A couple staying in Pune came to me for financial planning, The first question was in their mind whether this is a right time to opt financial planing ?
Some of the individuals are really confused about whether to go for a PAID advice or keep on taking FREE advice. Then we had a good discussion and after discussion there was a self realization of requirement of FEE BASED financial planning.
The couple Ashok and Anjali age 34 and 30 respectively having a child Anuj age 3 years.
The financial goals which come out of our discussion was
1. Anuj's Graduation 15 years from now. Today's cost Rs. 500000/-
2. Anuj's Post graduation 19 years from now. Today's cost Rs. 500000/-
3. Anuj's Marriage, 22 years from now Today's cost Rs. 500000/-
4. Ashok and Anjali's retirement 24 years from now and they choose to maintain the standard of living after retirement.
5. Creation of medical corpus in tune of Rs.500000/- today's value.
6. Want to go on World tour 6 years from now which expenses are measured to be rs.400000/- in today's term.
7. Want to buy a car immediately costs Rs.650000/- for which the funds are accumulated in FD and saving a/c.
The data which was collected during the process revels the following :
Existing data
Net asset :
Residential house ( Personal property ) : 4500000/-
Jewellery : 750000/-
Mutual funds : 350000/-
Equity : 450000/-
FD's : 375000/-
PF Accumulation : 234000/-
PPF ( both ) : 23000/-
Savings a/c : 200000/-
Housing loan : 3400000/-
Net asset Approx. : 3482000/-
Allocation of the investment ( Residential house and jewellery is not considered as investment )
Total : 1632000/-
Equity : 49%
Debt : 38.75%
Commodity : 0%
Cash : 12.25%
Real estate : 0%
The Suggested allocation is to be achieved over a period of time and support for same is provided by us.
Monthly cash inflows :
Ashok : 55000/-
Anjali : 48000/-
Monthly cash outflows :
Household exp : 30000/-
Life style exp. : 5000/-
Loan EMI : 33900/-
Insurance premiums : 10800/-
RD : 10000/-
Savings : 13300/-
Insurance cover :
Ashok : 800000/-
Anjali : 300000/-
It is communicated to couple that Insurance is not an investment instrument but a protection tool, by taking it as an investment tool results in under-performance of both protection and returns.
We suggested them to go for surrendering some of insurance endowment policies depending on the basis of expected ROI.
We suggested them to go for pure online term life insurance for the following amounts,
Ashok : 5800000/-
Anjali : 4900000/-
Medical insurance family floater plan with Sum assured Rs.500000/-
Accidental death and disability plan for Rs. 33,00,000/- for Ashok and 28,00,000/- for Anjali.
The couple suggested to keep a reserves for 6 months expenses 4,15,000/- as reserves to face any kind of contingency. These funds are to be maintained in combination of Savings A/c and FD.
The result of this suggestions results in additional savings of Rs. 82600 per year.
Ashok and Anjali were busy in their work and could not get a time to look in to financial management even they agreed it to be an important part of life.
We suggested them to invest in following funds to complete their financial goals.
We suggested Ashok to buy a car on loan, on the basis opportunity cost.
Goldbees ( Gold ETF ), ICICI Pru focused bluechip,IDFC premier equity fund,DSPBR microcap fund,UTI divident yield fund. And continuation of Existing RD.
now Anjali and Ashok are very clear about their goals and the strategy they have to adopt for completion of financial goals.
Anjali quote that " we were not sure about achieving all financial goals but now knowing the cash flow for the entire life we are confident and can take financial decisions in proactively ".
We know where we are and where to go !
About the author : Ashish Ramesh Bhave is a CERTIFIED FINANCIAL PLANNER, focused and specialized in financial planing for individuals and families. Can be reached at arbfinancials@gmail.com or Cell : 08793107044
Some of the individuals are really confused about whether to go for a PAID advice or keep on taking FREE advice. Then we had a good discussion and after discussion there was a self realization of requirement of FEE BASED financial planning.
The couple Ashok and Anjali age 34 and 30 respectively having a child Anuj age 3 years.
The financial goals which come out of our discussion was
1. Anuj's Graduation 15 years from now. Today's cost Rs. 500000/-
2. Anuj's Post graduation 19 years from now. Today's cost Rs. 500000/-
3. Anuj's Marriage, 22 years from now Today's cost Rs. 500000/-
4. Ashok and Anjali's retirement 24 years from now and they choose to maintain the standard of living after retirement.
5. Creation of medical corpus in tune of Rs.500000/- today's value.
6. Want to go on World tour 6 years from now which expenses are measured to be rs.400000/- in today's term.
7. Want to buy a car immediately costs Rs.650000/- for which the funds are accumulated in FD and saving a/c.
The data which was collected during the process revels the following :
Existing data
Net asset :
Residential house ( Personal property ) : 4500000/-
Jewellery : 750000/-
Mutual funds : 350000/-
Equity : 450000/-
FD's : 375000/-
PF Accumulation : 234000/-
PPF ( both ) : 23000/-
Savings a/c : 200000/-
Housing loan : 3400000/-
Net asset Approx. : 3482000/-
Allocation of the investment ( Residential house and jewellery is not considered as investment )
Total : 1632000/-
Equity : 49%
Debt : 38.75%
Commodity : 0%
Cash : 12.25%
Real estate : 0%
The Suggested allocation is to be achieved over a period of time and support for same is provided by us.
Monthly cash inflows :
Ashok : 55000/-
Anjali : 48000/-
Monthly cash outflows :
Household exp : 30000/-
Life style exp. : 5000/-
Loan EMI : 33900/-
Insurance premiums : 10800/-
RD : 10000/-
Savings : 13300/-
Insurance cover :
Ashok : 800000/-
Anjali : 300000/-
No Medical reimbursement plan as covered by company , no accidental death and disability plan.
It is communicated to couple that Insurance is not an investment instrument but a protection tool, by taking it as an investment tool results in under-performance of both protection and returns.
We suggested them to go for surrendering some of insurance endowment policies depending on the basis of expected ROI.
We suggested them to go for pure online term life insurance for the following amounts,
Ashok : 5800000/-
Anjali : 4900000/-
Medical insurance family floater plan with Sum assured Rs.500000/-
Accidental death and disability plan for Rs. 33,00,000/- for Ashok and 28,00,000/- for Anjali.
The couple suggested to keep a reserves for 6 months expenses 4,15,000/- as reserves to face any kind of contingency. These funds are to be maintained in combination of Savings A/c and FD.
The result of this suggestions results in additional savings of Rs. 82600 per year.
Ashok and Anjali were busy in their work and could not get a time to look in to financial management even they agreed it to be an important part of life.
We suggested them to invest in following funds to complete their financial goals.
We suggested Ashok to buy a car on loan, on the basis opportunity cost.
Goldbees ( Gold ETF ), ICICI Pru focused bluechip,IDFC premier equity fund,DSPBR microcap fund,UTI divident yield fund. And continuation of Existing RD.
now Anjali and Ashok are very clear about their goals and the strategy they have to adopt for completion of financial goals.
Anjali quote that " we were not sure about achieving all financial goals but now knowing the cash flow for the entire life we are confident and can take financial decisions in proactively ".
We know where we are and where to go !
About the author : Ashish Ramesh Bhave is a CERTIFIED FINANCIAL PLANNER, focused and specialized in financial planing for individuals and families. Can be reached at arbfinancials@gmail.com or Cell : 08793107044
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