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A report submitted in partial fulfillment of the requirements

of PGDM Programme of


AET Campus,Malad-Marve Road,Charkop Naka,Malad (west),Mumbai-400 095.


This is to certify that Ajay Patel has completed the Project “Financial
Planning of An Individual Investor-A Case Study” under the guidance of
Prof. Aditi Rode in partial fulfillment of the requirements for the award of
Post Graduate Diploma in Management for the academic period 2009-11.

Signature of the Guide Signature of the Director

Place: Mumbai



On the submission of my project report I would like to express my sincere

gratitude to my guide Prof.Aditi Rode and Prof.Hansraj Chappar for mentoring me and

taking active interest throughout the project.

I would also take this opportunity to express my sincere gratitude to

Mr.Pramod Kabade ,Mr.Ravi Gaikwad and Karvy Stock Broking Ltd. for providing me with

the infrastructure and valuable information for the project and ensuring support and


Finally, I would express my thanks to all those individuals who have

contributed in their own individual capacity, however miniscule it may be, in the project




I, Ajay Patel of Atharva School of Business, Malad(w) of PGDM

programme,hereby declare that I have completed a summer project on
‘Financial Planning of An Individual Investor-A Case Study.’ in the
academic year 2009-11.This information is true & original to the best of my

Date- Signature of candidate

Ajay Patel


Financial planning is the process of assessing financial goals of individual,

taking an inventory of the money and other assets which the person have,
determine life goals and then take necessary steps to achieve goals in the
stipulated period. It is a method of quantifying a person’s requirement in
terms of money.
Financial Planning is one such advisory service, which is yet
to get recognition from investors. Although financial planning
is not a new concept, it just needs to be conducted in
organized manner.Today we avail this service from
Insurance agent,Mutual fund agents, Tax consultant, Equity
Brokers, Chartered Accountants, etc. Different agents
provide different services and product oriented. Financial
Planner on other hand is a service provider which enables an
individual to select proper product mix for achieving their
The major things to be considered in financial planning are time horizon to
achieve life goals, identify risk tolerance of client, their liquidity need, the
inflation which would eat up living and decrease standard of living and the
need for growth or income. Keeping all this in mind financial planning is
done with six step process. This are self assessment of client,identify
personal goals and financial goals and objective, identify financial problems
and opportunities, determining recommendations and alternative solutions,
implementation of appropriate strategy to achieve goals and review and
update plan periodically.A good financial plan includes Contingency
planning, Risk Planning (insurance), Tax Planning, Retirement Planning and
Investment and Saving options.
There is need to create awareness among investors about Financial Planning
Service in India.Financial Planners help investor in achieving their goal by
drawing Financial Plan that explains how each goals can be met,where he
need to invest and why one need to invest in those recommended
In this Project Report a Case of an individual investor is studied and based
on Finacial Planning Process a Financial Plan has been prepared for him that

will be helpful for him to achieve his Financial Goals and with the
systematic investment approach recommended in the Plan one can
understand the effectiveness of Finacial Planning that helps a person to
create wealth.


Chapter 1: Introduction of the Project
1.1: Introduction to Financial Planning
1.2: Need For Financial Planning
1.3: Study of various factors
1.4: Comman Financial Mistakes ..
1.5: Project Objectives
……………………… 11
1.6: Significance of Study
……………………. 11
Chapter 2:Financial Planning in India
………………………….. 12

Chapter 3: Financial Planning Process

3.1: Self Assessment
3.2: Identifying Goals and Objectives ...

3.3: Understanding Risk Profile
3.4: Asset Allocation
3.5: Implementation of Plan
3.6: Reviewing

Chapter 4: Detailed Financial Plan(Case Study)


Chapter 5: Conclusion and Recommendation

Annexure 1
Annexure 2
……………… 45

Chapter 1 : Introduction to Financial

1.1 Introduction
Financial Planning is the process of meeting life goals through the proper
management of finances. Financial planning is a process that a person
goes through to find out where they are now (financially), determine where
they want to be in the future, and what they are going to do to get
there.Financial Planning provides direction and meaning to persons
financial decisions. It allows understanding of how each financial decision

a person makes affects other areas of their finances. For example, buying
a particular investment product might help to pay off mortgage faster or it
might delay the retirement significantly. By viewing each financial decision
as part of the whole, one can consider its short and long-term effects on
their life goals. Person can also adapt more easily to life changes and feel
more secure that their goals are on track.

In simple Financial Planning is what a person does with their

money.Individuals have been practicing financial planning for centuries.
Every individual who received money had to make a decision about the
best way to use it. Typically, the decision was either spend it now or save it
to spend later. Everyone have to make the same decision every time they
receive money.

