Summer Internship 2011PGDM 2010-12

Summer Internship Project Reporton

“ 360° FINANCIAL PLANNING ”

Undertaken at

BAJAJ CAPITAL LTD.NOIDA, SECTOR - 29

Prepared By:

ASIN GANGULYPGDM/2010-12/21

Company Guide Faculty Guide Anjni KumarTiwari Mr. SUMIT RASTOGI (Asst. Financial Planner)

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CONTENTS:

SL.NO TITLE

1 PREFACE2 DECLARATION3 ACKNOWLEDGEMENT4 OFFER LETTER5 INDUSTRY OVERVIEW6 COMPANY PROFILEi INTRODUCTIONii BUSINESSiii SWOT ANALYSISiv AIMSv MISSION & VISIONvi LOGO7 360° FINANCIAL PLANNINGvii WHY, WHO, HOW viii COMPONENTS8 FINANCIAL PLANNING TOOLS9 FINANCIAL PLANNING

REGISTRATION FORM 10 A 360° FINANCIAL PLAN ix OUR ADVISORY PROCESSx ANALYSIS OF THE PLAN &

SUGGESTIONSxi RECOMENDATIONS, FAQ’s,

OBJECTIVE11 CONCLUSION12 BIBLIOGRAPHY

PREFACEMBA is a stepping-stone to the management carrier and to develop good manager it is necessary that the theoretical must be supplemented with exposure to the real environ-ment. Theoretical knowledge just provides the base and it’s

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not sufficient to produce a good manager that’s why practi-cal knowledge is needed. Therefore the research product is an essential requirement for the student of MBA. This re-search project not only helps the student to utilize his skills properly learn field realities but also provides a chance to the organization to find out talent among the budding man-agers in the very beginning. In accordance with the re-quirement of MBA course I have summer training project on the topic “360 DEGREE FINANCIAL PLANNING”. The main objective of the research project was to study all the instru-ments of the financial planning and make a detailed study of it.In the growing global competition, business has taken a new shape in the World. Today’s Manager has to understand the uncertainty of business environment to cope with the situa-tion. Dissertation for each and everyStudent of PGDM is an essential part of completion at the end of 1st year of the course. The prime objective of this summer training to familiar with real life business environ-ment and apply the theoretical concept of business into real-ity and know how much theory is applicable in day to day business activity. It also sharpens their knowledge, hones their analytical and other business acumen and develops better appreciation of the practical problems of business, es-pecially from the management point of view.Moreover the experience acquired by student helps to de-cide the future Professional career.

DECLARATION

I hereby declare that the following documented project report titled "360 degree financial planning" is an authentic work done by me.The study was undertaken as a part of the course cur-riculum of PGDM, Full time Program in INTEGRATED INSTITUTE OF LEARNING & MANAGEMENT - COL-LEGE OF MANAGEMENT STUDIES

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(IILM-CMS) I hereby declare that the study has not been submitted to any other institute/organization for the reference.

ASIN GANGULY PGDM 2010-12/21

IILM - CMS

ACKNOWLEDGEMENT

A Successful project is fruitful culmination of efforts of many people, some directly involved, and others who have quietly encouraged and extended their support, while being in the background. I take this opportunity to extend my deep sense of gratitude and heartfelt thanks to all those who have helped us directly or indirectly during the course of my project. My colleagues and associates at IILM - CMS continue to have important impact on my thinking. I am in debt to my corporate guides Mr. VIJENDRA SHARMA (Branch Head) & Mr. ANJNI KUMAR TIWARI (Asst. Financial Planner) of “Bajaj Capital” Noida, Sec - 29 branch. This dissertation could not have been written without Mr. SUMIT RASTOGI

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(Faculty Head) Who not only served as my supervisor but also encouraged and challenged me throughout my academic program who patiently guided me through the dissertation process, never accepting less than my best efforts. I am also appreciative of all that I have learned from working with in-dustry executives who have generously shared their insight and experiences.

I would like to give thanks to all the staff of “Bajaj capital” Noida, Sec – 29 branch for their valuable and sincere cooper-ation and plying all the database of “Bajaj Capital”, Noida, Sec – 29 branch. I am thankful to my parents, & my entire family who are always my source of brainchild & unplumbed exertion towards the Journey of my life.

At last but not the least I am grateful to Omnipotent God for his manifold blessing in this endeavor of mine.

WEALTH MANAGEMENT

WEALTH MANAGEMENT is an investment advisory discipline that incorporates financial planning, investment portfolio man-agement and a number of aggregated financial services. High Net worth Individuals (HNWIs), small business owners and fami-lies who desire the assistance of a credentialed financial advi-sory specialist call upon wealth managers to coordinate retail banking, estate planning, legal resources, tax professionals and

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investment management. Wealth managers can be an indepen-dent Certified Financial Planner, MBAs, Chartered Strategic Wealth Professional, CFA Charter holders or any credentialed professional money manager who works to enhance the in-come, growth and tax favored treatment of long-term investors. Wealth management is often referred to as a high-level form of private banking for the especially affluent. One must already have accumulated a significant amount of wealth for wealth management strategies to be effective.

