financial plan- group 8

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Financial Plan

Prepared For: Mr. Roger G D’Mello

Prepared By: Vaishali Gandhi , (49)

Iti Bansal (26)

Anshu Sharma (10)

Date Prepared: September 11, 2011

Group no :- 8



Table of Contents

1) Disclaimer

2) Plan Summary

3) Personal Information

4) Goals

5) Net Worth

6) Cash Flow

7) Life Insurance

8) Disability Insurance

9) Estate Planning Checklist

10) Education

11) Recommendations



Disclaimer

Figures stated in the attached report are derived based on assumptions and

information provided by you, the client. These assumptions and information will

change over time. Some of the information presented is based on current tax and

legislation which are subject to change. Hence, it is imperative that you review yo ur fi na ncia l pl an re gula rly to en su re it i s up -to -dat e an d addresses yo ur

current needs. It is also important to look at a few different scenarios to get an

idea of the impact of various assumptions on your planning objectives.

Information provided in the attached report is general in nature and should NOT

be construed as providing legal, accounting and/or tax advice. Should you have

any specific questions and/or issues in these areas, please consult your legal, tax

and/or accounting advisor.



Plan Summary

Education Planning

Amount to be Funded

Mark Rs. 29.7

Stephanie Rs. 36.7

Marriage Planning

Amount to be Funded

Mark Rs. 51.4

Stephanie Rs. 63.7

Net Worth Rs.(in Lacs)

Total Assets 76.95

Total Liabilities 15.9

Your Net Worth 61.05

Cash Flow Rs.

Total Income 123253

Total Expenses 60862

Your Net Cash Flow 62391



Personal Information

Personal

First Name Roger Angela

Last Name G D’Mello G D’Mello

Age 29 years 31 years

Marital Status Married Married

Employer Multi National Company Fashion Designer

Dependents

First Name Relation Last Name Birth Date Age

Mark Son G D’Mello 12-02-2006 04

Stephanie Daughter G D’Mello 23-09-2009 0.7

Mrs. & Mr. G D’Mello Parents G D’Mello --------- ---------



FINANCIAL GOALS

LONG TERM

Goals Name Target Date Amount Education Mark 2024 14 lac

Education Stephanie 2028 14 lac

Marriage Mark 2033 15 lac

Marriage Stephanie 2037 15 lac

Retirement Corpus Self 2039 48.24 lac

Fund for vacation exp. Family 10 lac

SHORT TERM GOALS

Goals Target Date Amount

Bigger house 2011 50 lacs



Current Financial Situation

Assets Amount (inLacs)

Liabilities Amount (inLacs)

House 35 Home Loan 12.97

Car 3.5 Car Loan 2.93

PPF 2.9

Insurance Money Back Policy 3

Child Plan 12

Gold Ornaments 4.5

Equity MF Scheme 4.85

Balanced MF Scheme 2.25

Portfolio of Equity shares 3.95

Equity linked saving scheme 1.75

Bank FD 2.5

Cash/Bank Balance 0.75

Total Assets

76.95Total Liabilities

15.9

Net Worth 61.05



Current Monthly Cash Flow

Income Amount(Rs) Expenses Amount(Rs)

Gross Salary of Mr. G 85250 Sends to his Parents 10000

Net Profit of Mrs. G 33000 His Household Exp. 30000

Less Income Tax (9120)

Interest On Fixed Deposit 2083 Health Insurance Premium 1356

Interest on Equity MF schemes 4440 Premium for Ins. Money Back policy 1233

MF schemes 1690 Child Plan-LIC premium 3448

Gold & Gold ETF 2810 Home Loan Installment 10625

Int. On Portfolio of Equity

Shares

2300 Car loan Installment 4219

Int. from Liquid MF Scheme or

Equity Linked Saving Scheme

800

Total Income 123253 Total Expenses 60862

SURPLUS 62391

Assumption:-

1) Net profit of Mrs. G has been assumed to be Rs. 400000 in the financial year 2009-10 as well.

2) Tax Rate assumed (Income tax slabs 2011-2012 for general tax payers)



Your current portfolio allocation

Long Term Financial Goals:

Provide for Children’s education - Mark and Stephanie Provide for Children’s marriage - Mark and Stephanie

Education goal – Mark

We understand that you expect to incur an expense of Rs.14 lakh (in today's value ) 14years down

the line (in the year 2024) on Mark’s educati on. Further we understand that you have not made

any specified allocation for this goal.

Assuming an inflation rate of 5.5% for education cost, the future value of this goal will be Rs. 29.7

lakh after 14 years

At the end of the years 2013, the value of your portfolio can be expected to raise to approximately

Rs. 74.42 lakh. So from the portfolio you can use Rs. 29.7 lakh for Marks's education.

28%

13%

23%

10%

26%

Amount (Rs. In Lakh)

Equity Mutual

Fund scheme

Balanced Mutual

Fund scheme

Portfolio of

Equity Shares

Equity LinkedSaving Scheme

Gold ornaments

Funds

Amount (Rs.

In Lakh)

Equity Mutual Fund scheme 4.85

Balanced Mutual Fund

scheme 2.25

Portfolio of Equity Shares 3.95

Equity Linked Saving Scheme 1.75

Gold ornaments 4.5

TOTAL AMOUNT 17.3



Education goal –

Stephanie

We understand that you expect to incur an expense of Rs. 14 lakh (in today's value ) 18 years

down the line (in the year 2028) on Stephanie's education. Further we understand that you have

not made any specified allocation for this goal.

