10. Financial Planning and Asset Allocation Asset Classes to Invest Mutual Funds Art Insurance Commodities Real Estate Equity Debt Gold Financial Planning
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22. FINANCIAL PLANNING FOR THE FUTURE ……... Financial Planning and Asset Allocation Birth & Education Earning Years Retirement 35 yrs 25 yrs Over 25 - 30 yrs Housing Child’s Education Child’s Marriage Phase I Dependant Phase Phase III Distribution Phase Phase II Accumulation phase Income Age Marriage Children 22 yrs 60 yrs Age
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24. FEW EXAMPLES OF ASSET ALLOCATIONS Financial Planning and Asset Allocation
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27. INVESTOR PROFILE Maura & Akash Chaudary Financial Goals Retired Regular Income Medical Costs Investment Strategy Conservative Portfolio Stocks 15% Bank Deposits 40% Bonds 45% Financial Planning and Asset Allocation
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47. Income Schemes P.P.F. N.S.C. K.V.P. BANK F.D. Floating rate Funds Return % 8% 8% 8% 6-8% 5-6% Tax-free Yes NO NO NO Yes Rebate on Investment Yes Yes NO Yes if >5 year No Liquidity 50% withdrawal after 5 years 6 year lock in 7.5 years lock in Lock in as per term of F.D. No lock in
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64. Model Portfolio Profile Equity Diversified Equity Midcap Sector Balanced Fund MIP, Bond Fund Floating rate Fund Age 20-30 Dependent 1-2 35-40% 35-40% 20% 10% Age 30-40 Children in school 30-35% 20-25% 30% 10% Age 40-50 Children in college 30-35% 10-15% 20-30% 10% 10-20% Age 50-60 Children marriage Higher Education 25-30% 5-10% 20% 20% 10% > 60 years Retirement planning 10-20% 30% 30-40% 20%
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72. Why retirement planning Financial Planning and Asset Allocation Retirement Plan - An essential need Increasing life expectancy Protect Post- Retirement Lifestyle Increasing Cost of Health Protection for Spouse /Dependents Falling Interest Rate Scenario Breakdown of traditional support systems
73. FINANCIAL PLANNING FOR THE FUTURE ……... Financial Planning and Asset Allocation Birth & Education Earning Years Retirement 35 yrs 25 yrs Over 25 - 30 yrs Housing Child’s Education Child’s Marriage Phase I Phase III Phase II Income Age Marriage Children 22 yrs 60 yrs Age
80. Mutual fund returns Fund name Start date 1 year return 5 year return annualized % Since inception return % Worst 3 months return Reliance growth Oct-95 76.9 72.6 37 -45 Reliance Vision Oct-95 56.6 60.7 31.6 -39.6 SBI Magnum Contra- July 99 66.3 72.1 38.3 -42.7 HDFC Equity Dec.94 53.6 57.8 26.9 -34.7 DSP ML Equity April 97 70.3 62.9 32 -46 HDFC Prudence Jan 94 43.2 46.7 24.8 -18
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82. THE EIGHT WONDER OF THE WORLD... The Power of Compounding 350,000 2,533,529 330,000 2,099,636 300,000 1,572,834 Savings Returns * Saves from age 25 to 60 Saves from age 27 to 60 Saves from age 30 to 60 Assuming an annual savings of Rs. 10,000 in an instrument providing return of 9.5% p.a. Financial Planning and Asset Allocation
83. Amount required to be saved monthly:- Financial Planning and Asset Allocation Rs. 100 lakhs :-
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