Today in India financial planning means only investing money in the tax
saving instruments.This has led to a situation where people invest money
without really understanding the logic or the rationale behind the
investments made. Further the guiding force in investment seems to be the
‘rebate’ they receive from the individual agents and advisors.The more the
rebate an agent gives, the more smug person are in the belief that they
have made an intelligent decision of choosing the right agent who has
offered them more rebate. In the process what is not being realized is the
fact that the financial future is getting compromised.

Financial Planning v/s Wealth Management

Wealth management means taking care of the needs of affluent clients,

their families and their businesses as part of a long-term, consultative
relationship."While this sounds similar to Financial Planning , it differs in
the sense that Financial Planning is for one and all while Wealth
Management is only for a select few. Wealth Management relates more the
management of plenty, while Financial Planning aims at getting the most
out of limited resources.

1.2 The Need for Financial Planning

Financial Planning is useful to everyone. Very few can consider
themselves too rich to engage in Financial Planning. There are many
instances of highly paid employees who came to financial grief merely
because they did not plan for their post-career years. Similarly even people
earning small amounts of income should undertake this process, as it will
help them in prioritizing their goals so that their limited income can be
used more efficiently.

Financial Planning is a process through which an individual can chart a
roadmap to meet expected and unforeseen needs in life. It is taking
necessary steps to ensure that the individual is equipped to accomplish
what he has set out to achieve and is prepared to deal with contingencies
as well. The importance of financial planning (especially in the present
scenario) cannot be overstated.

1.3 Study of various Factors

Following are the factors that one need to consider while doing Financial

Time Horizon and Goals: It is important to understand what individual’s

goals are, and over what time period they want to achieve their goals.
Some goals are short term - for example, paying a credit card in six months
medium-term— such as saving for a down payment on a house in two
years,For such goals it is important to be conservative in one’s approach
and not take on too much risk. For long term goals,however, one can afford
to take on more risk and use time to one’s advantage

Risk Tolerance: Every individual should know what their capacity to take
risk is. Some investments can be more risky than others. These will not be
suitable for someone of a low risk profile, or for goals that require being
conservative. Crucially, one’s risk profile will change across life’s stages.
As a young person with no dependants or financial liabilities,one might be
able to take on lots of risk. However, if this young person gets married and
has a child, person will have dependants and higher fiscal responsibilities.
So persons approach to risk and finances cannot be the same as it was
when they were single.

Liquidity Needs: When does money is needed to meet the goal and how
quickly one can access this money. If investment is made in an asset and
expects to sell the asset to supplyfunds to meet a goal, then it needs to be
understood how easily one can sell the asset.Usually, money market and
stock market related assets are easy to liquidate. On the otherhand,
something like real estate might take a long time to sell.

Need for Growth or Income: As person make investments think about

what is required,whether capital appreciation or income.Not all investments
satisfy both requirements. Many people are buying apartments, but are not
renting them out even after they take possession. So, this asset is
generating no income for them and they are probably expecting only
capital appreciation from this.A young person should usually consider
investing for capital appreciation to take advantage of their young age. An
older person however might be more interested in generating income for

Inflation : Inflation is a situation where too much money chases a limited
number of goods. This leads to a fall in the value of money. It is also
expressed as a rise in the general price level. For example, a product that
costs Rs 100 at present would cost Rs 105 a year from today, assuming
that prices rise at 5%. This is the impact of rising prices over one year; over
a 30-Yr period, assuming that inflation continues to rise at 5%, the same
product will be available at Rs432! Financial planning can ensure that one
is equipped to deal with the impact of inflation, especially in phases like
retirement when expenses continue but income streams dry up.

Finally, there are contingencies like medical emergencies or unplanned

expenditures that an individual might have to cope with. Sound financial
planning can enable him to easily mitigate such situations, without
straining his finances.

1.4 Comman Financial Mistakes

`Financial mistakes', which if avoided, can result in financial freedom and
wealth creation. The most common of some of the financial mistakes are as

- Overspending
- Insurance follies
- Not creating Contingency fund
- Putting Off Financial Planning
- Not starting savings early and not realizing power of compounding

1.5 Objective of Study

•To identify investment habit of people.
•To understand financial planning done in India.
•To analyse the characteristics of different asset class.
•To study changes in financial planning with change in age.
•To identify various avenues for investment.
•To spread awareness of financial planning.
•To examine factors influencing the investment decision.

