Personal Financial Plan - WordPress.com · 2019. 7. 1. · Email: [email protected] Page 1 of 20 Ph.: +91 97692 54535, +91 22 4971 0559 10th December’ 2018 Dear Mr. Rohit,

Personal Financial Plan

Prepared for:

Mr. Rohit Mehta

Prepared by:

Ronak Morjaria

www.valuecurve.co.in

Email: [email protected] Page 1 of 20

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10th December’ 2018 Dear Mr. Rohit,

We would like to thank you for choosing our financial planning services.

The enclosed plan formalizes our recent discussions on the investment of your available

capital, allocation of surplus cash flows and reallocation of some of your existing

portfolio.

Our objective is to accurately assess your financial needs and to provide quality

recommendations and ongoing services in accordance with those needs.

The plan is based on the information provided by you on your current circumstances and

objectives. Please read the plan carefully to check for accuracy of the information

provided.

This plan is an important document, in accordance with the best standards of the

profession. However, it needs to be regularly reviewed and updated in response to

changes in your own circumstances and other factors, such as pension regulation, taxation

and market movements.

All the financial data and/or information provided by you in data collection form or reply

to any email thereafter and all the recommendations and advice furnished by us will be

strictly kept confidential as per FPSB’s code of ethics. We will not share or pass the data

and/or other information given by you to any other person, firm or company without your

consent. The reason we value confidentiality is that financial and life planning is a deeply

personal encounter. In order to facilitate open and honest communication, you need to

know that your choices, your decision-making process, and your future plans are kept

confidential.

Please feel free to contact us if you have any queries.

We look forward to reviewing and implementing these recommendations with you.

Yours sincerely,

Dipak Morjaria

Ronak Morjaria

Harshil Morjaria

http://www.valuecurve.co.in/

mailto:[email protected]



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The main body of this report has your personal details and your life objectives and

strategies to meet your objectives.

Name Relationship Age Health

Status

Mr. Rohit Self 30 Healthy

Mrs. Sneha Spouse 28 Healthy

Mr. Varun Son 1 Healthy

Goals and Objectives:

Executive Summary

Retirement Planning: You would like to provide a corpus for your

retirement at the age of 60 years. You would like to maintain the same

standard of living, which you are living at present.

Child's Education Planning: You would like to provide for the higher

education expenses for your son when he reaches the age of 21 years.

Child's Marriage Planning: You would like to provide for marriage

of your son when he reaches the age of 26 years.





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As per the information provided by you, the following are the cash inflow and outflow

for the current year:

ParticularsTotal -

Monthly

Total -

Annual

Total -

Monthly

Total -

Annual

Net Take Home Salary 66,667 8,00,000 66,667 8,00,000

Total Inflows 66,667 8,00,000 66,667 8,00,000

Household Expenses 28,500 3,42,000 28,500 3,42,000

Loan EMI's 11,200 1,34,400 11,200 1,34,400

Home Loan 11,200 1,34,400 11,200 1,34,400

Insurance Premium 8,333 1,00,000 4,192 50,300

Life Insurance 8,333 1,00,000 858 10,300

Health Insurance 0 0 2,333 28,000

Other Insurance 0 0 1,000 12,000

Total Outflows 48,033 5,76,400 43,892 5,26,700

Savings 18,633 2,23,600 22,775 2,73,300

Actual Investments 6,200 74,400 22,000 2,64,000

Surplus 12,433 1,49,200 775 9,300

Current Recommended

Income-Expense Statement

53%21%

15%

11%

Current CashflowHousehold Expenses

Loan EMI's

Insurance Premium

Actual Investments

44%

17%6%

33%

Recommended Cashflow

Household

Expenses

Loan EMI's

Insurance

Premium

Actual Investments





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Assets

Liabilities

Net Worth Statement

Type

Interest

Rate EMI

Outstanding

Balance

Home Loan 9.50% 11,200 7,50,000

Total 11,200 7,50,000

Total Assets(Investmetn Assets) 8,65,000

Total Liabiltiies 7,50,000

Your Net Worth 1,15,000

Net Worth

Particulars Mr. Rohit

Personal Assets 53,00,000

Residential Property 50,00,000

Vehicle 3,00,000

Investment Assets 8,65,000

Cash & Equivalents 40,000

Cash in hand 5,000

Savings Bank 35,000

Debt & Equivalents 4,75,000

Fixed Deposits 1,25,000

PPF 2,50,000

EPF 1,00,000

Debt Mutual Funds 0

Equity & Equivalents 3,50,000

Direct Equity 1,00,000

Equity/Balanced Mutual Funds 1,50,000

Insurance - Surrender Value 1,00,000

Total Assets 61,65,000





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Investment Avenue

Current

Allocation

Cash & Equivalents 5%

Debt & Equivalents 62%

Equity & Equivalents 33%

5%

80%

15%

Recommended

Allocation

Asset Allocation

5%

62%

33%

Current Asset AllocationCash & Equivalents

Debt & Equivalents

Equity & Equivalents

5%

15%

80%

Recommended Asset Allocation

Cash & Equivalents

Debt & Equivalents

Equity & Equivalents

Equity and debt, both, have an important role to play in your asset allocation.

