This document provides an overview of Mr. XYZ's financial plan. It analyzes his current assets of Rs. 1.19 crores in fixed assets and Rs. 40 lacs in financial assets against total liabilities of Rs. 27.5 lacs, giving a current net worth of Rs. 1.32 crores. It then breaks down his annual income sources, expenses, savings and cash flows. Based on a risk assessment, it recommends an aggressive asset allocation of 70% in equities, 20% in debt and 10% in cash. Finally, it analyzes his financial goals for education, marriage, retirement and vacations, and provides suggestions to meet these goals through insurance plans and investment strategies.
Financial Leverage Definition, Advantages, and Disadvantages
A simple and revolutionary financial plan report that does something simple.
1. Mr. XYZ and Family
FINANCIAL
PLAN
A B H I N A Y G U P T A . I N
2. OVERVIEW
A financial plan is a comprehensive
evaluation of an your current pay and
future financial state by using current
known variables to predict future income,
asset values and withdrawal plans.
A B H I N A Y G U P T A . I N
3. A B H I N A Y G U P T A . I N
Rs.1.19 Crores Rs.40 Lacs Rs.27.50 Lacs
FIXED ASSETS FINANCIAL ASSETS TOTAL LIABILITIES
4. is your total net worth* .
Rs.1.32CRORES
Net worth (sometimes called net or
wealth) is the total assets minus total
outside liabilities of an individual. Net
worth is used when talking about the
value of an individual's net economic
position. Put another way, net worth is
any asset owned minus any debt owed.
A B H I N A Y G U P T A . I N
5. A B H I N A Y G U P T A . I N
Spouse Income
7%
Rental Income
26%
Salary Income
66%
ANNUAL
INCOME
BREAKUP
6. A B H I N A Y G U P T A . I N
Entertainment
6%
Medical
1%
Education
7%
Traveling
4%
EMI
34%
Others
10%
Household
37%
ANNUAL
EXPENSES
BREAKUP
7. A B H I N A Y G U P T A . I N
Investibles
22%
Savings
78%
BALANCE
BREAKUP
9. YOUR RISK PROFILE
Risk profiling is a process of finding the optimal level of
investment risk for your client considering the risk
required, risk capacity and risk tolerance, where, risk
capacity is the level of financial risk you can afford to
take, and. risk tolerance is the level of risk you are
comfortable with.
A B H I N A Y G U P T A . I N
10. A B H I N A Y G U P T A . I N
AGGRESSIVE
INVESTOR
Based on your answers given for risk profiling questionnaires, you are
11. AS AN AGGRESSIVE INVESTOR
Your primary
aim is growth
of capital
You are
comfortable
with initial
fluctuations in
the value of
your
investments to
generate high
returns.
You
understand
that taking
larger risk
helps earn
higher returns.
You prefer
investing in
avenues such
as equity that
provide high
returns but at
the same time
pose high risk.
12. ASSET ALLOCATION
One of the most important stages in analyzing your
investments is to understand your asset allocation.
Asset allocation represents the mix of stocks, bonds,
and cash that you own.It is important to have a right
asset mix in order to enhance your return potential and
provide you the right diversification to benefit from
various investment opportunities.
A B H I N A Y G U P T A . I N
13. A B H I N A Y G U P T A . I N
Debt
9%
Cash
19%
Equity
72%
CURRENT
ASSET ALLOCATION
14. A B H I N A Y G U P T A . I N
Debt
20%
Cash
10%
Equity
70%
RECOMMENDED
ASSET ALLOCATION
15. FINANCIAL GOALS
A financial goal or financial target is an objective
which is expressed in or based upon money. Examples
include debt reduction, sufficient wealth to retire or
minimization of tax.
A B H I N A Y G U P T A . I N
16. A B H I N A Y G U P T A . I N
X-Graduation | 12 Years |
Rs.3,000,000
Y-Graduation | 16 Years |
Rs.3,000,000
Retirement | 19 Years |
Rs.600,000 p.a
X&Y Education | 15 Years |
Rs.600,000 p.a
X-Marriage | 20 Years |
Rs. 1,000,000
X-Marriage | 27 Years |
Rs. 1,000,000
Vacation 1 | 2 Years | Rs. 500,,000
Vacation 2 | 7 Years | Rs. 500,,000
17. GOALS ANALYSIS
AND SUGGESTIONS
The purpose of this stage is to analyze your finances,
make specific recommendations and develop strategies
to meet your short- and long-term financial goals.
