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Presented by
Ashoka RajanMBA, CFPCM
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Inflation the villain1985 2012 2030
Petrol 8 70 298
Toothpaste 5 70 407
Sugar 4 40 185
Movie 15 150 697
Milk 4 32 128
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Inflation the villainHouse hold expenses (today)
25000.00
After 30 years
House hold expenses250000.00
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Higher education Engineering (today) 500000.00
After 10 years
Expenses on engineering study 1300000.00
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Higher education MBA (today) 300000.00
After 10 years
Expenses on MBA study 780000.00
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Child Marriage Today 1000000.00
After 20 years
Expenses on Marriage 4500000.00
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Investments tools
Conventional products
Low risk products
High risk products
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Conventional productsLow risk and low returns
Bank FD / RD 9.00%
Post office 8.00%-8.50% NSC
PPF
RD
Investment through LIC
Overall ve returns will not beat inflation
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Conventional productsHigh risk & High returns (uncertain)
Gold ----liquid but work when uncertainty world wide
Properties---illiquid and geographical specific
There are crises in properties
Japan
USA subprime crises
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Corporate bonds
Depends upon rating
Higher the rating lower the returns
High returns ----fraud and scams
CRB Capital
Co-operative Banks and Societies
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Ponzy schemes
CRB capital fiasco
Gold Sukh
Speak Asea
Stock guru
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Stock markets and Mutual fund
High risk and high returns
Scams
Harshad Mehta scam
Ketan parikh scam
IPO scandle
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Stock markets and Mutual fundLong term stable returns
1979----100
2012---18500Returns---17% yoy
Very high liquidity
Individual stocks---too risky and need constant
monitoring
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Mutual fundsRetail investor ---pool their money
Professional fund managers
Trustees are big names
SBI HDFC
ICICI
PNB
TATA BIRLA
RELIANCE
Regulated by SEBI
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How financial planning help us
Case studyYogesh mathur
Age- 30 years Retirement age 60 years
Life expentancy80 years
Current monthly Income 4.36 lac per annum
Current house hold expenses 2.40 lac per annum
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Case study contd
Family
WifeSangita ( age -28 years)
House wife Son Ankur
Age 1 year
Daughter Rashi
Age 3 year
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Case study contd
Financial goals
Daughter Rashi higher studies Current cost4.00 lac
Daughter marriage
Current cost10.00 lac
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Case study contd
Financial goals
Son Ankur higher studies Current cost4.00 lac
Son Ankur marriage
Current cost8.00 lac
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Case study contd
Financial goals
Yogesh retirement corpusAssumptions
Inflation 10% (higher education)
Inflation 08% (marriage and house expenses)
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Case study contd
Future price of
Daughter Rashi higher studies 16.70 lac
Daughter Rashi marriage 46.60 lac Son Ankur higher studies 20.20 lac
Son Ankur marriage 50.72 lac
Yogesh retirement corpus 195.00 lac
Human life value of Yogesh 45.00 lac
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Case study contd
Now we have future projections
We can plan them today
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Case study contd
Yogesh retirement plan
term 30 years
Future value 2.00 crore
Rate 8% 12% 15%
Per MonthInvestment
13,330 5,665 2,853
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Case study contd
Yogesh retirement plan
Rate 15% per annum
Future value 2.00 crore
Timeperiod
( years)
20 25 30
Per MonthInvestment
13,193 6,089 2,853
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Who need financial planning?
Whatever may be level of your income or assets, youneed financial planning.
It is a myth that only rich people need financialplanning
Financial planning is a scientific methods
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Investment strategiesRisk profiling
Age Risk taking capacity
Income generation consistency
Dependency on invested money
Equity (100-age)
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Which type of Life Insurance plan?
Term Insurance It is purest form of insurance
Do not buy Endowment, Money back, Capitalprotection plan, Children plan or Unit Linked PlansULIP
Best option is Term Insurance + PPF / ELSS scheme ofmutual fund
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Past performanceOpen ended schemes (through SIP)
S.No. Name of the Scheme10 years
Return (%)
15 yearsReturn (%)
1 DSP Black Rock Equity 21.70 21.20
2 HDFC Equity 21.82 25.74
3 Reliance Growth 22.98 26.79
4 SBI Magnum Equity 18.39 17.23
5 Tata Ethical Fund 17.90 16.94
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Past performanceTax saving (ELSS) under sec. 80C (through SIP)
S.No. Name of the Scheme10 years
Return (%)
15 yearsReturn (%)
1 Birla SL tax relief 96 13.77 21.00
2 HDFC Taxsaver 20.96 27.71
3 Principal Taxsaver 13.65 18.71
4 SBI Magnum Taxxgain 22.42 21.53
5 TATA Tax saving 15.49 16.57
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Past performance of any mutual fund scheme is noguarantee of future performance
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Asset allocation
Diversification
Never put all your eggs in one basket
Different assets give better returns for specificduration
94% of portfolio return will depend on Assetallocation
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ThanksAshoka Rajan
9460293293
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