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Personal Financial Plan
Prepared for:
Mr. Rohit Mehta
Prepared by:
Ronak Morjaria
www.valuecurve.co.in
Email: [email protected] Page 1 of 20
Ph.: +91 97692 54535, +91 22 4971 0559
10th December’ 2018 Dear Mr. Rohit,
We would like to thank you for choosing our financial planning services.
The enclosed plan formalizes our recent discussions on the investment of your available
capital, allocation of surplus cash flows and reallocation of some of your existing
portfolio.
Our objective is to accurately assess your financial needs and to provide quality
recommendations and ongoing services in accordance with those needs.
The plan is based on the information provided by you on your current circumstances and
objectives. Please read the plan carefully to check for accuracy of the information
provided.
This plan is an important document, in accordance with the best standards of the
profession. However, it needs to be regularly reviewed and updated in response to
changes in your own circumstances and other factors, such as pension regulation, taxation
and market movements.
All the financial data and/or information provided by you in data collection form or reply
to any email thereafter and all the recommendations and advice furnished by us will be
strictly kept confidential as per FPSB’s code of ethics. We will not share or pass the data
and/or other information given by you to any other person, firm or company without your
consent. The reason we value confidentiality is that financial and life planning is a deeply
personal encounter. In order to facilitate open and honest communication, you need to
know that your choices, your decision-making process, and your future plans are kept
confidential.
Please feel free to contact us if you have any queries.
We look forward to reviewing and implementing these recommendations with you.
Yours sincerely,
Dipak Morjaria
Ronak Morjaria
Harshil Morjaria
www.valuecurve.co.in
Email: [email protected] Page 2 of 20
Ph.: +91 97692 54535, +91 22 4971 0559
The main body of this report has your personal details and your life objectives and
strategies to meet your objectives.
Name Relationship Age Health
Status
Mr. Rohit Self 30 Healthy
Mrs. Sneha Spouse 28 Healthy
Mr. Varun Son 1 Healthy
Goals and Objectives:
Executive Summary
Retirement Planning: You would like to provide a corpus for your
retirement at the age of 60 years. You would like to maintain the same
standard of living, which you are living at present.
Child's Education Planning: You would like to provide for the higher
education expenses for your son when he reaches the age of 21 years.
Child's Marriage Planning: You would like to provide for marriage
of your son when he reaches the age of 26 years.
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Email: [email protected] Page 3 of 20
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As per the information provided by you, the following are the cash inflow and outflow
for the current year:
ParticularsTotal -
Monthly
Total -
Annual
Total -
Monthly
Total -
Annual
Net Take Home Salary 66,667 8,00,000 66,667 8,00,000
Total Inflows 66,667 8,00,000 66,667 8,00,000
Household Expenses 28,500 3,42,000 28,500 3,42,000
Loan EMI's 11,200 1,34,400 11,200 1,34,400
Home Loan 11,200 1,34,400 11,200 1,34,400
Insurance Premium 8,333 1,00,000 4,192 50,300
Life Insurance 8,333 1,00,000 858 10,300
Health Insurance 0 0 2,333 28,000
Other Insurance 0 0 1,000 12,000
Total Outflows 48,033 5,76,400 43,892 5,26,700
Savings 18,633 2,23,600 22,775 2,73,300
Actual Investments 6,200 74,400 22,000 2,64,000
Surplus 12,433 1,49,200 775 9,300
Current Recommended
Income-Expense Statement
53%21%
15%
11%
Current CashflowHousehold Expenses
Loan EMI's
Insurance Premium
Actual Investments
44%
17%6%
33%
Recommended Cashflow
Household
Expenses
Loan EMI's
Insurance
Premium
Actual Investments
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Assets
Liabilities
Net Worth Statement
Type
Interest
Rate EMI
Outstanding
Balance
Home Loan 9.50% 11,200 7,50,000
Total 11,200 7,50,000
Total Assets(Investmetn Assets) 8,65,000
Total Liabiltiies 7,50,000
Your Net Worth 1,15,000
Net Worth
Particulars Mr. Rohit
Personal Assets 53,00,000
Residential Property 50,00,000
Vehicle 3,00,000
Investment Assets 8,65,000
Cash & Equivalents 40,000
Cash in hand 5,000
Savings Bank 35,000
Debt & Equivalents 4,75,000
Fixed Deposits 1,25,000
PPF 2,50,000
EPF 1,00,000
Debt Mutual Funds 0
Equity & Equivalents 3,50,000
Direct Equity 1,00,000
Equity/Balanced Mutual Funds 1,50,000
Insurance - Surrender Value 1,00,000
Total Assets 61,65,000
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Investment Avenue
Current
Allocation
Cash & Equivalents 5%
Debt & Equivalents 62%
Equity & Equivalents 33%
5%
80%
15%
Recommended
Allocation
Asset Allocation
5%
62%
33%
Current Asset AllocationCash & Equivalents
Debt & Equivalents
Equity & Equivalents
5%
15%
80%
Recommended Asset Allocation
Cash & Equivalents
Debt & Equivalents
Equity & Equivalents
Equity and debt, both, have an important role to play in your asset allocation.