Equity can provide superior inflation adjusted returns over the long term and

debt to protect your capital while growing.

Self-occupied residential property and Personal Jewelry are not treated as your

investment assets.

Gold Investment works as a hedge against inflation and provides safety in bad

economic and political conditions.

Real estate investment provides you a fixed income, potential for capital

appreciation and also helps in diversification of your portfolio. However, it is

highly capital intensive and most illiquid asset class.

Please review and rebalance your investment portfolio periodically.





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Contingency Fund

Transfer the loan to another lender at prevailing interest rate i.e. 10.50%

No pre-payment charges are payable on Floating rate loans.

You should keep aside at least 4 months expenses to be used only in

emergencies such as job loss.

Invest in HDFC Liquid Fund

Maintain discipline. Do not use except incase of emergencies

Current Monthly Expenses 38,500

Contingency Period (Months) 4

Contingency Funding (Required) 1,54,000

Investment Assets Utilized

Current

Value

Cash in hand 5,000

Savings Bank 35,000

Fixed Deposit 1,25,000

Total 1,65,000

1,54,000 1,65,000

11,000

Contingency FundingRequired

Availabe Resources Excess

Contingency Funding





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Insurance Need Analysis:

Looking at your present age, income, life style and life goals and also taking into

consideration your assets and liabilities, your life insurance need is calculated as under:

Analysis of current Policies and Recommendations:

Life Insurance

Taking into account various factors like present surrender value, maturity value and

premiums to be paid till maturity we advise you to surrender IDBI Federal ULIP

policies as this plans carries various charges which leads to lower returns. Also, this

policy does not provide sufficient insurance coverage.

Your wife is a homemaker and does not require life insurance.

Buy HDFC Life Click2Protect 3D Plus an online term plan for Rs.1 Crore for a term

of 30 years which will cost you around Rs.10,300 p.a.

Disclose all facts while buying insurance.

1,07,23,224

7,65,000

99,58,224

Total Life Insurance Required Total Assets Insurance Cover Required

Insurance Need Alalysis

Adequate Life insurance is a must to make sure your family’s life style is

not affected if you die early.





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This section covers analysis of your current General Insurance policies, Need Analysis of

the Client and our recommendations.

Health Insurance (Mediclaim): A serious illness could be catastrophic to your financial well being therefore,

it is imperative you have adequate medical insurance coverage.

Current Recommended

United India

Mediclaim Bajaj Allianz Health Guard Bajaj Allianz Extra Care Plus

Sum Assured Rs.3 Lakhs Rs.3 Lakhs Rs.20 Lakhs

Premium Rs.8,000/- Rs.11,300/- Rs.9,500/-

Type Floater Floater Floater

Members Self + Spouse + Child Self + Spouse + Child Self + Spouse + Child

Recommendation Port Buy Buy

Health Insurance

Your family floater health insurance is bought from United India. has room rent sub-limit

of 1% of sum assured.

Disability Insurance pays a lump sum in the event of suffering from a debilitating disease

such as cancer, stroke, organ failure or disability arising from an accident.

You should take an accident insurance policy covering disability for Rs.25 lakhs and a

critical illness policy for Rs.25 lakhs for yourself. Both these policies put together will

cost you around Rs.12,000 per year.

Disclose all facts while buying insurance.





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Analysis of Current Investment:

Direct Equity Investment:

Mutual Fund Investment:

Sr.

No.

Name of Scheme Current

Value

Recommendation Allocated

Goal

1. Birla Mid Cap Fund (D) 70,000 Redeem & Switch to

ICICI Pru BlueChip

Fund

Varun’s

Education 2. DSP BR Small & Mid Cap Fund (G) 50,000

3. ICICI Pru Infra Fund 30,000

Investment Planning

Direct investment in equity is not advised, as it

requires depth research and analysis.

Invest money in good mutual fund schemes.

Sell your equity investments and reinvest in

Mutual Fund schemes as recommended.

Instead of investing in sectoral or thematic funds, invest in well-diversified funds, which

invest in stocks of many sectors, which give good diversification across sectors. Hence,

we recommend switching as above.

