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Prospect Document Transcript

  • 1. Strictly Private & Confidential Comprehensive Financial Plan of Mr. Prospect & Family Prepared By Neeraj Chauhan, CFPCM Chief Financial Planner 109 DDA Market, A-6 Paschim Vihar, New Delhi -110063Mobile: 9810164567, Email: neeraj@thefinancialmall.com, Website: www.thefinancialmall.com
  • 2. Financial Plan of Prospect and Family Contents Sr. No. Section Page No. Executive Summary 1 Client Goals & Objectives 6 to 9 2 Goal Funding Map 10 3 Asset Re-Allocation 11 to 14 4 One Year Action Plan 15 5 Product Recommendations 16 Current Financials 1 Family Details & Assumptions 18 2 Networth Statement 19 3 Inflow Outflow Statement 20 4 Current Debt Instruments 21 5 Current Life Insurance Policies 22 6 Current General Insurance Policies 23 7 Current Equity Portfolio 24 Future Goals 1 Contingency Funding 26 2 Life Insurance Need Analysis 27 3 Recommended Life/General Insurance 28 4 Childrens Future 29 5 Retirement Planning 30 6 House Purchase 31 7 Car Purchase 32 8 International Vacation 33 9 Home Renovation 35Prepared by Neeraj Chauhan, CFPCM Page 2 of 37
  • 3. Financial Plan of Prospect and Family 22 July 2012 Mr. Prospect 123 A-1 Block Paschim Vihar New Delhi-110063 Dear Mr. Mr. Prospect Thank you for giving us an opportunity to prepare your Financial Plan. We appreciate your proactive approach in attaining financial freedom and fulfilling commitments made to your family members and take control of your personal finance matters. The enclosed financial plan for your family assesses your current financial situation & future financial goals and provides financial planning recommendations and an action plan to address them on a timely basis. The plan is prepared on the information provided by you based on your current circumstances and future financial objectives. Please read the plan carefully to check for accuracy of the information provided. However, it needs to be monitored on an ongoing basis and updated in response to changes in your own circumstances and other factors, such as government regulations, market movements and macro economy. We shall be glad to provide you with our ongoing services to implement & monitor your financial plan to ensure you meet your financial goals. Kindly read our disclaimer & disclosure on the next page. Please feel free to contact us if you need any clarifications or information. Thanking you once again Yours Sincerely ____________________ Neeraj Chauhan, CFPCM Chief Financial PlannerPrepared by Neeraj Chauhan, CFPCM Page 3 of 37
  • 4. Financial Plan of Prospect and Family Disclaimer A Financial Plan is a generic direction to your cash flows over a period of time. Your future financial condition may alter due to changes in income/expense patterns, new family commitments, macro economic scenario etc which may prompt you to alter some aspects of your goals and add new goals. Therefore this Financial Plan and the Cashflows depicted in it should be used to give you a long term direction for managing your personal finances while taking immediate actions as a step towards accomplishing your financial objectives. These recommendations are subject to review at the time when you are actually taking actions as recommended because of changes in legal circumstances, economic conditions etc. If considerable time has elapsed since the date of this plan, you should not act on any specific recommendation without further consideration with the planner. Returns from each recommended investment will vary in line with market conditions and investment policies of the fund manager. Income and growth assumptions are intended as a guide only and should be treated with caution. The planner should not be held responsible for the accuracy of the same. Most equity/ growth investment are long term in nature and significant variations including capital loss, may occur over shorter periods. Neither the authorized representative nor the company guarantees the performance or return of capital on any of these investments. Performances of investments are subject to market risks. Past performances of a particular asset class or investment may not be the true indicator of their performance in future. These recommendations are based on the information you have supplied. If any material information has been withheld or any inaccurate, these recommendations could prove to be inappropriate for you. While we have made every attempt to ensure that the calculations contained in this Financial Plan are correct and complete, kindly note the plan may contain inaccuracies or errors due the manual-computer interface involved in making the calculations and we expressly exclude liability for any such inaccuracies or errors. In the case where a error or omission is involved, you can request us to rectify the error or omission, we shall do needful. Disclosure If the product recommendation are implemented through us, we would receive applicable brokerage from all/some the investments recommended. We will be entitled to commission directly from product providers. We will be also eligible to other incentives including allowances and incentives based on volumes, discounted services and awards. However these benefits & compensation from the product manufacturers shall be disclosed to wherever applicable to youPrepared by Neeraj Chauhan, CFPCM Page 4 of 37
