S. P.

MANDALI’S
PRIN. L. N. WELINGKAR INSTITUTE OF MANAGEMENT
DEVELOPMENT & RESEARCH, MUMBAI 400 019

TRIMESTER – VI
FUNCTIONAL SPECIALISATION PROJECT REPORT

ON
PERCEPTIONS OF INVETORS TOWARDS FINANCIAL
PLANNING IN INDIA

BY
DARSHIL GUDHKA

PGDM E-Business (2020 – 2022)

ROLL NO: 40

PROJECT GUIDE
PROF. SMEETA BHATKAL
DEAN BFSI, WELINGKAR’S INSTITUTE OF
MANAGEMENT

1
SYNOPSIS
1. Name: Darshil R Gudhka

2. Program and year: PGDM E- Business 2020- 22

3. Topic of Research Project: Financial Planning in India

4. Name of the Mentor: Prof. Smeeta Bhatkal

5. Project Details:

a. Objective of the study:

The objective of this research is to study the financial planning amongst the early
investors and people in their middle age (Retirement Planning).

b. Research Methodology:
1. Secondary research based on the current financial avenues and their current
and expected returns.
2. Primary survey using tools to know investors point of view and their
behaviour.
3. Analysis of the primary data.
4. Drawing conclusion and giving suggestions.

c. Expected results:
1. Early investors and in the middle age are high risk takers than one planning for
retirement.

Project Guide Student

Name: Prof. Smeeta Bhatkal Name:
Darshil Gudhka
Signature: Signature:
Date: Date: 8th March 2022

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 ACKNOWLEDGEMENT

I would like to thank my mentor Prof. Smeeta Bhatkal, Dean BFSI, Welingkar’s Institute of
Management, for guiding me and supporting my ideas since the beginning of my final Trim
VI project. Her supervision provided the necessary direction on my work. I am thankful for
the various opportunities she provided to learn and experience. I would like to thank every
person who aided in the successful completion of this project.
I would like to extend my gratitude to Prin. L.N. Welingkar’s Institute of Management
Development and Research for giving me this opportunity. I acknowledge my gratitude to all
the members of my family, who have supported me. I also extend my heartfelt thanks to my
peers and well-wishers.

Darshil Gudhka
PGDM E-Business (2020-2022)

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PLAGIARISM CHECK REPORT

4
 COMPLETION CERTIFICATE

This is to certify that project titled “Perceptions of Investors towards Financial Planning in
India” has been successfully completed by Mr. Darshil Gudhka in fulfilment of his two years
full time course ‘Post Graduation Diploma in E-Business’ recognized by AICTE through
the S. P. Mandali's Prin. L. N. Welingkar Institute of Management Development & Research,
Matunga, Mumbai 400019.

This project in general is done under my guidance.

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 CONTENTS
ACKNOWLEDGEMENT..................................................................................................................3
COMPLETION CERTIFICATE.......................................................................................................5
EXECUTIVE SUMMARY.................................................................................................................7
INTRODUCTION TO FINANCIAL PLANNING...........................................................................8
LITERATURE REVIEW...................................................................................................................9
RESEARCH METHODOLOGY.....................................................................................................13
FACTORS AFFECTING FINANCIAL PLANNING....................................................................15
SIX STEP PROCESS OF FINANCIAL PLANNING....................................................................17
FINANCIAL AVENUES...................................................................................................................19
PRIMARY RESEARCH...................................................................................................................21
CONCLUSION AND RECOMMENDATIONS.............................................................................34
BIBLIOGRAPHY..............................................................................................................................36
ANNEXURE......................................................................................................................................38

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 EXECUTIVE SUMMARY

Financial planning is the process of assessing a person's financial objectives, inventorying his
or her money and other assets, setting life goals, and taking the activities necessary to
accomplish those goals within a given time frame. It's a way of calculating a person's
financial necessity.
The time horizon for accomplishing life objectives, defining the client's risk tolerance, their
need for liquidity, the inflation that would eat and reduce the quality of living, and the need
for growth. or income are the primary items to consider in financial planning. Financial
planning can be broken down into six parts. These include the client's self-evaluation, the
identification of personal and financial goals and objectives, the identification of financial
problems and opportunities, the determination of recommendations and alternative solutions,
the implementation of the appropriate strategy to achieve the objectives, and the periodic
review and updating of the plan. One such advice service that has failed to earn investor
acceptance is financial planning.
Financial planning is not a new concept, but it should be done in a systematic manner. As an
insurance agent, mutual fund agent, tax counsellor, stockbroker, chartered accountant, and so
on, we utilise this service today. Different agents provide a variety of services and goods. A
financial planner, on the other hand, is a service provider that helps people choose the right
products to reach their goals.
The financial services business provides a variety of services. The financial industry includes
a diverse variety of businesses that deal with money. Banks, credit card companies, insurance
companies, consumer credit companies, brokerage firms, investment funds, and several
government-sponsored corporations are among these businesses.
Emergency preparation, risk planning (insurance), tax planning, retirement planning, and
investment and savings options are all part of a sound financial plan. On the market, there are
a variety of instruments that may be customised to fit the demands of various planning
objectives.
At the end of the report, it is also recommended that all disclosure documents be kept as well,
as this would help in the event of a dispute being resolved. Investments under the SIP should
be encouraged. A small amount invested regularly for a long time can create greater wealth.
The SIP helps to calculate the average cost of the rupee, develops the habit of saving and
offers the convenience of investment.