1.6 Concept & Significance of the Study
Financial Planning is an integral part of any individual life, especially in this
modern world where value of everything is expressed in terms of money.
The active working span of human life is short as compared to the life
span. This means people will be spending approximately the same number
of years in after retirement what they have spent in their active working life.
Thus it becomes important to save and invest while working so that person
will continue to earn a satisfying income and enjoy a comfortable lifestyle.

Financial Planning enables a person to identify their goals, assess the

current position and takes necessary steps to achieve the goals. It helps us
to understand how financial decisions made effect our life. Financial
Planning is not just about investment planning but it is about life time
planning. Thus through proper financial planning a person can have a easy
and secured financial life.

Chapter 2:Financial Planning in

Introduction to Financial Planning Service Industry

Financial services refer to services provided by the finance industry. The
finance industry encompasses a broad range of organizations that deal
with the management of money. Among these organizations are banks,
credit card companies, insurance companies,consumer finance
companies, stock brokerages, investment funds and some government
sponsored enterprises.
The Indian financial services industry has undergone significant changes
over the years, particularly in the last decade, and continues to evolve
today. Financial Planning – a distinct element within the spectrum of
financial services industry - is still relatively a young discipline. But
personal finance products & services are increasingly becoming an
important part of this industry as the Indian consumers seek to maximize
and optimize the potential earnings and fruits of their hard-earned money.
Currently, there are distinct divisions within the financial services industry.
A person goes to a bank to save his money or to get a loan. He buys stocks
and bonds from a broker. He purchases insurance from an insurance agent
and mutual funds from a mutual fund distributor. The regulation of the
industry reflects the division of these transaction-based services

Category Product For Sales and Advice

Insurance Agents Insurance Policies

Mutual Fund Distributor Mutual Funds

Equity Share Broker/Sub-broker Share Trading/IPOs

Income Tax Consultant Tax Planning

Certified Financial Planners/Wealth All Financial Products


Indians have been making investment through such agents which was
restricted to a particular product.Apart from the above agent friends and
professionals like Chartered Accountant played an important role in
investment decisions. This is how for few decades investors have been
doing their Financial Planning.
However, financial services, especially on the retail side, have undergone a
major transformation and financial consumers are demanding a holistic &
comprehensive approach to their personal finance. Various factors have
catalyzed this change like privatisation of insurance and mutual fund
sectors has increased product options for the investor.

Second, fluctuating interest rates and the end of ‘guaranteed return’

products have prompted investors to look for alternative modes of
investment. And also with a number of mis-selling instances taking place in
the financial markets, investor’s confidence in ‘advisors’ has been shaken
and the investors are asking for a ‘trusted financial advisor’ like CFPs.
There are so many individuals who decide to start putting the term
“Financial Planner” in their business cards leaving the public more

From the above table we can see that there is huge requirement of
professional financial planners in India who can honestly plan individuals
financial plan. CFPs are certified by Financial Planning Board of India.

Chapter 3 :Financial Planning

3.1.Self assessment:
Clarify present situation, this is a preliminary step someone has to
complete prior to planning their finance. Doing a self assessment enable a
person to understand their present wealth status and responsibilities. Self
assessment should contain following

•Prospective retirement age

•Main source of income
•Dependents in family
•Expenses and monthly savings
•Current investment status

One should identify their wealth status prior to move with financial

3.2 : Identify Financial, Personal goals and Objectives :

Each individual aspires to lead a better and a happier life. To lead such a
life there are some needs and some wishes that need to be fulfilled. Money
is a medium through which such needs and wishes are fulfilled. Some of

the common needs that most individuals would have are creating enough
financial resources to lead a comfortable retired life,providing for a child's
education and marriage, buying a dream home, providing for medical
emergencies, etc. Once the needs/ objectives have been identified, they
need to be converted into financial goals. Two components go into
converting the needs into financial goals. First is to evaluate and find out
when it is needed to make withdrawals from investments for each of the
needs/ objectives. Then person should estimate the amount of money
needed in current value to meet the objective/need today. Then by using a
suitable inflation factor one can project what would be the amount of
money needed to meet the objective/ need in future. Similarly one need to
estimate the amount of money needed to meet all such objectives/needs.
Once person have all the values they need to plot it against a timeline.


�Each objective must be backed by a dedicated investment plan.

� When faced with multiple objectives, prioritise and start off with
the most pressing one.
� Don't delay the investment process on account of shortage of funds.
One need to start early and make up for any deficit at a later stage.

