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Personal Financial Plan

Prepared for:

Mr. Rohit Mehta Prepared by:

Ronak Morjaria

www.valuecurve.co.in

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

Email: [email protected] Page 1 of 20 Ph.: +91 97692 54535, +91 22 4971 0559

www.valuecurve.co.in

Executive Summary The main body of this report has your personal details and your life objectives and strategies to meet your objectives. Name

Mr. Rohit Mrs. Sneha Mr. Varun

Relationship

Self Spouse Son

Age

Health Status

30 28 1

Healthy Healthy Healthy

Goals and Objectives: 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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Income-Expense Statement As per the information provided by you, the following are the cash inflow and outflow for the current year: Current Total Total Monthly Annual 66,667 8,00,000

Particulars Net Take Home Salary Total Inflows

Recommended Total Total Monthly Annual 66,667 8,00,000

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 Home Loan

11,200 11,200

1,34,400 1,34,400

11,200 11,200

1,34,400 1,34,400

8,333 8,333 0 0

1,00,000 1,00,000 0 0

4,192 858 2,333 1,000

50,300 10,300 28,000 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

6,200

74,400

22,000

2,64,000

12,433

1,49,200

775

9,300

Insurance Premium Life Insurance Health Insurance Other Insurance

Actual Investments Surplus

Current Cashflow

Household E xpenses

Recommended Cashflow

11%

Household Expenses

Loan EMI's

33%

15% 21%

53%

Insurance Premium

Insurance Premium

6% Actual Investments

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Loan EMI's

44%

17%

Actual Investments

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Net Worth Statement Assets Particulars Personal Assets Residential Property Vehicle Investment Assets

Mr. Rohit 53,00,000 50,00,000 3,00,000 8,65,000

Cash & Equivalents Cash in hand Savings Bank

40,000 5,000 35,000

Debt & Equivalents Fixed Deposits PPF EPF Debt Mutual Funds

4,75,000 1,25,000 2,50,000 1,00,000 0

Equity & Equivalents Direc t Equity Equity/Balanced Mutual Funds Insurance - Surrender Value

3,50,000 1,00,000 1,50,000 1,00,000

Total Assets

61,65,000

Type

Interest Rate

EMI

Outstanding Balance

9.50%

11,200

7,50,000

11,200

7,50,000

Liabilities

Home Loan Total

Net Worth Total Assets(Investmetn Assets) Total Liabiltiies Your Net Worth

8,65,000 7,50,000 1,15,000

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Asset Allocation

Investment Avenue

Current Allocation

Recommended Allocation

5% 62% 33%

5% 15% 80%

Cash & Equivalents Debt & Equivalents Equity & Equivalents

Recommended Asset Allocation

Current Asset Allocation 5%

33%

Cash & Equivalents

5% 15%

Debt & Equivalents

62%

Cash & Equivalents

Debt & Equivalents

80% Equity & 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 Current Monthly Expenses Contingency Period (Months) Contingency Funding (Required)

38,500 4 1,54,000

Contingency Funding

1,65,000

1,54,000

11,000 Contingency Funding Required

Availabe Resources

Investment Assets Utilized Cash in hand Savings Bank Fixed Deposit Total

Excess

Current Value 5,000 35,000 1,25,000 1,65,000



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

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Life Insurance Adequate Life insurance is a must to make sure your family’s life style is not affected if you die early.

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: Insurance Need Alalysis 1,07,23,224

99,58,224

7,65,000 Total Life Insurance Required

Total Assets

Insurance Cover Required

Analysis of current Policies and Recommendations: 

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.

Email: [email protected] Page 7 of 20 Ph.: +91 97692 54535, +91 22 4971 0559

www.valuecurve.co.in

Health Insurance This section covers analysis of your current General Insurance policies, Need An 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 GuardBajaj Allianz Extra Care Plus Sum Assured Rs.3 Lakhs Rs.3 Lakhs Rs.20 Lakhs Rs.8,000/Rs.11,300/Rs.9,500/Premium Floater Floater Floater Type Self + Spouse + Child Self + Spouse + Child Self + Spouse + Child Members Port Buy Buy Recommendation



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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Investment Planning Analysis of Current Investment: Direct Equity Investment: 

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.

Mutual Fund Investment: Sr. Name of Scheme Current No. Value 1. Birla Mid Cap Fund (D) 70,000 2. DSP BR Small & Mid Cap Fund (G) 50,000 3. ICICI Pru Infra Fund 30,000

Recommendation Redeem & Switch to ICICI Pru BlueChip Fund

Allocated Goal Varun’s Education



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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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. Retirement Alalysis 7,23,50,000

3,30,000

33,20,000

Current Annual Expenses

Annual Expenses at Retirement Age

Investment Assets Utilized PPF EPF

Current Value 2,50,000 1,00,000

Corpus Required for Retirement

Term 30 30

Total

Assumed Rate of Return 8.00% 8.00%

Future Value 25,15,000 1,19,71,000 1,44,86,000



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.

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Education Planning 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 34,96,000

7,50,000

Current Value

Particulars Current Age Goal Age Years For Goal Expected Rate of Return Inflation Current Value Future Value Assets Utilized Required Monthly Funding

Investment Assets Utilized Direct Equity Equity Mutual Funds

Future Value

Varun 1 21 20 12.00% 8% 7,50,000 34,96,000 17,16,000 1,800

Current Value 1,00,000 1,50,000

Term 17 17

Assumed Rate of Return 12.00% 12.00%

Total

Future Value 6,86,000 10,30,000 17,16,000



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

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Marriage Planning 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 68,48,000

10,00,000 Current Value

Particulars Current Age Marriage Age Years For Goal Expected Rate of Return Inflation Current Value Future Value Required Monthly Funding

Future Value

Varun 1 26 25 12.00% 8% 10,00,000 68,48,000 3,600



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.

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Estate Planning



We strongly recommend making a Will.

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Asset Re-allocation

Existing Assets

Investment Assets Cash on hand Savings Bank Fixed Deposits PPF EPF Insurance - Surrender Value* Direct Equity Equity Mutual Funds Total Assets

Retirement

5,000 35,000

1,25,000 2,50,000 1,00,000

1,00,000 1,00,000 1,50,000 8,65,000

1,00,000 1,50,000 3,50,000

1,65,000

*Asset not utilized under any goal

Plan Assumptions:

Plan Assumptions Retirement Age Life Expectancy Inflation Rate Portfolio Returns – Liquid Funds Portfolio Returns – Debt / PPF / EPF Portfolio Returns – Equity Funds

Children's Education

5,000 35,000

1,25,000 2,50,000 1,00,000

Contingency Fund

Self 60 80 08.00% 05.00% 08.00% 12.00%

All returns are assumed as net of Indian Income tax. None of the returns are guaranteed.

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Spouse N.A. 80

2,50,000

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Summary of Recommendations 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. Goal No.

Investment Amt.

Remark/Suggestion

1.

Retirement

SIP Rs.7,500/SIP Rs.7,500/Rs.1,600 p.m.

Aditya Birla SL Frontline Equity Fund Reliance SmallCap Fund PPF

2. 3.

Varun’s Education Varun’s Marriage

SIP Rs.1,800/SIP Rs.3,000/-

Mirae Asset LargeCap Fund Kotak Standard MultiCap Fund

Rs.600 p.m.

Varun’s PPF

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Some good practices of financial planning 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 ...