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 INTRODUCTION TO FINANCIAL PLANNING

The process of accomplishing life's goals via sound financial management is known as
financial planning. Financial planning is a method of determining where a person is today
financially, where they want to be in the future, and what steps they will take to get there.
People's financial decisions are given direction and purpose through financial planning. It
aids in comprehending how each financial decision a person makes impacts other aspects of
his money. Purchasing a certain investment product, for example, might help you pay off
your mortgage sooner or postpone retirement significantly. We may analyse the short- and
long-term consequences of each financial action on their life objectives by looking at it. In
addition, the person can more quickly adjust to life changes and feel more certain that their
goals are on track.
This is what a person does with his money in basic financial planning. Individuals have been
preparing their finances for millennia. Each person who received money had to determine
how to spend it wisely. In most cases, the decision had to be made whether to spend now or
save for later. Every time money is received, everyone must make the same decision. Is it
better to spend it now or save it for later?
In India nowadays, financial planning entails just investing in tax-saving products. Thanks to
the profusion of tax exemptions and incentives offered under the Income Tax Act's many
articles and sub-articles. As a result, people are investing money without fully
comprehending the reasoning or justification behind their decisions.
Furthermore, the "discount" customers obtain from particular agents and advisers appears to
be the driving factor behind the investment. The more the discount given to an agent, the
more the smuggler feels he made the proper option in selecting the agent who has provided
him the most discounts. What is not gained in the process is that the financial future is
jeopardised.

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 LITERATURE REVIEW

A review of the literature makes it possible to understand the importance, the context and the
current situation linked to the subject selected for research work. Going through the literature
review, it is observed that many researchers / academics have thoroughly examined Western
literature on financial planning. This literature review aims to present the current state of
financial planning. The literature review is done through various books, articles, national and
international journals, reputable daily newspapers and covers demographics with people in
early investing days and ones planning for retirement. The literature review mainly focuses
on a variety of financial avenues available to invest in and Investors perception, knowledge,
and risk ability for investing. It also gives an idea of the periodic changes that occur during
the financial planning process. The literature review also highlights the limitations and
problems associated with financial planning and future scope.

YANG, Y (2006) - "SOURCES OF FINANCIAL INFORMATION"

There are a variety of financial information providers that disseminate information about the
items accessible on the financial markets. Choosing accurate and trustworthy sources of
information can have an impact on an investor's return on investment. The many sources of
information and how they are used are discussed in this section. Yang et al., 2006. Using the
2001 Survey of Consumer Finances, researchers looked at the factors that influence the size
of the search for savings and investment information.
Households in the second quintile of income were more likely than those in the lowest
quintile to seek investing information. Furthermore, it has been discovered that as people
become older, the scope of their searches shrinks. Female-headed couples and lone-parent
households were more likely than male-headed couples and lone-parent households to seek
investing information.

JAN WILSON, (2010) - "PERCEPTION OF FINANCIAL WELL-BEING"

Women from non-traditional homes were far more anxious about their financial future than
women who had just married. Single mothers were less likely to claim they had their finances
in control and were more concerned that their money would not last until they retired.
Women who lived together were far more likely to voice concerns about being a burden.
Long-term care insurance was seen necessary by all three categories, with women in first
marriages being the least likely to agree. Women who were older, more educated, had higher
wages, and contributed more to the household income had a more optimistic outlook on their
finances.

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DOUGLAS, (2007) - "PSYCHOLOGICAL FOUNDATIONS OF FINANCIAL
PLANNING"
The psychological factors that underpin financial planning are poorly understood. Most of the
financial planning and investment research have relied on demographic factors to forecast
individual savings disparities. A planning model is examined in this study, which proposes
psychological markers to adjudicate the link between demographic variables and savings
behaviour. The findings showed that psychological variables play a significant influence in
the retirement planning process. The findings have theoretical implications for the
development of psychology-based planning models, as well as practical consequences for
individuals attempting to comprehend the psycho-motivational factors at work in planning
and saving patterns.

ANDREAS OEHLER, (2008) - “FINANCIAL EDUCATION AND BEHAVIOR”

Financial planning for retirement benefits may be effective if it touches customers in their
natural surroundings at critical junctures in their lives. To do this, efforts in terms of money
and organisational setup are required. However, to establish the success of education,
particularly for vulnerable consumer groups, an assessment is required. It may be permissible
to influence behaviour through institutional set-up if the evaluation finds that these groups
cannot be successfully targeted or if consumers do not respond after receiving financial
education. retirement plans and financial resources as a political tool, education may be used
to help.

ARNAV PANDYA & PRANAV KRISHNAMURTHY, (2008) - "CAREER

OPPORTUNITIES FOR YOUNG FINANCIAL PLANNERS"
Numerous studies have found that a job in financial planning is the finest employment choice
in the country, recognising the professional benefits of financial planning. The majority of
financial planners are generally stress-free, have a great earning potential, and have a high
level of job autonomy. The importance of personal fulfilment cannot be overstated. "I
frequently see folks who are just overwhelmed and in need of direction. As a result, it is my
responsibility to listen, comprehend their condition, and propose solutions that would benefit
them "Zankhana Shah, a Mumbai-based planner, needs your help. "It's rewarding to be able
to assist others in improving their lives, and it's not just about money."
Srinivasan explains that this is to combine the financial portion of customers' life with other
aspects of their lives so that they may attain their objectives. The satisfaction acquired from
solid career growth is the satisfaction derived from discovering client solutions. The field is
predicted to develop significantly over the next 5-10 years, with practitioners earning more
money.

