PROJECT ON FINANCIAL PLAN OF AN INDIVIDUAL

Submitted by:
Jyoti Sareen JIML-10-0 Mainak Kumar Dhar JIML-10-073 Mani Kant Tripathi- JIML-10-074 Fahad Khan

Submittedto:
Karunakar Sir

Anil Agarwals Financial Plan 664 Malviya Nagar, Chowk, Allahabad (09125874230) Plan Summary
PERSONAL DETAILS Anil Agarwal 30 Years Head UP East, IDEA Cellular Neha Agarwal 28 Years Assistant Manager (PNB) Ishika Agarwal 1 Year Residence Rented apartment STRENGTHS AND WEAKNESSES Significant monthly surplus available for saving Adequate risk coverage is in place with insurance and assets Owns own home Goals may require modification or increased income Weak asset allocation

RECOMMENDED ASSET ALLOCATION

NET WORTH Total Assets- Total Liabilities 9,349,185

CASH FLOW Monthly Income Monthly Expenditures Monthly surplus / (shortfall) 153,000 50,000 103,000

I - Overview
Personal Details Anil Agarwal 30 years Head UP East, IDEA Cellular Neha Agarwal 28 Years Assistant Manager (PNB) Children Ishika Agarwal 1 year Financial Details Monthly earnings: Anil: Rs. 112000 p.m. (after taxes and EPF deductions of Rs.20000 p.m.) Neha: Rs. 25000 p.m. (after taxes and EPF deductions of Rs.6000 p.m.) Other: Rs.16000 p.m (from apartment they own) Total: Rs 153000 Average monthly expense: Rs 50000 Surplus per month: Rs 103000 Insurance premiums : Rs 20000 pm (ULIP) Annual premiums: Rs 60000 EMI on the Bangalore apartment: Rs 14000 pm ASSETS Particulars Bank Bal. Shares Mutual Fund Gold House

Amount 231000 622228 1251957 30000 5500000 7,605,185

Share in % 3 8 16.4 0.3 72.3 100

Type Financial Asset Financial Asset Financial Asset Physical Asset Physical Asset

Category Liquid Liquid Liquid Liquid Fixed

LIABILITY Details Home Loan

Amount borrowed in Rs 2,000,000

Outstanding EMI Principle 1,456,000 14000

Rate 10%

INSURANCE Policy Type HDFC SLIC young star MNYL Term Kotak Term Plan ULIP TERM TERM

Sum Assured 2,500,000 5,000,000 2,000,000

Maturity Date 15 JAN 2029 23 JUNE 2034 09 SEPT 2035

Maturity Value 3,500,000 -

GOALS Goal

Ishikas education Ishikas Annually marriage Retirement Monthly

Frequency Start End Yr Yr Annually 2029 2031 2036 2038 End

Inflatio n Rate 6%

Amount 500000

Future value 3,000,000

2036 6% 2058 5%

2,000,000 4,000,000 60000 34,825,000

II Analysis
NET WORTH Total Assets- Total Liabilities= 9,349,185 FINANCIAL ASSET ALLOCATION Type Amount Liquid 380028 Debt Equity 886520 Gold 38637 1305185

Share on % 29.1 0.0 67.9 3.0

EXPENSE PROTECTION Every individual who contributes to his/her familys expenses needs to ensure that if something fatal were to happen to him/her tomorrow, there are enough assets to take care of the familys living expenses so that the loved ones do not have to go through a financial loss as well. The expense protection corpus is the sum total of assets and insurance minus liabilities if any which is available to cover the familys living needs. Anils assets along with the insurance policies is enough to cover the expenses of his family. Likewise he is well covered even if Nehas income were not there.

EDUCATION Year of goal 2029

No. of yr to achieve 17

Goal amount (PV) 1,500,000

Future value* 40,39,000

*Assumed rate of inflation is 6% p.a. Asset Base to be used: Insurance proceeds maturing in 2025 + Mutual Fund Portfolio + Share Portfolio+ Bank Balance

Current value 1 lac (ULIP) 5.5 lacs (MF) 5.2 lacs (shares)

Growth (pa) 12% 12% 14%

No. of years 17 17 17

Projected value 30 lacs 8.6 lacs 8.8 lacs

No Short fall in case of the requirement

MARRIAGE Client Year No. of name of years goal to achieve Ishika 2036 24 Agarwal

Goal amount (PV)

Desired value

Savings required

Return assumed

2,000,000 4,000,00 0

24400/month* 10% pa

* Assuming that you start saving from today & there is no asset base. Since, there is no asset available to utilize for this goal. Hence, you have to save at least Rs. 24,400/- per month in order to achieve this goal which has to be invested at 10% annual rate of return. Total Savings : 60,000 Towards Goal : 24,400 Balance Savings: 35,600 No Short fall in case of the requirement Assumptions Life Expectancy: o Anil: 75 years o Neha: 75 years Inflation: 5% post & Pre retirement Inflated Value of retirement Expenses: Rs.60K in 2036=~146k Year of goal 2038 No. of year to achieve 26 Goal amount (PV) 60000/month Future value 23825000 Saving required 56000p.m* Return assumed 10%

*Assuming that you start saving today & if there is no asset base towards this goal. - The current savings and assets will be able to provide the corpus requirement. No Short fall in case of the requirement

III Conclusion
All goals are being met with following assumptions 1. Rate of return _ Savings 10% _ Mutual Funds 12% _ Stocks 14% _ Insurance Ulip 13% 2. Any increase in income is offset by equal increase in expenses hence no change in income or expenses. While in reality the income would grow more than the expenses, but it would be prudent to leave this gap as a buffer for unforeseen and unplanned circumstances. 3. Inflation is assumed to be 6% p.a

INVESTMENT POLICY STATEMENT TO BE FOLLOWED I. Considering a 12% return YOY for next 5-7 years, post that we will reduce the risk on a systematic basis and yet meet the goals. Guidelines Objective is to generate 12 % return YOY by investing in the below given manner Share in % Debt Equity 30% 70% Expected return Wtd avg return 7% 14% 2.1% 9.8% 11.9%

Equity allocation guideline Equity Share in % Large cap Mid cap Thematic 65% 30% 5%

Expected return Wtd avg return 13% 15% 20% 7.8% 4.2% 0.8% 12.8%

Equity is a long term investment and should not be looked at for speculation. II. We will need to ensure that the goals of Ishikas marriage and Anil (& Anils spouses) retirement is covered so that even in case of death or disability Anil is assured that his goals will be met.

III. A part of the retirement corpus should be met with pension plans to avoid the risk of living too long.