Download to read offline
Uploaded byPANDURANG PATKAR M.B.A, LL.B,CFP, A.I.I.I,
Financial Planning
The document outlines the importance of financial planning, emphasizing its role in helping individuals achieve their life goals through effective management of finances. It discusses the financial planning process, including goal-setting, investment strategies, and risk management, while highlighting the necessity of preparing for unforeseen events. Additionally, it stresses the significance of retirement planning in the context of changing family dynamics and the need for personal financial security.
More Related Content
Similar to Financial Planning
Financial Planning
- 2. PANDURANG PATKAR, BSc, LL.B,MBA, A.III, CFP. Founder & Director, FUTURECARE – BFSI Training Academy CERTIFIED FINANCIAL PLANNER & BFSI TRAINER ( Finance, Stock Market, Wealth Management, CFP ,Insurance & NISM courses Training) BTM Layout, Bangalore-76 pandurangpatkar101@gmail.com, 9535422995
- 3. What is FinancialPlanning Financial Planning is the process of meeting an individual’s Life’s Financial Goals through the proper management of one’s finances. Financial Planning is the blueprint for management of all financial affairs for our entire life.
- 4. Presentation Outline WhyFinancial Planning Financial Planning Process SMART Financial Goals Investment options Risk v/s Return Inflation effects on investment Retirement Planning Financial Planning Importance.
- 5. Why Financial Planning Financial Planning gives clarity in your life It provides direction & meaning to your financial decisions. It gives you confidence to achieve your Goals Prevention is better than cure – with Financial Plan you are prepared for any unforeseen events which affect your finance It helps to curtail your unnecessary expenses. With financial planning, you are able to foresee your goal achievements. Financial Planning propels you to put planning in to action. Financial Planning gives you peace of mind.
- 6.
- 7. ….for OUR GOALS,OUR DREAMS! We WORK for…
- 8. Improving Lifestyles, HighDiscretionary Spends… ….Overspend by extensive use of CREDIT
- 9. Increased Life Expectancy Reduced Working Life Rising Costs LessFamily Support High Consumption Less Job Security Rising Healthcare related problems Reduced Savings Higher Use of Credit One needs to be really PREPARED!
- 10. As we WORK EARN SPEND SAVE INVEST Our Dreamsare subject to Realities, One can’t ignore
- 11. Increase in costof living Rs 10 Lacs 8% Rs 46.6 Lacs Cost Now Inflation* Cost After 20 Years Higher Education e.g. MBA Rs 3 Lacs 8% Rs 13.9 Lacs Healthcare e.g. Cardiac Surgery Rs 0.5 Lacs 10% Rs 3.4 Lacs Monthly Household Expenses
- 12. The 6-step Financialplanning process Periodic Monitoring & Rebalancing Investment Allocation Strategy Asset Allocation Investor Profiling Analysis of current financial situation Identify your financial Goals
- 13. Steps for YOURPersonalized Plan Identifying Taking the RIGHT Approach towards RIGHT Results financial goals Analysis of current financial situation Investor Profiling Asset Allocation Investment Allocation Strategy Periodic Monitor & Rebalance Contingencies Child’s Education, Marriage etc. Retirement House, Car etc. Vacation & Other goals Personal Details Income & Expenses Assets & Liabilities Investible Surplus Net worth & Cash flow Risk Propensity Risk Capacity Attitude to Risk Current Asset Allocation Gap Analysis Recommended Asset Allocation Instrument- wise Asset Allocation 1 2 3 4 5 6 Review Plan Vs Actual Rebalance Plan for Key Life Events
- 14. Taking the RIGHTApproach towards RIGHT Results Mutual Funds Gold ETF Bank Deposits, PPF etc. Insurance Others Children‘s Future Contingencie s Protection House, Car etc. Retirement Vacation etc. Investible Surplus GOALS
- 15. Ivestment Avenues Divercify acrossasset classes through these investment PPF Fixed Deposits Property Equity Shares Mutual Funds Savings Bank Account Gold Postal Savings Investment Avenues PPF Fixed Deposits Property Equity Shares Mutual Funds Savings Bank Account GoldPostal Savings
- 17.
- 18.