BAJAJ CAPITALBajaj Capital is one of India’s leading Financial Services compa-nies offering Free Advice on Investments, Insurance, Tax Sav-ing, Retirement Planning, Financial Planning, Children’s Future Planning and other services. We also have a wide range of products and services for Corporate, High Net worth Individu-als, and NRIs… all under one roof.At Bajaj Capital, we believe in dreaming big. Dreams inspire us to excel. They ignite hope and kindle in us the passion to stretch our limits. We also believe that nothing can or should stop us from realizing our dreams… and financial constraints should be the last thing to stop anyone.

Wide range of services

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We offer a comprehensive range of services including financial planning and investment advice, and the entire gamut of finan-cial instruments and investment products of almost all major companies, both public and private. In addition, we also provide investment assistance by helping you complete all the for-malities, and help you keep regular track of your investments. These services and products are delivered through our network of 134 Bajaj Capital Investment Centers located all over the country. We are also a SEBI-approved Category I Merchant Banker. We raise resources for over 1,000 top institutions and corporate houses every year, and offer specialized services to Non-Resident Indian (NRIs) and High Net worth Clients.

What you can expect from us Sound, research-based advice Unbiased, independent and need-based advice Prompt, courteous service Honest, ethical dealings Accessibility

Key Personnel :-

Mr. K.K.Bajaj (CHAIRMAN) Mr. Rajiv Deep Bajaj (Vice Chairman & MD) Mr. Sanjiv Bajaj (Joint MD) Mr. Anil Chopra (CEO & Director)

BUSINESS :Bajaj Capital Ltd is engaged in the business of Merchant Banking, Resource Mobilisation, Distribution of Financial products, Stock Broking, Money Market Booking, Investment Advisory and Financial Planning.It offers investment, insurance, tax saving, retirement, financial cash flow, and children’s future planning services.The company also distributes various financial and investment products, such as mutual funds, life and general insurance, bonds, post office schemes, fixed deposits, initial public offerings, and real estate property investments. In addition, it provides investment banking services for private and public sector enterprises. The company operates through a network of investment centres.All in all a 360 degree financial planning.

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CUSTOMERS : individual investors corporate houses institutional investors non-resident Indians high net worth clients in India

AWARDS & RECOGNITION :

o Bajaj Capital won Smart Workplaces Awards 2008 in the financial services vertical; The Smart Workplace Award was instituted by The Economic Times in association with IT majors Acer and Intel, to recognise smart offices.

o  Bajaj Capital, one of India’s leading Investment Advisory and Financial Planning companies, has won the award for the ‘Best Performing National Financial Advisor – Retail’ at the CNBC TV18 Financial Advisor Awards 08-09

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SWOT ANALYSIS

STRENGTHS : Wide range of products & services 46yrs of experience as Investment Advisors & Financial

Planners More than 8 lac satisfied clients all over India Country wide network of 134 branches Over 12K NRI clients across the globe Personalised wealth management advice 24x7 online accessibility through www.bajajcapital.com Strong team of qualified & experienced professionals

including CA’s, MBA’s, MBE’s, CFP’s, CS’s, Insurance experts & others

SEBI approved Category 1 Merchant Bankers

WEAKNESSESS :

Due to market competition & personalised treatment to customers the cost to company rises up well.

OPPORTUNITIES :

Add diversified products to the product line Mergers or collaborations with software companies to build

a better software for more diversified Porfolio for the customers.

Acquisition with small advisory companies to increase market share

THREATS :

Volatility of the market. Changes in the govt. policies. Under performance of the Fund Manager of the company.

OUR AIMS To serve our clients with utmost dedication and integrity

so that we exceed their expectations and build enduring rela-tionships.

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To offer unparalleled quality of service through complete knowledge of products, constant innovation in services and use of the latest technology.

To always give honest and unbiased financial advice and earn our client’s everlasting trust.

To serve the community by educating individuals on the merits of Financial Planning and in turn help shape a financially strong society.

To create value for all stake holders by ensuring profitable growth.

To build an amicable environment that accords respect to every individual and permits their personal growth.

To utilize the power of teamwork to function as a family and build a seamless organization.

MISSION STATEMENTBajaj Capital aims to be the most useful, reliable and efficient provider of Financial Services. It is our continuous endeavor to be a trustworthy advisor to our clients, helping them achieve their financial goals.

OUR VISIONTo be the most preferred financial planning and investment ad-visory company in India by providing consumers with informed choices of lasting value, create wealth for them to make their tomorrow better than today.

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OUR LOGO depicts Lord Ganesha who is the source of all our

values and ethics in business.

The large ears of Lord Ganesha remind us to hear more. We listen carefully to our clients to understand their needs.