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SREEKANTH V, (2009) - “IMPACT OF INFLATION ON FINANCIAL PLANNING”
Financial planners, among other professionals, have the unique duty of anticipating the
future. Doctors, attorneys, architects, and chartered accountants address their customers'
present issues, maybe with some foresight. Financial planners, on the other hand, oversee
moulding a client's financial future, using the past and present as pointers.
As a result, financial planners face the difficult challenge of formulating assumptions
regarding critical factors such as future interest rates, inflation, client income growth, stock
returns, and so on. Income growth is a variable that only the client can control, and the
planner's responsibility is limited to assessing stability.

FINANCIAL SERVICES REVIEW-GREENWICH- 14 (4), 331, 2005

The goal of this study is to see how much people's knowledge of retirement planning,
prospects, and financial risk tolerance impacts their retirement savings habits. The research
enlisted the participation of 270 young adult employees. Each of the three factors is
predictive of savings behaviours, according to regression analysis, and they also interact. In
terms of application, the findings imply that counselling and intervention initiatives focused
at encouraging people to save for retirement should target people differently based on these
three psychological factors.

JOURNAL OF PERSONAL FINANCE 10 (1), 36-62, 2011

According to statistics from the Survey of Consumer Finances from 1998 to 2007, the
number of households reporting employing a financial planner climbed from 21% in 1998 to
25% in 2007, representing a nearly five million increases in homes between 2004 and 2007.
After controlling for income, equity, age, and other factors, a multivariate analysis shows that
the likelihood of using a financial planner is strongly linked to risk tolerance, with people
with low risk tolerance being the least likely and those with risk tolerance greater than the
average being the most likely. Those with a high-risk tolerance are less likely to use a
financial advisor than those with a low risk tolerance.

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DAVID S. MURPHY, SCOTT YETMAR, (2010): “PERSONAL FINANCIAL
PLANNING ATTITUDES: A PRELIMINARY STUDY OF GRADUATE
STUDENTS”, MANAGEMENT RESEARCH REVIEW, VOL. 33
Personal savings (including insurance and annuities), social insurance systems such as social
security, and employer-sponsored retirement plans have historically satisfied the demand for
financial security in India, particularly during retirement years.
The cornerstone of these financial security solutions has been employer-sponsored retirement
plans. As a result, persistent legislative activity has been directed at retirement schemes. The
Employee Income and Retirement Security Act of 1974 (ERISA) introduced important and
far-reaching modifications to most elements of employee and self-employed retirement plans
(i.e. legal, tax, investment, and actuarial) and established 4010 programmes. The popularity
of defined contribution pension plans is growing because of these improvements.

ASHLY LYNN JOSEPH AND M. PRAKASH (2014): A STUDY ON PREFERRED

INVESTMENT AVENUES
They stated in the paper 'A Study on Preferred Investment Avenues Among the People and
the Factors Considered for Investment' that they wanted to get an understanding of the
various investment avenues accessible and the preferred investment avenue among Bangalore
residents. New financial products are now available in today's globe. Due to a lack of
sufficient financial education among the public, deciding the variables that should be
considered while making smart investment decisions has become complicated and confusing.
Investors are also less knowledgeable about stock market and equity investments, preferring
traditional assets like as bank deposits, insurance, and post office savings, according to the
study.

LAXMAN PRASAD ET AL. (2015)

The goal of the research was to better understand investor attitudes regarding investment
option selection and to determine what variables influence investor attitudes toward
investment option selection, with a focus on sip. Before investing, investors should conduct
thorough research about the risks associated with the investment. It is also a good idea to get
advice from an asset management firm.

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 RESEARCH METHODOLOGY

TITLE
“Perceptions of individuals towards financial planning in India”

GOAL OF THE STUDY

The study is about to find various avenues available for an individual to invest and ways to
achieve long-term and short-term financial goals through financial planning. He intends to
study the model in which the individual distributes his savings into different asset classes. It
also aims to raise awareness of financial planning.

PRIMARY OBJECTIVE
 Understanding the financial planning carried out in
 India Publicize financial planning
 Identify different investment avenues
SECONDARY OBJECTIVE
 Identify people’s investment habit
 Study changes in financial planning with age change
 Examine the factors influencing the investment decision

SCOPE OF STUDY
The scope of the study is familiar with the different investment avenues available on the
market. Study the stages of an individual's life and identify their risk tolerance, income
stream, life goals and current investment. The study should cover all areas of the individual's
financial needs and should lead to the achievement of each of their goals. The scope of
planning will include risk management, insurance planning, retirement planning and tax
planning.

CONCEPT AND MEANING OF STUDY

Financial planning is an integral part of any individual life, especially in this modern world
where the value of everything is expressed in terms of money. The active duration of human
life is short compared to the lifespan. This means that people will spend approximately the
same number of years after retirement as they have spent in their working life. Thus, it
becomes important to save and invest while working so that this person continues to earn a
satisfactory income and enjoy a comfortable lifestyle. Financial planning allows a person to
identify their goals, assess the current position and take the necessary steps to achieve the
goals. This helps us to understand how financial decisions have affected our lives. Financial
planning is not only about investment planning, but lifespan planning. So, with good financial
planning, a person can have an easy and secure financial life.

