Goal Planning

Setting up short-term, mid-term and long-term financial goals helps you to live comfortably now and in future. It should be accompanied by periodic review and changes in plan accordingly. 

CA. Ashish Modani 
Certified Financial Planner 





The Effective FINANCIAL PLAN 

Mr Tanvir Ayub Qureshi is currently working with Idea Cellular Ltd, Jaipur, and his wife is running her own education consultancy firm in Ahmedabad. They are currently having household expenses of Rs 1,50,000 per month. They have a daughter Aayat, who is 12-year old. Apart from retirement, they also wish to plan for her higher education and wedding, which they believe could be around Rs 50 lakh and Rs 25 lakh, respectively, in today’s term.

Retirement Planning – 

The biggest challenge for peoplein the 21st century is RETIREMENT. With people living longer till 85-90 years of age, the conversations and concerns around retirement have grown because of lonely retirement, higher medical cost and lower interest rates. The good part is that we are living longer; the sad part is, we will have to pay for it. Considering his expenses today, we have given a projection of his expenses till the age of 85 (assumed life expectancy). All he needs is an automated savings in diversified equity funds to reach the abovementioned corpus, provided he increases it by 10% p.a. 

Kid’s Future Planning


Aayat Higher Education is just 6 years ahead, so Mr Qureshi needs to have a balanced approach and should invest money in bonds, fixed deposits and equity instruments. Increase this investment by 10% p.a. Aayat’s marriage is a decade away, so Mr Qureshi can start monthly investments in diversified equity fund and increase this every year by 10% p.a. 


Hygiene Factors 

Term Insurance – 

We advise Mr Qureshi to take term insurance of Rs 2 crore and for Mrs Qureshi of Rs 1 crore 

Medical Insurance – 

We advise him to take a floater policy of Rs 10 lakh which will take care of medical expenses. 

Contingency Fund – 

Emergency is something which can knock his door at any given point of time. So it advisable to have Rs 10 lakh in liquid and debt funds, which can be used at the time of emergency. 

Doing the same thing over and over again is very boring, but the reality is it gets the job done. Automation (SIP) helps you to stick to the decisions that you take and lets you to be disciplined which is critical for financial success. The best part about automation is that it just happens!! 

In the end, I would like to say we believe that financial plan should not be written just once and forgotten. As your circumstances change or you put in place new arrangements, the financial plan should be reviewed and updated accordingly

 

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