Mrs. Sanmeet Kaur Sahani is the first lady winner at the Kaun Banega Crorepati..(Indian version of Who wants to be a Millionaire)…this is a program conducted by the legendary Amitabh Bachhan and has got the imagination of the Indian middle class.

She won Rs. 5 crores (Rs. 50 million) – about US $ 1 Million.

Coincidentally Mr. Sushil Kumar who won the same amount a year ago was a school teacher and Mrs. Sahani is a tuition teacher. So teachers have it good on KBC.

I have no clue what Sushil did with his money, but here is an attempt to say what Mrs. Sanmeet Kaur Sahani should do…..

First of all, she will get about Rs. 3.4 crores after paying off the taxes. This by itself a HUGE amount and most well paid Indians do not accumulate this by the end of their working life. It is really a fortune.

Will she have the skill to manage it? Well she needs God’s blessings.

She plans to buy a house for starters – that in any part of Mumbai will take away a crore – or about 1/3rd of the amount. A house costing Rs. 1 crore will also involve a maintenance of Rs. 100,000 per annum – and that might hurt her cash flow. So about Rs. 10 lakhs has to be kept in a fixed deposit so that she has an income of  Rs. 1 lakh which will take care of the maintenance.

That leaves her with Rs 2 crores for investing.

She is a tuition teacher earning say Rs. 40,000 per month. Obviously she should not buy something which she will find difficult to maintain. So she should first invest Rs. 2 crores in  a liquid fund on day 1. Later on she can decide to asset allocation. She is about 40-45 years of age – and as a teacher she can go on for at least another 20 years. So if she were to continue her same standard of living she can :

spend Rs. 50 lakhs on a vacation, for buying gifts, and maybe some luxury items including a car and furnishing her house. However in keeping with their standard of living it should be only a Rs. 10 lakhs kinda car – a Honda City and not some luxury car which they will find difficult to maintain.

About Rs. 50 lakhs should be in a Short term MIP – to be kept for her daughter’s  wedding – assuming 2 daughters this should be more than enough, because it is only going to supplement what she has already earmarked.

That leaves Rs. 100 lakhs – this goes into a combination of equity funds, balanced funds and MIP plans – to take care of the retirement needs of the family.

Surely there will be some charities, some fun….but all this should be done after a MONTH – by which time the heart beats normally! She will need to develop the power to say NO to a lot of people:

Elder brother – wanting to set up his own business

Younger brother – wanting to quit his ‘piddly’ Rs. 1500 per month job – and he will want to start a new business too

Her daughters will want a nice big house – befitting the ‘crorepati’ mother’s status. LIC agents, mutual fund agents, bank managers, other life insurance companies, pension providers, brokerage houses, banks.

Frankly it will be interesting to track her life over the next 10 years on a year to year basis to see how much this money is scaring her, helping her, torturing her, helping her in meeting her goals, etc.

Sadly along with a big amount of money GOD does not give ‘financial wisdom’ – not even the wisdom of knowing that SHE needs unbiased financial advise. Sad. I am not able to rejoice in HER success. I can see tomorrow.