Dr. Saurabh is a dentist by profession. He started his own practising firm in 2013-14. His average net profit after tax for the last four financial years comes to Rs. 18 lakhs. He got married in the year 2015-16. His wife is also a dentist by profession. Since her wife joined the clinic, increment in income of 30% was observed. The dental clinic where he practices was taken on rental basis. Dr. Saurabh used to spend 40% of his income and the rest was invested in National Savings certificate (20%) and Term Deposit (40%) for a period of five years. Dr. Saurabh and his spouse stay together in their own house. He resides with his mother whose age is 58 years and father whose age is 62 years. He has no siblings. His father is a retired person and his mother is a housewife. His father got retired at the age of 59. His father had savings of Rs. 44 lakhs which is invested in Term deposit @ 7.5% and also has his own residential house worth Rs. 1.40 crore. which is in his own name. Dr. Saurabh anticipates that his earning will be increased by approximately 25% yoy basis for a period of next five years.
Dr. Saurabh's parents neither have any mediclaim policy nor they hold any investment in LIC. Dr. Saurabh has a mediclaim insurance policy (family floater which covers only Dr. Saurabh and his spouse) of Rs. 10,00,000 wherein he pays a sum of Rs. 22,000/- on a yearly basis. Dr. Saurabh and his wife are now thinking of family planning in the coming year. He has approached you as a wealth management consultant to advise him regarding his wealth. He expects more than a reasonable return and is willing to take risk to a certain extent. Advise him regarding the aforesaid.
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Thakur Institute of Management Studies & Research