The weight of the trunk on the mouth symbolises silence. We work silently, without blowing our own trumpet.

The long trunk symbolises continuous exploration. We ex-plore all avenues to provide the best investment opportunities for our clients.

The heavy posture of Ganesha symbolises stability. We help our clients to attain financial stability through wise invest-ments.

Lord Ganesha is known as the remover of obstacles and bestower of prosperity. We emulate His example and try our best to help our clients attain prosperity by proper financial planning.

Our logo has a yellow background. Yellow is the colour of gold, which symbolises wealth. According to Vedic lore, it is also the colour associated with Brihaspati, the guru and counsellor of the Gods. We offer our clients sage counsel to make their wealth grow.

The letters are in red. Red is the colour rajas – symbolising power and incessant activity. It symbolises our aggressive quest for your well-being and happiness.

The white streak represents the trunk of Lord Ganesha. White is the colour of satvaguna, and implies our selfless com-mitment to your life-long happiness

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360° Financial Planning

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360° Financial Planning is a unique software-based simulation that takes a holistic view of your life-long financial needs and charts a personalized investment strategy to help you meet them.Broadly, it involves:

Identifying your current financial status Listing and prioritizing your goals Creating a sound investment plan to achieve them Monitoring the plan to facilitate swift corrective action

360°Financial Planning is based on the premise that every indi-vidual has certain basic financial needs that are expressed at various stages of life (getting married, buying assets like homes, vehicles, or providing for your child's education and wedding and retiring finally ). With the help of 360° Financial Planning, you can prepare yourself well in time for all these goals.

Why do you need Bajaj Capital's 360° Financial Planning?You may have many dreams, needs and desires. For example, you could be dreaming of:

Owning a new car Buying a dream house Providing your children with the best education Planning a grand wedding for your children Having a great time after your retirement

But in today's world of skyrocketing costs and increasing infla-tion, how many of these dreams can you hope to turn into real-ity? By planning well, you can utilize your limited resources to the fullest. 360° Financial Planning helps you see the big pic-ture and invest for specific long-term and short-term goals well in time.

Who needs 360° Financial Planning?Everyone does! Because everyone has a right to dream. And realizing dreams is easier when you work to a plan that's: 

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Reliable Realistic Proven

Bajaj Capital's 360° Financial Planning Programme could make a difference to all those who wish to lead a worry-free, finan-cially secure life.

Here’ is how Financial Plans are prepared: The process begins with identifying your needs with the

help of the Need Analysis Form Our Financial Planners then use the especially-created

360° Financial Planning software to generate a personalized Snapshot.

The Snapshot gives you a graphic account of all your fi-nancial requirements, at every stage of your future life.

Based on the Snapshot, our experts work out an invest-ment strategy.

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Once implemented, our experts keep regular track of your investmentsA Financial Planning session takes just 15 minutes but gives you benefits of a lifetime.

Briefly, 360° Financial Planning comprises: Investment Planning: To make your wealth grow Cash Flow Planning: To provide for assets and meet the

periodic cash requirements Tax Planning: To save on taxes and increase your in-

come Insurance Planning: To protect yourself, your family and

your assets

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Children's Future Planning: To give your children a fi-nancially secure future

Retirement Planning: Because retirement is a time to relax, not to get worried

INVESTMENT PLANNING

Everyone needs to save for a rainy day. Once you have saved enough to take care of emergencies, you should start thinking about investing and to make your money grow. We can help you plan your investments so that you can reap adequate ben-efits and achieve your financial goals.Bajaj Capital’s Investment Planning Service includes: Risk Profiling Asset Allocation and Portfolio Construction Creation and Accumulation of Wealth through Systematic In-vestment Plans (SIP) Regular review of progress and Portfolio Rebalancing

Essentially, Investment Planning involves identifying your finan-cial goals throughout your life, and prioritizing them. Invest-ment Planning is important because it helps you to derive the maximum benefit from your investments.Your success as an investor depends upon your ability to choose the right investment options. This, in turn, depends on your requirements, needs and goals. For most investors, how-ever, the three prime criteria of evaluating any investment op-tion are liquidity, safety and return.Investment Planning also helps you to decide upon the right in-vestment strategy. Besides your individual requirement, your investment strategy would also depend upon your age, per-sonal circumstances and your risk appetite. These aspects are typically taken care of during investment planning.Investment Planning also helps you to strike a balance between risk and returns. By prudent planning, it is possible to arrive at an optimal mix of risk and returns that suits your particular needs and requirements.

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Cash Flow Planning

In simple terms, cash flow refers to the inflow and outflow of money. It is a record of your income and expenses. Though this sound simple, very few people actually take the time out to find out what comes in and what goes out of their hands each month.Cash flow planning refers to the process of identifying the ma-jor expenditures in future (both short-term and long-term) and making planned investments so that the required amount is ac-cumulated within the required time frame. Cash flow planning is the first thing that should be done prior to starting an invest-ment exercise, because only then will you be in a position to know how your finances look like, and what is it that you can in-vest without causing a strain on yourself. It will also enable you to understand if a particular investment matches with your flow requirement.So does it involve looking at future cash flows only? Not really. You should always do a cash flow for yourself as on date, and you will realize that you could have a potential savings amount within each month of your working life. This is the amount that you should look at saving for meeting your financial goals. The best way of doing this is to have a personal budget.

