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Plutus Capital
We assume that all information you have provided is accurate and does not independently verify the accuracy of any such information.
Advisor: Ankur Kapur, CFA®
Feb xxx, 2017
THIS IS A SAMPLE PLAN CREATED FOR A SAMPLE CLIENT
Action Plan Prepared For:Arjun
www.plutuscapital.co
TABLE OF CONTENT
Intro
One Number Recap
Net Worth
Goals
Protects
Arjun,
Here it is ! Your fully customized Action Plan, which is
based on the budgeting strategy we agreed upon on our
last call. This Action Plan outlines three key elements of
your Program.
Your Cash Release Strategy
We will recap your ‘cash release’ and show you how
sticking to this budgeting strategy can grow your net
worth over time.
Your Goals Summary and Recommendations
For each goal, we explain the why behind our advice, tell
you how much you need and explain how to work toward
your target amount.
Your Life Insurance Analysis
We will review your income and expense and evaluate
how much coverage you need to keep your assets
protected.
Let’s dive in!
Ankur Kapur, CFA
Your Cash Release Strategy
At Plutus Capital, we believe your Cash Release Strategy
is the key to your success with the Program. We will
break down your new monthly budget in the Action steps
section, but first let’s look at how your Flex Number
drives the pace of your progress on an annualized basis.
Rs 30,000
Your monthly Flex Spending number
Why it Matters
Sticking to this number will enable you to cover day-today
expenses while also having the money to put towards
your goal contributions. The end result: you maintain a
balanced budget and make progress on your goals.
Household Income: Rs 30,00,000 per year*
Annual Fixed Expenses:
Rs 24,00,000 per year
Annual Flex Spending:
Rs 4,50,000 per year
Rent, home loan EMI, car
loan EMIs, school fees
Eating out, shopping,
entertainment etc.
Annual Fund Available to Invest
Rs 5,00,000 per year
*Annual Net Income + PF
contribution
Your Net Worth
Next, let’s take a step back to see how these goal
contributions support the growth of your net worth over
time. Your net worth is only one measure of your financial
health. There is no “right” number. Below is a summary of
your net worth today.
What You Have
Rs 1,50,00,000
Net Worth
(Asset – Liabilities)
Rs 2,50,00,000
Assets
Fixed Deposit Rs 12,50,000
Savings Account Rs 7,50,000
PF & PPF Balance Rs 50,00,000
Mutual Funds Rs 10,00,000
Direct Equity Rs 10,00,000
Real Estate (Est. Value) Rs 1,60,00,000
Rs 1,00,00,000
Liabilities
Home Loan Rs 90,00,000
Car Loan Rs 10,00,000
GOALS
Your Goals Summary
At Plutus Capital, we believe that order matters. We
place three goals above the rest: emergency savings,
retirement and staying out of debt or loan. These satisfy
your basic financial security needs and make it possible
to work on other goals. We have included all goals you
mentioned, and a few more we find important.
Your Five-Year Goal Progress
Below is a visualization of the goals you will work on over
the next five years.
2017 2018 2019 2020 2021 2022
Emergency FundBASIC SECURITY
Retirement FundBASIC SECURITY
Personal LoanBASIC SECURITY Min payments until Dec 2019
Child Future Fund
Buy a Home
When You’ll Get There
Focusing on a few goals at a time will enable you to
make noticeable progress.
Priority Goal NameGoal start
yearCorpus
requiredExisting savings
Additional savings
1 Emergency Fund 2019 ₹ 10 lakhs ₹ 2.5 lakhs ₹ 25,000 p.m.
2 Retirement 2032 ₹ 8.6 crores ₹ 1.07 crores ₹ 50,000 p.m.
3 Personal Loan 2021 ₹ 20 lakhs ₹ 0 ₹ 45,000 p.m.
4 Child’s Future 2032 ₹ 1 crores ₹ 0 ₹ 15,000 p.m.
5 Buy a Home (DP) 2022 ₹ 20 lakhs ₹ 0 ₹ 15,000 p.m.
Basic
Desire
Aspiration
Emergency Fund BASIC SECURITY
Having an Emergency Fund helps protect you from
relying on credit cards or dipping into your retirement
savings in the event of the unexpected like a job loss,
major home or car repair, large medical bill, or
bereavement related expense, which could derail your
financial security. It also provides you with the freedom to
make big financial decisions like pursuing a career
change, or moving to a new city.