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RESEARCH DESIGN
Type of Research Plan: Descriptive Research Plan
Data Source: Primary and Secondary Data
Research Approach: Survey Method
Finding Aid: Questionnaire
Sampling Technique: Non-Probabilistic Technique
Research Area: MUMBAI, BENGALURU, JAIPUR, DELHI, DEHRADUN

LIMITATIONS
The study, however, has certain limitations. The researcher will do everything possible for an
in-depth study of the degree of risk and the returns on investments. However, the
unavailability of adequate information can be a key limitation in a few cases.
The investigation was limited within the geographic boundaries of a few cities of India. Thus,
the results may not be applicable to the whole country.
The sample size was only 100. Thus, the results may not reflect the actual situation. A large
sample size may reflect better results. Also, the conclusion cannot be applied due to the
diverse opinions of the respondents. The data collected cannot be judged by the authenticity
of the responses.

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 FACTORS AFFECTING FINANCIAL PLANNING

Funding planning involves what type of funding should be used, where to get it, and when it
should be available. Financial planning is an exercise that must be unique and tailored to each
person - we cannot just take a person’s financial plan and copy it. Our financial plan should
be based on our unique personal factors and the external factors that surround us. The
following should be considered when planning financial planning:

1. TIME HORIZON AND GOALS

It is important to understand what the individual goals are and over what period they want
to achieve their goals. Some goals are short-term goals, the ones that people want to
achieve during the year. For such objectives, it is important to be careful in your approach
and not to take too many risks. For long-term goals, however, you can afford to take more
risks and use time to your advantage.
2. LIQUIDITY REQUIREMENTS
When is money needed to reach the target and how quickly can this money be accessed.
If the investment is made in an asset and plans to sell it to provide funds to achieve a goal,
then one must understand how easily one can sell the asset. Usually, money market and
stock market related assets are easy to liquidate. On the other hand, something like real
estate could take a long time to sell.
3. INFLATION

Inflation is a fact of economic life in India. The bottle of cold drink brought in today is
almost double the price that would have been paid ten years ago. At inflation or slightly
above 4% per year, a package of cookies that costs Rs 20 today will cost Rs. 30 in ten
years. Imagine the cost of buying a car or buying a house in ten years! The purchasing
power of money decreases every year. Therefore, the cost of achieving the goals must be
seen in what the inflated price in the future will be.
4. RISK TOLERANCE
Everyone must know what their risk-taking capacity is. Some investments may be riskier
than others. These will not suit a low-risk person or goals that need to be conservative.
Above all, everyone's risk profile will change at each stage of life. As a young person
with no dependents or financial liabilities, one might be able to take a lot of risks.
However, if this young person marries and has a child, the person will have more
dependents and greater tax responsibilities. Thus, people's approach to risk and finances
cannot be the same as when they were single.
5. NEED FOR GROWTH OR INCOME
As the person invests, think about what is required, be it capital appreciation or income.
Not all investments meet both requirements. Many people buy apartments, but do not rent
them even after taking possession. So, this asset does not generate any income for them

15
and they probably only expect capital appreciation. A young person should generally
consider investing in capital appreciation in order to take advantage of their young age.
An older person, however, may be more interested in generating income for themselves.
6. GLOBAL ISSUES

Our economy is tormented by many worldwide issues. If prices of oil rise internationally,
we face higher fuel costs too. Directly and in a roundabout way this pushes inflation
upwards. Also, since money flows between India and the rest of the world in the form of
investments, if countries abroad are facing problems, it affects their investments in India
and vice versa. As a result, the destiny of the global financial system makes our inventory
markets flow up and down and ultimately could impact businesses.

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 SIX STEP PROCESS OF FINANCIAL PLANNING

1. SELF-ASSESSMENT
Clarify the current situation, this is a preliminary step that someone must perform before
planning their funding. Doing a self-assessment allows a person to understand his current
state of fortune and his responsibilities.
The self-assessment should contain the following:
• Potential retirement age
• Main source of income
• Dependents in the family
• Monthly expenses and savings
• Current investment status One must identify their wealth status before moving on to
financial planning.

2. IDENTIFY FINANCIAL AND PERSONAL GOALS AND OBJECTIVES

Everyone aspires to lead a better and happier life. To lead such a life, there are needs and
wishes that must be met. Money is a means by which such needs and wishes are met.
Some of the common needs that most individuals would have are creating enough
financial resources to lead a comfortable retirement life, providing for a child's education
and marriage, buying a dream home, planning for medical emergencies, etc. Once the
defined needs / objectives have been identified, they must be converted into financial
objectives. Two elements enter into the conversion of needs into financial objectives. The
first is to assess and know when it is necessary to withdraw investments for each of the
needs / objectives. Next, the person must estimate the amount of money needed in present
value to meet the goal / need today. Then, using an appropriate inflation factor, one can
project what would be the amount of money needed to meet the target / need in the future.
Likewise, it is necessary to estimate the amount of money necessary to meet all these
objectives / needs. Once the person has all the values, they should represent it against a
timeline.

3. IDENTIFY PROBLEMS OR FINANCIAL OPPORTUNITIES

Once the objectives and the current situation have been identified, the shortfall in
achieving the objective can be assessed. This short fall must be covered over a period to
meet various needs at different stages of life. Since the future cannot be predicted, all
eventualities must be considered when planning financial matters. a good financial plan
should cover itself against various risks. A flexible approach should be taken to meet
changing needs and should be ready to reorganize our financial plan from time to time.

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4. DETERMINE RECOMMENDATIONS AND ALTERNATIVE SOLUTIONS
Now examine various investment options such as stocks, mutual funds, debt instruments
such as PPFs, bonds, fixed deposits, gold funds, etc. and identify the instrument or a
combination of these that best suit the need. The investment period must correspond to
the target period.