- 19. ALWAYS SAVINGS FIRST RightSavings Formula Income – Expenses = Savings Income – Savings = Expenses
- 20. Create Wealth overLong Term (Illustration) An SIP^ of Rs 10000 per Month growing @ 10% , 12% & 15% PERIOD PRINCIPLE (Rs in LAKH) FINAL VALUE (Rs in LAKH) @ 10% P.A FINAL VALUE (Rs in LAKH) @ 12% P.A FINAL VALUE (Rs in LAKH) @ 15% P.A 10 years 12.00 20.48 23.00 27.52 15 years 18.00 41.45 49.95 66.85 20 years 24.00 75.93 98.92 149.00 25 years 30.00 132.68 187.88 324.35 A small difference of even 2% in returns can change the final amount significantly
- 21. WHAT not todo in SIPs (Illustration) Do not delay or discontinue your SIPTarget of Rs 1 crore at Age 60 @12% p.a.* Start Age Monthly Investment 25 Years 1,540 30 Years 2,833 35 Years 5,270 40 Years 10,009 45 Years 19,819 Only Rs 1540 p.m. needed if you start at 25 years But Rs 2,833 p.m. if you start 5 years later and so on..
- 22. What is RiskManagement Risk could be related to Life, Health, Finance & Property. In the financial world, risk management is the process of identification, analysis and acceptance or mitigation of uncertainty in investment decisions. Risk management occurs when an investor analyzes and attempts to quantify the potential for losses in an investment , Property, Life & Health and then takes the appropriate action given his investment objectives and risk tolerance.
- 23. Total Protection Triangle– Risk Management Accident Insurance Accident (wealth protection)
- 24. Unforeseen events &contingencies Rising lifestyle diseases – diabetes, hypertension, arthritis etc. & related spends Risk to Life & Assets due to unforeseen events ― Death ― Critical illness ― Permanent disability ― Damage due to fire, theft etc. to house, car & other assets
- 25. Life Needs FinancialGoals Living Needs Goals Bills Loans Medical Expenses Rent Child’s Education New Car Marriage Retirement
- 26. You can’t protectthe Income earner from any unfortunate incident… But you can Protect the Income What if AmaLLL ma dies in an accident...lLFIRLIFE INSURANCE ( Term Plan )
- 27. LIFE PROTECTION Protection foryourself is a PRICELESS SECURITY TO YOUR Family Against all the RISKS that can drain you off the hard earned returns By Protecting yourself, you are only making yourself more certain about achieving your Financial Goals.
- 28.
- 29. TERM INSURANCE T OOL Income Needs Income & Future Needs Protection Protection Meet all your Financial Goals without a Compromise
- 30. Why Retirement Plan Unlike the US and Europe, where senior citizens receive social security benefits from the state, India is not a welfare state. In the absence of sufficient retirement savings, the only fallback option available for Indian senior citizens is their family. Taking care of parents in their old age is part of our Indian culture. With changing social and economic dynamics, our society is moving towards nuclear family units either due to cultural factors or due to economic factors (children living in different cities or even countries)
- 31.
- 32. Previous generation vs.New generation Source: Oasis Committee Report Working – 42 years Working – 30 years Retirement – 22 Years Retirement – 7 yrs Age 18 to 60 Age 60 to 67 Age 25 to 55 Age 55 to 77 Life stage of average individual Lesser Working Years to provide for Longer Life PREVIOUSNEW …that too with much LESS JOB SECURITY
- 33. Changing face ofthe INDIAN FAMILY Average children per household is going down Families turning Nuclear Parents can no longer depend on children for support in old age
- 34. So which means WORK EARN SPEND SAVE INVESTOurInvestments will have to WORK for Us
- 35. But are weconsidering? Ascertaining how much each goal would require & when? Considering the impact of inflation & taxes on your investments? Identifying our financial goals? Analyzing if our investments are in line with our risk appetite? Whether investments will be sufficient & available when we need it? Are prepared for contingencies & unforeseen events? In short, Are we planning?
- 36. Investing without Planning islike sailing without directions! which means, there is no guarantee of reaching the destination
- 37. Self Medication isdangerous
- 38. Investment Truths It’snot your salary that makes you Rich It’s your spending habits. A penny saved is penny earned Beware of little expenses, a small leak will sink a great ship
- 39.
- 40. Become a Informed& Knowledgeable Investor An Investment in Knowledge pays the Best Interest.
- 41. Action speaks louderthan words
- 42.