What You Have
You have saved Rs 2,50,000 which would last you ~1
month based on your current living expenses.
What You Need
Your recommended savings is Rs 10,00,000, which
would last you 3 months based on your current living
expenses.
How to Get There
You already have a great head start on your Emergency
Fund, but it’s important to continue working towards
having 3 months of living expenses to fully protect
yourself from the unexpected.
Since you already have a solid safety net in place, let’s
focus on paying down your Home Loan so you can save
on interest. Once we make headway on your Home loan,
we will weave more emergency savings back.
In the event of an emergency, if you feel more
comfortable having quicker access to your savings
instead of waiting for a transfer to be completed, keep a
small chuck of savings in a fixed deposit connected to
your savings account. The remainder of your Emergency
Fund should be kept in ultra short-term debt funds.
Recommended options
You can invest Rs 2.5 lakhs in a fixed deposit. You can
split Rs 25,000 per month between these two funds.
Rs 12,500 p.m.
Franklin Templeton Ultra ST Bond Fund
Rs 12,500 p.m.
UTI Banking & PSU Debt Fund
Retirement Fund BASIC SECURITY
Saving for retirement will likely to be the biggest and
longest running goal of your life. Ultimately, you need to
have enough money to pay yourself for 20-30 years after
you are no longer earning an income.
What You Have
60
Desired retirement age
Rs 1,07,00,000
Existing Savings
Rs 8,62,43,000
Projected nest egg
What You Need
Rs 50,000 per month
Additional investment
How to Get There
Below are the types of accounts we will use to diversify
your retirement savings and optimize for taxes.
Provident Fund
Rs 17,500 per month
Your account at work enables you to build up a tax-free
nest egg for retirement. Your contributions will be before-
tax today and withdrawal in retirement will be tax-free.
Given the time-horizon, this would be a substantial tax
benefit. Public Provident Fund
Rs 12,500 per month
Your PPF account enables you to build up a tax-free nest
egg for retirement. Your contributions will be before-tax
today and withdrawal in retirement will be tax-free. Given
the time-horizon, this would be a substantial tax benefit.
New Pension Scheme
Rs 6,000 per month
Your NPS account enables you to build up a nest egg for
retirement. Your contributions will be after-tax today and
withdrawal in retirement will be taxable.
Mutual Fund
Rs 20,000 per month
Your mutual fund account enables you to build up a tax-
free nest egg for retirement. Your contributions will be
after-tax today and withdrawal in retirement will be tax-
free. Given the time-horizon, this would be a substantial
tax benefit.
Mutual Fund Investment Allocation for Retirement
Retirement goal is long-term therefore your monthly
investments may be allocated towards growth assets.
Rs 5,000 p.m.
Birla Sun Life Frontline Equity Fund
Rs 5,000 p.m.
Mirae Asset India Opportunities Fund
Rs 5,000 p.m.
Franklin India Prima Fund
Rs 5,000 p.m.
HDFC Mid-Cap Opportunities Fund
Personal Loan BASIC SECURITY
Eliminating personal loan as quickly (and safely) as
possible can have huge financial benefits. You will save
money by paying less in interest.
What You Have
Rs 20,00,000
Total Home Loan to tackle
Rs 7,00,000
Total Interest to be paid
5 years
Tenure left
What You Need
Rs 25,000 per month
Saving post Dec 2019
How to Get There
Once you are able to build emergency fund, you can plan
to allocate additional Rs 25,000 per month towards
payment of personal loan principle. The Funds should be
kept in ultra short-term debt funds. Until Dec 2019,
continue to pay the EMIs.
Rs 3,60,000
Interest you will save with this Plan
Child’s Future
Laying the foundation for basic financial security is the
first step. Child’s future planning includes higher
education and marriage related expenses.
What You Have
Rs 0
Total saved
What You Want
Rs 1,00,00,000
Expected cost
15 years
Time left
How to Get There
You need to save additional Rs 15,000 per month to
achieve your goal to fund your child’s future expenses.
Rs 5,000 p.m.
Birla Sun Life Equity Fund
Rs 5,000 p.m.