5. IMPLEMENT THE APPROPRIATE STRATEGIES TO ACHIEVE THE

OBJECTIVES
Until the person puts things into practice, everything is wasted. The necessary measures
must be taken to achieve the financial objectives, in particular the collection of the
necessary documents, the opening of a necessary bank, dematerialization, the trading
account, liaison with brokers and start-up. Simply put, start investing and stick to the
plan.

6. REVIEW AND UPDATE THE PLAN PERIODICALLY

Financial planning is not a one-time activity. A successful plan requires serious
commitment and periodic review (once every six months, or during a major event such as
birth, death, inheritance). The individual should be prepared to make minor or major
revisions to their current financial condition, objectives and investment schedule based on
an examination of the investment performance.

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 FINANCIAL AVENUES

There are many ways to invest your money. Of course, to decide which investment vehicles
are right for you, you need to know their features and why they may be suitable for a
particular investment objective.
1. LIFE INSURANCE
Life insurance is a policy provided by an insurance company, according to which, in
exchange for the payment of premiums, the insurer is obliged to pay a certain amount (a
lump sum or portions of small sums) to the beneficiary in insured death. Life insurance is
literally a matter of life and death, since the purchase of life insurance is mainly expected
after death. When they are healthy and in good health, people from all walks of life prefer
not to think that one day they would die. However, planning after death can be as
important as planning other important actions in life. By paying a very small amount of
money, a person can protect themselves and their family financially from an unfortunate
event. Life insurance provides a economic support for dependents in the family and, in
some cases, may even create an estate for heirs. Factors to consider before buying a life
insurance policy.
• Age and number of dependents
• Annual income and expenses
• Unpaid liabilities such as mortgage, car loan, etc., investments and savings
• Lifestyle expenses, money required in the future
2. EQUITY SHARES
Shares are a type of title that represents ownership of a business. The shares are traded
(bought and sold) on the stock markets. Alternatively, they can be purchased via the
initial public offer route (IPO), i.e. directly from the company. Investing in stocks is a
good long-term investment option, as long-term equity returns are generally higher than
most other investment opportunities. However, with the possibility of higher returns,
there is a greater risk.
3. MUTUAL FUNDS
A mutual fund allows a group of people to pool their money and have it professionally
managed, in accordance with a predetermined investment objective. This investment
avenue is popular because of its profitability, risk diversification, professional
management, and sound regulation. The person can invest as little as Rs. 1,000 per month
in a mutual fund. There are different general and thematic mutual funds to choose from,
and the risk and reward possibilities vary accordingly. A mutual fund is a trust that pools
the savings of several investors who share a common financial goal. The money thus
collected is then invested in capital market instruments such as stocks, debentures, and
other securities. The income generated by these investments and the capital gain realized
are shared by its unit holders in proportion to the number of units they hold. Thus, a

19
mutual fund is the most suitable investment for the common man because it offers the
possibility of investing in a diversified basket of securities managed by professionals at a
relatively low cost.
4. GOLD
The love of gold in India is legendary. There has always been a good demand for gold in
India, making it the largest consumer of gold in the world. The consumption of gold is
mainly in the form of jewellery. But as an investment, an investor generally buys gold as
a hedge or refuge from any economic, political, social, or monetary crisis. These crises
include declining investment markets, inflation, war, and social unrest. Gold can be
bought in various forms, you can either buy it in the form of physical gold - bars, cookies
and or coins, or even in dematerialized form. Gold jewellery is not a good investment
because it is not as liquid as bullion or gold funds. The price of gold is determined by the
balance of supply and demand. It has an effect of world demand on its prices. Demand for
gold has steadily increased, while supply has remained relatively inelastic, driving prices
up. Gold prices are also inversely related to the dollar price. Gold is a sure asset.
5. FIXED DEPOSITS
Bank investments can be considered as the most common or the most important
investment channels. Few people recognize this sector as an investment avenue. Banks
are the most common and often very popular first investment experience.
6. PUBLIC PROVIDENT FUND (PPF)
PPF is considered a safe investment avenue. The current interest rate on PPF is 8% per
year. Again, like the EPF, the interest rate is not fixed. The government changes the same
thing from time to time. The best part of the PPF is that the interest thereon is exempt
from tax under subsection 10 (11) of the Income Tax Act. The tax deduction can be
claimed on the contribution of an individual to his own PPF account or to the PPF
account of his spouse or children. The PPF account can be opened in a nationalized bank
or a post office. It is a 15-year account. The total amount, including accrued interest, can
be withdrawn after 15 years. Partial withdrawals are allowed from the 7th year. The
minimum investment amount is Rs 500 per financial year and the maximum is Rs 70,000
per financial year. The amount of investment that can be made can vary each year, which
gives the person a lot of flexibility in planning their investments. Many may not like to
invest in PPF due to its very long duration (15 years).
7. REAL ESTATE INVESTMENT
Real estate investment is now treated as a major case of investment budgeting using an
analysis of advanced investments that integrates the future flow of income that it can
generate and the associated risk adjustments. This has been the culmination of the
investment literature since the 1970s, when investment theorists extended techniques such
as probability, time value of money, and utility in its analysis. Real estate is essentially
defined as real estate such as land and everything that is permanently attached to it like
buildings. Real estate, as opposed to personal or movable property, is characterized by the
right to transfer title to the land.

