Assignment

On
Financial Planning

Submitted to Submitted by
Prof. P. Chhabra Bhoopendra Tiwari
PGDBM 13 (A)
EMPI B School PGDBM
EMPI B School
New Delhi
Financial Plan prepared for Mr. K. L. Shukla

Personal Information:
Name: K. L. Shukla Address: Vil.- Pure Khushiyal, Post- Mishrauli
Age : 29 yrs Dist.- Sultanpur (UP)
DOB : 21-Sep-1980 Office Address- 23/11, Sayajiganj, Vadodara,
Gujrat
Phone No. : 9662518590

Family Members:
Name Relation D.O.B. Age Dependent
Mrs. Amrawati Mother 12-May-1965 45 yrs Yes
Mrs. Sandhya Wife 2-Nov-1983 26 yrs Yes
Amit Son 8-Nov-2008 1 yrs Yes

Long Term Financial Goals

Goals Name Target Date (Year)
Education Amit 2026
Marriage Amit 2035
Second Home in Lucknow Self 2015

Immediate Financial Goals

 Take a life insurance plan in order to meet expenses of the dependents in case
of an unfortunate event.
Current Monthly Cash Flow: (Income less Expenses)
Income Amount (Rs.) Expenses Amount (Rs.)
Gross Salary
(30000) 28800 EMI 5300
Less Tax (1200)
Living Expenses 15000
Agriculture 5000 Other Expenses 3000
Income
PF Contribution 4000
Total Income 33800 Total Expenses 27300
Surplus 6500

Current Financial Situation:

Asset Amount (Rs.) Liability Amount (Rs.)
Home 10,00,000 Home Loan 10,00,000
Saving A/C 20,000
NSC 90,000
Fixed Deposit 90,000

Total Asset 12,00,000 Total Liability 10,00,000

Net Worth 2,00,000

Assumptions used in the analysis (based on data you have

shared):
 Annual inflation rate – 5%
 For education - 5%
 Retirement age - 60 yrs
 Life Expectancy for self and dependants – 80 yrs
 You are the only earning member in your family
Protection Planning:
Observation:
There may not be sufficient resources to protect your total outstanding liabilities in
case of an unfortunate accident to you; currently, you are inadequately covered for
insurance.
Analysis
Currently you don’t have any insurance

Recommendation:
 Mr. Shukla, I recommend you to buy a Term Life Insurance Policy.
The Term Life Insurance Policy should be of sum assured Rs. 27 lakh for a term of 12
years. The premium of this policy will be Rs. 1,150 per month (Aviva Life Insurance
Risk Care Term Policy). This will enable your survivors’ pay off liabilities in case of
your premature death.

Back up data for the above analysis:

Below table depicts the need of your dependants till their life expectancy and liability
to be protected in case of any unfortunate event happening today:

Total Liability that needed for Protection Amount (Rs.)

A – Home Loan 10,00,000

B – Education & Marriage of Amit 18,00,000

Total Expenses that needed for protection

Expenses that Expected Age till which Total Protection
needed in case of Expenses support required needed
any unfortunate (P.M.) (yrs) (Rs.)
happen
Smt. Sandhya 3,000 80 3,95,000
Amit 5,000 24 5,05,000
Expenses needed for protection (C) 9,00,000

Total Protection Needed (A+B+C) 37,00,000

Current Coverage (8,70,000)
Retirement Planning:
Observation:
You needed Rs. 82,000 after your retirement to meet your post retirement expenses.
Analysis:
As per the current analysis you need Rs. 1.23 crore (approximately) to meet your post
retirement expenses. Your current Provident Fund contribution and your total current
contribution of Rs. 8,000 per month (your contribution and your employer
contribution) to the P.F will add upto Rs. 1.18 crore (approximately) by your
retirement age. Our analysis forecasts that there is still a shortfall of Rs. 5 lakh to meet
your after retirement expenses. For that you can take an endowment policy and
premium would be Rs.153.

in crore
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m g h m
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Financial / Accumulation Goals:
 Pay for children's education.
 Provide for children's marriage expenses.
Analysis

Goals Financial need Target Date

Amit education 10,00,000 2026

Amit marriage 8,00,000 2035

House in Lucknow 15,00,000 2015

Recommendations: Following recommendations are based on assumption:

 For education of amit I would recommend you take a PPF for 15 years and
installment would be Rs.3,100 on the name of Amit.(rate of interest is 8%)
 For Amit marriage I wou ld suggest to invest in mutual fund for 25 years and
installment would be Rs. 500. (Rate of interest 12%)
 For house plan you don’t have sufficient amount of money so I would suggest
you to postpone for some time after repayment of your loan then you can use
that money for this purpose.

CONCLUSION:
The value of this plan lies in its implementation. Once your plan accurately reflects
what you're personally trying to accomplish, the quicker you take action, more likely
the desired results will be achieved. No financial plan is of any value unless it is
implemented promptly. Our services are available to assist you in this endeavor on an
annual basis.
DISCLAIMER
This financial plan is based on information detailed in your personal Client
Information and Investment Profile Questionnaire and personal discussions with you.
A copy of your Questionnaire is available on request. You must read the information
contained in the Questionnaire and in this financial plan carefully. If you believe that
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This financial plan is based on your current situation and goals, which will change
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change in income/salary levels, assets acquired, liabilities incurred, change in number
of dependants, health condition, or the passage of time of more than 12 months or the
effect of inflation or deflation.

We strongly recommend that a) you review this plan periodically to ensure that your
plan’s actual performance is consistent in meeting your goals, and
b) You update your plan annually to ensure that your plan is updated for your
changing situation and goals.