We suggest you to keep all your Mutual Fund units under Growth option and in

recommended Mutual Fund Portfolio.

All your existing investments have been allocated towards your all major goals. Equity

schemes of mutual fund invest around 90-100% in shares of listed companies and the

balance 0-10% in highly rated debt instruments.

Balanced mutual fund schemes invest around 70-80% in shares of listed companies and

the balance 20-30% in highly rated debt instruments. They provide an ideal mix of safety

(debt instruments) and growth (equity).

We suggest you to have a periodical review process to monitor your portfolio and

rebalance your portfolio as per your asset allocation.





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You would like to provide a corpus for your retirement at the age of 60 years. You would

like to maintain the same standard of living, which you are living at present.

Retirement Planning

We allocated your present EPF & PPF towards this goal.

Start monthly investment of Rs.16,600 in ratio 90% in Equity and 10% in Debt.

Start fresh SIP of Rs.7,500 each in Aditya Birla SL Frontline Equity Fund and

Reliance SmallCap Fund, and deposit Rs.1,600 every month in PPF account.

3,30,000 33,20,000

7,23,50,000

Current Annual Expenses Annual Expenses at RetirementAge

Corpus Required for Retirement

Retirement Alalysis


Current

Value Term

Assumed

Rate of

Return

Future

Value

PPF 2,50,000 30 8.00% 25,15,000

EPF 1,00,000 30 8.00% 1,19,71,000

Total 1,44,86,000





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You would like to plan for your son’s education and would like to provide Rs.7.50 lakhs

in present value of this goal.

Education Planning

Sell your existing equity shares and transfer to Mirae Asset LargeCap Fund

Sell your existing equity mutual funds, and shift to ICICI Pru BlueChip Fund

Additionally start SIP of Rs.1,800 in Mirae Asset LargeCap Fund

7,50,000

34,96,000

Current Value Future Value

Education Planning

Particulars Varun

Current Age 1

Goal Age 21

Years For Goal 20

Expected Rate of Return 12.00%

Inflation 8%

Current Value 7,50,000

Future Value 34,96,000

Assets Utilized 17,16,000

Required Monthly Funding 1,800


Current

Value Term

Assumed

Rate of

Return

Future

Value

Direct Equity 1,00,000 17 12.00% 6,86,000

Equity Mutual Funds 1,50,000 17 12.00% 10,30,000

Total 17,16,000





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You would like to plan for your son's marriage at the age of 26 years and provide a sum

of Rs.7.50 lakhs in present value for this goal.

Marriage Planning

Start monthly investment of Rs.3,600 in ratio 90% in Equity and 10% in Debt

Start fresh SIP of Rs.3,000 in ratio in Kotak Standard MultiCap Fund and

Rs.600/month in Varun’s PPF account respectively.

10,00,000

68,48,000

Current Value Future Value

Marriage Planning

Particulars Varun

Current Age 1

Marriage Age 26

Years For Goal 25

Expected Rate of Return 12.00%

Inflation 8%

Current Value 10,00,000

Future Value 68,48,000

Required Monthly Funding 3,600





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Estate Planning

We strongly recommend making a Will.





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Investment Assets Existing Assets

Retirement Contingency

Fund Children's Education

Cash on hand 5,000 5,000

Savings Bank 35,000 35,000

Fixed Deposits 1,25,000 1,25,000

PPF 2,50,000 2,50,000

EPF 1,00,000 1,00,000

Insurance - Surrender Value* 1,00,000

Direct Equity 1,00,000 1,00,000

Equity Mutual Funds 1,50,000 1,50,000

Total Assets 8,65,000 3,50,000 1,65,000 2,50,000

*Asset not utilized under any goal

Plan Assumptions:

Plan Assumptions

Self Spouse

Retirement Age 60 N.A.

Life Expectancy 80 80

Inflation Rate 08.00%

Portfolio Returns – Liquid Funds 05.00%

Portfolio Returns – Debt / PPF / EPF 08.00%

Portfolio Returns – Equity Funds 12.00%

All returns are assumed as net of Indian Income tax.

None of the returns are guaranteed.

Asset Re-allocation





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Contingency Planning: HDFC Liquid Fund Rs.1.65 Lakhs Start ASAP

Life Insurance:

HDFC Life Click2Protect 3D Rs.1 Crore Buy ASAP

Health Insurance:

Family Buy Bajaj Allianz Health Guard Individual Rs.3 Lakhs

Family Buy Bajaj Allianz Extra Care Plus Rs.20 Lakhs

Self Buy Bajaj Allianz Premium Personal Guard Rs.25 Lakhs

Self Buy HDFC Life Critical Illness Rider (with

Click2Protect 3D Plus) Rs.25 Lakhs

Other Goals:

Sr.