Franklin India High Growth Companies Fund
Rs 5,000 p.m.
Franklin India Smaller Companies Fund
Buy a Home
Laying the foundation for basic financial security is the
first step to prepare, and ultimately qualify to buy a home.
Now that we have covered that, let’s take a close look at
what buying a home means to you and what’s going to be
doable based on where you are today.
What You Have
Rs 0
Total saved
What You Want
Rs 1,00,00,000 Rs 78,000
Desired Home value Estimated monthly
EMI
Rs 20,00,000
Down payment needed to purchase
What You Can Afford
At Plutus Capital, we strongly recommend, saving 30%
for a down payment. Your analysis considers your debt to
income ratio, your credit score, your current savings, and
the likely size of mortgage.
Rs 1,00,00,000
Recommended home
value with the
achievable down
payment
Rs 20,00,000
Estimated down
payment + closing costs
by Feb 2022
Rs 78,000
Estimated monthly EMI
How to Get There
Owning a home is an important goal, but it comes with
additional financial responsibilities and unexpected
expenses. Let’s focus on building basic security before
saving for a down payment.
Your estimated mortgage payment (EMI) is reasonable
given your current budget, so a home in this price range
should be affordable for you.
Stick with it! There are very real advantages to waiting
until you are able to fully fund your down payment.
Putting 30% down when you purchase a home enables
you to avoid taking any personal loan, which comes at an
additional interest cost. This would also build equity in the
home for security if the real estate market dips.
Before setting aside funds for a home, let’s focus focus
on completing your emergency fund, which is essential
step towards preparing for the unexpected expenses of
home ownership.
Saving for a home can feel daunting, but stick with it and
remember there are some very real advantages to
renting like being able to call your landlord to fix (and pay
for!) any issues.
PROTECT
Your Insurance Needs
At Plutus Capital, we want to help ensure that your
income and assets are properly protected from an
unexpected events that could potentially derail your
goals.
Life Insurance
Term life insurance is designed to protect those that rely
on your income (spouse, kids) and can be used to payoff
large debts (home loan, car loan) in the event of your
death. The length of the term plan will depend on the
period of time for which you need to cover financial risk,
but is often 10-30 years.
Having adequate life insurance coverage
enables your family to meet immediate and
ongoing financial needs should you pass
away. Rs 30,00,000
Current annual income
Rs 20,00,000
Outstanding loans
Rs 2,20,00,000
Estimated value of life cover
based on Human Capital
Disclosures
Information in this Financial Plan is for educational purposes only. Calculations are allestimates based on information from the financial profile you provided during thefinancial planning process. We assume all information you have provided is accurateand does not independently verify the accuracy of any such information. Thesuggestions here are neither appropriate for the purposes of making a decision tocarry out a transaction or trade, nor do they provide any tax or legal advice or makeany recommendations regarding particular financial instruments, investments, orproducts. Plutus capital / Ankur Kapur is not broker, dealer, attorney, tax advisor, orinsurance agent. Ankur Kapur is a Registered Investment Adviser. MATERIALS ARE FOREXISTING CLIENT USE ONLY. Recommendations made by Ankur Kapur are for you, thepaid client, and this information is based upon information supplied to Ankur Kapur byyou, the paid client.
Recommendations and forward projections are based on your existing income andexpenses provided by you and other communication with your financial advisor. If youdid not provide the data required to run the projections, an industry-standard defaultresponse was applied in order to estimate the numbers shown in this plan. If anythingin your finances changes (income or expenses), projections may no longer beapplicable. You should discuss any changes in your financial situation with yourfinancial advisor as soon as possible. The statements related to the future businessand financial performance, and future events or developments involving yourportfolio or investments may constitute forward-looking statements. Thesestatements may be identified by words such as “expects,” “looks forward to,”“anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “project” orwords of similar meaning. Such statements are based on the current expectations andcertain assumptions of financial markets and historical performance of those markets,and are, therefore, subject to certain risks and uncertainties. A variety of factors,many of which are beyond our Planning’s control, may affect investment operations,performance, business strategy and results and could cause the actual results,performance or achievements of your investment accounts to be materially differentfrom any future results, performance or achievements that may be expressed orimplied by such forward-looking statements or anticipated on the basis of historicaltrends.
www.plutuscapital.co
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