Equity can provide superior inflation adjusted returns over the long term and
debt to protect your capital while growing.
Self-occupied residential property and Personal Jewelry are not treated as your
investment assets.
Gold Investment works as a hedge against inflation and provides safety in bad
economic and political conditions.
Real estate investment provides you a fixed income, potential for capital
appreciation and also helps in diversification of your portfolio. However, it is
highly capital intensive and most illiquid asset class.
Please review and rebalance your investment portfolio periodically.
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Contingency Fund
Transfer the loan to another lender at prevailing interest rate i.e. 10.50%
No pre-payment charges are payable on Floating rate loans.
You should keep aside at least 4 months expenses to be used only in
emergencies such as job loss.
Invest in HDFC Liquid Fund
Maintain discipline. Do not use except incase of emergencies
Current Monthly Expenses 38,500
Contingency Period (Months) 4
Contingency Funding (Required) 1,54,000
Investment Assets Utilized
Current
Value
Cash in hand 5,000
Savings Bank 35,000
Fixed Deposit 1,25,000
Total 1,65,000
1,54,000 1,65,000
11,000
Contingency FundingRequired
Availabe Resources Excess
Contingency Funding
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Insurance Need Analysis:
Looking at your present age, income, life style and life goals and also taking into
consideration your assets and liabilities, your life insurance need is calculated as under:
Analysis of current Policies and Recommendations:
Life Insurance
Taking into account various factors like present surrender value, maturity value and
premiums to be paid till maturity we advise you to surrender IDBI Federal ULIP
policies as this plans carries various charges which leads to lower returns. Also, this
policy does not provide sufficient insurance coverage.
Your wife is a homemaker and does not require life insurance.
Buy HDFC Life Click2Protect 3D Plus an online term plan for Rs.1 Crore for a term
of 30 years which will cost you around Rs.10,300 p.a.
Disclose all facts while buying insurance.
1,07,23,224
7,65,000
99,58,224
Total Life Insurance Required Total Assets Insurance Cover Required
Insurance Need Alalysis
Adequate Life insurance is a must to make sure your family’s life style is
not affected if you die early.
www.valuecurve.co.in
Email: [email protected] Page 8 of 20
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This section covers analysis of your current General Insurance policies, Need Analysis of
the Client and our recommendations.
Health Insurance (Mediclaim): A serious illness could be catastrophic to your financial well being therefore,
it is imperative you have adequate medical insurance coverage.
Current Recommended
United India
Mediclaim Bajaj Allianz Health Guard Bajaj Allianz Extra Care Plus
Sum Assured Rs.3 Lakhs Rs.3 Lakhs Rs.20 Lakhs
Premium Rs.8,000/- Rs.11,300/- Rs.9,500/-
Type Floater Floater Floater
Members Self + Spouse + Child Self + Spouse + Child Self + Spouse + Child
Recommendation Port Buy Buy
Health Insurance
Your family floater health insurance is bought from United India. has room rent sub-limit
of 1% of sum assured.
Disability Insurance pays a lump sum in the event of suffering from a debilitating disease
such as cancer, stroke, organ failure or disability arising from an accident.
You should take an accident insurance policy covering disability for Rs.25 lakhs and a
critical illness policy for Rs.25 lakhs for yourself. Both these policies put together will
cost you around Rs.12,000 per year.
Disclose all facts while buying insurance.
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Analysis of Current Investment:
Direct Equity Investment:
Mutual Fund Investment:
Sr.
No.
Name of Scheme Current
Value
Recommendation Allocated
Goal
1. Birla Mid Cap Fund (D) 70,000 Redeem & Switch to
ICICI Pru BlueChip
Fund
Varun’s
Education 2. DSP BR Small & Mid Cap Fund (G) 50,000
3. ICICI Pru Infra Fund 30,000
Investment Planning
Direct investment in equity is not advised, as it
requires depth research and analysis.
Invest money in good mutual fund schemes.
Sell your equity investments and reinvest in
Mutual Fund schemes as recommended.
Instead of investing in sectoral or thematic funds, invest in well-diversified funds, which
invest in stocks of many sectors, which give good diversification across sectors. Hence,
we recommend switching as above.
