Melvin Joseph

Investment Adviser || SEBI Registration Number: INA 000000342

FINANCIAL PLANNING GUIDE

Your First Step towards Financial Success

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Financial Planning Guide for Mr. X & Family
Melvin Joseph
Investment Adviser || SEBI Registration Number: INA 000000342

18th August 2018

Dear Mr. X,

With immense pleasure, I welcome you to the family of Finvin Financial Planners. Our
mission is to be a reliable partner with each of our clients and help them in reaching their
financial goals by giving unbiased financial advice at affordable prices. I will always try to
serve you after understanding your needs and will not be biased to any product or
manufacturer in my services.

Let me thank you at the outset for seeking advice regarding your financial planning needs.

I have prepared the enclosed financial plan for you based on the details provided by you in
the Data Sheet and the subsequent communication and discussion. I have also taken into
consideration the quantitative data like your needs, goals and available resources (cash
flows) and the qualitative data inferred based on our discussions like your risk tolerance
level, investment habits and life style.

The objective of this plan is to help you make informed decisions regarding your personal
finance and enhance your chances of achieving your financial goals at the right point of
time with adequate resources in a systematic and disciplined way.

I request you to go through the plan in detail. If you want any modifications in the
recommendations, I will be happy to review the plan. You may call me for any clarification
in this regard.

I recommend that once the plan is implemented, it has to be regularly reviewed and revised
in response to the changing circumstances in your lifestyle, family needs or employment
or any other external factors like the economic conditions.

I look forward to discuss the plan with you and implement it as per the recommendations.

Thanking you,

Yours sincerely

Melvin Joseph
CERTIFIED FINANCIAL PLANNERCM
SEBI Registered Investment Adviser

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Financial Planning Guide for Mr. X & Family
Melvin Joseph
Investment Adviser || SEBI Registration Number: INA 000000342

Financial Planning Basics

Your First Step towards

Financial Success

The objective of this plan is to help you understand your financial situation and guide you
on the path of financial independence.

I have considered a number of alternatives before finalizing the recommendations and

believe that the recommended strategy will help you achieve your financial goals in a
disciplined and systematic manner.

I would like to state that I have taken some assumptions as stated below to ensure the
feasibility of the plan.

In case the assumptions deviate, the plan might become infeasible, so I recommend that
the plan is to be reviewed at least once in a year.

Basic Assumptions

1. I have considered the inflation rate to be 6% in the long term and education inflation
at 8%.
2. The return from equity is assumed at 12% and that from debt & real estate is
assumed at 6% in the long term.
3. The return on investment post retirement is taken as 1% above inflation.
(I have assumed the above percentages based on the historical data available.)

I believe that these recommendations have the potential to help you to: -

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Financial Planning Guide for Mr. X & Family
Melvin Joseph
Investment Adviser || SEBI Registration Number: INA 000000342

✓ Incorporate discipline in your savings and investment habits

✓ Create and accumulate wealth over your working years
✓ Maintain standard of living after retirement
✓ Provide financial security for your family in case of an unexpected event
✓ Restructure your portfolio according to your risk tolerance and time horizon

Life Insurance Planning

Life insurance for the adequate value is very important in financial planning. As per the
expense replacement method of calculation, your family should have a life insurance cover
of around 3 Crores. You have 2 term policies totaling to 2 Crore. You may continue these
term policies and purchase an additional term policy of 1 Crore.

I suggest Click 2 protect 3D plus policy from HDFC Life. This policy also offers premium
waiver in case of disability due to accident and certain critical illnesses. Opt for the 3D
Life (New) option. Select a term of 15 years which covers you till age 60.

Please mention details of your existing policies/health conditions/habits etc. while applying
for this policy

Avoid savings linked policies due to the low return it offers.

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Financial Planning Guide for Mr. X & Family
Melvin Joseph
Investment Adviser || SEBI Registration Number: INA 000000342

Health Insurance Planning

Health insurance is a top priority in Financial Planning.

As of now, you don't have any health insurance other than the corporate health cover from
your employer. It is not sufficient in the long term. I suggest you purchase a family floater
health insurance of 20 Lakhs now and increase the cover gradually to ensure decent health
cover for the post retired life.

I suggest ‘Health Companion’ family floater policy from Max Bupa Health Insurance.

You can also purchase a 1 Crore Personal Accident policy for you which offer disability
benefits also. I suggest Personal Accident Policy of 1 Crore from Max Bupa Health
Insurance. Also add 20 Lakhs cover for Temporary Total Disability in this policy.

Continue the Max Bupa policy for parents without any break. Try to increase this cover.

Increasing the cover at higher ages can be difficult.

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Financial Planning Guide for Mr. X & Family
Melvin Joseph
Investment Adviser || SEBI Registration Number: INA 000000342

Higher Education & marriage

Please see the following table

Amount
Amount to
required Value
Year of be Recommended
Purpose at required
requirement invested Products
current then
per month
cost
at 8% inflation
Equity/Debt
Higher
2031 30 Lakhs 82 Lakhs 28,000 Mutual Funds
Education
(50:50)
at 6% inflation
Equity Mutual
2038 Marriage 14 Lakhs 45 Lakhs 6,000
Fund
Total 34,000

You want to provide 30 Lakhs for the higher education and 14 Lakhs for the marriage of
your son. With inflation, it will cost around 82 Lakhs in 2031 and around 45 Lakhs in 2038.

