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What is Financial Planning
"Financial planning, I believe, is not exclusively about retirement planning or
investing or even portfolio management. If distilled to its purest elements, this
discipline is more accurately understood as one that involves applying guiding
principles to deal with our past, present and future finances.
Our past - because some of us may be carrying the baggage of yesterday's
excesses that are costing us our future happiness and financial well-being;
Our present - because now is the best time to act and change course toward a
better destination; and
Our future - because each of us is entitled to dream of a better tomorrow."
Individual Investor Needs
All individuals need to save for
� Retirement
� Child’s Education / Marriage
� Home / Car
� Other family obligation
Every individual has one or more of the above goals during some part of their life stages
Life Stage Planning
All individuals have finite period to save (generally, 25 to 60) to save for their investment goals.
Value of Money over time
Impact of inflation on monthly
expenses of Rs 30,000 @ 7%Value of Rs 100,000 over time
Retirement Planning
Retirement corpus required to meet
post retirement expenses. (If invested
@ 7% and inflation @ 5%)Monthly household expenses
@ 7% and inflation @ 5%)
`̀̀̀ 3.26 Cr
Child’s Education
Educational Degree
But I do save…. (or Do I Save?)
Money in Fixed Deposits 100,000
Add: Interest earned in 1 year (@ 9% pa) 9,000
Total 109,000
Less: Tax on interest (@30.9%) 2,781Less: Tax on interest (@30.9%) 2,781
Less: Impact of Inflation (@8%) 8,000
Value at the end of year 1 98,219
The Financial Planning Process
Why Financial Planning?
Step 1: Start Early: Cost of delayGeeta has two choices� Either earn on her investments @ 15% OR
� Save monthly Rs25,634
Difficult……Isn’t it?
Particular Seeta Geeta
Starts investing at the age (in years) 28 38
Monthly savings (in Rupees) 10,000 10,000
Returns expected from Bank Fixed Deposit 8% 8%
Both invest till the age of (in years) 58 58
Total Investment 3,600,000 2,400,000
Wealth Accumulated (in Rupees Lacs) 149.04 58.90 Difficult……Isn’t it?
Wealth Accumulated (in Rupees Lacs) 149.04 58.90
Step 2: Invest Systematically & Regularly
Date NAV (`̀̀̀) Units Amount (`̀̀̀)
2-Mar-09 190.47 52.5017 10,000
13-Apr-09 233.32 42.8596 10,000
11-May-09 252.50 39.6040 10,000
10-Jun-09 339.27 29.4750 10,000
10-Jul-09 307.21 32.5510 10,000
10-Aug-09 343.02 29.1528 10,000
10-Sep-09 375.56 26.6269 10,000
12-Oct-09 392.46 25.4803 10,000
10-Nov-09 392.76 25.4608 10,000
10-Dec-09 416.48 24.0108 10,000
11-Jan-10 439.79 22.7381 10,000
10-Feb-10 412.21 24.2595 10,000
Total 374.7205 120,000
Benefits of Rupee Cost Averaging:
Say you are investing Rs 10,000 every month from March 2009 to
February 2010 in a diversified equity fund.
Now check the average purchase cost per unit of your investments. It
would be lower than the average NAV of your investments over the past
12 months.
Average Cost = 120,000/374.7205 = Rs 320.24
Note: Past performance may or may not be sustained in the future.
The above table considers the actual NAV of a diversified equity fund to explain the
concept of Rupee Cost Averaging. The NAVs do not in any manner indicate the
future NAVs of any of the schemes
Why Financial Planning?
Step 3: Invest Long term
Money grows over a period of Time.
Rs 5000 invested at 8% p.a. compounded return instrument every month for
….just like a rolling ….just like a rolling
snowball gathers snow
an grows.
This is an hypothetical illustration taking example of a recurring deposit to explain the concept of ‘Power of
Compounding”.