We suggest you to keep all your Mutual Fund units under Growth option and in
recommended Mutual Fund Portfolio.
All your existing investments have been allocated towards your all major goals. Equity
schemes of mutual fund invest around 90-100% in shares of listed companies and the
balance 0-10% in highly rated debt instruments.
Balanced mutual fund schemes invest around 70-80% in shares of listed companies and
the balance 20-30% in highly rated debt instruments. They provide an ideal mix of safety
(debt instruments) and growth (equity).
We suggest you to have a periodical review process to monitor your portfolio and
rebalance your portfolio as per your asset allocation.
www.valuecurve.co.in
Email: [email protected] Page 10 of 20
Ph.: +91 97692 54535, +91 22 4971 0559
You would like to provide a corpus for your retirement at the age of 60 years. You would
like to maintain the same standard of living, which you are living at present.
Retirement Planning
We allocated your present EPF & PPF towards this goal.
Start monthly investment of Rs.16,600 in ratio 90% in Equity and 10% in Debt.
Start fresh SIP of Rs.7,500 each in Aditya Birla SL Frontline Equity Fund and
Reliance SmallCap Fund, and deposit Rs.1,600 every month in PPF account.
3,30,000 33,20,000
7,23,50,000
Current Annual Expenses Annual Expenses at RetirementAge
Corpus Required for Retirement
Retirement Alalysis
Investment Assets Utilized
Current
Value Term
Assumed
Rate of
Return
Future
Value
PPF 2,50,000 30 8.00% 25,15,000
EPF 1,00,000 30 8.00% 1,19,71,000
Total 1,44,86,000
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Email: [email protected] Page 11 of 20
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You would like to plan for your son’s education and would like to provide Rs.7.50 lakhs
in present value of this goal.
Education Planning
Sell your existing equity shares and transfer to Mirae Asset LargeCap Fund
Sell your existing equity mutual funds, and shift to ICICI Pru BlueChip Fund
Additionally start SIP of Rs.1,800 in Mirae Asset LargeCap Fund
7,50,000
34,96,000
Current Value Future Value
Education Planning
Particulars Varun
Current Age 1
Goal Age 21
Years For Goal 20
Expected Rate of Return 12.00%
Inflation 8%
Current Value 7,50,000
Future Value 34,96,000
Assets Utilized 17,16,000
Required Monthly Funding 1,800
Investment Assets Utilized
Current
Value Term
Assumed
Rate of
Return
Future
Value
Direct Equity 1,00,000 17 12.00% 6,86,000
Equity Mutual Funds 1,50,000 17 12.00% 10,30,000
Total 17,16,000
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You would like to plan for your son's marriage at the age of 26 years and provide a sum
of Rs.7.50 lakhs in present value for this goal.
Marriage Planning
Start monthly investment of Rs.3,600 in ratio 90% in Equity and 10% in Debt
Start fresh SIP of Rs.3,000 in ratio in Kotak Standard MultiCap Fund and
Rs.600/month in Varun’s PPF account respectively.
10,00,000
68,48,000
Current Value Future Value
Marriage Planning
Particulars Varun
Current Age 1
Marriage Age 26
Years For Goal 25
Expected Rate of Return 12.00%
Inflation 8%
Current Value 10,00,000
Future Value 68,48,000
Required Monthly Funding 3,600
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Estate Planning
We strongly recommend making a Will.
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Investment Assets Existing Assets
Retirement Contingency
Fund Children's Education
Cash on hand 5,000 5,000
Savings Bank 35,000 35,000
Fixed Deposits 1,25,000 1,25,000
PPF 2,50,000 2,50,000
EPF 1,00,000 1,00,000
Insurance - Surrender Value* 1,00,000
Direct Equity 1,00,000 1,00,000
Equity Mutual Funds 1,50,000 1,50,000
Total Assets 8,65,000 3,50,000 1,65,000 2,50,000
*Asset not utilized under any goal
Plan Assumptions:
Plan Assumptions
Self Spouse
Retirement Age 60 N.A.
Life Expectancy 80 80
Inflation Rate 08.00%
Portfolio Returns – Liquid Funds 05.00%
Portfolio Returns – Debt / PPF / EPF 08.00%
Portfolio Returns – Equity Funds 12.00%
All returns are assumed as net of Indian Income tax.
None of the returns are guaranteed.