No. Goal

Investment

Amt. Remark/Suggestion

1. Retirement SIP Rs.7,500/- Aditya Birla SL Frontline Equity Fund

SIP Rs.7,500/- Reliance SmallCap Fund

Rs.1,600 p.m. PPF

2. Varun’s Education SIP Rs.1,800/- Mirae Asset LargeCap Fund

3. Varun’s Marriage SIP Rs.3,000/- Kotak Standard MultiCap Fund

Rs.600 p.m. Varun’s PPF

Summary of Recommendations





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1. Make sure that the recommendations provided to you by your financial planner

are executed properly and without any delays. Also you should keep the planner

posted with any developments like change in income, any major health issues

within family that may affect your financial planning.

2. Sit down once every year to review and revisit all your goals. Also reprioritize

them in case needed.

3. Put automatic payments (ECS) on all insurance premium and SIP. Provide your

mobile number to the insurance companies and mutual fund houses. They send

reminders to maintain the required balance in your account a few days before the

ECS is due.

4. Start moving your assets from risky assets like equities or alternative investments

to debt instruments systematically when your goal is around 2-3 years away – this

will ensure that in case the equity markets falls just before your goals are arriving,

your corpus would be protected to a very great extent.

5. Keep all your insurance and investment documents at one place and inform your

spouse, parents and kids about the same – in case of any emergency, they can

trace them easily. Many a times, when a person gets admitted, then the family

members have no clue about the mediclaim card that needs to be shown to the

hospital.

6. Don't delay, investments or payment of your credit card bills/loan EMIs – both of

them can affect your financial future badly? If you delay in starting your

investments on time, then you will lose the opportunity to create enough corpuses

for your future goals. In case you delay in making payments for your credit card

bills and loan EMIs then you will land up lowering your CIBIL score and risk

your chances of getting a loan in future.

7. Get your CIBIL report and go through it to check if there is any of the information

mentioned there are not true. In case any of the information mentioned there are

not correct, you should report the same to CIBIL and get the same rectified at the

earliest to avoid any complications in future.

8. Provide your mobile number to all the bank accounts and credit cards – any

transactions that is done on your debit card or your credit card is reported to your

mobile number.

9. You should make sure that you have put nominations for all your investments.

You should also prepare a will to plan for your estate since nominations are not

sufficient to make sure that there is no dispute about the assets in the event of the

death of the owner.

Some good practices of financial planning





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Any financial plan made by us is based on information detailed by the information

provided by the client in the data gathering sheet and the personal discussions with the

client. A copy of the data gathering sheet is available on request. The information

contained in the financial plan must be read carefully. In case any relevant information is

overlooked or misinterpreted, then we request the client to contact us before proceeding

with the implementation of the plan. The financial plan is completely based on the

information supplied to us by the client, which we assume to be correct. No responsibility

can be accepted if the information provided to us is incorrect or inaccurate. This plan is

prepared solely for the use of the client to whom it is addressed.

This financial plan is a forward-looking document where we have assumed certain

return on investments on various investment classes and inflation. These forward-looking

statements involve, and are subject to known and unknown risks, uncertainties and other

factors, which could cause actual results, performance or achievements to differ from the

future results, performance or achievements expressed or implied by such forward-

looking statements.

All these forward-looking statements attributable to Ronak Morjaria herein are

expressly qualified in their entirety by the above-mentioned cautionary statement. Ronak

Morjaria does not accept any direct or indirect liability for any results, performance or

achievements that differ from results, performance or achievements implied by such

forward-looking statements.

We do not promise that the investments you make based on this plan will be

profitable. Investments are always subject to various market, currency, and economic,

political and business risks. We will not be liable for any losses that may be caused

directly or indirectly by such investment decisions.

This financial plan is based on the current situation and goals, which will change

with the passage of time. Any material change in the financial situation of the client will

necessarily render the contents of the plan out of date. Material changes refer to change in

income/salary levels, assets acquired, liabilities incurred, change in number of

dependents, health condition, or the passage of time of more than 12 months or the effect

of inflation or deflation.

We strongly recommend that

a) You review this plan periodically to ensure that your plan’s actual performance is

consistent in meeting your goals, and

b) You update your plan annually to ensure that your plan is updated for your changing

situation and goals.

Disclaimer





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Thank You



Documents

Personal Financial Plan - WordPress.com · 2019. 7. 1. · Email: [email protected] Page 1 of 20 Ph.: +91 97692 54535, +91 22 4971 0559 10th December’ 2018 Dear Mr. Rohit,