1. I bought flat 1 in 2021. It’s a 1.4 cr house. Okay. There is a Loan of 1.17 Cr. What’s the tenure? 20

years. Interest? We started with 6.5% Okay. Today? 9.2% So how much is the EMI for it? It’s 91,000. Why did you buy the first flat? For personal use, for family, I mean to live on my own. Let’s come to the second flat. Why did you buy that? I bought the second flat for pure investment.

When did you buy this house? 2-3 months after buying the first flat So you bought it in 2021. Yes. How much is this flat? Flat is 60L. Okay. The Loan is 50L. What’s the tenure? This is for 15 years. What is the interest rate? 9% What is the EMI for this? Somewhere around 23K.

But it will keep changing. Doesn’t it make sense for you to pay the full EMI right from day 0? I feel that I can make a much better use of that money if I have it rather than giving it to the bank. And what will you do with that money? Will you put it in your business? I will reinvest it.

Whether it’s in the business or maybe another property or maybe some other form of investment. One thing that I would like to say, there is a caveat that he started investing in flats and making these bigger bets after he started earning like 50 lakhs. In the initial days when you are earning

like 10 lakhs, 15 lakhs, 20 lakhs, do not look at houses as Investments because a big sum of your money gets locked. The third Loan is for my native place. I have two properties there. Two? Yes. When did you take this? One was an emotional decision. Okay. My mother

said that I have to buy the house that is next to my house. How much was the amount? It was a Loan of 16 lakhs. And the interest is around 7.5%? It was around 11%. Then I gave some money and got it reduced. So now it is 9.5%. And what is the EMI of this? It is 22,000. Then you said

that you have one more property. Yes. How much is the amount of house 4? It is of 60 lakhs. I have taken a Loan of 50 lakhs. This is of 15 years. What is the EMI? It is around 25K. So here I can see that your EMI is around 1,70,000. Okay. And all these Loans are

for 20, 15, 10 years, so your long term commitments are very high. The most important question is, are you and your wife insured? Both are insured from our companies. My health Insurance is of 8 lakhs. Okay. So the total cover of the family is 8 lakhs? Yes, from the company. Okay.

Then I also have my own personal health Insurance. Okay. That is of 1 cr. Do you have a term Insurance as of now? That is of 2 cr. According to me, if I just look at the cost and the total commitments, you should take a term Insurance of around 5

crores. Okay. Because these are longer term commitments and you also have responsibilities. A term Insurance will basically give your family financial stability if you have an untimely demise. Okay. So you should give both these Insurances as soon as possible. As

we discussed, you should have an Insurance of 2-2.5 cr. Your wife should also have a term life Insurance. Yes. And in max life Insurance, a 2 cr term life plan starts with as little as 1,000 or 1,100 rupees per month. Okay. So you guys should also

definitely check out max term life Insurance. Generally, it happens that only those people get term Insurance who are working. But, max is now also giving term Insurance to housewives or house husbands. Okay. So if your partner doesn’t work,

still they can get term Insurance in max life Insurance. According to the last financial year, max life Insurance’s death claim settlement ratio is around 99.51%. You should also take additional riders with you. Like accidental cover,

permanent disability rider, critical illness protection. So you should definitely look at these few factors before investing or buying a term Insurance. So if you haven’t bought your term Insurance yet, check out the link in my description. Okay. According to

your expenses, Income, and responsibilities, decide your appropriate cover. And then you can go out with the best plan which suits you and your family’s needs. So after your expenses and Loans, you spend Rs. 3 lakhs every month. What do you do with the

remaining money? I invest Rs. 50,000 per month in mutual funds. And what is the value of your mutual fund Portfolio? It’s around Rs. 4-5 lakhs. I personally feel that all these Investments that you have, the challenge here is everything is illiquid. You

don’t have any Investments that you can sell overnight and get money in 3 working days. Correct. So I would personally suggest that you should liquidate one of these properties and keep that in liquid Investments. Like Equity,

Debt, you should keep it so that you have that option if you need it, your Investments will be useful. Correct. This cycle has to end. You cannot just keep on taking Loans, Loans, Loans, Loans.

Yes. I also wanted to understand how safe is your Income? As such, there is nothing called safe in life. After corona, I think. Of course. It is purely, till the time I can keep upskilling myself in whatever way, I will be relevant. But even if something like this happens, I have a

business to fall back to. Do you have an emergency fund? I have around Rs. 14 lakhs. So in your case, ideally, you should have Rs. 15-17 lakhs cash in liquid Investments, Debt instruments, short-term Debt instruments, or your

Savings account. Overall, Income wise, your family is doing well. Your side business is also good. The three areas where you need to work upon is, firstly, increase the cover of your term Insurance, your family’s term

Insurance, around 5 crs. You need an emergency fund of at least Rs. 18 lakhs. Yes. And you should invest more in liquid Investments. Okay. So that you have a 360 degree financial protection. So this is our rapid fire round. We will give you the answers as soon as

possible. First question is, if you had to choose between a 10% increase in your monthly salary or a 10% reduction in your working hours, what would you choose? 10% increase. Which means that you like what you are doing, you are content. That is true and I have work-life balance. Second is, if you

had an unlimited budget, what would you gift your wife? Jaguar. Bathtub or car? Car. Okay. What would you choose? A bonus of 5 lakhs or a salary increase of Rs. 10,000 per month? Lumsum. Lumsum. And the last question is, what are some of the steps that you will take after this session to, you know,

enhance your financial journey? Increase my term Insurance. Because I think it is a very valid thing. And I took term Insurance long back, right? At that time, 2 crs were too much for me. Similarly, I did not have my own health Insurance. But I

think after listening to your CashNews.cos, that’s when I thought that I should have my own personal Insurance. I would like to tell you an incident. on why personal health Insurance is very important? a colleague used to work with us. Unfortunately, he met

with an accident. So, he needed money. He had Insurance. But then I think it covered the expense of 2-3 days. Because that company fired him the third day This is one key lesson I took. That he had company Insurance. He was insured. Everything was fine. But then

things can go any direction. I think this was a very important story that you shared. Company is unbelievable. Everyone is on their own. So, you need to take your own health Insurance. And if you have any responsibilities, take term Insurance right now. You should

buy term Insurance right now. Because the sooner you buy it, you will get it at a lower price. Because the premiums are directly proportional to your age. That’s all for today’s CashNews.co guys. Thank you so much. for inviting us to your house. I hope you guys learned

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