Identify Financial problems or opportunities :

Once goals and current situation are identified, the short fall to achieve the
goal can be assessed. This short fall need to be covered over a period of
time to fullfill various need at different life stages. Since future cannot be
predicted, all the contingencies should be considered while doing financial
planning. A good financial plan should hedge from various risk. A flexible
approach should be taken to cater to changing needs and should be ready
to reorganize our financial plan from time to time.

3.3 Understand Risk Profile:

Now review various investment options such as stocks, mutual funds, debt
instruments such as PPF, bonds, fixed deposits, gilt funds, etc. and
identify which instrument(s) or a combination thereof best suits the need
and risk appetite of the investor. The time frame for investment must
correspond with the time period for goals. If an investor can afford to lose
significant amount of money on his principal before it can generate a
return, then his risk appetite is high.Risk is the amount of money that the
investor can afford to lose, in the interim, in his quest for a certain return
on his investment. If an investor can afford to lose only a moderate amount
of money, then his risk appetite is on the lower side.In any investment

product how much return it can generate that is shown but the risk factor
related to it is not disclosed and also the investment opportunities that are
shown are misleading.So it becomes very much important for an investor
to quantify his risk profile and accordingly one should invest in such

• If one can afford to see significant erosion in his investments (say upto
50% of investments) in order to achieve the target return then that
makes him a High risk investor.
• If one is of the type, who can tolerate a dip in his investments only upto
a certain level (say upto 10%), then he is Low risk investor.
• Person between the above two condition has Moderate risk
profile,generally he can bear the erosion in investment upto 25-30%.

3.4 .Asset Allocation considering Risk Appetite:

It means distributing investors money across various investment avenues
or assets so that the poor performance of any one avenue/asset does not
jeopardise the entire investment plan.One need to ask himself following 2
question such as,
(a)Which assets(Investment Options) should be included in his Investment
(b)How much of it should he own?
As solution for First question may not be difficult for an investor ,solution
to second question can be determined based on his risk profile.

A person with High Risk Tolerance is generally advised by the experts with
following Asset Allocation

A person with Moderate Risk Tolerance is generally advised by the experts with
following Asset Allocation

A person with Low Risk Tolerance is generally advised by the experts with
following Asset Allocation

Following table shows the list of various investment options and risk
attatched to it.
Review of Investment Options

3.5 Implementation of Plan :
Until person put things into action everything is waste. Necessary steps
needs to be taken to achieve financial goals this may include gathering
necessary documents, open necessary bank, demat, trading account with
brokers and get started. In simple terms, start investing and stick to the

3.6 Review and update plan periodically:

Financial planning is not a one-time activity. A successful plan needs
serious commitment and periodical review (once in six months, or at a
major event such as birth, death,inheritance). Person should be prepared
to make minor or major revisions to their current financial situation, goals
and investment time frame based on a review of the performance of the

Chapter 4 :Detailed Financial Plan

(Case Study)
Name: Ritesh Gala Home Address: 501,Rajhuns CHS,
DOB: 5th June ,1980. 11th Road,Khar(West),
Age: 30 Mumbai-400 052.
Pan no:
Occupation: Sales Manager, XYZ Email:
Pvt Ltd.
Contact No. 9191895675

Now Self Assessment is the first step in Financial Planning Process.Here

one need to provide details regarding Dependents,Income and
Expenses,Retirement age,His Assets and Liabilities and last but not the
least the Financial Goals he wants to achieve.

Family Members and Dependants

Name Relationship DOB Age Dependant

Parul Gala Wife 30 Dec,1981 29 Yes
Sumit Gala Son 17th Jan,2009 01 Yes

Savitri Gala Mother 4th April,1950 60 Yes

Financial Goals

Goal Name Goal Year

Emergency Fund 2010
Purchase Of House 2016
Purchase Of Car 2025
Child’s Education 2028
Child’s Marriage 2039
Retirement 2038

Income And Expense Detail

Cashflow for the current calendar year (remaining 12 months)
Description Remaining Current Year
Salary-CTC 6,00,000
Salary – Variable 0
Income from business/profession 0
Pension 0
Rental income 0
Investment Income 0
Annuity 0
Other income 0
Total Income 6,00,000
Living Expenses -1,56,000
Loan EMIs -1,02,000
Insurance Premiums -43,000

Other Expenses 0
Other Deduction From Salary 0
Taxes -42,000
Total Expense 3,43,000
Excess (shortage) before 2,57,000
PF 0
Superannuation 0
Other Committed Savings(Towards 60,000
Total 60,000
Discretionary Surplus 1,97,000

Insurance Premium Details:-

Type Amount
Endowment Plan(S.A.-Rs.5,00,000) 30,000
Term Plan (S.A.-Rs.15,00,000) 3,000
Health Insurance Family Floater Plan 10,000
Total 43,000