  • 5. Financial Plan of Prospect and Family Executive SummaryPrepared by Neeraj Chauhan, CFPCM Page 5 of 37
  • 6. Financial Plan of Prospect and Family Client Goals & Objectives Sr. No. Goals Description of Goals Planner Comments Life insurance may be one of the most important purchases you’ll ever make. In the event of a tragedy, life insurance proceeds can help pay the bills, continue a family business, finance future needs As per Human Life Value you should have like your children’s education, protect 1 Life Insurance a Life Insurance cover of 72 Lacs. your spouse’s retirement plans, and much more. Life insurance plays important role in a sound financial plan,We analysed your cover on basis of Human Life value and suggest you buy Life cover for 75 Lacs to cover yourself adequately . Health insurance is one type of insurance you’re pretty much guaranteed to use. We all need medical attention from time to time, you never know when you might be involved in an accident or be diagnosed with a serious medical condition. the main reason to have coverage is to have protection against the You would like to get insured for medical potentially catastrophic expenses of 2 Health Insurance emergencies so that’s the situation serious illness or injury.. When care is doesn’t drain out your assets/savings needed, you want to focus on getting better not on how you’re going to come up with the money to pay your medical bills.On analysing we found that Your existing cover is individual & inadequate, therefore we suggest you to buy Family Floater Insurance of 20 lacs for appropriate cover. Your most important asset is not your home, your car, your jewelry or other possessions. It’s your ability to earn a living. Think about it: All of your plans for the future—from buying a home to putting your kids through college to building a retirement nest egg—are based Premanent & Temporary disability due to on the assumption you will continue to 3 Disability Insurance accident is required earn a paycheck until you retire. But what would happen if those paychecks stopped? That’s where disability insurance comes in. It provides an income to you and your family if you are unable to work because of illness or injury.We suggest you to buy CI & Personal Accident policy with disability cover for 50 Lacs.Prepared by Neeraj Chauhan, CFPCM Page 6 of 37
  • 7. Financial Plan of Prospect and Family Contracting a serious illness or disease can be devastating - both to your health and to your finances. Should you be unable to work due to failing health, you may find yourself unable to pay for basic needs or necessary medical care, adding worries about money to worries about your health. Critical illness insurance is Critical Illness policy is important to Critical Illness designed to alleviate your financial 4 compensate loss of Income due to such Insurance concerns should you find yourself facing illness life-threatening health problems. Its no cure-all, but if you fall prey to a bout of very ill health, at least youll be able to focus your attention on getting well, rather than on making ends meet. therefore we suggest you to take Critical Illness cover of 25 Lacs for yourself and 15 Lacs for Mrs Prospect No matter how many plans one makes, life always has a different plan of its own. One may have a solid and accurately chalked financial plan but emergencies seldom come with prior notice. Emergencies in the form of an accident, death, loss of job, loss in business, Contingency fund is important to tide medical conditions, etc can strike anyone 5 Contingency Fund over short term disruption/loss of income at any time. This is why, one of the most in life. important part of financial planning, is the contingency fund.we feel that you do not have any sufficient savings and assets allocated towards your Emergency Fund goal.Therefore we suggest you to maintain the Minimum balance of 2.5 Lac in the saving account + 2 Lacs in Bank FD for contingency & 4.5 Lacs in Short term Irrespective of where we come from, what we are now or what we want to be, some aspirations common to all are those for our children’s future: One of which is a good education. Further, in these competitive times, a first-class education You need 15lacs & 10lacs in current value is a ticket to a great future. Hence, we as 6 Sons Education for his graduation & post graduation parents are all the more keen that we respectively. should have enough funds to provide the best education to our children more than any estate or property.You can also achieve this goal by using maturity proceeds of RD & FD and also start saving monthly thru SIP of 27K in recommended schemes .Prepared by Neeraj Chauhan, CFPCM Page 7 of 37