Past performance may or may not be sustained in the future
After all, it’s your choice
Choice 1
� Simple, straightforward way to
create long term wealth
� Understand and embrace risk
� Put time to your side
Choice 2
� Invest in instruments which might
not beat inflation
� Select your stocks judiciously &
follow the market very closely� Put time to your side
� Invest systematically
� Don’t worry about market timing
� A tried & tested method
follow the market very closely
� Time your entry and exit very well
� Invest systematically
� And hope that you get it right
more often than not!
How can we help you?
� Prudent Partners is a boutique firm started by first generation entrepreneurs –
Vivek Damani, CFPCM & Vijay Dalmia, CFPCM, LUTCF
� The object of this firm is to manage relationships with the assistance of external
intermediaries and provide products and services through structured serviceintermediaries and provide products and services through structured service
oriented architecture
� It boasts of highly successful strategic advisors comprising of professionals
bringing with them relevant domain knowledge and global best practices to help
relationships with their financial management
About Prudent Partners
� Prudent Partners is a boutique firm started by first generation entrepreneurs – Vivek
Damani, CFPCM & Vijay Dalmia, CFPCM, LUTCF
� The object of this firm is to manage relationships with the assistance of external� The object of this firm is to manage relationships with the assistance of external
intermediaries and provide products and services through structured service oriented
architecture
� It boasts of highly successful strategic advisors comprising of professionals
bringing with them relevant domain knowledge and global best practices to help
relationships with their financial management
Our Vision
To be a leading financial services provider backed by superior advisory capabilities
for discerning clients
This we hope to achieve by:
� Building long term relations with our clients
� Understanding the needs of the clients & offering them
independent and unbiased advice
� Leveraging technology to service clients quickly, efficiently
and conveniently
� Building transparency in all our dealings
The success of the company will be built by its unwaivered commitment to the five core
values –
C l i e n t F i r s t C o n f i d e n t i a l i t y
I n t e g r i t y Tr a n s p a r e n c y
P a s s i o n
Our Unique Proposition
� Professionally qualified team of
Financial Planners guiding and
mentoring the Firm
� Wide range of product suite available
to offer you the ones which suits your
� Focus on service centric architecture
rather than product push
� Strategic, flexible and adaptable service
� Maximum use of technology to serviceto offer you the ones which suits your
specific needs
� Independent & objective financial
advice
� Strategic planning, sourcing &
implementation capabilities
� Experience & stability
Maximum use of technology to service
you quickly, efficiently and conveniently
� Creative solutions to financial challenges
Thank YouThank YouThank YouThank You
Disclaimer
� This document constitutes neither an offer nor solicitation to purchase or sell securities or any otherfinancial instruments.
� The views constitute only the opinions and do not constitute any guidelines or recommendations on anycourse of action to be followed by the readers. This information is meant for general reading purpose and isnot meant to serve as a professional guide for the readers.
� This document has been prepared on the basis of publicly available information, internally developed dataand other sources believed to be reliable. The Partners, employees, affiliates or representatives do notassume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of suchassume any responsibility for, or warrant the accuracy, completeness, adequacy and reliability of suchinformation. Whilst no action has been solicited based upon the information provided herein, due care hasbeen taken to ensure that the facts are accurate and opinions given are fair & reasonable.
� The recipient is requested to take into consideration all the risk factors including their financial condition,suitability to risk-return profile, and take professional advice before contracting with Prudent Partners.
� None of the Partners, employees, affiliates or representatives shall be liable for any direct, indirect, special,incidental, consequential, punitive or exemplary damages including loss profits arising in any way from theinformation contained in this material.
� The illustrations give herein should not be construed as a promise, guarantee on or a forecast of anyminimum returns. We at Prudent Partners does not assure any safeguard of capital and the illustrated returnsare not necessarily indicative of future results and may not necessarily provide a basis for comparison withother investments.
� This presentation is not for public distribution and has been furnished solely for information and must notbe reproduced or redistributed to any other person. Persons into whose possession this document may comeare required to observe these restrictions. No part of this material may be duplicated in any form and/orredistributed without Prudent Partners’ prior written consent.
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