Financial
Planning
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FINANCIAL PLANNING STEPS
STEP 1: DETERMINE WHERE YOU ARE
FINANCIALLY
STEP 2: SET GOALS
STEP 3: DEVELOP A PLAN
STEP 4: MONITOR YOUR PROGRESS
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STEP 1: DETERMINE WHERE YOU
ARE FINANCIALLY
CALCULATING YOUR NET
WORTH
ANALYZING YOUR CASH
FLOW
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CALCULATING YOUR NET WORTH
NET WORTH = WHATS LEFT
AFTER YOU SUBTRACT YOUR
LIABILITIES
FROM
YOUR
ASSETS
NET WORHT/MONTH= 10 LAKHS
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ANALYZING YOUR CASH FLOW
ASSESSING YOUR CASH FLOW WILL:
INDICATE YOUR ABILITY TO SAVE
LET YOU SIZE UP YOUR STANDARD OF
LIVING
INDICATE IF YOU'RE LIVING WITHIN OR
BEYOND YOUR MEANS
HIGHLIGHT PROBLEM AREAS
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STEP 2: SET GOALS
QUESTIONS TO BE ADDRESSED BEFORE
SETTING GOALS
HOW LONG WILL YOU CONTINUE TO
WORK?- UP TO 60 YEARS
WHAT WILL HAPPEN WITH YOUR INCOME
-WILL IT REMAIN THE SAME, RISE, OR
FALL?- RISE
WHAT WILL HAPPEN WITH TAX RATES?INCREASE
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STEP 2: SET GOALS
WHAT INVESTMENT RATES CAN YOU
REASONABLY EXPECT?- 20 % (AVERAGE)
WHAT ABOUT THE RATE OF INFLATION?
- 10 % (AVERAGE)
HOW MUCH INVOLVEMENT DO YOU WISH TO
HAVE IN MANAGING YOUR INVESTMENTS?MODERATE
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SHORT-TERM GOALS
PAY OFF CREDIT CARD AND CONSUMER
START SAVINGS PLAN
SET ASIDE CASH FOR A CONTINGENCY
FUND EQUALING 3 MONTHS' EXPENSES
ACQUIRE
ADDITIONAL
INSURANCE
ACQUIRE
INSURANCE
INDIVIDUAL
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TERM
LIFE
DISABILITY
MEDIUM-TERM GOALS
START COLLEGE SAVINGS PLAN
DIVERSIFY INVESTMENT PORTFOLIO
CONVERT TERM LIFE INSURANCE POLICY
TO CASH-VALUE POLICY
CONTRIBUTE MAXIMUM TO 401 (K) PLAN
AND IRA
PUBLIC PROVIDENT FUND
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LONG-TERM GOALS
PURCHASE RETIREMENT PROPERTY
RETIRE AT AGE 62
MAINTAIN
STANDARD
OF
RETIREMENT
PRE-RETIREMENT
LIVING
DURING
EMRGENCY FUND
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STEP 3:
DEVELOP YOUR PLAN
FLEXIBILITY
LIQUIDITY
MINIMIZATION OF TAXES
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PUBLIC PROVIDENT FUND (PPF)
Your PPF Information
Do can
youdownload
want to this presentation at:
You
Variable amount every year
invest a :
Enter your PPF contributions for 15 years:
Year 1: Rs. 50000
Year 2: Rs. 50000
Year 3:
Rs. 50000
Year 4: Rs. 60000
Year 5: Rs. 60000
Year 6:
Rs. 60000
Year 7: Rs. 70000
Year 8: Rs. 70000
Year 9:
Rs. 70000
Year 10: Rs. 80000
Year 11: Rs. 80000
Year 12: Rs. 80000
Year 13: Rs. 90000
Year 14: Rs. 90000
Year 15: Rs. 90000
Year
Opening Balance
Your investment
Interest Earned
Closing Balance
15
Rs. 1,777,660.22
Rs. 90,000.00
Rs. 162,486.44
Rs. 2,030,146.66
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RETIREMENT PLAN
NPS_HDFC PENSION
nps
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Current age :- 28
Retirement age :- 60
Total investing period :- 32
Monthly contribution towards NPS :- 5000
( To avail maximum tax benefit, contribute 10% of your
Basic income + DA towards NPS )
Expected rate of return on NPS investment :- 8 %
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Summary of your NPS Investment
Principal Amount invested by you :- 19,20,000
Interest earned on investment :- 69,05,959
Total tax saving :- 5,76,000
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Pension
wealth generated :- 88,25,959
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(Interest earned is on monthly compounding basis)
% of Pension wealth reinvested in Annuity plan:- 80 %
Pension amount reinvested :- 70,60,767
Rate of interest :- 8%
Pension per month post retirement :- 47,071
Lump Sum Amount Withdrawn :- 17,65,192
Tax laws may change, affecting the Return On
Investment (ROI).
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SYSTEMATIC INVESTMENT PLAN
DISCIPLINED APPROACH TO INVESTMENTS
NO NEED TO TIMEYou
THE
MARKET
can
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HARNESS THE POWER OF TWO POWERFUL
INVESTMENT STRATEGIES:
RUPEE COST AVERAGING - BENEFIT FROM
VOLATILITY
POWER
OF
COMPOUNDING
SMALL
INVESTMENTS CREATE BIG KITTY OVER TIME
LIGHTER ON THE WALLET REAP BENEFITS OF
STARTING EARLY
15
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MUTUAL FUND PLAN (SAVINGS &
PROTECTION)-RELIANCE SIP
SIP Amount: 2000You can download this presentation at:
SIP Frequency: Monthly
Expected Interest Rate: 12 %
Number of Installments: 60 months
Investment Duration Is: 5Y 0M
The future value of your SIP - Based on
investment will be :- 1,64,972.73
Your Investment :- 1,20,000.00
Your Earnings :- 44,972.73
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E-TERM PLAN (PROTECTION)
PLAN :-0825 e-Term
TERM :-35
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AGE:27
Non Smoker
Sum Assured :- 50,00,000
Yearly (Rs) :- 9450
Plan only through online mode
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LIFE INSURANCE PLAN (SAVINGS & PROTECTION)
PLAN:0815 New Jeevan Anand TERM:20
AGE:22
Sum Assured :-500000
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Yearly (Rs) :- 27023
Half Yearly (Rs) :- 13656
Quarterly (Rs) :- 6900
Monthly (Rs) :- 2300
PLAN:0827 Jeevan Rakshak TERM :20
SumAssured:500000
Yearly (Rs): 16944
Half Yearly (Rs): 8561
Quarterly (Rs): 4325
Monthly (Rs): 1442
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AGE:22
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STEP 4:
MONITOR YOUR PROGRESS
HERE ARE THE GENERAL QUESTIONS TO ASK:
ARE YOU MEETING YOUR BUDGET?
ARE YOU EARNING THE INVESTMENT
RATES OF RETURN YOU ANTICIPATED?
TO WHAT DEGREE IS
AFFECTING YOUR FINANCES?
INFLATION
HAS YOUR TAX SITUATION CHANGED?
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SOURCE :
ERNST & YOUNGS PERSONAL FINANCIAL
PLANNING
GUIDE
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