A B H I N A Y G U P T A . I N
18. VACATIONS
Future Cost- Rs.583,200 Future Cost- Rs.856,912
Existing linked assets
Invest Rs.13,714 p.a from 2017 to 2018 Invest Rs.11,132 p.m from 2019 to 2024
Vacation 1 Vacation 2
Reduce your value from Rs. 5 lakh to
Rs.3 lakh.
New Investments
19. EDUCATION
X-Graduation Y-Graduation XY-Graduation
Future Cost- Rs.7,554,510
Max Newyork Life
Insurance
PPF
LIC Policy
Mutual Fund
Future Cost- Rs.10,277,828
Icici Pru Life Insurance
Mutual Fund
Future Cost- Rs.3,172,169
Mutual Fund
Existing linked assets Existing linked assets Existing linked assets
20. MARRIAGE
X-Marriage Y-Marriage
Future Cost- Rs.4,660,957 Future Cost- Rs.7,988,061
Mutual Fund
Existing linked assets
Invest Rs.4,949 p.m from 2019 Invest Rs.8,243 p.m from 2019
New Investments
21. A B H I N A Y G U P T A . I N
RETIREMENT PLANNING
Annual Expenses:
Rs.600,00 p.a.
Retirement Age:
55 Years
Life Expectancy:
80 Years
Contingency Fund:
Rs.5,436,540 p.a.
Rs. 88,894,363
Total Retirement Corpus Required
22. Rs. 88,894,363
Total Retirement Corpus Required
Rs. 55,285,747
Corpus from existing investments
Rs.33,608,615
Shortfall in required Corpus
Invest Rs. 9,100 p.m increasing @ 20% p.a
A B H I N A Y G U P T A . I N
24. A B H I N A Y G U P T A . I N
INSURANCE PLANNING
Regular Expenses till
life time: Rs.970,000
Existing Cover:
Rs.20,000,000
Liabilities :
Rs. 1,300,000
Future Obligations:
Rs.9,000,000
Rs. 22,970,000
Total Life Insurance Cover Required
25. Rs. 22,970,000
Total Life Insurance Cover Required
Rs. 20,000,000
Existing Insurance Cover
Rs.2,970,00
Shortfall in life Insurance Cover
Buy a pure term life insurance policy for the
deficit cover in life insurance.
A B H I N A Y G U P T A . I N
27. 2017Repayment of Personal Loan
Rs.1,300,000
INCOME&LIABILITIES
2020
Maturity of Max Newyork Life
Insurance
Rs.1,349,220
2022
2024
2026
2027
2028
2032
2033
2039
Maturity of LIC
Rs.408,995
X Graduation
Rs.7,554,510
Maturity of ICICI Pru Policy
Rs.1,747,486
X/Y Education Fund
Rs.3,172,169
Y Graduation
Rs.10,277,828
X Marriage
Rs.4,660,957
Y Marriage
Rs.7,988,061
PF Accumulation & Expected
gratuity of Spouse
Rs.14,708,391
28. A B H I N A Y G U P T A . I N
ACTION PLAN
Insure your life for an additional amount of Rs. 85 lakh
Insure your life for an additional amount of Rs. 85 lakh.
Take a family floater medical insurance cover for your family for Rs. 4 lakh and
increase the same regularly.
Insure your existing house properties.
Maintain a contingency fund of at least 3 months’ expenses in your Savings balance.
Reduce the value of your Vacation-1 goal (2 years) to Rs. 3 lakh (in today’s value).
Postpone your retirement by 3 years to your age of 58, if you want to spend the
desired post-retirement expenses & accommodate your Vacation-2 goal (7 years).
Create a medical contingency fund of Rs. 10 lakh (in today’s value) by the time you
retire.
Start investing for accumulating the shortfall in your goals and retirement corpus &
start paying insurance premiums as per the table provided in the next page.