USE OF INCOME-Current Year

Commite Savings

33% Living Expenses

26% Loan EMIs


Total Net Worth is Rs.8,21,000.
Liquid Assets Home Loans 0
Savings account 1,00,000 Vehicle Loans -4,08,000
Liquid funds 0 Education Loan 0
Financial Assets Personal/Credit Card 0

Cash value of life 1,76,000 Other Loans 0
insurance policies
Fixed interest 1,28,000 Total Liabilities -4,08,000
Mutual funds 2,20,000
Others 0
Direct equity 25,000 Net Worth
Tangible Assets

Real estate 0
Other assets (eg. Art, 0
Coin and Stamp
Gold 0
Personal Assets
Primary house 0
Vacation home 0
Car/Vehicle 0
Jewellery 3,60,000
Other personal assets 0
Retirement Assets Total Net Worth is Rs.8,21,000.
Provident fund 2,20,000
Superannuation 0
Gratuity 0
Public provident fund 0
Cash value of pension 0
Total Asset 12,29,000

Retirem during Annual Expense
ent Retirem retirement at the time of
Start ent End (In Today’s Retirement(Futu Corpus
Year Year Value) re Value) Required
2038 2060 1,05,000 536,72 11,807,

7 996

Goal Inflatio Today's In Goal Priori
Name Year n Rate Value Year ty
Fund 2010 0% 140,000 140,000 1
Purchase of 2, ,546,29 2
House 2016 6% 500,000 8
Child ,779,95 3
Education 2028 10% 500,000 9
Child's 1, ,111,68 4
Marriage 2039 6% 000,000 7

Purchase of 8,00,00 19,17,6 5

Car 2025 6% 0 00

Risk Profile

Based on the responses to risk profiling questionnaire, it has been

evaluated that Mr.Gala has a Moderate risk profile.
(Refer annexure 1)


Assumptions made while planning:

1. Life expectancy for Ritesh Gala is 80 years.

2. Retirement age of Ritesh Gala is 58 years.
3. Current year's surplus for the remaining year is Rs.1,97,000.

Assumed growth rate for Asset/Fund Classes (Growth rates are based on
long term historical returns)
Asset/Fund Class Assumed Growth Rate (%)
Cash and money market 6.5
Debt Investments 8
Index Funds 11
Large Cap Funds 12.3
Mid Cap Funds 13.45
Diversified Equity 12.55
Balanced Funds 11.25
Sectoral Funds 15
Real Estate 15
Art 14
Gold 8
International Equity Investments 14
Commodity 14
Direct Equity 12.5
Source:Sykes & Ray Financial Planners

Assumed Income Growth Rates

Income Income Growth From (Year) To (Year)
Name Type Rate (%)
Fixed Salary Salary Fixed 7 2010 2038

Assumed Expenses Growth Rates

Expense Expense Growth From To (Year)
Name Type Rate(%) (Year)
Tax on Fixed Tax on 10 2010 2038
Salary Salary-Fixed
Household Household 10 2010 2038
Expenses Expenses


1. Description
Name Inflation Goal Today’s Value In
Rate(%) Year Value Goal
Emergenc 2010 1,40,000 1,40,000

2. Goal funding

a. Existing Assets
Name Amount Year
Bank Savings 1,00,000 2010
Mutual Funds 40,000 2010

Recommended Portfolio Return:-6.5%

3. Analysis
Here, current assets and surplus income contribution are
sufficient to meet emergency goal. Typically, one must keep 3-6
months of living expenses in the emergency fund to meet any
future contingencies.



Name Inflation (%) Goal Year Today’s Value in Goal
Value Year
Purchase of 6 2016 25,00,000 35,47,500

2.Goal Funding

a.Existing Assets
Name Amount Year Value in
Year(At 9%)
Bank FD 1,26,000 2010
Mutual Funds 1,80,000 2010
Direct Equity 25,000 2010
Total 3,31,000 5,55,087

Start Date Tenure Amount EMI Interest(%)
1st Jan,2016 10 15,00,000 15,000 11

c.Contribution From Surplus

Contributi amount Contribution from
Year on @9%
2010 157600 157600
2011 173360 345144
2012 190696 566903
2013 209766 827690
2014 230742 1132924
2015 253816 1488704
surplus recurring
by 10% every year

3.Total Funding

Source Amount
Existing Assets growing at 9% 5,55,087
Loan for 10 yr from 2016 to 15,00,000
Contribution From Surplus 14,88,707 Goal
Total 35,43,794 Met

Recommended Portfolio Return 9%

To Achieve the goal at 9% growth rate ,Mr.Gala need to invest

the surplus contributions and existing assets amount as per the
above suggested portfolio.