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 PRIMARY RESEARCH

The primary data was accumulated circulating the questionnaire (Refer to Annexure) in the
city of Mumbai. The survey successfully collected 70 responses. The interpretation is as
follows.

1. Age:
a. 21- 30
b. 31- 45

c. 45- 60
d. Above 60

INTERPRETATION:
Almost 80% of respondent was from age group 21yrs to 45yrs this is most active age group.
During this age, life of an individual changes very drastically. The career is in growing stage
in starting few years and there are hardly any responsibilities, currently there is a lot of funds
available for disposal. It is this age where maximum risk can be taken, and a greater period
can be given to grow the amount invested.
As a person enter their 30’s they have increased family responsibility and gradually the risk-
taking ability reduces with the age. With a greater portion of such population included in data
collection a greater degree of understanding can be gained how financial planning is done by
young India.

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 2. Income pa
a. 6,00,000- 12,00,000
b. 13,00,000- 24,00,000
c. Above 24,00,000

INTERPRETATION:
Financial planning is about assessing our present cash flows; estimating the required cash
flow after a certain period and to determine the steps required to achieve this over a period.
The amount of disposable income at hand determines various investment decisions. It also
helps in making tax plans so that maxim benefit can be gained through various tax
exemptions.
So, it is necessary to know the income inflow of an individual. The above graph shows that a
major portion of respondents are in income slab of up to Rs.12,00,000 p.a.; this indicates that
the persons may be in the beginning stage of career. With increasing income slab the no of
respondent are reduced.

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 3. Have you set any financial goals?
a. Yes
b. No

INTERPRETATION:
This question marks as the beginning of my main primary research as this question makes me
understand about my sample sizes and their understanding about keeping the financial goals.
In the above graph we can see that 70% of the respondents are clear and have set their
financial goals.

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 4. What percentage of your monthly salary/ income do you save?
a. 10- 15%
b. 15- 20%
c. 20- 25%
d. Above 25%

INTERPRETATION:
According to respondents saving pattern where individual generally save only less than 20%
from their salary or income generation, it is about 62% of the individual save their income
after completed their expenses and save amount circulated in the financial avenues. Highly
educated Indians are more likely to save money. Education can be underestimated due to its
high cost. The amount in the savings account or emergency fund is directly correlated with
household income.
Also, the research shows that those living in the North of the country tend to save more as
well as Indians who have a full-time job. But, what for the rest of the population? With a low
household income, putting money aside can be tough. Sadly, those with less money in their
bank account are more likely to have an economic emergency. There is always a solution to
get out of debt and start saving money.

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 5. Which all investment avenues do you prefer to invest in?
a. Equity
b. Bonds
c. Life insurance
d. Mutual Funds
e. PPF
f. Crypto
g. Real Estate

INTERPRETATION:
A fair idea of asset allocation of individuals in various asset class can be observed through
this. The maximum chosen investment was equity market. If you manage the risks, you can
take advantage of the stock market to secure your financial position and earn money. It is safe
to invest, however there are certain things you need to know about the same: Investing in
stocks comes with substantial risk, especially in the short term. Equity was a preferred
investment among many not due to its volatile nature, but many used it as a long-term
investment by investing in large companies.
Mutual funds are one of the safest investment options as there is less risk of losing money
and the SIP option provided by mutual funds is which makes it easy for investors to invest
small amounts.

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 6. Are you happy with your investments in terms of returns?
a. Yes
b. No
c. Maybe

INTERPRETATION:
A portion of respondent was unsatisfied with the returns they got on their investment while
the people who invested smartly were satisfied with their respective investments. This
reflects that investment decision was not taken properly.
Few common reasons cited were:
▪ Inadequate knowledge about the instrument in which investment was made
▪ Misguided by the agent of financial company
▪ Charges applicable were not disclosed initially
▪ Unplanned investment
Also, a major portion of investment was in assets which has a low risk - low returns category.
This also was a major reason of respondent unsatisfied with current returns

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 7. What are important objectives of choosing an investment?
a. Safety of principal
b. High returns
c. Safety against contingencies

INTERPRETATION:
Investment objective to a greater extend determine the investment tenure and the avenue.
Different investment objectives have different investment avenues to meet them. By
determining the objective, we can easily determine the investment vehicle for individuals.
The persons looking for principal safety can investment in Post office schemes, government
securities, banks and PPF. Investment in Equity and Mutual funds can give greater returns
which can beat high inflation rate.
Term deposits are useful when money is needed after a fixed period. It is seen that a
maximum portion of people save money or make an investment for their future expenses and
to maintain their standard of living. A standard of living is the level of wealth, comfort,
material goods, and necessities available to a certain socioeconomic class or a certain
geographic area. The standard of living includes basic material factors such as income, gross
domestic product (GDP), life expectancy, and economic opportunity. The standard of living
is closely related to quality of life.

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 8. What is frequency of your investment?
a. Monthly
b. Quarterly
c. Half- Yearly
d. Annually

INTERPRETATION:
A good number of investors prefer to invest regularly on monthly basis, thanks to Systematic
Investment Plan. Monthly investment helps to invest in small denominations with benefits of
Rupee cost averaging. Monthly investment was largely found in Mutual Funds. To a surprise
many prefer to invest in single- or one-time instalment without knowing the risk attached to
it. One-time investment is a good option only for physical assets life real estate and gold.
It is also seen that a major portion of people make their investments half yearly. Such kind of
people try to invest wisely and safely. Many people even make their investments annually.
The returns generated from these investments are quite lesser than their main or primary
source of income.