Invest 34,000 per month in equity /debt mutual fund to create necessary amounts as shown
above.

Rebalancing the portfolio is required to derive optimum benefits from equity funds.

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Financial Planning Guide for Mr. X & Family
Melvin Joseph
Investment Adviser || SEBI Registration Number: INA 000000342

Retirement Planning

Monthly amount to be provided in current value: 50,000, Retirement Age – 60.

Value of 50,000 after 15 years on your retirement @ 6% inflation: 1.2 Lakhs per month.

This has to continue till age 90 of your wife. Around 32 years (Assuming longevity of 90
for this calculation)

Assumed investment return post retirement period is 1% above inflation.

The Corpus required for this will be around 4 Crores

You may plan to accumulate this amount as follows:

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Financial Planning Guide for Mr. X & Family
Melvin Joseph
Investment Adviser || SEBI Registration Number: INA 000000342

1. You will get around 100 Lakhs from PF at age 60. I have assumed an average
annual increase of 6% in PF contribution & interest rate of 6% throughout.

2. Your wife will get around 85 Lakhs from PF.

3. Earmark the 18 Lakhs mutual funds for this goal. Assuming a 10% CAGR, it can
contribute around 75 Lakhs at age 60.

4. Assuming a monthly investment of 7000 per month in shares, you will have around
28 Lakhs at age 60 assuming a CAGR of 10% throughout.

5. Invest 28,000 per month in equity mutual funds to create around 112 Lakhs in the
next 15 years.

6. This way, you can create 4 Crores for retired life.

Suggested investments

You can invest in direct plans of mutual funds without agents. Your final accumulation
will be higher by around 15%, if you invest in direct plan without agents. You can do this
online through the websites of respective fund houses.

I suggest the following funds for SIP of 62,000. The first 4 funds are equity funds and the
last 2 are debt funds.

1. ICICI Prudential Bluechip Fund direct Plan – 12,000

2. Axis Bluechip Fund direct plan – 12,000
3. Mirae Asset India Equity Fund direct Plan – 12,000
4. Franklin India Prima Fund direct Plan – 12,000
5. Aditya Birla Sunlife savings Fund direct Plan -7,000
6. Kotak Savings Fund direct Plan -7,000

You can consolidate your existing mutual fund portfolio into the above 4 equity funds in a
phased manner without attracting exit load/taxation.

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Financial Planning Guide for Mr. X & Family
Melvin Joseph
Investment Adviser || SEBI Registration Number: INA 000000342

Summary

1. Purchase1 Crore online term policy. Continue the existing policies. Avoid savings
linked policies in future.

2. Purchase the family floater health insurance of 20 Lakhs & Personal Accident
policy as suggested. Continue the Max Bupa policy for parents without any break.
Try to increase this cover.

3. You may invest 34,000 per month in equity /debt mutual fund to create necessary
amounts for the higher education and marriage of son.

4. Retirement can be planned through PF, Mutual Funds, Equity and Shares.
Earmark the mutual funds for this goal. You may invest 7000 per month in shares.
Also invest 28,000 per month in equity mutual funds.

5. You may invest your monthly surplus in a debt fund to create necessary amount
for recurring goals like Vehicle purchase/Vacation etc. Aditya Birla Sunlife
Savings Fund is a good option.

6. You may preclose the home loan using your monthly surplus/bonuses.

7. You may stop the regular plan SIPs and start new SIPs under direct plan.

8. Always maintain a contingency fund of 6 months living expenses in a bank

account/liquid funds as contingency fund. Keep 20,000 at home for emergency.

9. Proper review of funds and changes in asset allocation is extremely important in

financial planning. I will do it in the annual review.

10. Ensure that, nomination is in order in all investments/insurance and let the
nominee know about this. In mutual funds, nomination is folio specific. So ensure
that nomination is done in all folios.

Please feel free to contact me in case of any clarification.

Going forward, I am at your service. In case of any queries on personal finance,

please send a mail to melvin@finvin.in. I will revert to you within 48 Hours.

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Financial Planning Guide for Mr. X & Family
Melvin Joseph
Investment Adviser || SEBI Registration Number: INA 000000342

DISCLAIMER

The plan is prepared based on the information provided by you. If any material information
has not been revealed or is inaccurate, it will have a significant impact on the outcome of
the plan and the recommendations given would be inappropriate.

The recommendations are especially for you and cannot be treated as a general advice.

The plan is prepared based on a lot of assumptions as stated earlier and as the economic
conditions keep changing, there is no guarantee that the assumptions would hold good
throughout.

The rate of return on investments is based on forecasts based on the research. It might vary
with the market conditions.

All investments are prone to various risks which might be beyond my control to manage
or anticipate.

Contact Details

Melvin Joseph
SEBI Registered Investment Adviser
SEBI registration Number – INA 000000342

Finvin Financial Planners

10, Ground Floor, Olive Excel CHS Ltd,
Plot No. 16, Sector- 42, Nerul (West)
Navi Mumbai -400706

E-mail: melvin@finvin.in
Mobile: 9820843739
Website: www.finvin.in

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Financial Planning Guide for Mr. X & Family