Ujjwal Das, 43, is a dentist and government employee, serving both as a practitioner and educator at a state government’s dental college in Kolkata. His designation is that of associate professor in the college. Das’ wife, also a dentist, works as an associate professor in another government dental college. Their 13-year-old son is in class VII.
Das started his financial planning journey in 2020, but he was not a first-time investor.
“I had made my first mutual fund investment in 2012 and kept making investments here and there, even in some stocks. However, I had to withdraw nearly all my investments in 2016 to cover my wife’s medical emergency and make a down payment on our home,” he says.
Das adds that there was no disciplined goal-based investing, and hence whatever funds were available were used to meet the family’s immediate needs.
He began to seriously consider financial planning after the covid-19 outbreak, when many doctors with private practices suddenly found themselves without income due to clinic closures. “We never imagined doctors could face such a situation. I realised it was time to plan our finances systematically, so I approached Suresh Sadagopan and his team at Ladder7 Wealth Planners,” Das recalls.
Das has allocated 55% of his investment portfolio to equities, 26% to debt, and 19% to real estate. His real estate investment is a private dental clinic, purchased in 2021, conveniently located near his home.
Das has invested his entire equity allocation through equity mutual funds. His debt portfolio is a mix of liquid and illiquid investments. The liquid portion is managed through arbitrage schemes, while the illiquid part is invested in the General Provident Fund (GPF). Of the 26% debt allocation, 22% is in GPF, and 4% is in arbitrage schemes.
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GPF is a retirement savings scheme for government employees, where employees contribute 6% of their base salary monthly. It earns an annual interest rate of 7.1% and can be withdrawn upon retirement. It is effectively a provident fund, and enjoys all the tax benefits of a provident fund.
As a government employee, Das will receive a regular monthly pension on retirement, since the West Bengal government still follows the old pension scheme. Still, Das is targeting a wealth accumulation corpus of ₹8 crore by age 60.
He also wants to save some money for his son’s higher education. “We are not sure what my son would like to pursue in the future, but education costs can be large, so it is better to plan in advance. If my son wants to pursue medical studies, the cost of MBBS (Bachelor of Medicine, Bachelor of Surgery) from a good private college in India today is nearly ₹1 crore,” Das says.
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For post-retirement income, Das is also counting on his private clinic. He says at some point he should be able to make enough net income from the clinic. Right now, the clinic is neither making a profit or a loss. “There are some months when there are profits also. Fortunately, we have never been in losses on a month-on-month basis,” he says.
The clinic has certain operating costs such as his attendant’s salary, buying of dental materials, and repair and maintenance of equipment, but Das says the costs are largely sustained by the clinic’s income.
The family also aims to travel twice a year, usually on domestic trips. The costs for these trips are planned in advance, with money set aside in arbitrage schemes for easy liquidity.
Despite being associated with the medical profession, Das learned the importance of medical insurance the hard way. “In 2016, my wife had an operation on her gall bladder. At that point, I had to suddenly withdraw all my mutual funds. I had built an investment portfolio by doing SIPs in six or seven mutual funds,” he recalls.
His wife, also a West Bengal government employee, had a cashless medical cover of up to ₹1.5 lakh, but as the hospital she was admitted in didn’t offer cashless facility on the government’s medical scheme, Das had to withdraw all his mutual fund investments to meet the medical costs.
Today, he has a ₹10 lakh medical cover for himself and another ₹10 lakh cover for his wife and son, apart from the government’s medical cover for his wife, son and him.
Das also has a term cover of ₹1 crore, while his wife has a term cover of ₹1.2 crore. On his advisor’s recommendation, he has also purchased a professional indemnity insurance of ₹25 lakh. His wife and he each also have accidental insurance, with permanent disability coverage of ₹50 lakh and a temporary disability coverage of ₹15 lakh.
Das says he also had a bunch of endowment plans but he soon surrendered them after discussing the merits and demerits with his financial advisor. “I closed these products and transferred the investments into mutual funds, as my financial advisor explained that such products didn’t offer very attractive returns. The insurance value is also very less while the premiums are on higher side,” he says.
Of the total family income, 50% goes towards mutual fund systematic investment plans (SIPs), 27% to household expenses (including insurance premium), and 23% to loan repayments.
Das says once his equated monthly instalments towards loans are over, he will increase his SIP allocation to expedite his financial goals.
While he isn’t in a hurry to retire, Das says, “The day my income from the clinic matches my job salary on a regular basis I would consider retiring.” He adds, "Given the extreme pressure of working at a government hospital, there are rarely any off days. We only get one weekly off, on Sundays. My simple goal after retirement is to spend as much time with my family as possible.”
Das lives in a joint family. While his parents have a separate house nearby, they spend most of their time together at his house.
As the West Bengal government has revised the retirement age for college and university teachers in 2019, Das, an associate professor, now has an official retirement age of 65. However, he says he will try to retire earlier than this threshold.
With an additional income source already in place, which Das is working to expand gradually, and a regular pension expected upon retirement, he is not particularly worried about meeting his household expenses after retirement.
He can run his clinic well into his 60s and beyond if he wishes. Additionally, he is targeting a large corpus by the age of 60. “I expect to have adequate funds and income sources in place to meet my basic retirement goals and my desire to travel more with my family, both within India and abroad,” Das says.