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 9. When do you prefer start planning for your retirement?
a. Under 30
b. 31- 40
c. 41- 50
d. Above 50

INTERPRETATION:
While 60 was widely accepted as the standard age of retirement by previous generations, the
survey shows that the average Indian now plans to retire at the age of 56. They also start
investing to build a retirement corpus early, at around 29 years of age. If you start planning
for retirement early on, you can bridge the gap between what you have in your hand today
and what you would like to have when you retire.
What to keep in mind while saving for retirement depends a lot on our age and how much
money you are willing to set aside every month. If you begin saving for retirement early on in
your life, you can set aside smaller amounts. Planning for retirement in early age of
employment is depicted on analysing the responses as 23% start planning below the age of 30
years, while around 50% of the respondents feel, the ideal age to be above 40 years.

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 10. What is your main objective while taking any insurance policy?
a. Get at least the premium amount back if I survive the plan period
b. Get some return on premium if I survive the plan period
c. Get market linked return on the amount of premium and some life cover or
pension
d. Cover pure risk without any consideration of return

INTERPRETATION:
Life insurance is one of the fastest growing sectors in India since 2000 as Government
allowed private players and FDI up to 26% and recently the cabinet approved a proposal to
increase it to 49%. It was observed that large number of Life Insurance investors have
invested in market linked return on the amount of premium and some life cover pension
which provides with a regular, moderate capital appreciation and at the same time minimizing
the risk of capital erosion.
The other major portion went to the return on premium if survive the plan period which gives
a high return. A small portion has invested in pure risk without any consideration of return,
this investment has a low risk – low return characteristics with little capital appreciation.

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 11. How do you check performance of all your investments?
a. Newspapers, Publications, and media
b. Agents/ brokers
c. Friends, Peer groups
d. Online/ website of the funds

INTERPRETATION:
A regular check on the investments made and taking decisions regarding it is very important
and crucial. When people do not seek help from financial planners, 46% of the respondents
influence their decisions regarding investments through newspapers, publications and media.
These sources of information are always up-to-date and help people manage their funds own
their own. Reading newspapers and checking media information regularly helps a lot to
decide on which financial product should we invest. It is also observed that 47% of the
respondents have chosen friends and peer groups. Friends and groups are the ones we are
always in touch.
Through discussions of various topics and investments friends’ suggestions does influence a
lot of people regarding investment opportunities. 40% respondents approach brokers and
agents to check the performance of their investments and changing decisions regarding any
change in the policies and taxation.

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 12. Would you like to seek professional help of a CFP practitioner to streamline your
finances through a structured financial plan for your family?
a. Yes
b. No
c. Maybe

INTERPRETATION:
It is observed that around 44% of the respondents agreed to seek professional help of a
CERITIFIED FINANCIAL PLANNER or CFP Practitioner to streamline finances through a
structured financial plan for their family. CFPs help them to decide and choose financial
products according to their incomes and expenses and meet future expenses and
contingencies. As almost half of the respondents seek financial help, this indicates that CFPs
play an important role in the market. 35% of the respondents are not sure whether they will
seek professional help or CFP to streamline their investments. This shows that people are
confused about how to make investments and the decisions are influenced by their
surroundings. 20% of the respondents do not wish to seek help or approach a CFP for
managing their funds. They take their decisions regarding financial products themselves and
are capable enough to manage them. Maybe in near future they will realize that the market is
very competitive and seeking professional help is important.

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 13. Do financial planners play an important role?

INTERPRETATION:
It is seen that 31% of the respondents agree that financial planners play an important role in the
market whereas 46% strongly agree with the statement. In today’s world which is full of
competition, proper allocation of resources and finance is very important which can be done by the
guidance of financial planners.

Also, 19% respondents have given a neutral opinion that financial planners can and cannot also play
an important role. This interprets that they do not know what the role of financial planners in the
dynamic market which is why they can’t decide their importance. 1% respondents disagree and 3%
strongly disagree with the statement that financial planners play an important role. These
respondents do not have much income which is why they disagree to the statement. They plan and
allocate their resources themselves without seeking help of financial planners. They themselves are
the financial planners for their earned income.

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 CONCLUSION AND RECOMMENDATIONS

Today, corporate securities have become part of household savings where individuals prefer
to invest their savings in the security market. The reason given is the growth observed on the
stock market and the low interest rate and yield offered by traditional instruments. In
addition, the increase in working class incomes has also largely contributed to the
development of savings methods in India. Household savings in India can be broadly
classified savings on physical properties and in savings in financial instruments or household
financial savings.
Most of the financial savings are used for pension funds and life insurance. It has recently
been found that traditional savings instruments such as special tax incentives or higher
interest rates are not able to increase the rate of private savings in the long run. We also find
that the response of savings to changes in interest rates in India was among the weakest in
developing countries. Over the past 30 years, the two main long-term household savings
vehicles, such as pension savings and life insurance, have stalled. On the other hand, mutual
funds began to be more successful in the early 1990s. Given these two factors, we can
conclude two weaknesses in the savings market in India. First, the public sector dominates
the markets. Secondly, the allocation of the portfolio is under control, which makes the low
returns of the market evolution.
After all this, it can be said that the fundamental cornerstones of a successful investment are:
• Save regularly, invest regularly
• Start early
• To diversify
• Use a tax shelter
• Keep a regular check on the investment and modify the plans if necessary
People need to be educated and informed about financial planning and this provides a greater
opportunity for the distributor of financial products like Reliance Money to educate people.
Companies can organize seminars and sessions through which they can provide information
to people and in return can get potential customers from the audience. In this way, the public
and the company can also benefit. Financial planning is not a one-time activity; the initiative
must be taken by the financial planner to present it to his client. Regular meetings should be
arranged between the financial planner and the client to review the investment portfolio. The
modification must be carried out in the portfolio according to the needs and requirements of
the client.
This will ensure that the investment objectives are met. This will create goodwill for the
financial planner and his business. This is an area where many planners are lacking today.
Tracking, tracking, and tracking require an hour and must be understood by the financial
service provider. The objective must be correctly divided into short term, medium term, and
long term. Appropriate allocation should be made in various instruments depending on the