  • 8. Financial Plan of Prospect and Family You need 15lacs & 10lacs in current value To achieve this goal we suggest you to 7 Daughters Education for her graduation & post graduation start monthly SIP of 30.5k in respectively. recommended schemes. This goal can be met by selling 33% gold 8 Sons Marriage You need 10 lacs for his Marriage. jewellery & investing monthly thru SIP of 4.5k in Diversified Equity Fund + Gold ETF. For a parent, seeing their child happily married is an unparalleled joy. Whether it is the pride of seeing your son bring home a bride, or the bittersweet joy of seeing your daughter start a new life with her husband. Planning your children’s weddings should be a labour of love, a time when the whole family comes together to see your children start a family of their own. We know that your 9 Daughters Marriage You need 20 lacs for her Marriage. children’s wedding day will be the most important day in their lives as well as your own; a day that all of you will remember forever as the fulfillment of a lifelong dream. So let’s make sure that on that day, your children get the wedding of their dreams!.This goal can be met by selling 33% gold jewellery & investing monthly thru SIP of 13k in Diversified Equity Fund + Gold ETF. This goal can be met by 30% loan funding Your Goal is to buy a house in 2024 worth 10 Real Estate + the current investment in real estate 1 Crore and start SIP of 6k monthly for 8 years. We suggest you to start accumulating for 11 Car You want to buy a car in 2014 worth 8Lacs this goal by investing monthly via SIP of 16k for 2years in MIP Fund. Retirement isn’t the end of your professional life, but the beginning of a new life; a life that you can enjoy to the fullest without the stress of work and having to live according to other peoples’ schedules and demands. A life when you You wish to retire at age 60 with a regular can look back and enjoy all the hard work 12 Retirement income of R 1.5 lac monthly in todays you’ve put in and enjoy your life without value having to worry about income or compromising on your lifestyle, with such thoughts in mind we suggest you to continue investing 2 lacs per annum in PPF & Start investing 7lacs p.a via SIP in suggested mutual fund schemes from 2016 with step up of 20% yoy.Prepared by Neeraj Chauhan, CFPCM Page 8 of 37
  • 9. Financial Plan of Prospect and Family Vacations are actually quite beneficial. In fact, humans have been celebrating holidays for thousands of years. And if you’ve ever had a great vacation, you know that it can provide a pleasant break from normal life. In fact, you may have even discovered that when you got back from your vacation you were more 13 Vacation You want 2.5lacs in 2013 productive. Vacation is a time to relax, or a time to seek out adventure. It’s a way to let go of your stress and live out your fantasies. The stress and pain of budgeting the vacation shouldn’t take the fizz out of your fun time.You can easily achieve this goal by starting SIP of 22k for one year in Income Fund You want 5lacs in 2015 for home We suggest you to start SIP of 18k in 14 House Renovation renovation. Balanced Fund to achieve this goal No matter what your net worth is, its important to have a basic estate plan in place. Everybody needs a will. A will tells the world exactly where you want your assets distributed when you die. Its also the best place to name guardians for your children. Dying without a will -- also You would like to ensure smooth known as dying "intestate" -- can be costly transition of your physical and investment 15 Legacy Planning to your heirs and leaves you no say over assets to the desired heirs in case of who gets your assets. Even if you have a premature death trust, you still need a will to take care of any holdings outside of that trust when you dieAt any age, it is ideal to have a "Will" to avoid any conflicts among the family members in case of pre-mature death. Also ensure proper nomination of all current & future assetsPrepared by Neeraj Chauhan, CFPCM Page 9 of 37
