1. Financial Planning
Jyoti Aneja
Munish Aggarwal
Prashant Bhardwaj

2. Do Not Work For Money
Let Your Money Work For You

3. What is Financial Planning
Financial Planning
 is when you develop a plan for your money
 is the process of meeting your life goals through the proper
management of your finances
 is a critical exercise in ensuring long-term financial security.
 provides direction and meaning to your financial decisions.
 Helps you to adapt more easily to life changes and feel more
secure that your goals are on track.

4. Why should you have a
Financial Plan?
 Do you know how much you need to invest in order to have a
comfortable retirement?
 Do you know how much you need to save up in order to get an
MBA education for your 1 year old after 20 years?
 Do you know how much you need to invest today to get your
10 year old married after 15 years?
 Do you know in which investment avenues should you invest
your money to achieve these goals?
 Do you know what kind of life insurance you should buy?
 Do you know how much health insurance do you need?
 Do you know what is your net worth?
 Do you know what is your asset allocation?
A financial plan would help you answer these questions, and more

5. Financial Plan
A financial plan is a road map to
help you achieve your life’s
financial goals.
The process involves:
 gathering relevant financial
information,
 setting life goals,
 examining your current
financial status
 coming up with a strategy
or plan for how you can
meet your goals given your
current situation and future
plans.

6. How to make Financial
Planning work for you?
To achieve the best results from your Financial
Planning engagement, you will need to be prepared
to avoid some of the common mistakes by
considering the following advice:
 Start planning as soon as you can
 Set measurable goals
 Be realistic in your expectations
 Realize that you are in charge
 Understand the effect of each financial decision
 Re-evaluate your financial situation periodically

7. Budget Planning
 Budgeting allows you to
track your monthly
expenditures so that you can
plan key savings strategies
for important short- and
long-term goals.
 Having a financial budget
may find that about 5-10%
of your total spending may
be for purchases that are not
needed.
 Budget identifies expenses
that can be cut so that you
can set goals on making
important long-term savings.

8. Saving and Investing
 If you are not currently saving, you may never achieve financial
independence
 Save at least 10% of your gross income each month
 Creating a savings plan help you reach your short and long term
goals
 Once you commit to creating savings, you must define an
investment strategy that works for you.
 Assess your risk tolerance and then invest so you will have
enough money to reach your goal.

9. Contingency Plan
 A contingency plan is a plan devised for a specific situation when things
could go wrong.
 It is your guard for those Murphy moments in life.
 A good emergency fund consists of 3 to 6 months of living expenses.
 This could be saved in form of cash in Saving Accounts, Bank FD's and
liquid funds.

10. Assets & Liabilities
 Assets
 In financial accounting, assets are economic resources.
 Anything that has value and that is held to have positive
economic value is considered an asset.
 Assets include stocks, mutual funds, gold, real estate
 Liabilities
 indebtedness: an obligation to pay money to another party
 Liabilities include loans such as Home Loan, Education loan,
Personal loan and Credit Card loan

11. Investments
 Short Term Investments
 Bank and Post Office Fixed Deposits
 Recurring Deposits
 Fixed Maturity Plans
 Liquid Funds
 Company Deposits

12. Investments
 Long Term Investments
 Stocks
 Mutual Funds
 Real Estate
 Provident Fund
 National Savings Certificates
 Kisan Vikas Patras
 ULIPS

13. Alternative Investments
 Gold and Silver
 Agricultural Commodities
 Art
 Wine
 Currencies

14. Insurance
 Life Insurance
 Term Insurance
 Whole Life Insurance
 Endowment Plans
 ULIPS
 Health Insurance
 Accident Insurance
 Motor Insurance

15. Debt
 Education Loans
 Home Loans
 Car Loans
 Loan Against Gold
 Loan Against Securities
 Personal Loans
 Credit Card Loans

16. TAX
The only sure things in life are death and taxes
 Utilize the entire Section 80C deduction
 Provident Fund
 National Saving Certificate
 Life Insurance Premium
 Tuition fees paid for children's education
(maximum 2 children)
 Principal component of home loan repayment
 Equity Linked Savings Schemes (ELSS)
 5-Year fixed deposits with banks and Post Office

17. TAX
 Think beyond Section 80C
 Interest payments on Home
Loan
 Medical Insurance for Self &
Family
 Medical Insurance for
Parents
 Donations
 HRA
 LTA

18. Estate Planning
 An estate is the total of all personal and real property owned by
an individual
 Estate planning is the process of anticipating and arranging
for the disposal of an estate.
 Estate planning typically attempts to eliminate uncertainties
over the administration of a probate and maximize the value
of the estate by reducing taxes and other expenses.
 Guardians are often designated for minor children and
beneficiaries in incapacity.

19. Retirement Planning
 Analysis of the available retirement benefits from various
sources, such as the State, the employer, etc. to arrive at the
additional needs to be met
 Dependency needs of self and other family members requiring
continued income flow
 Anticipation of possible changes to the employment conditions
and the family circumstances
 Decision on the savings pattern out of the present income to
build the required corpus for the visualized and prioritized needs
 Proper selection of investment strategies on the basis of defined
yield and rate of accumulation
 Analysis of risk elements arising during the process

20. Summarize

21. Q&A