Aakash Malhotra Model Financial Planning Reports

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COMPREHENSIVE FINANCIAL PLAN SPECIALLY PREPARED

FOR

MR AAKASH MALHOTRA AND FAMILYNO-19/A, PANKAJ, GAYATRI TAPOVAN, J P NAGAR 8THPHASE, BANGALORE-56007

PHONE RES;080 26695760 MOB 9888366888

[email protected]

MODEL FINANCIAL PLANNING REPORTS IMAGINARY DATA FOR ILLUSTRATION ONLY

Financial Plan

Prepared on-

Prepared by- Advisor / Financial Planner: SRIKANTH .V.KULKARNIAFP,CPFA

Thursday, May 26, 2011


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inancial Plan

AAKASH S MALHOTRA

WEL COMEAbout Us

MONEY TREE established in the year 2002 with business focus on financial planningcum investment advisory services to guide and help our esteemed clients to achieve theirfinancial goals. Presently managing wealth of over 500 client base spread across India.

Financial planning is the very common and frequently used word now a days as it isthe core necessity of any individual , which would bring happiness, stability and excellentstandard of life. Financial planning brings contentment, preparedness with confidence forife situations which could be known or unknown surprises. Any individual has to do a

proper financial planning for the future, just as you prepare for a journey.

In the recent years financial planning has evolved into a highly respectedprofession from just a product based investment portfolio to more need and goal basedportfolio which helps any investor to go in the right direction of achieving his goals. This iust

ike, going to an architect for a plan to build our dream house, rather than directly buyingproducts available in the market which may or may not be useful in future.

We as financial planners make the difference of giving you the vision and directionwith the help of professional knowledge and ability of expertise, so that financial goals likife and health insurance , tax planning, educational needs, retirement planning, and to ha

a comfortable standard of life are achieved well in time with disciplined investments.

We are qualified in the levels of Associate Financial Planners from FPSB India andCPFA-Certified Personal Financial Advisor certification which is jointly developed by NISMNational Institute of Securities Markets established by SEBI and FPCIL - Financial PlanninCorporation [India] established by FPSB INDIA - Financial Planning Standards Board OfIndia, a certification aims to enhance the quality of financial advisory and related servicesWe are also empanelled with major frontline Insurance [Life and General] and AssetManagement Companies to offer vide range of products and services without any bias. Ouclient relationship is well managed with regular interaction seminars and review investormeets, which is well supported by the latest know how and technology.

CONTACT US:

Srikanth V Kulkarni

AFP,CPFA

MONEY-TREE, #2, Vanajakshi complex, Katriguppa main road, BSK 3RD Stage,[Near Big Bazaar] BANGALORE-560085.

PHONE- OFF; 080 26695760 MOBILE 98863 27711EMAIL- [email protected] [email protected]

VISIT US@: www.moneytreeindia.co.in

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FAMILY OF MR AAKASH MALHOTRA

GOAL OF CHILDREN EDUCATION

GOAL OF BUYING NEW CAR

CHILDREN MARRIAGE GOAL

FAMILY HOLIDAY

COMFORTABLE RETIREMENT LIFE

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WE HELP YOU PLAN YOUR FUTURE!

inancial Plan

AAKASH S MALHOTRA


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WELCOME TO THE WORLD OF FINANCIAL PLANNING

What is Financial Planning?Financial planning is a critical exercise in ensuring long-term financial security. A financial plan is a road map to help youachieve your lifes financial goals.

Here are three basic questions that you will answer during financial planning:Where are you today? What is your current financial situation?Where do you want to get to? What is your vision of your financial future and goals?Will you be able to get there? How do you plan to achieve your vision?During the financial planning process you analyze what your financial needs and goals are. Then, you quantify in moneyerms

what resources you need to meet those goals, and the time frame during which you want to achieve these goals. Finally w

write an action plan on what you need to fulfill your plan in terms of what products to buy and what types of savings tomakebased upon your risk profile.

Financial PlanningThe financial planner integrates your risk profile and planned financial goals with your current investments and liabilities. Iebalances your portfolio as per the suggested asset allocation and projects your cash flow and net worth over your planni

horizon. It also calculates your insurance requirements and suggests instruments for investment.Based on your discussion with us, we have outlined our proposal in the subsequent pages.The proposal will help you understand your current state of finances, stated financial goals, risk appetite and preview youruture cash flow & net worth. This will enable you to identify gaps in your finances that may inhibit you from attaining yougoals.t will provide you with a model asset allocation suitable to your risk profile. Our model portfolio will help mitigate these ga

and take you towards your goal fulfillment. Graphical illustrations have been used wherever required to enrich yourunderstanding. In case you have any further queries or clarifications, please feel free to contact us.