  • 10. Financial Plan of Prospect and Family Goal Funding Map Sr. No. Particulars Year Present Value Future Value Current Assets Amount Future Invests No of Years Amount 1 Childrens Future RD + Fixed Mast. Prospect - Graduation 2019 15,00,000 27,88,863 8,70,509 Monthly SIP 7 17,535 Deposit Mast. Prospect - Post 2024 10,00,000 29,94,328 - Monthly SIP 12 10,007 Graduation Selling 33% Mast. Prospect - Marriage 2032 10,00,000 64,18,608 21,18,141 Monthly SIP 20 4,519 Gold Jewellery Ms. Prospect - Graduation 2021 15,00,000 34,00,175 - Monthly SIP 9 20,965 Ms. Prospect - Post 2026 10,00,000 36,50,678 - Monthly SIP 14 9,406 Graduation Selling 33% Ms. Prospect - Marriage 2029 20,00,000 97,18,104 16,03,487 Monthly SIP 17 12,715 Gold Jewellery Total 80,00,000 2,89,70,757 75,148 2 Retirement Corpus 2030 NA 15,19,99,294 Shares + ULIP 5,37,02,349 Monthly SIP 18 2,19,137 3 House Purchase Downpayment 1905 NA 2,22,82,606 Current Real Estate 2,14,35,888 Monthly SIP 8 5,792 Loan Funding 1905 NA 95,49,688 EMI 10 1,26,200 Total 1,48,50,000 3,18,32,294 4 Car Purchase Downpayment 2014 NA 3,76,712 NIL 0 Monthly SIP 2 15,696 Loan Funding 2014 NA 5,65,068 EMI 0 0 Total 8 1Prepared by Neeraj Chauhan, CFP CM Page 10 of 37
  • 11. Financial Plan of Prospect and Family Asset Re-Allocation Current Current Recommended (in Recommended Change Change Asset Class (in Rs.) (in %) Rs.) (in %) (in Rs.) (in %) Liquid 4,50,000 3% 6,47,000 5% 1,97,000 1.40% Debt 13,30,812 10% 6,00,000 4% -7,30,812 -5.46% Gold 0 0% 6,50,000 5% 6,50,000 4.75% Equity 17,45,035 13% 18,00,000 13% 54,965 0.24% Real Estate 1,00,00,000 74% 1,00,00,000 73% 0 -0.92% Total 1,35,25,847 100% 1,36,97,000 100% 1,71,153 0.00% Recommendations for Change in Asset Allocation S. No. Liquidate Amount Re-Invest Amount Remarks 1 RD 80,812 Gold 80,812 Liquidate RD and Invest in gold ETF 2 Fixed Deposit 4,00,403 Gold 4,00,403 Liquidate RD and Invest in gold ETF 3 4 Total 4,81,216 4,81,216Prepared by Neeraj Chauhan, CFPCM Page 11 of 37
  • 12. Financial Plan of Prospect and Family Current Asset Allocation Liquid Liquid Current Asset Allocation 3% 3% Debt 10% Gold 0% Gold Equity 13% 0% Debt 10% Real Estate 74% Equity 13% Real Estate 74% Recommended Asset Allocation Recommended Asset allocation Liquid Liquid 5% Debt 5% 4% Gold Debt 4% 5% Gold 5% Equity 13% Equity Real Estate 73% 13% Real Estate 73%Prepared by Neeraj Chauhan, CFP CM Page 12 of 37
  • 13. Financial Plan of Prospect and Family Networth Statement Networth 3,33,25,847 Networth Statement Total Liabilities 22,00,000 Total Assets 3,55,25,847 Personal Assets, Personal Assets 2,20,00,000 Investment Assets 1,35,25,847 Investment Assets, Investment Assets Personal Assets 2,20,00,000 1,35,25,847 Total Assets, Total Assets 3,55,25,847 Total Liabilities, Total Liabilities 22,00,000 Networth, Networth 3,33,25,847 0 1,00,00,000 2,00,00,000 3,00,00,000 4,00,00,000 Current inflow Outflow Current Inflow Outflow Statement Series1 Income 33,00,000 Household Expenses Surplus 10,66,840 3,09,600 LifestyleRegular Investments Expenses 6,58,880 5,46,000 Dependents Expenses Loan Servicing 3,04,680 3,60,000 Pure Insurance Premiums Pure Insurance Premiums 18,000 18,000 Loan Servicing 3,04,680 Dependents Expenses 3,60,000 Regular Investments 6,58,880 Lifestyle Expenses 5,46,000 Surplus 10,66,840 Household Expenses 3,09,600 Income 33,00,000Prepared by Neeraj Chauhan, CFP CM Page 13 of 37
  • 14. Financial Plan of Prospect and Family Risk Return Assumption Liquid Risk return Assumption 5.00% Debt 8.00% Gold 10.00% Liquid Real Estate 10.00% 11% Equity Equity 28% 13.00% Debt 17% Real Estate Gold 22% 22% Life Insurance Requirement Life Insurance requirements Current Life Insurance Cover 24,15,119 Current Life Current Assets providing cover 1,34,28,847 Insurance Cover Additional Life Insurance Requirement Additional Life 72,43,379 11% Insurance Requirement 31% Current Assets providing cover 58%Prepared by Neeraj Chauhan, CFP CM Page 14 of 37
  • 15. Financial Plan of Prospect and Family One Year Action Plan Sr. No. Action to be taken Goal Through Timeline Investment Planning Mutual Fund Agent / Within 2 1 Start SIP for 30.5k Monthly Daughters Education Online / FP months Mutual Fund Agent / Within 2 2 Start SIP for 27k Monthly Sons Education Online / FP months Mutual Fund Agent / Within 2 3 Start SIP for 13k Monthly Daughters Marriage Online / FP months Mutual Fund Agent / Within 2 4 Start SIP for 4.5k Monthly Sons Marriage Online / FP months Mutual Fund Agent / Within 3 5 Start SIP for 6k Monthly House Online / FP months Insurance Planning Insurance Broker/ Agent Within 1 1 Buy 75Lac Term Plan Life Cover / FP months Buy 25Lac Cover for self & 15Lacs for Insurance Broker/ Agent Within 2 2 Critical Illness Cover Mrs. Prospect / FP months Insurance Broker/ Agent Within 3 3 Buy 20Lacs Family Floater Policy Health Cover / FP months Buy 50Lacs Personal Accidental Personal Accidental Insurance Broker/ Agent Within 1 4 Policy Cover / FP months Tax & Estate Planning Within 3 1 Make a Will Estate Planning Lawyer / FP months Ensure proper nomination of all Within 3 2 Estate Planning Self investment & physical assets months 3 File your income tax returns Income Tax Online / CA / FP When Due General Take second opinion before making 1 Preventive Action Financial Planner NA any investment decision Telephonic Quarterly Reviews of Every 3 2 General Financial Planner Progress on Action Plan months 3 Annual Review of Financial Plan General Financial Planner After 1 YearPrepared by Neeraj Chauhan, CFPCM Page 15 of 37
