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What is Financial Planning"Financial planning, I believe, is not exclusively about retirement planning orinvesting or even...
Individual Investor NeedsAll individuals need to save for        Retirement        Child’s Education / Marriage        Hom...
Life Stage PlanningAll individuals have finite period to save (generally, 25 to 60) to save for their investment goals.
Value of Money over timeImpact of inflation on monthly        Value of Rs 100,000 over timeexpenses of Rs 30,000 @ 7%
Retirement Planning                                  Retirement corpus required to meetMonthly household expenses        p...
Child’s EducationEducational Degree
But I do save…. (or Do I Save?)Money in Fixed Deposits                    100,000Add: Interest earned in 1 year (@ 9% pa) ...
The Financial Planning Process
Why Financial Planning?Step 1: Start Early: Cost of delayParticular                                           Seeta       ...
Why Financial Planning?Step 3: Invest Long termMoney grows over a period of Time.Rs 5000 invested at 8% p.a. compounded re...
After all, it’s your choiceChoice 1                            Choice 2  Simple, straightforward way to      Invest in ins...
How can we help you?Prudent Partners is a boutique firm started by first generation entrepreneurs –Vivek Damani, CFPCM & V...
About Prudent PartnersPrudent Partners is a boutique firm started by first generation entrepreneurs – VivekDamani, CFPCM &...
Our VisionTo be a leading financial services provider backed by superior advisory capabilitiesfor discerning clientsThis w...
Our Unique PropositionProfessionally qualified team of         Focus on service centric architectureFinancial Planners gui...
Thank You
DisclaimerThis document constitutes neither an offer nor solicitation to purchase or sell securities or any otherfinancial...
Prudent Partners on financial planning
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Prudent Partners on financial planning

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Transcript of "Prudent Partners on financial planning"

  1. 1. What is Financial Planning"Financial planning, I believe, is not exclusively about retirement planning orinvesting or even portfolio management. If distilled to its purest elements, thisdiscipline is more accurately understood as one that involves applying guidingprinciples to deal with our past, present and future finances.Our past - because some of us may be carrying the baggage of yesterdaysexcesses that are costing us our future happiness and financial well-being;Our present - because now is the best time to act and change course toward abetter destination; andOur future - because each of us is entitled to dream of a better tomorrow."
  2. 2. Individual Investor NeedsAll individuals need to save for Retirement Child’s Education / Marriage Home / Car Other family obligation Every individual has one or more of the above goals during some part of their life stages
  3. 3. Life Stage PlanningAll individuals have finite period to save (generally, 25 to 60) to save for their investment goals.
  4. 4. Value of Money over timeImpact of inflation on monthly Value of Rs 100,000 over timeexpenses of Rs 30,000 @ 7%
  5. 5. Retirement Planning Retirement corpus required to meetMonthly household expenses post retirement expenses. (If invested @ 7% and inflation @ 5%) ` 3.26 Cr
  6. 6. Child’s EducationEducational Degree
  7. 7. But I do save…. (or Do I Save?)Money in Fixed Deposits 100,000Add: Interest earned in 1 year (@ 9% pa) 9,000Total 109,000Less: Tax on interest (@30.9%) 2,781Less: Impact of Inflation (@8%) 8,000Value at the end of year 1 98,219
  8. 8. The Financial Planning Process
  9. 9. Why Financial Planning?Step 1: Start Early: Cost of delayParticular Seeta Geeta Geeta has two choicesStarts investing at the age (in years) 28 38 Either earn on her investments @ 15% ORMonthly savings (in Rupees) 10,000 10,000 Save monthly Rs25,634Returns expected from Bank Fixed Deposit 8% 8%Both invest till the age of (in years) 58 58Total InvestmentWealth Accumulated (in Rupees Lacs) 3,600,000 149.04 2,400,000 58.90 Difficult……Isn’t it?Step 2: Invest Systematically & Regularly Date ` NAV (` ) Units ` Amount (` ) Benefits of Rupee Cost Averaging: 2-Mar-09 190.47 52.5017 10,000 Say you are investing Rs 10,000 every month from March 2009 to13-Apr-09 233.32 42.8596 10,00011-May-09 252.50 39.6040 10,000 February 2010 in a diversified equity fund. 10-Jun-09 339.27 29.4750 10,000 Now check the average purchase cost per unit of your investments. It 10-Jul-09 307.21 32.5510 10,000 would be lower than the average NAV of your investments over the past10-Aug-09 343.02 29.1528 10,000 12 months.10-Sep-09 375.56 26.6269 10,00012-Oct-09 392.46 25.4803 10,000 Average Cost = 120,000/374.7205 = Rs 320.2410-Nov-09 392.76 25.4608 10,00010-Dec-09 416.48 24.0108 10,000 Note: Past performance may or may not be sustained in the future. 11-Jan-10 439.79 22.7381 10,000 The above table considers the actual NAV of a diversified equity fund to explain the10-Feb-10 412.21 24.2595 10,000 concept of Rupee Cost Averaging. The NAVs do not in any manner indicate theTotal 374.7205 120,000 future NAVs of any of the schemes
  10. 10. Why Financial Planning?Step 3: Invest Long termMoney grows over a period of Time.Rs 5000 invested at 8% p.a. compounded return instrument every month for ….just like a rolling snowball gathers snow an grows. This is an hypothetical illustration taking example of a recurring deposit to explain the concept of ‘Power of Compounding”. Past performance may or may not be sustained in the future
  11. 11. After all, it’s your choiceChoice 1 Choice 2 Simple, straightforward way to Invest in instruments which might create long term wealth not beat inflation Understand and embrace risk Select your stocks judiciously & Put time to your side follow the market very closely Invest systematically Time your entry and exit very well Don’t worry about market timing Invest systematically A tried & tested method And hope that you get it right more often than not!
