financialplanning-151228111506
TRANSCRIPT
The next 15 minutes could change
your life…
Forever…
Everybody has some Goals and Dreams in life…
Have you planned for your financial future???
Wedding of Children
Wealth Creation
Children Education
Comfortable Retired life Passing Wealth to the next generation
And many more…
Dream House
Put an end to your worries…FH presents
… your road map toFinancial Independence.
What is 360° Financial Planning ?It is the process of helping you …
• identify and prioritise your goals • realize them in a planned, disciplined and systematic manner
…by taking a holistic view of your financial life.360° Financial Planning – A 4 Step Approach
Step 1 Where you stand now? Financial Status Analysis
• Cash Flow Planning • Investment Planning • Insurance (Protection) Planning
• Children's Future Planning• Tax Planning • Retirement Planning
Step 4 Regular Review of progress…
Step 3 How to get there? Tools
Step 2 Where do you want to go? Goal analysis
Financial Status Analysis…
Steps:1. Analysis of your Monthly Income and Expenditure (Household Budget)2. Calculation of Surplus Cash (Monthly Savings) available for meeting financial
goals3. Computation of your Personal Net Worth - Assets and Liabilities4. Compilation of your Current Investment Portfolio
Unmarried Young Married
Middle Aged
Young Married with Children
Pre Retiree
Retired
Age
Income
• Asset Acquisition• Protection against
Disability• Short Term Needs
• Income Protection• Protection against Liabilities• Wealth Creation and Accumulation
• Life / Health Insurance • Provision for Child Education
and Marriage• Wealth Creation and
Accumulation
• Life / Health Insurance Need• Tax Minimization• Retirement Planning
• Health Insurance Need• Tax Minimization• Retirement Planning
• Regular Income• Health Insurance • Preservation of Capital
7 Human Life Stages and Needs
Childhood
Cash Flow Planning
Steps:1. Identify sources of cash inflows 2. Create cushion for emergencies3. Prioritise goals4. Estimate future outflows5. Match inflows and outflows
Steps:1. Risk Profiling2. Asset Allocation and Construction of Portfolio3. Creation and Accumulation of Wealth through Systematic Investment Plans (SIPs).4. Regular Review of progress and Rebalancing of Portfolio
“90% of portfolio performance depends on Asset Allocation”*
*Source: Brisnson,Singer and Beebower research on investments (1991)
Investment Planning
‘Always provide for your unpredictable needs before your predictable financial needs.’
Steps:1. Identify and Evaluate risks on your life, health and assets.2. Make provisions for adequate coverage using appropriate products.
For protection against unforeseen …
Insurance (Protection) Planning
Children’s Future and OtherGoals Planning
Steps: 1. Compute the amount required to fund specific goals like your
Children's Education and Marriage, Dream House, Bigger Car, Overseas Vacation…
2. Calculate the lump sum amount or systematic investment amount required to fund that goal.
3. Periodic Review of actual investment performance and Rebalancing of Portfolio.
Tax Planning
Steps:1. Analysis of your present Tax Status and Saving Potential.2. Minimise your tax outflows through prudent tax planning.3. Select tax efficient investments suited to your needs.
*Illustration for an investor earning over Rs.15 lacs p.a.
‘In Financial Year 2015-2016, you can invest up to Rs.2,50,000 in various Tax Saving products and save tax up to Rs.77,000.’*
Tax Planning
Retirement Planning
Steps: 1. Compute the amount that would be required post retirement considering inflation, time value of money. 2. Start building your Retirement Corpus using SIPs and other long
term Growth oriented products. 3. Ensure adequate post retirement income through safe
investments.
‘Asset Allocation and Selection of Investments will change as you approach retirement.’
Core Principles of Financial Planning
Mr. Mohan started investing Rs.4000 per month at the age of 30 and his friend Mr. Sohan started slightly late at age 40. He invested Rs.6000 per month. When both of them retired at age 60.
Mr. Mohan Mr. Sohan
Age at which began investing (yrs) 30 40Monthly Investment Amount (Rs.) 4000 6000
Total Amount Invested (Rs.) 14,40,000 14,40,000
Corpus at age 60 (Rs.) 91,17,301 45,94,181
Mr. Mohan is a richer man by almost Rs. 45,00,000 !
@ 10% pa
Start investing early – it makes an exponential difference
Mr. Ram starts investing early at age 25 and continues for just 10 years. Mr. Shyam starts late and invests for 26 years. If both invested Rs.12,000 p.a. how much will they have at age 60 ?
Mr. Ram Mr. Shyam
Age at which began investing (yrs) 25 35Investment till age (yrs) 34 60Total Amount Invested (Rs.) 1,20,000 3,12,000Corpus at age 60 (Rs.) 25,07,275 14,41,199
Corpus Increases 21 fold 5 fold
The Magic of Compounding…
Core Principles of Financial Planning
@ 10% pa
The Power of Compounding
Risk Management & Insurance Planning
The ‘foundation’ of ‘three pillars’ is Risk Management & Insurance Planning.
Cash Income Growth
The ‘Three Pillars’ of Financial Planning
Cash Income Growth
First, take care of your emergency
cash needs. Cash portfolio should be appox.2 times of Average Monthly
Household Expenses.
Next, create an Income Portfolio
with a regular interest income
stream equal to your Fixed Monthly
Household Expenses.
Invest the balance in Growth Portfolio.
The balance savings should be invested in growth schemes for Wealth Creation &
meeting your future goals.
“Income Replacement Strategy” through Risk Management & InsuranceYour Life Insurance cover should be at least 10 times of your Annual Income plus Loan
Liabilities.
Implementation of Financial Planning with…‘3 Pillars Model’
CashSavings Bank
a/cLiquid Fund
Floating Rate Fund – ST
PO – MISGOI Savings
BondsPension PlansFloating Rate
Fund – LTIncome Funds
MF MIPs
SIPsPPF
KVP / NSCBalance Mutual
FundsEquity Mutual
Funds
Risk Management & InsuranceLife Insurance • Disability Insurance • Health Insurance • Asset Insurance
Cash Income Growth
Implementation of Financial Planning with…‘3 Pillars Model’
Thank You
Wish You A Financial Independence