  • 16. Financial Plan of Prospect and Family Product Recommendations Sr. No. Products SIP Amount Lumpsum Amount Remarks Equity Mutual Funds 1 IDFC Premier Equity Fund 14,500 Kids Education 2 DSP Blackrock Top 100 Equity Fund 14,500 Kids Education 4 Reliance Equity Opportunities 9,000 Kids Marriage 5 HDFC Gold Fund/Gold Bees 9,000 Kids Marriage Balanced Funds 1 HDFC Balanced Fund 21,000 Retirement 2 Franklin India Bluechip Fund 21,000 Retirement 3 HDFC Prudence Fund 14,000 Kids Education 4 ICICI Pru Balanced Fund 18,000 Home Renovation 5 Income Funds 1 Franklin IBA Fund 11,000 Vacations 2 IDFC Short Term Income Fund 11,000 Vacations MIP Funds 1 Birla SL MIP 14,000 Kids Education 2 HDFC MIP 16,000 Car Liquid Funds 1 IDFC Money Manager/Bank RD/FD 480000 Contingency Fixed Deposits/Income 1 PPF 16,000 Retirement Sr. No. Products Insurance Cover Approx. Premium Remarks Term Life Insurance 1 DLF Pramerica Term Insurance 75,00,000 32,000 2 3 Health Insurance 1 Max Bupa Family First- Gold 20,00,000 33,000 Personal Accident 1 Oriental Insurance 50,00,000 9,000 Critical Illness 1 HDFC Critical Care 40,00,000 48,000Prepared by Neeraj Chauhan, CFPCM Page 16 of 37
  • 17. Financial Plan of Prospect and Family Current FinancialsPrepared by Neeraj Chauhan, CFPCM Page 17 of 37
  • 18. Financial Plan of Prospect and Family Family Details & Assumptions Particulars Husband Wife Name Prospect Mrs. Prospect Date of Birth 20-Sep-70 30-Mar-74 Current Age 42 38 Retirement Age 60 55 Life Expectancy 80 80 % Income Increase 15% 15% Dependents Particulars Child-1 Child-2 Father Mother Name Mast. Prospect Ms. Prospect Date of Birth 26-Jan-02 24-Feb-04 Current Age 10 8 Returns Assumptions Liquid Debt Gold Real Estate Equity 5% 8% 10% 10% 13% Other Assumptions Plan Date Economic Inflation Education Inflation 22-Jul-12 8.5% 10%Prepared by Neeraj Chauhan, CFPCM Page 18 of 37
  • 19. Financial Plan of Prospect and Family Networth Statement Particulars Total Percentage Goals Mapped Remarks/Note Residential Property 2,00,00,000 Vehicle 0 Jewellery 10,00,000 Inheritance of Wealth 10,00,000 Others 0 Personal Assets 2,20,00,000 Savings Bank/Cash in Hand 4,50,000 Receivables 0 Total Liquid Assets 4,50,000 3% Fixed Deposits 3,50,000 PPF (Public Provident Fund) 6,20,000 EPF + Superannuation + Gratuity 2,80,000 NSC / POMIS / KVP / RDs etc 80,812 Debt Mutual Funds 0 Traditional Insurance Policies SV 0 Bonds/Debentures/CDs 0 Total Debt Assets 13,30,812 10% Direct Equity 9,32,255 Equity Mutual Funds 0 Unit-linked Insurance Policies SV 8,12,780 Total Equity Assets 17,45,035 13% Gold/Silver (ETFs, MF, Bars) 0 0% Real Estate 1,00,00,000 74% Investment Assets 1,35,25,847 100% Total Assets 3,55,25,847 Home Loan 22,00,000 Vehicle Loan 0 Credit Card Outstanding 0 Total Liabilities 22,00,000 Networth (Assets-Liabilities) 3,33,25,847Prepared by Neeraj Chauhan, CFPCM Page 19 of 37
  • 20. Financial Plan of Prospect and Family Inflow Outflow Statement Particulars Monthly Annual Percentage Remarks/Note Salary Income (Take home) 50,000 6,00,000 Performance Bonus (Net of TDS) 0 0 Re-imbursements 0 0 Business Income 2,00,000 24,00,000 Rental Income 25,000 3,00,000 Investment Income 0 0 Inflows 2,75,000 33,00,000 Food & Grocery 10,000 1,20,000 House Rent / Maintenance / Repair 3,500 6,000 Conveyance, Fuel & Maintenance 3,000 36,000 Medicines / Doctor / Healthcare 500 6,000 Electricity / Cable / Labour / AMCs 5,800 69,600 Mobile / Internet / Telephone 6,000 72,000 Household Expenses 28,800 3,09,600 10% Clothes & Accessories 10,000 1,20,000 Shopping, Gifts, Whitegoods, Gadgets 2,500 30,000 Dining / Movies / Sports 12,000 1,44,000 Personal Care / Others 1,000 12,000 Travel & Annual Vacations 20,000 2,40,000 Lifestyle Expenses 45,500 5,46,000 17% Childrens Schooling/College Expenses 30,000 3,60,000 Contribution to Parents, Siblings etc 0 0 Dependent Expenses 30,000 3,60,000 11% Life Insurance (Term) 0 0 Mediclaim/PA/CI 1,500 18,000 Motor Insurance 0 0 Pure Insurance Premiums 1,500 18,000 1% Home Loan EMIs 25,390 3,04,680 Vehicle Loan EMIs 0 0 Personal Loan EMIs 0 0 Loan Servicing 25,390 3,04,680 9% Net Outflows 1,31,190 15,74,280 48% Savings (Inflows-Outflows) 1,43,810 17,25,720 52% PPF 4,000 48,000 Recurring Deposits (RDs) 2,000 24,000 Insurance Premiums (Investments) 48,907 5,86,880 Mutual Fund SIPs 0 0 Regular Investments 54,907 6,58,880 20% Surplus (Savings-Investments) 88,903 10,66,840 32%Prepared by Neeraj Chauhan, CFPCM Page 20 of 37
