Investment Tactics

Financial Planners – Bharti, Disha, Neetu,

Isha, Sachin

Our Project Goal

• To conduct a case study of a client

• To study how the family is managing their savings

• To plan an investment portfolio of the family

Factors influencing Savings• We have analysed what are the factors

influencing savings using seeing reason tool.

Our Analysis

• We realised that some factors like improper planning, improper investment, expenditure, etc. are controllable factors,

• Whereas, number of dependants, salary, age, etc are uncontrollable factors.

• Hence, our main focus is on managing the controllable factors by considering the uncontrollable factors.

Our research question

How do we plan our investment?

Our Case Study

About the Client

• Age: 35 years• Profession: Plastic Surgeon• Working with: Wadia Hospital, Baroda &

Private practice• No. of family members: 4

• Wife - 32 years – practicing doctor• Mother – 60 years• Daughter – 10 years

• Dependants : 2• No. of earning members : 2

Financial Goals

• Daughter’s higher education after 10 years

• Daughter’s marriage after 15 years

• Their retirement after 20 years

Where are they today?

• Family annual income - Rs 6 lakhs (approx.)

• Annual routine Expenditure – Rs 3.5 lakhs (approx.)

Total investment-savings

• Savings account – Rs.1 lakh

• Contingency Fund – Rs. 80000

• Fixed Deposit – Rs. 1 lakh

• Equity based funds – stock market – Rs. 1.5 lakhs

Total Investment-savings

23%

23%

19%

35%

Fixed Deposit Saving Account

Contingency Fund Equity based investment

Analysis

• 42% of the total funds are lying in the bank (saving) or at home (contingency fund) after meeting household and other expenses .

• Considering the age and financial goals – investment in equity based investment is low. As a thumb rule, amount equivalent to 100 minus your age times salary amount should be invested in equity funds.

• Insurance Cover of the client- Rs. 10 lakhs and his wife - Rs. 5 lakhs should be reconsidered.

Proposed Investment Portfolio

• Cash at home should be equivalent to only one month’s household expenses. – Rs. 25000 (Rs. 6 lakh/12 months)

• Overall cash, savings bank and fixed deposit should be the equivalent of three months’ household expenses. – Rs. 90000 (Rs. 3.5 lakh/12 * 3)

• The family is dependent on the income of both husband and wife for meeting future goals. Therefore, both need more life insurance. Coverage of Rs 25 lakhs for the client and Rs 15 lakhs for his wife is recommended.

Proposed investmentin current year

– Rs. 20000 as annual contingency fund– Rs. 20000 in savings account– Rs. 50000 in fixed deposit– Rs. 150000 equity based funds – stock

market (60% of total funds to be on the safer side)

– Rs. 10000 extra insurance premium

References• http://epaper.timesofindia.com/Repository/

ml.asp?Ref=VE9JQ0cvMjAwNi8wNS8zMSNBcjAzMTAx&Mode=HTML&Locale=english-skin-custom

• http://epaper.timesofindia.com/Repository/ml.asp?Ref=RVRCRy8yMDA0LzEyLzE4I0FyMDE3MDQ=&Mode=HTML&Locale=english-skin-custom

Thank You