Why is cash flow planning important?Cash flow plans are commonly used by business houses. With-out a viable cash flow plan, a company could easily spend more than its revenue, putting it in peril. Unfortunately, most of us do not realize that a cash flow plan is as important for people like us as well. The principles that apply to corporate finance and to our personal lives are largely the same.There has never been a bigger need than today for families and individuals to work out cash flow plans. Without proper cash flow planning one could easily get caught in the debt trap. Of course, it goes without saying that creating a plan is not enough. One also needs to implement the plan, besides bring-ing about a change in the spending habits.Cash flow plan brings you face-to-face with what you should ideally be saving, and investing in a systematic and regular manner, and what would it mean to you to withdraw from your portfolio after a couple of years. It brings down in numbers

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what your financial future has in store for you, and gives a crys-tal clear view (as much as is possible with inflation and the in-terest rate scenario).

Tax Planning Proper tax planning is a basic duty of every person which should be carried out religiously. Basically, there are three steps in tax planning exercise. These three steps in tax plan-ning are:

Calculate your taxable income under all heads i.e., Income from Salary, House Property, Business & Profession, Capi-tal Gains and Income from Other Sources.

Calculate tax payable on gross taxable income for whole financial year (i.e., From 1st April to 31st March)

After you have calculated the amount of your tax liability. You have two options to choose from:

1. Pay your tax (No tax planning required)2. Minimize your tax through prudent tax planning.Most people rightly choose Option 'B'. Here you have to com-pare the advantages of several tax saving schemes and de-pending upon your age, social liabilities, tax slabs and personal preferences, decide upon a right mix of investments, which shall reduce your tax liability to zero or the minimum possible.Every citizen has a fundamental right to avail all the tax incen-tives provided by the Government. Therefore, through prudent tax planning not only income-tax liability is reduced but also a better future is ensured due to compulsory savings in highly safe Government schemes. We sincerely advise all our readers and clients to plan their investments in such a way, that the post-tax yield is the highest possible keeping in view the basic parameters of safety and liquidity.

Insurance Planning

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“Insurance is not for the person who passes away, it for those who survive" goes a popular saying that explains the importance of Insurance Planning.It is extremely important that every person, especially the breadwinner, covers the risks to his life, so that his family's quality of life does not undergo any drastic change in case of an unfortunate eventuality. It is extremely important that every person, especially the breadwinner, covers the risks to his life, so that his family's quality of life does not undergo any drastic change in case of an unfortunate eventuality. Insurance Plan-ning is concerned with ensuring adequate coverage against in-surable risks. Calculating the right level of risk cover is a spe-cialized activity, requiring considerable expertise. Proper Insur-ance Planning can help you look at the possibility of getting a wider coverage for the same amount of premium or the same level of coverage for the same amount of premium or the same level of coverage for a reduced premium. Hence, the need for proper insurance planning. Insurance, simply put, is the cover for the risks that we run during our lives. Insurance enables us to live our lives to the fullest, without worrying about the finan-cial impact of events that could hamper it. In other words, in-surance protects us from the contingencies that could affect us. So what are the risks that we run? To name a few - the risk on our lives that is, the worries of replacement of the incomes that we contribute to the running of the household), the risks of medical contingencies (since they have the capability of deplet-ing our wealth considerably) and risks to assets (since the re-placement of these can have tremendous financial implica-tions). If we can imagine a situation where our goals are dis-turbed by acts beyond our control, we can realize the relevance of insurance in our lives. Insurance Planning takes into account the risks that surround you and then provides an adequate cov-erage against those risks. There is no risk not worth insuring yourself against, and insurance should first and foremost be looked as a measure to guard against risks - the risk of your dreams going awry due to events beyond your control

Children's Future Planning

Like every parent, you too must be overjoyed to watch your child grow. All parents want to give the best possible upbring-