  12. 12. How can we help you?Prudent Partners is a boutique firm started by first generation entrepreneurs –Vivek Damani, CFPCM & Vijay Dalmia, CFPCM, LUTCFThe object of this firm is to manage relationships with the assistance of externalintermediaries and provide products and services through structured serviceoriented architectureIt boasts of highly successful strategic advisors comprising of professionalsbringing with them relevant domain knowledge and global best practices to helprelationships with their financial management
  13. 13. About Prudent PartnersPrudent Partners is a boutique firm started by first generation entrepreneurs – VivekDamani, CFPCM & Vijay Dalmia, CFPCM, LUTCFThe object of this firm is to manage relationships with the assistance of externalintermediaries and provide products and services through structured service orientedarchitectureIt boasts of highly successful strategic advisors comprising of professionalsbringing with them relevant domain knowledge and global best practices to helprelationships with their financial management
  14. 14. Our VisionTo be a leading financial services provider backed by superior advisory capabilitiesfor discerning clientsThis we hope to achieve by: Building long term relations with our clients Understanding the needs of the clients & offering them independent and unbiased advice Leveraging technology to service clients quickly, efficiently and conveniently Building transparency in all our dealingsThe success of the company will be built by its unwaivered commitment to the five corevalues – Client First Confidentiality Integrity Tr a n s p a r e n c y Passion
  15. 15. Our Unique PropositionProfessionally qualified team of Focus on service centric architectureFinancial Planners guiding and rather than product pushmentoring the Firm Strategic, flexible and adaptable serviceWide range of product suite availableto offer you the ones which suits your Maximum use of technology to servicespecific needs you quickly, efficiently and convenientlyIndependent & objective financial Creative solutions to financial challengesadviceStrategic planning, sourcing &implementation capabilitiesExperience & stability
  16. 16. Thank You
  17. 17. DisclaimerThis document constitutes neither an offer nor solicitation to purchase or sell securities or any otherfinancial instruments.The views constitute only the opinions and do not constitute any guidelines or recommendations on anycourse of action to be followed by the readers. This information is meant for general reading purpose and isnot meant to serve as a professional guide for the readers.This document has been prepared on the basis of publicly available information, internally developed dataand other sources believed to be reliable. The Partners, employees, affiliates or representatives do notassume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of suchinformation. Whilst no action has been solicited based upon the information provided herein, due care hasbeen taken to ensure that the facts are accurate and opinions given are fair & reasonable.The recipient is requested to take into consideration all the risk factors including their financial condition,suitability to risk-return profile, and take professional advice before contracting with Prudent Partners.None of the Partners, employees, affiliates or representatives shall be liable for any direct, indirect, special,incidental, consequential, punitive or exemplary damages including loss profits arising in any way from theinformation contained in this material.The illustrations give herein should not be construed as a promise, guarantee on or a forecast of anyminimum returns. We at Prudent Partners does not assure any safeguard of capital and the illustrated returnsare not necessarily indicative of future results and may not necessarily provide a basis for comparison withother investments.This presentation is not for public distribution and has been furnished solely for information and must notbe reproduced or redistributed to any other person. Persons into whose possession this document may comeare required to observe these restrictions. No part of this material may be duplicated in any form and/orredistributed without Prudent Partners’ prior written consent.
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