INTRODUCTIONWe are pleased to submit this financial plan for your records . We urge you to keep this safely and privately to avoid any

eakage of your confidential financial information.A full financial plan would cover Cash Management, Risk Management, Retirement Planning, Investment Planning and Esta& Tax Planning. The sections covered in this plan are outlined on the contents page.The following plan will document your Goals and Resources and make recommendations in line with your Goals based on tnformation you have provided. The solutions adopted in this plan need to be regularly reviewed. The projected outcomesareprovisional and should be treated as indicative rather than as guaranteed. It is vital that the plan is reviewed regularly andhe

assumptions tested against actual outcomes. Life is dynamic and your financial plan must reflect changes in your personalsituation!We urge you to study these recommendations carefully and we will respond to any questions you may have. You may neeo

make important decisions on the urgency and timing of the issues dealt within this plan. The effort you have taken to reac

hispoint is well worth the effort to secure your financial future.Please see the Appendices for details of the underlying assumptions related to your financial future used in building yourplan,our Disclosures / Disclaimers and a Glossary to assist you with the terminology used herein.

We trust the experience will be rewarding for a sound financial future and help you reach your goals.We endeavour to respect your privacy and maintain client confidentiality.

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SUMMARY

This Report is based on inputs provided by you about your current financial situation and assumptions on futu

economic and market outlook, which are based on our extensive research. This Report contains an extensive analysisyour present and possible future financial condition, based on which we have presented our recommendations in the lasections of this Report, to help you manage and maintain your financial situation under changeable conditions.

Customer

Name: AAKASH S MALHOTRA DOB:

Risk Class:E-Mail: [email protected]

Assets: Liabilities: NetWorth:3,900,000 400,000 3,500,000

Moderate

1-Jan-1980

CURRENT OBSERVATION AND SITUATION

Net Worth Your current Net Worth is Rs. 3,500,000

Protection You have Life insurance protection of Rs. 1,300,000

Investments Your current investments are Rs. 100,000 in equity, Rs. 950,000 in MutualFund, Rs. 350,000 in FixedIncome and Rs. 50,000 in others

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FINANCIAL HEALTH

Here we have provided the most important indicator of your financial health. It is expedient to stay within the safe limits of indicator in order to ensure the effectiveness of the Financial Planning exercise through which a person is able to successfully me

financial goals. If the asset allocation is not optimum, either one will not be able to increase ones wealth to the desired level or one wexposing ones investment portfolio to undue risks which can lead to undue downside risks and inability to meet goals. If loan liabare too high or low, then one runs the risk of either leveraging too much which can have disastrous results when interest rates go there is a hit on income levels or not being able to build sufficient assets by being too average to debt. Low savings rate will negaimpact building up sufficient wealth to meet the various goals, while high savings rate may result in unduly high present sacrifices fofuture.

Debt Ratio

This Ratio compares debt to net worth; A lower debt ratio is best. However, this ratio can be high when a person goes in for a Housing Loan.

=20-1

You are borrowing adequately

0.11Value:

Debt to income

The amount utilised for repaying the loans

=6646-65

It appears as though you are saving substantial income for future and current use. Make sure that you are not necessarily stretching out your debrepayment periods. You should consider early repayment or a partial offset to reduce your interest payments.

3.32Value:

nsurance cover

Reflects the current insurance cover to the annual income

=53-4

It appears as though your cover is inadequate to meet your requirements in case of need. We recommend that you review your life cover and brina minimum of 5 times of your annual salary

1.81Value:

Loan to assets

Debt to assets ratio Should not exceed 75% at any point in time. Lower the ratio better

=6045-59

Your assets appear to be well protected against a drop in investment values or interest rate increases. Ensure you have allocated your assetsappropriately according to your risk profile.

10.26Value:

Savings to income

This tells how much cash of earnings is set aside for future use

=2616-25

You are saving a good amount for your future use. If a large amount of your savings is kept in a deposit amount, you might be missing out a bettereturns. Consider exploring other investment products. Our qualified Personal Financial Consultants can help you plan your investing strategy.