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ing to their children. This includes good education and security, in case of any eventuality. Soon, your little bundle of joy will grow up, and it will be time to provide for his or her higher edu-cation and wedding. The purpose of Children's Future Planning is to create a corpus for foreseeable expenditures such as those on higher education and wedding, and to provide for an ade-quate security cover during their growing years.Children's Future Planning acquires added importance because children's education and wedding are high priority life goals, which can neither be postponed nor can there be a compromise on the amount. Good education has always been the passport to a secure future. Today, career opportunities have grown manifold, and there are many professional course that your child can aspire for. However, costs of higher education have also increased exponentially.Like most parents, you might be saving regularly to ensure a safe tomorrow for your child. However, savings alone is no longer enough. For ensuring adequate funding of your child's education, you as a parent need to do two things: Invest appropriate amount systematically and at regular in-tervals Provide for a financial security blanket to cover any eventual-ityIt is never too early to start saving and investing for your child's future. Especially in today's context. For example, the cost of a professional degree today is approximately Rs 2.5 lakhs. If your child is one-year-old today, after 17 years when he/she goes to college, you may require a sum of Rs 6.3 lakhs, assuming an annual rate of inflation of 6%.There are many products which your Financial Planner can use to achieve the above objectives. For example, he could suggest a Children's Future Plan offered by any good insurance com-pany, to build a corpus for your child's higher education, and provide for a security cover in the event of the parent's unfortu-nate demise. Children's plans are also available under unit-linked option. Being unit-linked, they offer access to invest-ments in all kinds of asset classes - equity, debt and cash.

Retirement PlanningSome like it. Some don’t. But retirement is a reality for every working person.

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Most young people today think of retirement as a distant real-ity. However, it is important to plan for your post-retirement life if you wish to retain your financial independence and maintain a comfortable standard of living even when you are no longer earning. This is extremely important, because, unlike devel-oped nations, India does not have a social security net. Retire-ment Planning acquires added importance because of the fact that though longevity has increased, the number of working years haven’t.

Our Retirement Planning Service involves: computing that amount that would be required post-retire-ment. This is done after taking inflation and time value of money into account. Building your Retirement Corpus using Systematic Investment Plans(SIPs) and other long-term growth orient products Ensuring adequate post-retirement income through safe in-vestments. The asset allocation and selection of investment ve-hicles keep changing as your risk-bearing capacity diminishes.

PLAN FOR A WORRY FREE RETIREMENTIn simple words, retirement planning means making sure you will have enough money to live on after retiring from work. Re-tirement should be the best period of your life, when you can literally sit back and relax or enjoy your life by reaping benefits of what you earn in so many years of hard work. But it is easier said than done. To achieve a hassle-free retired life, you need to make prudent investment decisions during your working life, thus putting your hard-earned money to work for you in future.

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Financial Planning Tools

Crorepati Planner

Top of Form

HOW TO BECOME A “CROREPATI” EASILY

* What is your goal amount?                                                   (In Rs.)

* In how many years you wish to achieve this goal?  (In Years)

Name

* Email 

Phone / Mobile

* City

* marked Fields a mandatory.

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Systematic Investment Planner

SEE HOW YOUR MONEY GROWS

* How much amount can you save on a monthly basis?   (In Rs.)

* For how many years?  (In Years)

Name

* Email  

Phone / Mobile

* City

*marked Fields a mandatory.

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Child's Education Planner

Top of Form

GET DESIRED AMOUNT FOR YOUR CHILD'S EDUCATION

How old is you child today?*  (In Years.)

At what age will your child’s go for professional education?*

 (In Years)

Expected duration of profes-sional education?*  (In Years)

Amount required for profes-sional education per year in today’s term?*

 (In Rs)

Inflation rate  (In %)

Name

Email *  

Phone / Mobile

City *

* marked Fields a mandatory.

 

Disclaimer: The inflation rate is taken as 6% in above made calculations assuming that you are planning the investments for long term. The inflation rate may fluctuate from time to time depending on the economic scenario of the country. However if we aver-age the inflation rate over long period, it is expected to be in the range of 5-6%.

Retirement Planner

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Top of Form

GET DESIRED AMOUNT OF PENSION AFTER RETIREMENT

What are the expected monthly expenses after retirement in to-day's term?*

  (In Rs.)

Your current age?*  (In Years)

At what age would you like to re-tire?*   (In Years)

Inflation rate*   (In %)

Name

Email*  

Phone / Mobile

City *

* marked Fields a mandatory.

 

Disclaimer: The inflation rate is taken as 6% in above made calculations assuming that you are planning the investments for long term. The inflation rate may fluctuate from time to time depending on the economic scenario of the country. However if we aver-age the inflation rate over long period, it is expected to be in the range of 5-6%.

Human Life Value Calculator

Top of Form

HUMAN LIFE VALUE CALCULATOR

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Age of Dependent (Spouse)*

Monthly Family Expenses*

Life Expectancy of the De-pendent*   Years

Years of Life Left (Depen-dent)*

Expected Portfolio Return*   %

Expected Inflation Rate*

Name*

Email*

Mobile*

City*

Disclaimer: Insurance products are sourced through Bajaj Capital Insurance Broking Ltd.

97, Bajaj House, Nehru Place, New Delhi - 110019. Bajaj Capital Insurance Broking Ltd.

(BCIB) is an IRDA licensed 'Composite Insurance Broker" bearing license number CB

042/02 rendering advice on various insurance covers, suitable to all kinds of needs. Ad-

vice on similar insurance product(s), other than mentioned above, in offer from various

insurer(s) is also offered by BCIB. Prospective client(s) are advised to go through all com-

parable products in offer, before taking an investment decision.