  • 21. Financial Plan of Prospect and Family Current Debt Instruments Investment Investment Current Maturity Maturity Recomme Goals Years Goal Sr. No. Instrument Interest Returns Date Value Value Date Value ndation Mapped Reinvest Amount 1 RD 1/Jan/10 66,000 8.00% 80,812 1/Jan/15 1,46,953 Continue 4.00 8.00% 1,99,928 Son 2 Fixed Deposit 1/Feb/11 2,00,000 9.25% 2,28,802 1/Feb/14 2,60,792 Continue Graduation 5.00 8.00% 3,83,189 3 Fixed Deposit 1/Feb/11 1,50,000 9.25% 1,71,601 1/Feb/14 1,95,594 Continue 5.00 8.00% 2,87,392 Total 4,81,216 8,70,509Prepared by Neeraj Chauhan, CFP CM Page 21 of 37
  • 22. Financial Plan of Prospect and Family Current Life Insurance Policies Premium Maturity Surrender Maturity Recommen Years Goal Sr. No. Policy Name Type PPT Start Date Life Cover Yield Goals Mapped Returns (pa) Date Value Value dation Reinvest Amount Prospect Tata AIA Assure 1 Endowment 9,700 15 11/Oct/02 11/Oct/16 3,00,000 97,000 0 Surrender 0 Golden Years 2 LIC ULIP 2,00,000 14 31/Mar/11 31/Mar/31 14,00,000 0 46,55,194 Continue Retirement 0 0.00% 46,55,194 3 LIC ULIP 2,02,000 14 31/Mar/11 31/Mar/31 7,15,119 0 47,01,746 Continue Retirement 0 0.00% 47,01,746 Total 4,11,700 24,15,119 97,000 93,56,940 Mrs. Prospect 1 HDFC Unit Linked ULIP 4,980 20 14/Oct/02 14/Oct/22 99,600 54,780 0 Surrender 54,780 4,980 99,600 54,780 0 Mast. Prospect 1 Birla SL ULIP 50,000 15 25/Oct/08 25/Oct/23 10,00,000 2,00,000 0 Surrender Kotak Headstart 2 Child Plan 25,100 20 30/Apr/07 30/Apr/27 2,51,000 1,25,500 0 Surrender Future Protect 75,100 12,51,000 3,25,500 0 Ms. Prospect 1 Birla SL ULIP 70,000 15 29/Oct/08 29/Oct/23 14,00,000 2,10,000 0 Surrender 2,10,000 Kotak Headstart 2 Child Plan 25,100 20 30/Apr/07 30/Apr/27 2,51,000 1,25,500 0 Surrender Future Protect 95,100 16,51,000 3,35,500 0 Grand Total 5,86,880 8,12,780 0Prepared by Neeraj Chauhan, CFP CM Page 22 of 37
  • 23. Financial Plan of Prospect and Family Current General Insurance Policies Sr. No. Type Policy Name Sum Insured Annual Premium Insured Recommendation Increase the sum assured 1 Health Insurance Oriental Family Floater 5,00,000 18,000 All and convert to floater Total Premium 18,000Prepared by Neeraj Chauhan, CFP CM Page 23 of 37
  • 24. Financial Plan of Prospect and Family Current Equity Portfolio No of Investment Current Value (As Returns Recommend Years Sr. No. Script Name Goals Mapped Returns Goal Amount Shares Value on 06/11/2012) (Absolute) ation Reinvest 1 Reliance Industries 150 58,800 1,19,700 103.57% 18 12.20% 9,64,861 2 Jaiprakash Power 1,000 32,000 38,250 19.53% 18 12.20% 3,08,320 3 Jubilant Foodwork 150 1,32,600 1,92,900 45.48% Sell Individual 18 12.20% 15,54,901 4 Mayur Uniqoters 500 1,86,500 2,19,400 17.64% stocks and 18 12.20% 17,68,508 Invest in Retirement 5 Nissan 3,000 12,150 12,300 1.23% Diversified 18 12.20% 99,146 6 Capital Hotels 500 2,435 2,325 -4.52% Equity fund 18 12.20% 18,741 7 Zee News 1,000 17,050 15,180 -10.97% 18 12.20% 1,22,361 8 Larsen n Toubro 200 3,18,230 3,32,200 4.39% 18 12.20% 26,77,751 Total 7,59,765 9,32,255 75,14,589Prepared by Neeraj Chauhan, CFP CM Page 24 of 37
  • 25. Financial Plan of Prospect and Family Financial GoalsPrepared by Neeraj Chauhan, CFPCM Page 25 of 37
  • 26. Financial Plan of Prospect and Family Contingency Funding Steps Particulars Amount Remarks/Notes Step I Current Monthly Expenses Household Expenses 28,800 Lifestyle Expenses 45,500 Dependent Expenses 30,000 Pure Insurance Premiums 1,500 Insurance Premiums (Investments) 48,907 Loan Servicing 25,390 Total Monthly Expenses 1,80,097 Step II Contingency Funding Requirement Contingency Period (No. of Months) 6 Contingency Funds 10,80,580 Step III Utilization of Current Assets Cash in hand 4,50,000 Rent 1,50,000 Total Current Assets Utilized 6,00,000 Step IV Fresh Savings Required Deficit (Funds Required-Assets Utilized) 4,80,580 No. of Months in Savings Period 1 Monthly Savings Required 4,80,580Prepared by Neeraj Chauhan, CFPCM Page 26 of 37
  • 27. Financial Plan of Prospect and Family Life Insurance Need Analysis Steps Particulars Amount Remarks/Notes Home Loan 22,00,000 Vehicle Loan 0 Step I Total Outstanding Liability 22,00,000 Childrens Education & Marriage 30,00,000 Childrens Primary Education 30,76,767 Contribution to Dependents Step II Total Commitments to Dependents 60,76,767 Household Expenses 28,800 Lifestyle Expenses 45500 Total Expenses 74,300 Discounting Factor ("Insured" Expenses of Total) 25% Net Monthly Expenses 55,725 Step III Current Annual Expenses 6,68,700 Present Age of Spouse 38 Life Expectancy of Spouse 80 Remaining Life of Spouse 42 Inflation Rate 8.50% Net Tax on Investment Income 0.00% Investment Returns on insurance claim/corpus 9.40% Tax Adjusted Returns 9.40% Net Returns 0.83% Step IV Corpus Required for Managing Future Expenses 2,36,67,761 I+II+IV Total Life Insurance Required 3,19,44,528 Present Value of Rent 36,11,633 Life Insurance Sum Assured (less surrenders) 24,15,119 Current Investment Assets (less SV) 1,34,28,847 Present Value of Future Earnings by Spouse 52,45,551 Step V Total Resources Available 2,47,01,150 Additional Cover Required (Requirement-Available) 72,43,379Prepared by Neeraj Chauhan, CFPCM Page 27 of 37
