Hey folks, I'm new here and not sure if I'm doing the calculations right. Here's my current situation:
I'm 32, married, and my combined net worth is about 2 Cr (maybe).
Allocation mix:
- Equity 50%
- Debt 11%
- Gold and Cash 15%
- Real Estate 24%
Detailed split:
- Indian Equity (mutual funds only): 40 L
- US equity (Nasdaq FoF): 4 L
- Stocks from previous employer: 29.5 L
- Stocks from current employer: 25 L
- NPS, EPF, PPF: 13 L
- Real Estate: 52 L – this is a flat we own (no loan) in my native tier‑2 city, currently occupied by my parents. (Should I count this in net worth? My parents have their own flat which is rented out.)
- Emergency corpus (liquid instruments): 16 L (~10 months runway)
- Partner savings: 23 L (10 L EPF, 4 L cash, 9 L physical gold which I probably won't sell)
- Other assets: a flat I live in. There is a home loan on it. Bought for 1.7 Cr, outstanding loan 1.14 Cr, current market value 2.5 Cr. I'm not counting this flat or the loan because I could sell it and clear the loan if needed.
I started investing in early 2017, after clearing an education loan of ~22 L. I was doing a SIP in Indian MFs until about six months ago, then paused to clear the home loan on the first flat. I'll restart the SIP soon.
Current monthly expenses are ~1.7 L for the family (we have a 2‑year‑old). On top of that we pay a home EMI of ~1.07 L.
My questions:
1. Any mistakes in the above calculation? Anything I'm missing?
2. How do I take it to the next level? Most of my gains so far have come from the market bull run and a good job. I don't expect a big salary hike soon.
3. I haven't been very disciplined with investments. I sold about 17 L of Indian MFs and 26 L of company stocks for the home down‑payment. Is that okay? Hopefully I won't need to do this again.
4. When I liquidate any of these items, tax will be levied. For example, selling the flat will attract capital gains tax. Should I calculate net worth after removing the tax? Right now the numbers are current values assuming no tax.
Thanks a lot!
Congrats, that's solid progress for your age. Your calculations look fine except for the parents' house – it's not generating income and you can't readily sell it, so I'd leave it out. The next step is to start investing again consistently; I'd recommend low‑cost index mutual funds. All the best.
I doubt you'll ever sell your partner's gold or your parents' house unless there's a real emergency – which we hope never happens – so you can leave those out of your net worth. Regarding equity exposure, given your age, two income streams and a house paid off, you could push it above 70 %. For rebalancing, start with the cash you have on hand, about 20 L. I'm also curious how a family of three manages a 1.7 L expense plus a 1.07 L home EMI.
Congrats on the progress, but selling a flat is tough and you often don't get the market price you expect. Speaking from experience – I own an apartment in a posh DLF complex near a golf course. It's an eight‑year‑old building and every time we tried to sell, buyers and brokers low‑balled. New buyers usually prefer a brand‑new tower. In my view, land is a much better investment.
What's your take‑home salary and how much are you able to invest each month? Your saving rate will be the main driver. The 52 L house should be counted in your net worth, as should the current home (value minus the loan). They don't generate returns, so you can treat them as separate assets. Roughly, you're looking at about 1.5 Cr net worth growing at ~8 % YoY plus yearly savings, plus another ~1 Cr property.
The real pain point is the home loan – about 1.1 Cr still outstanding. How you manage that will be critical. If you start pre‑paying, your liquid funds may stay flat for the next 3‑4 years; if you keep the loan, you'll need to boost savings in liquid instruments while the loan remains around 1 Cr.
Congrats. However, I'd suggest not counting flats that don't generate rental income, and also leave out physical gold jewellery when you calculate net worth.
About point 4 – any profit you make will get indexation benefits to offset inflation, and if you reinvest the amount into another real‑estate purchase, you can avoid capital‑gains tax. I'm not a tax expert, so please check with a chartered accountant.
OP – congrats on the progress. Please share your and your spouse's current salaries and a detailed expense breakup so we can give more specific advice.
Congrats, OP. Most people will tell you to leave out the real‑estate value, but I see it differently. Don't mix your net‑worth figure with your FI target. When you calculate the FI number, exclude your primary residence and any property you can't easily sell. If you're just working out net worth, feel free to include the full real‑estate value minus any loans.
Your monthly expense of 1.7 L is quite high and will likely rise as your child grows. Do you have a detailed breakup or trend? Maybe there are areas you can trim.