Assuming an inflation rate of 5.5% for education cost, the future value of this goal will be Rs.

36.7 lakh after 18 years.

At the end of the years 2027, the value of your portfolio can be expected to rise to approximately

Rs. 55.4 lakh. So from the portfolio you can use Rs. 36.7 lakh for Stephanie's education.

Marriage goal – Mark

We understand that you expect to incur an expense of Rs. 15 lakh (in today's value ) 23 years

down the line (in the year 2033) on Mark's marriage. Further we understand that you have not

made any specified allocation for this goal.

Assuming an inflation rate of 5.5%, the future value of this goal will be Rs. 51.4 lakh after 23years.

At the end of the year 2032, the value of your portfolio can be expected to raise to approximately

Rs. 24.4 lakh. So you need additional 27 lakh for that for Mark's marriage.

You can start saving Rs. 10227 per month for this goal.

Marriage goal –

Stephanie

We understand that you expect to incur an expense of Rs. 15 lakh (in today's value) 27 years

down the line (in the year 2037) on Stephanie's marriage. Further we understand that you have

not made any specified allocation for this goal.



Assuming an inflation rate of 5.5%, the future value of this goal will be Rs. 63.7 lakh after 27

years.

And you do not have adequate funds for that, so you should start investing Rs. 19660 per month

from your cash surplus.

Immediate Financial Goals

Loan for changing home

Goals Financial Need

Amount (in Rs.)

Target Date

Bigger house 5000000 2011

New Home Loan:

Recommendation:

We understand that next year in 2011 you want to take a loan for new bigger home offs. 15 lakh.

Currently you can get such a loan at the rate of 11.5% p.a from ICICI home loan. For the period of20

years the estimated EMI will be Rs. 15997. Please note that this rate of interest on the loan is for

illustrative purpose only. Actual rates will depend upon then prevailing market.

Estate Planning

Observation:

You do not have any will.

You have 4 dependents.



Analysis

Your current Net Worth is Rs. 61.05 lakh. As you build your portfolio, your net worth will increase further.

These assets ought to be allocated to the beneficiaries in order to plan your estate and avoid the

problems of dying intestate.

Recommendation:

We strongly recommend that you start thinking about your will and actually execute within the next

few years. At your age, now that the size of your family is stable and because you have a very substantial

amount of assets, including a portfolio which his growing quite fast, it is critical that you identify who

your beneficiaries will be and in what proportion do you want them to benefit. This will help your

survivors avoid numerous problems later on.

Life Insurance

Observation:

You are not adequately covered for life insurance.

Analysis:

Currently, your total life insurance cover is Rs. 15 lakh and you pay an annual premium of Rs. 56,172

Sum Assured (in Rs.) Annual Premium (in Rs.)

Money Back Policy 3,00,000 14.798

Child Plan 12,00,000 41,374

15,00,000 56,172

Recommendation:

Mr. G, our analysis shows that you are not adequately covered for life insurance and require buying

further insurance.

You need to have additional insurance of Rs. 1,56,000. We suggest you to go for Aviva i-Life.

However, if the following conditions occur, we encourage you to review your insurance coverage

immediately

Change in family size

Increase in salary



Increase in assets and liabilities

Any other life changing events (change in job, any new financial goals, etc)

Description Amount

Expenses that need protectionExpenses that need

protection in case of

any unfortunate event

Expected Expenses

(Rs.) p.m.

Age till which support is

required

(years)

Total Protection

needed

(Rs.)

Mark- son 3000 25 7,56,000

Stephanie 3000 25 9,00,000

Total 16,56,000

Less: Existing Insurance Cover 15,00,000

Insurance Needed 1,56,000

Assumptions:

.

Both Mark and Stephanie are assumed to start working at the age of 25 years.

Health Insurance

Observation:

You have a family floater policy for health insurance of a total cover of Rs. 15 lakh

Recommendation:

This scheme covers you, your spouse, and your 2 children. This is sufficient to cover your family of

4 members.



Home Insurance

Observation:

You do not have a Home (buildings/contents) Insurance for your house.

Recommendation:

You should buy a Home Insurance policy in the near future for your house where you

Are residing. The sum assured of this policy will depend upon the value of building and

different contents in the house.

Motor Insurance

Observation:

You have not shared the details of motor insurance. However we assumed that you

have compulsory motor insurance which covers third party liability and / or death and

Property damage...

Recommendation:

We recommend you to go for comprehensive policy for vehicle insurance to cover

against the risk of fire and / or theft and third party/ theft risks.



Summary of Recommendations:

Goals/Needs Recommendation

Life Insurance You need to have additional insurance of Rs.

1,56,000

Health Insurance You are adequately covered for health insurance

Home insurance You should buy a Home Insurance policy; the

value for the same will depend upon the value

of building and different contents in the

house.

Motor Insurance We recommend you to go for comprehensive

policy for vehicle insurance

Home Loan We recommend you to take a loan for new homethat you intend to buy the next year

Estate Planning You should execute a will within the next few

years

As time pass, your needs, situation and context changes. Therefore, review your plan regularly.

We would advise another meeting after 1 year.

financial plan- group 8

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