* Fields marked are mandatory

Future Value Calculator

Top of Form

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Future Value Calculator

Amount (Rs.)*

Rate (%)*

Term (Yrs)*

Name*

Email*

Mobile*

City*

 

 Employee Provident Fund Calculator

Top of Form

Employee Provident Fund (EPF) Calculator

Age ( Yrs)*

Retirement Age ( Yrs)*

Current Balance (Rs.)*

Monthly Contribution (Rs.)*

Income Growth Rate (%)*

Name*

Email*

Mobile*

City*

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 Gratuity Calculator

Top of Form

Gratuity Calculator

No. of Years In Current Ser-vice (Yrs)*

Current Age (Yrs)*

Retirement Age (Yrs)*  

Monthly Basic Salary (Rs.)*  

Income Growth Rate (%)*  

Name*

Email *

Mobile*

City *

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FINANCIAL PLANNING REGISTRATION

FORM

A 360° FINANCIAL PLAN

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ADVISORY PROCESS

Investment consultancy is a complex business, requiring an in-timate understanding of several financial parameters and hu-man factors, including the client's requirements and the market subtleties. Being a process-driven organization:We have perfected a four-step advisory procedure, which includes:

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Need Analysis: Our experts analyze and assess your in-vestment objectives and your comfort level with various asset classes, such as Equity, Debt, Realty etc..

Asset Allocation: We determine an optimal mix of asset classes to meet your financial goals.

Portfolio Construction: Based on the asset mix, we build a customized, diversified portfolio of insurance and invest-ment products.

Ongoing Review: Once implemented, we monitor your portfolio regularly. This allows our advisors to recommend ad-justments if required, and these are executed once we receive your go-ahead.

ANALYSIS & INTERPRETATION

As per the advisory process & the financial plan the suggestions & interpretations I would prefer with guidance of my organization mentor is that:Mr. Tiwari is carrying low cash but is having moderate assets. He has limited liabilities & his savings are good as compared in his current cash flow analysis.

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The person is already insured & is also bearing mediclaims.So henceforth to cater all his goals i shall suggest him to invest on mutual funds, with low liability he has the advantage to bear risks so hence i shall suggest him to go for growth options on

MF’s. With the capacity to bear marginal risks i shall also suggest him to go for systematic investment plan (SIP) on volatile funds i.e. mostly sectoral funds& small & midcap funds. While doing so he can also keep his money a bit safe by invest-ing in funds which keep a 50%-50% equity debt ratio so that if the market falls he shall have the fund balance to support the sudden fluctuations.

He can also keep a bit in gold funds as gold prices are well on a hike.

The AMC’s I shall vouch upon are:-

BLUE-CHIP FUNDS:

DSP Blackrock Top 100 Equity Fund HDFC Top 200 Fund ICICI Prudential Focused Equity Plan ICICI Prudential Growth Plan ICICI Prudential Equity Opportunity

MID-CAP FUNDS:

DSP Blackrock Micro Cap Fund Canara Robeco Emerging Equities

SMALL-CAP FUNDS:

DSP Blackrock Small & Midcap

SECTORAL FUNDS:

Franklin FMCG Fund Reliance Pharma Fund

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RECOMENDATIONS:

INVESTMENT PLANNING TIPS

Set a Goal: What you want to achieve and when-deciding this is important. So set financial goals to bring purpose and clarity to the investment process.

Research Regularly: Next step is to know what kind of investments will help you achieve the goal. You can do it your-self or take the help of a professional investment advisor.

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Invest Early: Once you know where to invest; do it as soon as possible. The earlier you begin, the more you benefit from the power of compounding.

Budget Planning: A must for all prudent investors. Makes you live within your means and give a clear picture of your finances.

Avoid Debts: Avoid unnecessary borrowings. Treat extra expenses as a loan that you must repay yourself. Make saving a habit. Small changes in your lifestyle can result in major changes in your saving corpus.

Review and Reinvest: Be alert and open to changes. Markets change, your needs change, investment instruments change. Be aware and make it a point to review your invest-ments from time to time to create maximum wealth for your-self.

RETIREMENT PLANNING TIPS

People have different plans for retired life. For example you may think of retirement as a time to relax, to laze around, to spend more time with family, travel or write a masterpiece. At-taining financial independence after retirement will not be just a dream if the following steps are followed with steady disci-pline, perseverance and if smart investment strategies.

Start saving early: Nobody takes retirement seriously. But the fact is that even a small sum of money saved regularly and invested regularly makes a big amount which will come in

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very handy after retirement. One should not believe that after retirement, one can place all savings into income generating in-vestment and spend rest of life in happiness. If you don't plan early, you could end up eroding your principal savings in order to supplement your monthly income.

Retirement should be your top priority: Retirement should be kept as a top priority because if one does not keep it at the top one might end up depending on one's children, which probably no one would relish.