  • 28. Financial Plan of Prospect and Family Recommended Life/General Insurance Policies Approx. Annual Sr. No. Type Cover For Remarks Premium 1 Life Insurance 75,00,000 32,000 Self 2 Health Insurance 20,00,000 33,000 Self 25lacs Self + 15lacs 4 Critical Illness 40,00,000 48,000 Mrs. Prospect 5 Personal Accident 50,00,000 9,000 Self Total Premium 1,22,000Prepared by Neeraj Chauhan, CFPCM Page 28 of 37
  • 29. Financial Plan of Prospect and Family Childrens Future Steps Childs Name Mast. Prospect Ms. Prospect Goals Graduation Post Graduation Marriage Graduation Post Graduation Marriage Step I Quantify Goals Current Age 10 8 Goal Age 17 22 30 17 22 25 Remaining Years for Goal 7 12 20 9 14 17 Goal Year 2019 2024 2032 2021 2026 2029 Present Value of Goal 15,00,000 10,00,000 10,00,000 15,00,000 10,00,000 20,00,000 Step II Future Value of Goal Expected Inflation of Expenses 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% Future Expense Amount 27,88,863 29,94,328 64,18,608 34,00,175 36,50,678 97,18,104 Step III Utilization of Current Assets Gold Jewellery 21,18,141 16,03,487 RD 1,99,928 Fixed Deposit 6,70,581 Current Assets Utilized 8,70,509 0 21,18,141 0 0 16,03,487 Step IV Fresh Investments Required Shortfall to met by Fresh Investments 19,18,355 29,94,328 43,00,468 34,00,175 36,50,678 81,14,617 Start investing after (no. of years) Stop investing before (no. of years) Expected Investment Returns 10.00% 12.20% 12.20% 10.00% 11.45% 12.20% Lumpsum Investments (If Available) 10,31,794 7,96,231 4,55,316 15,00,000 8,37,008 12,02,462 Monthly Investments Required 17,535 10,007 4,519 20,965 9,406 12,715 Note: 1. Education corpus may fall short in case you choose for overseas programs / Courses. 2. Marriage expenditures needs to be re-assesed as we feel cost would be much higher.Prepared by Neeraj Chauhan, CFP CM Page 29 of 37
  • 30. Financial Plan of Prospect and Family Retirement Corpus Funding Steps Particulars Amount Remarks/Notes Step I Current Expenses Household Expenses 28,800 Lifestyle Expenses 45,500 Addition/Deduction (Vacations, Insurance etc) 40,700 Total Monthly Expenses 1,50,000 Total Annual Expenses 18,00,000 Step II Future Expenses at Retirement Inflation 8.50% No. of Years for Retirement 18 Retirement Year 2030 Expenses in the First Year of Retirement 79,02,493 Step III Corpus Required to Fund Retirement Expenses No. of Years in Retirement 20 Inflation during Retirement Years 8.50% Net Tax on Investment Income 0.00% Investment Returns on Retirement Corpus 8.95% Tax Adjusted Returns 8.95% Net Returns 0.41% Retirement Corpus Required 15,19,99,294 Step IV Utilization of Current Assets & Benefits Present Value of Rent 1,55,85,049 Equity 75,18,263 Maturity of Max + Tata ULIP 93,56,940 PPF 27,21,970 Gratuity 38,66,625 EPF /Superannuation /Gratuity 1,46,53,502 Total Current Assets Utilized 5,37,02,349 Step V Fresh Investments Required Deficit (Corpus Required-Assets Utilized) 9,82,96,945 Start investing after (no. of years) 4 Stop investing before (no. of years) 0 Expected Investment Returns 12.20% Lumpsum Funding Required (If Available) 1,93,16,510 Monthly Investments Required 2,19,137 Alternatively, R. 58,000 can be invested monthly with yearly step-up of 20% from 2016 to get the same maturityPrepared by Neeraj Chauhan, CFPCM Page 30 of 37
  • 31. Financial Plan of Prospect and Family House Purchase Steps Particulars Amount Remarks/Notes Step I Current Cost of House Preferred Area (in Sq. Ft) 1,800 Preferred Rate Per Square Feet 7,500 Additional Costs (Parking, Club, Registration Etc) 10% Total Cost of House 1,48,50,000 Step II Future Cost of House Growth Rate of Real Estate 10.00% Current Age 42 Number of Years for Goal 8 Expected Age of Buying House 50 Goal Year 2024 Future Cost of House 3,18,32,294 Step III Funding of Goal Home Loan Funding 30% Home Loan Amount 95,49,688 Down-Payment 70.00% Down-Payment Amount 2,22,82,606 Step IV Home Loan Funding Expected Monthly Income while buying home 6,11,805 Ideal Percentage of EMI to Monthly Income 35% Ideal Home Loan EMI Limit 2,14,132 Home Loan Rate 10% Home Loan Tenure (in Years) 10 Home Loan EMI 1,26,200 Step V Utilization of Current Assets for Down-payment 1 Current Real Estate 2,14,35,888 Total Current Assets Utilized 2,14,35,888 Step VI Fresh Investments Required for Down-payment Deficit (Corpus Required-Assets Utilized) 8,46,718 Start investing after (no. of years) 0 Stop investing before (no. of years) Expected Investment Returns 10.00% Lumpsum Funding Required (If Available) 3,95,000 Monthly Investments Required 5,792 Note: 1. Real Estate allocation is on higher side and you should avoid fresh purchase in Real estatePrepared by Neeraj Chauhan, CFPCM Page 31 of 37
