S.R.

LUTHRA INSTITUTE OF MANAGEMENT

SARVAJANIK UNIVERSITY, SURAT.
MBA Programme

Batch 2022-2024

ASSESSMENT – 1

Topic: “SMART financial goal”

SUBJECT: Financial Planning and Taxation

(MGMB16303)

Submitted by :
Vishvakarma Sumit
(LM22MGMB280)

Division: - FPT2
Submitted to :
Dr. Ranjan Sabhaya
SMART Financial Goals

SMART goals are concrete targets that you aim to hit over a certain period. These goals
should be carefully drafted by a manager and their direct report to set them up for success.
"SMART" is an acronym that describes the most important characteristics of each goal.

"SMART" stands for "specific," "measurable," "attainable," "relevant," and "time-bound."

Each SMART goal should have these five characteristics to ensure the goal can be reached
and benefits the employee. Find out what each characteristic means below, and how to write
a SMART goal that exemplifies them.

 Specific — target a specific area for improvement.

 Measurable — quantify or at least suggest an indicator of progress.
 Assignable — specify who will do it.
 Realistic — state what results can realistically be achieved, given available resources.
 Time-related — specify when the result(s) can be achieved.

Short-Term Financial Goal:

Semester Fees:
Needs to be set aside an amount of Rs 380 for each day for 100 days by
establishing an savings account for education-related expenses. Explore part-
time work during breaks to supplement my expense.

Additional Courses for Campus Placement Preparation:

Researching affordable course options and compare prices before enrolling.
Exploring free or low-cost online resources for supplemental learning. Enrolling
for NISM Certificate examination within 15 days whose cost is 3000 rupees.

Travel Costs: Minimize the impact of travel expenses on my overall budget

keeping aside a sum of 1000 rupees per month.
Medium-Term Financial Goal:

Investment Portfolio: Start building a diversified investment portfolio for long-

term wealth growth. Aim to contribute 20% of my monthly income towards
investments like stocks, mutual funds.

Buying a new bike:

I have to buy a new bike after getting placement to travel purpose, for that I will
start saving rupees 10000 every month for 6 months from my salary for the
downpayment of bike.

Long-Term Financial Goal:

Starting a business (First as a side hustle):

I will have to start a business in long run after doing job for 5 to 7 years, for that
I will start a side hustle in a business project and start saving 30% of my
earnings to grow the business.

Buying a new house: Aim to save 20% of the desired house price within 5
years for downpayment. I will buy a new house from that income which is
raised by my side business, I will make EMI payments of the house by the
income of my business.
Term Insurance: term insurance is very important for family earning member
so it provides protection to the family. So, for that I would spend around 5oo to
1000 monthly bases.
Mediclaim: Mediclaim provide protection in time of any health-related uneven
event happen in future and it provide economic protection to the family. So, for
that I spend near to 20000 yearly bases.
Time value of money

Considering the time value of money, it's crucial to understand that money has
different values at different points in time. Future money is worth less than
present money due to factors like inflation and the potential to earn returns on
investments.
Present Value (PV) = (1+r)n
Future Value (FV) = (1/1+r)n
If the rate of return is 6%.
Short term goal

 keeping aside an amount of 380 per day for 100 days

Semester fees = 380*100=38000 (PV)
Future value = (1+7/100)n = (1.07)12/360 =41040
 Need 3000 rupees after 20 days for NISM certification.
Calculating present value of 3000 rupees.
Present value = (1+r)n =(1/1+0.06)12/360 =2830

Medium term goal

 Saving rupees 10000 per month for buying a new bike for 6 months
Future value = (1+6/100)n = (1.06)6/12 = 60000*1.03=61800

Long term goal

 Saving 20% of my income for 5 years to buy a car.

If the income is 720000 per year.
20% of 600000 = 144000*5 =720000 rupees
Future value of 600000 after 5 years is calculated as following:
Future value = = (1+6/100)n = (1.06)5/1 = 720000*1.3 = 9,36,000.