Create a Retirement Plan: Develop a plan for saving based on your requirements at the time of retirement. The goals you keep for saving depend on your lifestyle but you will need at least about 66% of your pre-retirement income to maintain your standard of living when you stop working.

Understand your Pension Plan: If your employer offers pension plan, understand carefully your benefit level, financial stability of plan and the vesting period. Use retirement plans even if you already have enough money. With retirement plans your money grows in a tax efficient manner and compounding interest over time makes it one of the best investment options.

Balance your risk tolerance and your investment strategy: Evaluate your risk profile and then balance your in-vestment strategy to invest in various avenues to get the most out of your retirement money keeping your risk profile unham-pered.

Diversify your investments & allocate your assets carefully: Depending on your work profile divide your savings into equity, bonds, Mutual Funds, and other investment av-enues. Don't invest too heavily in one sector or one company, since the risk associated with putting all your eggs in one bas-ket is indeed very high.

Save and Invest Regularly: Saving and investing regu-larly makes a big difference at the time of retirement. Investing at regular intervals builds your retirement fund over time and

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helps you to minimize risk and gives a tension free retirement-a time to pursue your hobbies, fulfill your dreams and passions.

Tax Planning Tips

Tax Planning - IntroductionFirst, let's start by assessing your income tax liability. Once you have identified your tax liability, you can then create the right plan. Please note that this applies only to salaried individuals.Following rates are applicable for computing tax liability for the current Financial Year i.e. April 1, 2009 to March 31, 2010 (Assessment year 2010-2011). Our endeavour is to present the complex provisions of the Income Tax Act in a simplified manner, which could be understood by a common investor as well as by a layman.

For other Resident Male Individuals below 65 years of age and HUFs

Net Income Range Income Tax

Plus Education

CessUp to Rs. 1,60,000 Nil NilRs. 1,60,001 to Rs. 3,00,000

10% of income above Rs. 1,60,000

3% of income tax

Rs 3,00,001 to Rs 5,00,000

Rs. 14,000 + 20% of the income above Rs. 3,00,000

3% of income tax

Above Rs. 5,00,000

Rs. 54,000 + 30% of income above Rs. 5,00,000

3% of income tax

For other Resident Female Individuals below 65 years of age and HUFs

Net Income Range Income Tax

Plus Education Cess

Up to Rs. 1,90,000 Nil NilRs. 1,90,001 to Rs. 3,00,000

10% of the income above Rs. 1,90,000

3% of income tax

Rs 3,00,001 to Rs Rs. 11,000 + 20% of the 3% of

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5,00,000 income above Rs. 3,00,000 income taxAbove Rs. 5,00,000

Rs. 51,000 + 30% of the income above Rs. 5,00,000

3% of income tax

For Resident Senior Citizens (who are 65 years or more at any time during the Financial Year 2007-08)

Net Income Range

Income TaxPlus

Education Cess

Up to Rs. 2,40,000 Nil NilRs. 2,40,001 to Rs. 3,00,000

10% of the income above Rs. 2,40,000

3% of income tax

Rs 3,00,001 to Rs 5,00,000

Rs. 6000 + 20% of the income above Rs. 3,00,000

3% of income tax

Above Rs. 5,00,000

Rs. 46000 + 30% of the income above Rs. 5,00,000

3% of income tax

The rules for "Senior Citizen" are the same as for 'Men' as well as 'Women'. Any person who turns 65 on any day prior to or on March 31, 2009 will be treated as A Senior Citizen.

Tax Liability

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Filing of Income Tax Return1. Filing of income tax return is compulsory for all individuals

whose gross annual income exceeds the maximum amount which is not chargeable to income tax i.e. Rs. 1, 90,000 for Resident Women, Rs. 2, 40,000 for Senior Cit-izens and Rs. 1, 60,000 for other individuals and HUFs.

2. The last date of filing income tax return is July 31, in case of individuals who are not covered in point 3 below.

3. If the income includes business or professional income re-quiring tax audit (turnover Rs. 40 lakhs), the last date for filing the return is September 30.

4. The penalty for non-filing of income tax return is Rs. 5000 (after assessment year).

Financial Planning FAQs

What is Financial Planning?

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Financial planning is the process of meeting your life goals through the proper management of your finances. Financial planning helps you make advance provision for financial needs that will arise in the future. The objective of financial planning is to ensure that the right amount of money is available in the right hands at the right point in the future to achieve an individ-ual's life goals. 

Why should I make a Financial Plan?Financial planning provides direction and meaning to your fi-nancial decisions. It allows you to understand how each finan-cial decision you make affects other areas of your finances. For example, buying a particular investment product might help you save adequately to finance your child's higher education or it may provide enough for a comfortable retirement. You can also adapt more easily to life changes and feel more secure that your goals are on track.