34
time involved. There are different instruments available that can meet different period needs.
If the investment yields a regular return or matures, it must be reinvested correctly.
If an investor asks an advisor for help, then they should collect enough product information
from different sources. This will help you make the right investment decision and choose the
right advisor. It is also necessary that the advisor has sufficient experience. Thus, the ultimate
responsibility rests with the investor when it comes to making an investment decision.
Always keep the investment simple. Diversification is essential, but not to a greater extent.
The investor must know exactly what he is investing in. If they do not have adequate
information, a question should be asked to the financial advisor. It is better to invest in
instruments that we can understand than to depend on someone else's advice. All
documentation must be complete and must be kept. At the time of maturity, it is necessary to
produce the investment documents which serve as proof. But often, investors do not have
appropriate documents that dishonour the request when due. It is also recommended that all
disclosure documents be kept as well, as this would help in the event of a dispute being
resolved. Investments under the SIP should be encouraged. A small amount invested
regularly for a long time can create greater wealth. The SIP helps to calculate the average
cost of the rupee, develops the habit of saving and offers the convenience of investment.

35
 BIBLIOGRAPHY

BOOKS
Basu, D. S. (2010). Financial Literacy and Life Cycle
David S. Murphy, S. Y. (2010). Personal Financial Planning Attitudes
Douglas. (2007). Psychological Foundations of Financial Planning.
Kelleher, S. (2007). The Dilemma of Financial Planners
Krishnamurthy, A. P. (2008). Career Opportunities for Young Financial Planners
Oehler, A. (2008). Financial Education and Behaviour
Patibanda, R. (2010). When Money Meets Ethics.
Sarin, R. (2008). Financial Planning for Businessmen and SMEs
V, S. (2009). Impact Of Inflation of Financial Planning.
Wilson, J. (N.D.). Perception Of Financial Well-Being. Y, Y. (2006). Sources Of Financial
Information
Halbert S. Kerr. (1981), Financial Management

JOURNALS
Nachiket Bhate, D. A. Personal Financial Planning: A Review. Indore, India
Financial Services Review. (2005). Greenwich-14 (4), 331
Glass, J. C. Jr., & Kilpatrick, B. B. (1998). Financial Planning for Retirement, 595-617
IARFC, (2011). Journal of Personal Finance (10), 36-62

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WEBSITES

http://profit.ndtv.com/PersonalFinance/Insurance.aspx

http://profit.ndtv.com/2008/01/16190747/Compare-Different-Insurance-Pl.html

http://business.rediff.com/report/2009/may/15/perfin-types-of-life-insurance.htm

http://www.mywealthguide.com/persnl.htm

http://www.kingswoodconsultants.com/LifetimeFinancialPlanning.html

37
 ANNEXURE

1. Age
a. 21- 30
b. 31- 45
c. 45- 60
d. Above 60
2. Gender
a. Male
b. Female
c. Others
3. Occupation
a. Professional
b. Job
c. Business
d. Student
e. Homemaker
4. Income p.a.
a. 6,00,0000- 12,00,000
b. 13,00,000- 24,00,000
c. Above 24,00,000
5. Have you set any financial goals?
a. Yes
b. No
c. Maybe
6. What % of your monthly salary/ income do you save?
a. 10- 15
b. 15- 20
c. 20- 25
d. Above 25
7. Which all investment avenues do you invest in?
a. Equity
b. Bonds
c. Life Insurance
d. Mutual Funds
e. Gold
f. PPF
g. Crypto
8. Are you happy with your investments in terms of returns?
a. Yes
b. No
c. Maybe
9. Do you have any dependent (s)?
a. 0
b. 1-3
c. More than 3

38
10. Have you set aside any emergency funds?
a. Yes
b. No
11. What are important objectives of choosing an investment? 
a. Safety of principal
b. High Returns
c. Safety against contingencies
12. What is frequency of your investment?
a. Monthly
b. Quarterly
c. Half- yearly
d. Annually
13. When do you prefer start planning for retirement?
a. Under 30
b. 31- 40
c. 41- 50
d. Above 50
14. What is your main objective while taking any insurance policy?
a. Get at least the premium amount back if I survive the plan period
b. Get some return on premium if I survive the plan period
c. Get market linked return on the amount of premium and some life cover or
pension
d. Cover pure risk without any consideration of return
15. How do you check performance of all of your investments? 
a. Newspapers, Publications, Media
b. Agents/ Brokers
c. Friends, Peer Groups
d. Online/ Websites of the funds
16. Would you like to seek professional help of a CFP practitioner to streamline your
finances through a structured financial plan for your family? 
a. Yes
b. No
c. Maybe
17. Do financial planners play an important role?
a. Strongly Disagree
b. Disagree
c. Neutral
d. Agree
e. Strongly Agree

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