58.81Value:

Solvency Ratio

This is emergency fund that is available

=134-124.34Value:

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AAKASH S MALHOTRA

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Detailed understanding of financial terms used generally in the reports;

What is Net Worth?he Net Worth is what you're worth financially. Use it to list all your assets and liabilitiesnd then subtract the sum of your liabilities from your total assets.

Why Risk Profiling is necessary?isk profiling can help you make decisions that are suitable to you, as it is a method of measuring personalerance to investment risk. In simple terms, how much risk an individual is willing to take, and what is his

erception about risk.

What is Insurance?simple terms, Life insurance offers financial protection to you and your loved ones when you retire, not

vailable in this world or are unable to continue providing financially due to unforeseen incidents. Whileothing can substitute your loss, insurance at least takes care of the financial need created by your

bsence or the absence of an active income source. It thus tries to eliminate risk by substituting certaintyr uncertainty, The compensation of corpus can generate the cash flow as if it were in your presence,

ence not sacrificing the standard of life you have had set.

inflation a silent killer?flation, a universal concept, is an economy-wide sustained trend of increasing prices from one year to th

ext. The rate of inflation is important as it represents the rate at which the real value of an investment isroded and the loss in spending power over time. Inflation also tells investors exactly how much of a return%) their investments need to make for them to maintain their standard of living.

ow important is to diversify my investments?

goes by a saying DONOT PUT ALL YOUR EGGS IN ONE BASKET

is required to balance and Portfolio diversification is the means by which investors minimize or eliminateeir exposure to risk, reduce systematic risk and moderate the short-term effects of individual asset class

erformance on portfolio value.

ow compounding effects my investments?

ompounding is the leverage effect of the first investment working for a longer tenure and creatingggercorpus, so start early, invest less and create bigger corpus,. Concept is well defined by the

ompounding effect,.

Why Asset Allocation?sset allocation brings financial discipline and gives balanced exposure to different asset classes likequity ,debt ,real estate, gold etc,. which is established in accordance to the shouldering capability of thevestor , in conjunction to his current age, income, dependents, assets, liabilities etc,. so that he is able toithstand any volatility in his investment portfolio.

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AAKASH S MALHOTRA

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GOAL PROFILING

For the purpose of this basic financial plan, we focus upon the major life cycle goals of all families in India. These goare childrens education and marriage, buying home and retirement planning.

Goal

Goal Name

Required InYear

Goal

Amount

Inflation(

%)

Exp

Ret(%)

Amount to Saved Month

[Amount in R

CostToday

Child Education -- 2031 801,783.87 6.00 10.00 1,055.8250,000.00

Child Marriage -- 2037 2,729,629.78 6.00 12.00 1,281.6600,000.00

Other -- 2021 358,169.54 6.00 12.00 1,557.0200,000.00

Other -- 2012 2,650,000.00 6.00 14.00 207,019.22,500,000.00

Total: 210,913.63,550,000.00

Based on your inputs we have done an analysis of your life's major financial goals and savings required to achieve them

For your childs education you have to save Rs. 1,056 per month.Your monthly saving should be Rs. 1,282 to meet your child's marriage expenses.For all other goal's you need to save Rs. 208,576 every month.

Retirement planning is one of most important financial planning goals which is often not given the priority it deservesmost people. We accord highest priority to it and would strongly recommend that you also pay due attention to it.

GoalRetirement

Year

Corpus

RequiredAmount To be Save

Cost Today

Inflation(

%)

Exp

Ret(%)

Retirement 360,000.00 Rs 19,506,196.442040 6,311.96.00 12.00

We have done an extensive analysis of your retirement goal needs and savings required per month to meet those needBased on the inputs provided by you we have calculated that at the time of your retirement you'll need a corpus of R19,506,196 in 2040 to lead a financially stable retired life. You have no investments attached to your retirement. For tgap of Rs. 19,506,196 for your retirement goal, you need to start planning soon. Monthly savings required to meretirement goal is Rs. 6,312

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AAKASH S MALHOTRA

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Goal Amount In Rs

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INCOME AND EXPENSE SUMMARY

Income

Type Amount (Monthly)

[Amount in Rs]

Pctg(%)