Who is a Financial Planner? A financial planner is someone who uses the financial planning process to help you determine how to meet your life goals. The key function of a financial planner is to help people identify their financial planning needs, their present priorities and the products that are most suitable to meet their needs. He or she normally possesses detailed knowledge of a wide range of fi-nancial planning tools and products, but his major role is to help clients choose the best products for each need. The plan-ner can take a 'big picture' view of your financial situation and make financial planning recommendations that are right for you. 

Can I do my own Financial Planning? Some personal finance software packages, magazines or self-help books can help you do your own financial planning. How-ever, you may decide to seek help from a professional financial planner if:

You need expertise you don't possess in certain areas. For example, a planner can help you evaluate the level of risk in your investment portfolio and revise your asset allocation

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You don't have the time to spare to do your own financial planning;

You know that you need to improve your current financial situation but don't know where to start;

You feel that a professional advisor could help you im-prove on how you are currently managing your finances;

You have an immediate need or unexpected life event such as an inheritance or major illness;

You want to get a professional opinion about the financial plan you developed for yourself.

What should I look for in a Financial Planner?A financial planner works for you. His or her loyalty should be to the client, not the product (s) he is trying to sell. The financial planner should be in a position to provide you with unbiased advice and recommend products that match your needs and are the best performing ones available. Look for any affiliations of the financial planner to any product manufacturer. Until un-less the financial planner is truly independent, (s) he will not be able to give you objective advice.

How can I plan for tomorrow when I can hardly pay for today?Have a budget. Determine what you actually spend each month. There are fixed expenses like rent, loan repayments, etc. every month about which we can do little. The variable items such as food, clothing and entertainment are often what get away from us. Use your discretion to contain these variable expenses to start saving. 

How much should I be saving? It is hard to apply a rule of thumb toward savings, because it varies with age and income level. Ten percent is a good start. If you find that is too high for you, don't let that deter you. You can start by putting a little aside each month and then slowly increasing it.

What if I don't achieve my goals? Financial planning is a common sense approach to managing your finances to reach your life goals. It cannot change your sit-

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uation overnight; it is a lifelong process. Remember that events beyond your control such as inflation or changes in the stock market or interest rates will affect your financial planning re-sults.

Why do I have to provide so much personal informa-tion? Consider a visit to your doctor. Without complete and fully ac-curate details, your doctor cannot prescribe the best course of action. The same applies to financial planning. In order to ob-tain the best service for your 'financial health' all details and specifics must be disclosed. 

What type of information do I have to provide? Typically, information regarding investments held, number of dependants, income and expenditure details, and savings and financial planning needs, etc. The more accurate information you give, the better the quality of advice given.

What should a Financial Plan include? A financial plan should include a review of your net worth, goals and objectives, investment portfolio, cash flow, investments, re-tirement planning, tax planning and insurance needs, as well as a plan for implementing your goals.

Why is there an evaluation of my insurance needs? Evaluating your insurance needs is part of personal financial planning. Insurance takes care of your unpredictable needs and as these needs can arise at anytime, insurance is extremely im-portant. Investments take care of your predictable needs and ideally should follow after your unpredictable needs are first ad-dressed. The insurance industry has changed a great deal over the past few years and there is a whole array of new products from LIC as well as private insurance companies.

What about taxes? It is important that financial plans are tax efficient. The finan-cial plan should help you in minimizing your tax liability and

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also maximizing your after-tax returns from your investments. Some financial planners help their clients in preparing and filing their tax returns.

After a plan is developed, what next? The best plan is useless unless it is put into action. Your finan-cial planner will assist you completely in implementing the plan, if and when, desired by you.

How often should I update the plan? It is good to review the plan when there is a lifestyle change such as marriage, birth, death or divorce. Any change in finan-cial position should be evaluated as well. Most people have an annual update that reviews how the plan is being implemented. The review also considers changing goals and circumstances.

RESEARCH OBJECTIVE

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This research was undertaken with the following scope of work: To know the current strategy of investment. To know why salaried employees do investment {need of

investment}. To understand & prepare financial plans To know when they invest. To know where they prefer to invest. To identify the whether they are aware about the Tax

structure. To give suggestion related to their investment strategy.

CONCLUSION

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Many years ago people used to hold money means that they kept their money as Cash in hand or other safe places but to-day people are more aware of different investment option, which are the Key of growth of money. Instead of a range of in-vestment option salaried employees prefer to take Medium risk and they will invest their money in that option where they get Maximum returns with average risk.If you know your product well and if you have a good communi-cation skill & have the poise to listen what your customer is talking about pitching your desired service becomes a lot eas-ier. A client always speaks what he wants in the first 10 mins, and then mostly she/he is ignorant. That is when your skills come into play.It’s all about communication and interpretation.

“Money never grows on its own, you shall have to invest and invest WISELY

to make it grow.”

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Books: Indian financial services by M.Y.Khan

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Bajaj Capital publication Investor India Money Multiplier News

Web Site www.google.com www.Bajaj Capital .com www.amfi.com www.valueresearchonline.com

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