  • 32. Financial Plan of Prospect and Family Car Purchase Steps Particulars Amount Remarks/Notes Step I Future Cost of Car Current On Road Price of the Car 8,00,000 Inflation 8.50% Current Age 42 Number of Years for Goal 2 Expected Age of Buying a Car 44 Goal Year 2014 Future Cost of Car 9,41,780 Step II Funding of Goal Vehicle Loan 60% Vehicle Loan Amount 5,65,068 Down-Payment 40% Down-Payment Amount 3,76,712 Step III Vehicle Loan Funding Vehicle Loan Rate 12% Vehicle Loan Tenure (in Years) 5 Vehicle Loan EMI 12,570 Step IV Utilization of Current Assets for Down-payment Total Current Assets Utilized 0 Step V Fresh Investments Required for Down-payment Deficit (Corpus Required-Assets Utilized) 3,76,712 Start investing after (no. of years) Stop investing before (no. of years) Expected Investment Returns Lumpsum Funding Required (If Available) 3,76,712 Monthly Investments Required 15,696Prepared by Neeraj Chauhan, CFPCM Page 32 of 37
  • 33. Financial Plan of Prospect and Family International Vacation Steps Particulars Amount Remarks/Notes Step I Future Cost of Vacation Current Cost of Vacation 2,50,000 Inflation 8.50% Current Age 42 Number of Years for Goal 1 Expected Age of Going for Vacation 43 Goal Year 2013 Future Cost of Vacation 2,71,250 Step II Utilization of Current Assets Total Current Assets Utilized 0 Step III Fresh Investments Required Deficit (Corpus Required-Assets Utilized) 2,71,250 Start investing after (no. of years) Stop investing before (no. of years) Expected Investment Returns 5.00% Lumpsum Funding Required (If Available) 2,58,333 Monthly Investments Required 22,091Prepared by Neeraj Chauhan, CFPCM Page 33 of 37
  • 34. Financial Plan of Prospect and Family Other CalculatorsPrepared by Neeraj Chauhan, CFPCM Page 34 of 37
  • 35. Financial Plan of Prospect and Family Home Renovation Steps Particulars Amount Remarks/Notes Step I Future Cost of Goal Current Cost of Goal 5,00,000 Inflation 8.50% Current Age 42 Number of Years for Goal 3 Expected Age of Goal 45 Goal Year 2015 Future Cost of Goal 6,38,645 Step II Utilization of Current Assets Total Current Assets Utilized 0 Step III Fresh Investments Required Deficit (Corpus Required-Assets Utilized) 6,38,645 Start investing after (no. of years) Stop investing before (no. of years) Expected Investment Returns Lumpsum Funding Required (If Available) 6,38,645 Monthly Investments Required 17,740Prepared by Neeraj Chauhan, CFPCM Page 35 of 37
  • 36. Financial Plan of Prospect and Family Investment Risk Profile Sr. No. Instrument Answer Marks How familiar are you with the investment markets 1 a 0 and share investments? Equity assets can counter the eroding effect of 2 c 8 inflation but is risky in short-term. Which of the following risk/return scenarios would 3 c 8 you be most comfortable with? What would you do if your investment dropped in 4 c 8 value from an initial Rs.1,000 to Rs.850 If you were investing in a share portfolio, which of 5 d 12 the following would suit you best? Profile is Growth Balanced Score is 36 Points Risk Profile Category Liquid Debt Equity Gold Real Estate 0-15 Conservative 15%-25% 40%-75% 5%-20% 5%-10% 0% 16-30 Conservative Balanced 10%-20% 35%-70% 15%-30% 5%-10% 0% 31-45 Growth Balanced 5%-20% 10%-50% 40%-60% 0%-5% 0% 46-60 Growth 5%-15% 10%-30% 40%-75% 0%-5% 10%-30%Prepared by Neeraj Chauhan, CFP CM Page 36 of 37
  • 37. Financial Plan of Prospect and Family Financial Ratios Calculator Name of Ratio Description Formulae Benchmark Your Ratio Remarks Measures the number of Basic Liquidity months you can sustain your Liquid Assets / Monthly >6 6 Ratio expenses should you lose all Expenses sources of income. Shows how much of total debt Liquid Asset Liquid Assets / Outstanding can be serviced by liquid >20% 1% Coverage Ratio Liabilities assets. Checks your yearly outgoings EMI / Income towards your loans vis-à-vis Total EMI / Total Income <35% 9.23% your income. Outstanding Checks your outstanding Liability / Total Total Liabilities / Total Assets <35% 6.19% liability vis a vis your assets. Assets Measures the current total Life Insurance Total Available Resources / resources available to cover the > 100% 77.33% Coverage Ratio Total Life Insurance Required life insurance requirement CMPrepared by Neeraj Chauhan, CFP Page 37 of 37