Salary 60,000.00 71.43

Agricultural Income 15,000.00 17.86

Rental Property 8,000.00 9.52

Capital Gains 1,000.00 1.19

84,000.00Total: 100

Expense

Amount (Monthly)Type

[Amount in R

Pctg(%

Rent 8,000.00 23.12

Food 5,000.00 14.45

Transportation 4,000.00 11.56

Utilities 3,000.00 8.67

EMI 2,791.67 8.07

Insurance 2,606.25 7.53

Health & personal care 2,500.00 7.23

Other 2,500.00 7.23

Entertainment and holidays 2,000.00 5.78

Domestic Help 1,200.00 3.47

Personal wear 1,000.00 2.89

34,597.92Total: 100

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CASH FLOWS (Annual)

[Amount in R

In the above analysis we see that income cover both expenses as well as investment needs for major life goals. Moreoevery year your family is left with surplus of Rs. -2013882.84. You can review your major life goals or plan an earlyretirement.

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Asset

Assets Values

[Amount in Rs]

Pctg(%)

51.282,000,000.00Property

24.36950,000.00Mutual Fund

8.97350,000.00Fixed Income

5.13200,000.00Gold

3.85150,000.00Cash&Savings

2.56100,000.00Govt Savings

2.56100,000.00Direct Equity

1.2850,000.00Others

3,900,000.00Total: 100

Liabilities

Outstanding AmountLoan

[Amount in

Pctg(

62.5250,000.00Home Loan

25.0100,000.00Auto Loan

12.550,000.00Personal Loan

400,000.00Total: 100

NET WORTH SUMMARY

Assets: NetWorth:Liabilities:3,900,000 400,000 3,500,000

For the purpose of this basic financial plan, we focus upon the major life cycle goals of all families in India. These goare childrens education and marriage, buying home and retirement planning

In order to enjoy an adequate Net Worth level, one should ensure that there is no undue leverage upon loan liabilitieThrough proper Financial Planning you should ensure that loan liabilities are pegged at an optimum level based upneeds and not unduly stretched to satisfy wants.

inancial Plan

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RISK PROFILE AND PORTFOLIO ALLOCATION

Risk Profile

onservative

here are you today? What is your current financial situation?ou seek to achieve above deposit rate returns and protect your capital against inflation. You are willing to accept very lowvels of investment risk over the medium term (up to 2 years).he value of your investment can fluctuate and may fall below your original investment. While volatility is expected to bew, short-term losses may be higher.

oderate

ou seek to achieve a moderate level of capital growth on your investments and you are willing to accept moderate levelsinvestment risk over the medium to long term (up to 3 years).

he value of your investments can fluctuate and may fall below your original investment. While volatility is expected to beoderate, short-term losses may be higher.

ggressive

ou seek to achieve significant capital growth on your investments and you are willing to accept very high levels ofvestment risk and volatility over the short, medium and long term.he value of your investments can experience very high levels of fluctuations and may fall substantially below your originavestment.

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RISK PROFILE AND PORTFOLIO ALLOCATION

Risk Profile

Your risk behavior is Moderate. It shows that by nature you are a balanced risk taker. Before investing anywhere you in to account all the upsides and downsides associated with it and then take a well-reasoned decision. You are bothabout the downside of high-risk investments and therefore, want to maintain a balanced portfolio.

ModerateRisk Class :

Action Needed(%)Current(%)Recommended(%)Class

Equity 64.17 63.64 0.53

Debt 28.83 27.27 1.56

Cash 7.00 9.09 -2.09

Recommended Asset Allocation Current Asset Allocation

Based on your current investments we have identified that your asset allocation does not match the asset allocation recommended

us. The asset allocation recommended by us is based on your risk profile and other data pulled from your profile information. Yocurrent equity allocation is 63.64%, debt allocation is 27.27%, alternate allocation is 0% and cash allocation is 9.09%. But based our analysis we recommend an equity allocation of 64.17%, debt allocation of 28.83%, alternate allocation of 0% and cash allocatof 7%. Please contact our advisor to help you shift closer to the recommended asset allocation. This will keep you in sync with yorisks taking capacity and risk appetite. Moreover we recommend you to keep 7% of your investment portfolio in cash and caequivalents to take care of liquidity in your portfolio. Based on your current asset allocation we have identified that cash allocationmore than recommended. Please contact your advisor to remove the gap.

