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Life is uncertain. We do not know what may happen tomorrow. All of us hope for a better future ahead. Dont we all want to lead a worry-free and financially secure life?
We should be able to deal with all kind of risks in life.
Financial Planning
Financial decisions form the basis of much of what we do in our lives. Poorly thought out personal finance decisions can at best cause great anxiety and at worst lead to bankruptcy, whereas well thought out, sound financial decisions can lead to a prosperous lifestyle.
Financial Planning is the process of identifying a persons financial goals, evaluating existing resources, and designing the financial strategies that help the person achieve those goals.
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captained India to their maiden and only Cricket World Cup in 1983. His businesses: 5% stake in Zicom Electronics
Invested money in his own Kapil's Eleven restaurant and Kaptain's Retreat Hotel.
Tax Planning
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Asset allocation
Its paramount for wealth creation There is no fixed rule for asset allocation But as the age goes up the risk assets such as equity has to be lowered For instance if you are 40 you can restrict your exposure to equity between 50-60 per cent. Asset allocation can be in the range of 50:20:20:10(equity,debt,real estate and gold) for a conservative investor. Fixing target and profit booking are the two important key for wealth creation.
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Needing insurance is like needing a parachute. If it isn't there the first time, chances are you won't need it again! Insurance is not for the person who passes away, it is for those who survive.
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Term Insurance
If you are 30 years and wish to buy a term insurance for Rs 50 lakh till age of 60 the premium out go per annum will be Rs 13401 and it will be Rs 21067 if you are 40 and if you are 50 for the same cover it will be Rs 37171 for a period of 10 years( till age of 60).How many times of my annual earnings I require insurance? The idea is to protect monthly income even if the bread winner is not there.
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Retirement planning?
Some may like it and others may not! But retirement is a reality for every working person.
It is important to plan for your post-retirement life if you wish to retain your financial independence and maintain a comfortable standard of living even when you are no longer earning. According to NSSO 93 per cent of working classes has no social security.
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Case Study
Assume if you are at 40 and your currently monthly expenses is Rs 40000 and annual requirement is Rs 4.8 lakhs.Taking a inflation at 6 per cent at the end of 20 years( at the age of 60) you need annual pension of Rs 15.4 lakh.To get this pension at the time of retirement you should have a corpus of Rs 1.63 crore and it should earn 8 per cent interest. To reach this target he should save monthly a sum of Rs 16340 for next 240 months and it should earn an interest of 12 per cent.
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Paying tax
It would be great if all of us could pay our taxes with a smile on our face, but unfortunately, this is not so
Therefore, the question arises How to minimize our tax liabilities?
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Tax evasion Tax Avoidance Tax Planning Tax Evasion means trying to reduce taxes by concealing income, inflation of expenses, falsification of accounts and wilful violation of the provisions of the Income-tax Act.
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Tax Evasion
Taxpayers
Tax Avoidance
Tax Planning
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Tax planning is an arrangement of financial activities in such a way that maximum tax benefits, as provided in the income-tax act are availed of. It envisages use of certain exemptions, deductions, rebates and relief's provided in the act.
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Thanking you
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Financial Planning
By Suresh Parthasarathy, Sr.Research Analyst, Business Line, Chennai. Mobile 98404 54737 E mail suresh_pin@yahoo.com
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Banks
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Abundance
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