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Financial Planning For Mr. John Sharma
Financial Planning For Mr. John Sharma
Financial Planning For Mr. John Sharma
John Sharma
1
Agenda
2
Profile:
• Age – 32 yrs
• Dependants Spouse (28 yrs) & Child (4 yrs)
3
Expenses
GOALS PV Tenure
Childs Education (1) 1,500,000 15
Childs Marriage (2) 500,000 20
Housing (3) 10,000,000 15
Retirement (per month) (4) 60,000 23
5
Detailed Investment Report of the family
Postal
Direct MF Compan RBI Infra. Debent PP Bank Total
Sr Client Name MF Debt Schem NSS
Equity Equity y FD Bond Bonds ure F FD (Lacs)
e
Total (Lacs) 11.86 20.61 16.86 2.00 11.00 3.50 5.00 2.21 0 2.77 2.67 78.48
Income (Monthly)
Salary 60,000
Insurance Protection
Life Insurance 75,00,000
Medi-claim 5,00,000
7
Future Value of Goals
8
Retirement Calculations
Year Outstanding
Current Expenses to be Earnings Expenses Net Effect
Start Capital
planned at the time of 1 54,535,192 2,181,408 2,211,497 -30,089
retirement
2 54,505,103 2,180,204 2,255,727 -75,523
3 54,429,580 2,177,183 2,300,842 -123,658
Returns on retirement
considered at 4% 4 54,305,921 2,172,237 2,346,858 -174,622
5 54,131,300 2,165,252 2,393,796 -228,544
Post Retirement expenses 31 18,532,141 741,286 4,005,821 -3,264,535
growth rate (inflation) @ 5% 32 15,267,606 610,704 4,085,937 -3,475,233
33 11,792,373 471,695 4,167,656 -3,695,961
34 8,096,412 323,856 4,251,009 -3,927,153
35 4,169,259 166,770 4,336,029 -4,169,259
9
Lump-sum savings required for each goal
10
Existing Investment Utilised for F goals
Post-Tax
Existing Investments Amount after 15 years
Returns
Equity 900,000 15% 7,323,355
Debt 600,000 6% 1,437,935
Inheritance 3,500,000 10% 14,620,369
Total 23,381,659
Childs Educations Need 3,118,392
Balance Remaining 20,263,267
Housing Need 20,789,282
-526,015
Both Goals, Child Education + Housing are maturing in 15 years. Priority also considered
11
Pending Dreams
Monthly
Goal PV Tenure FV Returns
Savings
Childs Marriage 500,000 20 1,326,649 1,262 12%
Childs Education 1,500,000 15 3,118,392 - -
Housing Shortfall 253,022 15 526,015 989 12%
12
Protection required
Goals PV
Housing -
Family Support is assuming that the
Family Support (Expenses) 16,020,000 family would not suffer to meet the
regular HH expenses from today till
Total 18,020,000 next 40 years in John’s absence
13
Insurance
Existing Inv
14
Investment planning
15
Cash Flows …
Investments
Existing Equity - 9 Lacs 1,035,000 1,810,221 3,641,002 7,323,355
New Savings / Investments (12%) 467,460 3,083,682 8,858,059 19,409,736 37,674,502 55,463,691
Dream Realisation
Housing 20,789,282
Retirement
Net Worth Balance of Dreams 5,988,460 11,333,624 22,651,669 18,883,721 36,347,853 55,463,691
16
Assumptions
• Inflation considered @ 5%, if returns falls down the inflation should also
fall & hence the impact would be nullified
• Returns on Income are even
• Business Income & Capital not considered
• Cash Flows of existing Life Insurance Policies not considered
• Return of 12% on new savings decided based on John’s risk profiling & it
satisfies his needs
17
Important things required in FP
18
Thank you …
19