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AAKASH S MALHOTRA

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LIFE INSURANCE DETAILS

An integral part of Financial Planning is ensuring that adequate risk cover are taken against the various risks and pwhich we are exposed to. Some of minimum and most basic insurance cover which all families must have are:

assured equal to the human life value of main bread winner, health insurance, personal accident and property insuran

Type Sum Assured

[Amount in Rs]

Term Policy 1,000,000

Endowment policy 200,000

moneyback policy 100,000

1,300,000Total:

Human Life Value Analysis HLV Values

[Amount in Rs]

8Discount Rate

720,000Salary income(annual)

65Retirement age

34Years left till retirement

9,010,000HLV based on income

ife Insurance Gap Analysis

Financial Net Worth 3,500,000Insurance Cover Recommended 5,510,000

Current Insurance Cover 1,300,000

Insurance Cover Required 4,210,000

Notes:

2.HLV uses income replacement method.

1.Discount rate of 8% is assumed.

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GENERAL INSURANCE DETAILS

Health

Sum AssuredType

[Amount in Rs ]

Health/Medical 300000

Gap Analysis

Recommende Cover 800000

Existing Cover 0

Gap 500,000

It appears as though your mediclaim cover is inadequate to meet your requirements in case of medical need. We recommend that yreview your mediclaim cover and bring atleast upto your annual salary.

Other

Type Sum Assured

[Amount in Rs ]

Home 1,000,000

Personal Accident 100,000

Total: 1,100,000

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ISCLAIMER

ote: The calculation of performance measures and portfolio classification are according to certain preset methodolond may or may not conform to your requirement of filing tax returns or other investment decision making imperatives.

hould independently verify the data before making any investment decision or for any tax/regulatory reporting. Whileasonable care has been taken in preparing this document, no responsibility or liability is accepted for error of fact or forpinion expressed herein. This document is for information purposes only. It does not constitute any offer, recommenda

solicitation to any person to enter into any transaction or adopt any hedging, trading or investment strategy, nor doonstitute any prediction of likely future movements in rates or prices or any representation that any such future movemll not exceed those shown in any illustration. Past performance is not necessarily indicative of future performance;

alue, price or income from investments may fall as well as rise Advisor, and/or a connected company, may have a posany of the instruments or currencies mentioned in this document. You are advised to make your own indepen

dgment with respect to any matter contained herein.

he recommended products and strategies in this Goal Based Plan have prepared especially for you. These recommendationsven here flow out of an analysis of your Investor Profile and your Goals and Objectives as presented to us.addition, it is important to be aware of the following:

All market linked investment returns will reflect the performance of the underlying assets of the products you have chosen andll go up and down with the value of the products assets.

With all international investments you are exposed to the added risk of currency fluctuations.

Most Investments are medium to long term and the minimum investment term must be considered before making an investment

xed Interest Trusts 1-3 years; Shares 5 years; Property 5-7 years.

Any report product information goods services or advice ("advice") given to you has been prepared from the information supplied

us from you. Any decisions made by you in reliance upon or in relation to such advice are to be made by you and not by us. You

e therefore exclusively responsible for all acts and decisions in making any decisions in reliance on any advice or materials

pplied to us by you.

Any calculated projections or any predictions given by us to you are not guaranteed and are merely an expression of opinion only

d are not intended for other than illustration purposes only.

hilst every care has been exercised and the advice and the statements made are based on information believed to beccurate that no liability is accepted by us or our employees or officers or outside suppliers of information for any error or

mission contained herein. It is strongly recommended that this qualification be borne in mind when making any decisions inliance upon any of the advice contained herein. You are exclusively responsible for all such decisions. Further, oursponsibility in connection with any materials or advice given by us to you is supplied to you alone and neither we nor our

mployees either directly or indirectly accept any responsibility howsoever arising on any grounds whatsoever to any otherarty.hereby have read and understood the complete subject financial plan and the same has been explained to me in detail bye planner and I am satisfied by his explanation, have no objections,.

EE - Please note that all the services like financial planning , strategy creation, implementation or any other

dvisory services etc,. are based on the different fee structure.

he disclosures of commissions receivable from the Insurance companies, Asset Managament Companies and

her product manufacturers will be made available to the clients pertaining to their investments.

indly contact us for further details.

d/-

LIENTS SIGNATURE Shri/SmtFINANCIAL PLANNERS SIGNATURE ...

ate:ace:

1inancial Plan

AAKASH S MALHOTRA

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A NEW RELATIONSHIP BEGINS HERE.

AAKASH S MALHOTRA

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