Name Inflation(%) Goal Year Today’s Value in
Value Goal Year
Child’s 10 2028 5,00,000 27,79,959

2.Goal Funding:
a.Existing Assets
b.Contribution From Surplus
Surplus For Contribution Growth
Year Each Year From Surplus Amt@9%
2016 233,625 140000 140000
2017 255,276 140000 292600
2018 277,390 140000 458934
2019 299,894 140000 640238
2020 322,701 140000 837859
2021 345,703 140000 1053267
2022 368,775 140000 1288061
2023 391,767 140000 1543986
2024 414,504 140000 1822945
2025 436,782 140000 2127010
2026 458,364 140000 2458441 Goal
2027 478,975 140000 2819701

Recommended Portfolio Growth Rate 9%



Name Inflation Goal Year Today’s Value in

Value Goal Year
Son’s 6 2039 10,00,000 51,11,687

2.Goal Funding

a.Existing Assets

b.Current Year Surplus

Available Contributio
Surplus Each n From Growth
Year Year Surplus @10%
2021 3 115000 115000
2022 5 115000 241500
2023 7 115000 380650
2024 4 115000 533715
2025 2 115000 702087
2026 4 115000 887295
2027 5 115000 1091025
2028 0 115000 1315127
2029 5 115000 1561640
2030 5 115000 1832804

2031 4 115000 2131084
2032 3 115000 2459193
2033 4 115000 2820112
2034 1 115000 3217123
2035 2 115000 3653835
2036 2 115000 4134219
713,71 Goal
2037 0 115000 4662641 Met
2038 6 115000 5243905

Recommended Portfolio 1

Direct Equity
30% Diversified
Equity Funds
Debt Fund

• The Above recommended portfolio should be maintained

to achieve 10% return.
• The above recommended 20% asset allocation in Gold
should be made by investing in Gold ETFs and the amount
can be redeemed at the time of marriage to buy Gold

Recommended Portfolio 2

Large Cap
45% Funds
15% Diversified
Equity Fund
Balance Fund

• The above recommended 45% allocation in Debt can be made in Debt

Funds available in the market or some amount can be deposited in
Bank or Company Fixed Deposites.

Name Inflation(%) Goal Year Today’s Value in

Value Goal Year
Car 6 2025 8,00,000 19,76,600

2. Goal Funding

a. Existing Assets

Life Insurance Policy

Sum Annual Cumulative Maturity
Plan Assured Premium Rate of Return Year
5,00,000 30,000 8% 2025


Year Annual Growth Year Annual Growth

Premium @8% Premium Paid @8%


2005 30000 30000 2019 30000 814563

2006 30000 62400 2020 30000 909728
2007 30000 97392 2021 30000 101250
2008 30000 135183 2022 30000 112350
2009 30000 175998 2023 30000 124338
2010 30000 220078 2024 30000 13,72,8
2011 30000 267684
2012 30000 319099
2013 30000 374627
2014 30000 434597
2015 30000 499365
2016 30000 569314
2017 30000 644859
2018 30000 726448

b.Contribution From Total Surplus = Rs.6,10,000.

Total Funding
Endowment Plan 13,72,859
Contribution From
Total Surplus(MFs) 6,10,000
Total 19,82,859 Goal Met

NOTE- Some Units of Mutual Fund investments, that are to be

made from the remaining yearly surplus after
contributing to all goals, need to be sold for above



Retirem Retirem Annual Annual Expense at Corpus

ent Start ent End Expense during the time of Required
Year Year retirement (In Retirement(Future
Today’s Value) Value)
2038 2060 1,05,000 536,727 11,807,

2.Goal Funding
Contributi Cumulativ Contributio
on e n Cumulative
Recurring Growth@1 Recurring Growth@10
YEAR @ 10% 0% YEAR @ 10% %
2016 55000 55000 2031 229749 3675978
2017 60500 121000 2032 252724 4296300

2018 66550 199650 2033 277996 5003926
2019 73205 292820 2034 305795 5810114
2020 80526 402628 2035 336375 6727500
2021 88578 531468 2036 370012 7770262
2022 97436 682051 2037 407014 8954302
2023 107179 857436 2038 447715 1,02,97,448
2024 117897 1061076
2025 129687 1296871
2026 142656 1569214
2027 156921 1883057
2028 172614 2243976
2029 189875 2658249
2030 208862 3132936

Total Funding
Yearly 10% Recurring 1,02,97,448
Contribution From Total 15,10,548
Surplus(MFs)as on 2038 Goal
Total 1,18,07,996

Recommended Portfolio

20% Direct Equity
Equity MF
40% Debt
30% Gold ETFs

Recommended Portfolio Return:- 10%

• One can also invest in Balanced Funds instead of Gold

ETFs to get the same returns.