Asset Re-allocation
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Contingency Planning: HDFC Liquid Fund Rs.1.65 Lakhs Start ASAP
Life Insurance:
HDFC Life Click2Protect 3D Rs.1 Crore Buy ASAP
Health Insurance:
Family Buy Bajaj Allianz Health Guard Individual Rs.3 Lakhs
Family Buy Bajaj Allianz Extra Care Plus Rs.20 Lakhs
Self Buy Bajaj Allianz Premium Personal Guard Rs.25 Lakhs
Self Buy HDFC Life Critical Illness Rider (with
Click2Protect 3D Plus) Rs.25 Lakhs
Other Goals:
Sr.
No. Goal
Investment
Amt. Remark/Suggestion
1. Retirement SIP Rs.7,500/- Aditya Birla SL Frontline Equity Fund
SIP Rs.7,500/- Reliance SmallCap Fund
Rs.1,600 p.m. PPF
2. Varun’s Education SIP Rs.1,800/- Mirae Asset LargeCap Fund
3. Varun’s Marriage SIP Rs.3,000/- Kotak Standard MultiCap Fund
Rs.600 p.m. Varun’s PPF
Summary of Recommendations
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1. Make sure that the recommendations provided to you by your financial planner
are executed properly and without any delays. Also you should keep the planner
posted with any developments like change in income, any major health issues
within family that may affect your financial planning.
2. Sit down once every year to review and revisit all your goals. Also reprioritize
them in case needed.
3. Put automatic payments (ECS) on all insurance premium and SIP. Provide your
mobile number to the insurance companies and mutual fund houses. They send
reminders to maintain the required balance in your account a few days before the
ECS is due.
4. Start moving your assets from risky assets like equities or alternative investments
to debt instruments systematically when your goal is around 2-3 years away – this
will ensure that in case the equity markets falls just before your goals are arriving,
your corpus would be protected to a very great extent.
5. Keep all your insurance and investment documents at one place and inform your
spouse, parents and kids about the same – in case of any emergency, they can
trace them easily. Many a times, when a person gets admitted, then the family
members have no clue about the mediclaim card that needs to be shown to the
hospital.
6. Don't delay, investments or payment of your credit card bills/loan EMIs – both of
them can affect your financial future badly? If you delay in starting your
investments on time, then you will lose the opportunity to create enough corpuses
for your future goals. In case you delay in making payments for your credit card
bills and loan EMIs then you will land up lowering your CIBIL score and risk
your chances of getting a loan in future.
7. Get your CIBIL report and go through it to check if there is any of the information
mentioned there are not true. In case any of the information mentioned there are
not correct, you should report the same to CIBIL and get the same rectified at the
earliest to avoid any complications in future.
8. Provide your mobile number to all the bank accounts and credit cards – any
transactions that is done on your debit card or your credit card is reported to your
mobile number.
9. You should make sure that you have put nominations for all your investments.
You should also prepare a will to plan for your estate since nominations are not
sufficient to make sure that there is no dispute about the assets in the event of the
death of the owner.
Some good practices of financial planning
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Any financial plan made by us is based on information detailed by the information
provided by the client in the data gathering sheet and the personal discussions with the
client. A copy of the data gathering sheet is available on request. The information
contained in the financial plan must be read carefully. In case any relevant information is
overlooked or misinterpreted, then we request the client to contact us before proceeding
with the implementation of the plan. The financial plan is completely based on the
information supplied to us by the client, which we assume to be correct. No responsibility
can be accepted if the information provided to us is incorrect or inaccurate. This plan is
prepared solely for the use of the client to whom it is addressed.
This financial plan is a forward-looking document where we have assumed certain
return on investments on various investment classes and inflation. These forward-looking
statements involve, and are subject to known and unknown risks, uncertainties and other
factors, which could cause actual results, performance or achievements to differ from the
future results, performance or achievements expressed or implied by such forward-
looking statements.
All these forward-looking statements attributable to Ronak Morjaria herein are
expressly qualified in their entirety by the above-mentioned cautionary statement. Ronak
Morjaria does not accept any direct or indirect liability for any results, performance or
achievements that differ from results, performance or achievements implied by such
forward-looking statements.
We do not promise that the investments you make based on this plan will be
profitable. Investments are always subject to various market, currency, and economic,
political and business risks. We will not be liable for any losses that may be caused
directly or indirectly by such investment decisions.
This financial plan is based on the current situation and goals, which will change
with the passage of time. Any material change in the financial situation of the client will
necessarily render the contents of the plan out of date. Material changes refer to change in
income/salary levels, assets acquired, liabilities incurred, change in number of
dependents, health condition, or the passage of time of more than 12 months or the effect
of inflation or deflation.
We strongly recommend that
a) You review this plan periodically to ensure that your plan’s actual performance is
consistent in meeting your goals, and
b) You update your plan annually to ensure that your plan is updated for your changing
situation and goals.
Disclaimer
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Thank You