Note- Some Units of Mutual Fund investments, that are to be

made from the remaining yearly surplus after
contributing to all goals, need to be sold for above


Ag Less:Total ed
Year e Salary CTC Exp Savings Cash Surplus
2010 30 600,000 343,000 60,000 197,000
2011 31 642,000 362,800 64,200 215,000
2012 32 686,940 384,580 68,694 233,666
2013 33 735,026 408,538 73,503 252,985
2014 34 786,478 332,892 78,648 374,938
2015 35 841,531 361,881 84,153 395,497
2016 36 900,438 576,769 90,044 233,625
2017 37 963,469 611,846 96,347 255,276
2018 38 1,030,912 650,431 103,091 277,390
2019 39 1,103,076 692,874 110,308 299,894
2020 40 1,180,291 739,561 118,029 322,701

2021 41 1,262,911 790,917 126,291 345,703
2022 42 1,351,315 847,409 135,131 368,775
2023 43 1,445,907 909,550 144,591 391,767
2024 44 1,547,120 977,905 154,712 414,504
2025 45 1,655,419 1,053,095 165,542 436,782
2026 46 1,771,298 1,135,805 177,130 458,364
2027 47 1,895,289 1,226,785 189,529 478,975
2028 48 2,027,959 1,326,864 202,796 498,300
2029 49 2,169,917 1,436,950 216,992 515,975
2030 50 2,321,811 1,558,045 232,181 531,585
2031 51 2,484,337 1,511,249 248,434 724,654
2032 52 2,658,241 1,657,774 265,824 734,643
2033 53 2,844,318 1,818,952 284,432 740,934
2034 54 3,043,420 1,996,247 304,342 742,831
2035 55 3,256,460 2,191,272 325,646 739,542
2036 56 3,484,412 2,405,799 348,441 730,172
2037 57 3,728,321 2,641,779 372,832 713,710
2038 58 3,989,303 2,901,357 398,930 689,016


Contr uti-on
ib- Child’s For Remainin
Contri ution Marria Retirem g
bu- For ge ent Surplus/I MF
tion Educ Contri Recurri nvst- growth
Cash For ati- bu- ng @ ment in
Year Surplus House on tion 10%p.a MFs @10%
2010 19 15760 - - - 39
7,000 0 ,400 39400
2011 21 17336 - - - 41
5,000 0 ,640 84980
2012 23 19069 - - - 42
3,666 6 ,970 136448
2013 25 20976 - - - 43
2,985 6 ,220 193312
2014 37 23074 - - - 144
4,938 2 ,196 356840
2015 39 25381 - - - 141
5,497 6 ,681 534204

2016 23 - 1400 - 55000 38
3,625 00 ,625 626250
2017 25 - 1400 - 60500 54
5,276 00 ,776 743651
2018 27 - 1400 - 66550 70
7,390 00 ,840 888856
2019 29 - 1400 - 73205 86
9,894 00 ,689 1064431
2020 32 - 1400 - 80526 102
2,701 00 ,175 1273049
2021 34 - 1400 11500 88578 2
5,703 00 0 ,125 1402479
2022 36 - 1400 11500 97436 16
8,775 00 0 ,339 1559066
2023 39 - 1400 11500 107179 29
1,767 00 0 ,587 1744559
2024 41 - 1400 11500 117897 41
4,504 00 0 ,606 1960622
2025 43 - 1400 11500 129687 52 1598778
6,782 00 0 ,095 *
2026 45 - 1400 11500 142656 60
8,364 00 0 ,708 1819364
2027 47 - 1400 11500 156921 67
8,975 00 0 ,054 2068354
2028 49 - - 11500 172614 325
8,300 0 ,686 2600876
2029 51 - - 11500 189875 326
5,975 0 ,100 3187064
2030 53 - - 11500 208862 322
1,585 0 ,722 3828492
2031 72 - - 11500 229749 494
4,654 0 ,906 4706247
2032 73 - - 11500 252724 481
4,643 0 ,919 5658791
2033 74 - - 11500 277996 462
0,934 0 ,938 6687608
2034 74 - - 11500 305795 437
2,831 0 ,036 7793405
2035 73 - - 11500 336375 403
9,542 0 ,167 8975912
2036 73 - - 11500 370012 360 1023366
0,172 0 ,159 2
2037 71 - - 11500 407014 306 1156372
3,710 0 ,696 5
2038 68 - - 11500 447715 241 1145085
9,016 0 ,301 0**
NOTE – * Rs.6,10,000 will be withdrawn to fund the Purchase of Car in the year 2025.
** Rs.15,10,548 will be withdrawn to fund the Retirement Corpus in the year 2038.

The above Cash Flow shows the balance amount left after all the
contribution made to achieve the desired goals.The balance
amount need to be invested as per the recommended portfolio
to generate compounded return of 10% p.a.

Recommended Portfolio

Large Cap
15% Funds
Balanced Fund
Gold ETFs

20% Debt

Recommended Portfolio Return:- 10%

The above Porfolio would generate the amount of Rs.1,21,61,398 till

the year 2038( Year of Retirement).

Total Amount in hand at the time of Retirement

Details Amount
Retirement Corpus 1,18,07,996
Surplus Amount/Portfolio Value 1,21,61,398
Amount Generated For Charity** 1,32,18,107**
Total 3,71,87,501
NOTE- **Amount Generated for Charity by investing 10% of salary every year into Debt
Fund,starting from 2010.

Chapter 5
Conclusion and Recommendations
1.Protection Planning

a.Life Insurance
Mr.Gala has taken Life Coverage of Rs.20,00,000
Based on the Financial Need Analysis(Annexure 2) Mr.Gala is
underinsured by Rs.14,00,000/- So,it is recommended to increase
the Life Coverage by taking additional Term Plan for the same.

b.Health Insurance
Based on the details provided by Mr.Gala it has been observed
that Mr.Gala has not taken Health Insurance Plan for his
mother,which may impact his Financial health in future.So it is
recommended to take health insurance for his mother.

2.Plan Implementation & Reviewing

• Before making investment in any investment product ,please go
through each and every single detail.Always calculate future
costs and your investment should always be able to beat the
• Regular review of Financial Plan is necessary since part of
investment is made into equity linked instruments,generally one
must review the portfolio once every three month.
• When one is close to achieving goal ,he must divert the risky
equity investment gradually to debt fund,so that goals can be
achieved effectively.

Q1. I generally prefer to stay in a familiar situation, rather than take a
chance on a new situation.
Strongly agree Somewhat disagree
Somewhat agree Strongly Disagree
Q2. You have won a prize. It comes in three options. Which options would
you choose?
Rs. 10,000 in cash A 50% chance to win Rs. 50,000
A 20% chance to win Rs. 2,00,000
Q3.Which of the following statement describes your future income with
respect to expenses?
My income from my occupation is likely to increase substantially with respect
to my expenses comfortably in coming years
My income from my occupation is likely to meet my expenses comfortably in
the coming years.
My income in coming years, will just meet my expenses.
In coming years, my income will not be sufficient to meet my expenses.
Q4. A substantial part of your savings is in…
Shares. Bank deposits.
Mutual funds. No savings.
Q5. You prefer to invest in stocks that....
Rise slowly and steadily. Show a volatile behaviour,but give
high returns.
Q6. Describe your investment knowledge...
Excellent Good Average Poor

Q7. How much time do you spend monitoring your investments?
Almost Never Regularly
Occasionally When I need to sell assets to raise some
Q8. Time period after which major expenditure expected
Less than a year 1 to 3 years
3 to 5 years More than 5 years
Q9. How important is your income from investments, to pay your monthly
Essential Somewhat Important
Very Important Not Important
Q10. How much of your income do you save each month?
None Under 5% 5 to 15% Above 15%
Q11. Apart from self, you are financially responsible for

Older parents

Your spouse or your children

Whole family including parents and our relatives

Q12. How much of tax do you pay.
A large amount. A medium amount.
A small amount. Don't pay tax




1)Living Expense
(FD Required to
get Rs.13,000
Monthly) 20,80,000 1)Fixed Deposite 1,28,000
Basic- 3,50,000 2)Investment in
Higher- 6,00,000 9,50,000 Mutual Funds 2,20,000
3)Child’s Marriage 10,00,000 3)Savings Account 1,00,000
4)Housing Loan - 4)Cash Value of
Life Insurance 20,00,000
5)Car Loan 4,08,000 5)Direct Equity 25,000
6)Jewellery 3,60,000
7)Provident Fund 2,20,000
LIABILITY 44,38,000 TOTAL ASSETS 30,53,000

TOTAL GAP OF Rs.13,85,000.