Financial planning

FINANCIAL PLANNING OF INDIVIDUALS RESIDING IN AHMEDABAD: 

FINANCIAL PLANNING OF INDIVIDUALS RESIDING IN AHMEDABAD SUBMITTED BY: ISHITA MEHTA 10/MBA/18

introduction: 

introduction Personal financial planning is important because it helps individuals to achieve financial independence. There is a trend to increased self-reliance. Many employers are requiring that employees plan and manage their own retirement accounts. Traditional pension plans are less common today. The federal government is unwilling to deal with the funding problems for Social Security. There is greater economic uncertainty associated with job stability and investments. Therefore, financial planning is increasingly important. Many people study personal finance in order to achieve financial success. Financial success may not have the same meaning to everyone. Some people think financial success is accumulating a lot of money. Some people may define financial success by their ability to purchase goods and services

Your Goals in Life: 

Your Goals in Life Financial goals Financial independence is an important goal for many people. Financial independence is defined as having enough income or resources to be self-reliant Nonfinancial goals Family, children, education, religious, social, etc. Finances can affect your ability to attain these goals. One of the financial choices that we make is between consumption today versus consumption in the future. Researchers have found that most people, regardless of their income level, feel that they need 20% more wealth than they currently have.

ACHIEVING FINANCIAL GOALS THROUGH PLANNING: 

ACHIEVING FINANCIAL GOALS THROUGH PLANNING Planning is the key to achieving all goals especially financial goals. Life-cycle planning is the phrase that suggests that financial planning is a lifelong process. People experience different phases in their life such as career development and family formation, retirement, etc. Major financial planning areas The different phases of life impact the importance of the various components of financial planning. At different phases, different financial planning areas increase or decrease in importance

Major Financial Planning Areas: 

Major Financial Planning Areas Consumption and Savings Planning Debt Planning Insurance Planning Investment Planning Retirement Planning Estate Planning Income Tax Planning Career Planning

Financial planning process: 

Financial planning process Step 1. Determine concrete goals. First state your broad goal such as the purchase of a home. Determine the specific pieces to achieve that goal such as the cost of the house, the down payment amount, etc. Step 2. Create an action plan. How will you achieve the goals stated in step 1? How much will you save each month and where will the money be invested? Step 3. Evaluate performance. At least annually, evaluate steps 1 and 2 to determine if any adjustments should be made in the action plan or goals. Step 4. Decide on a future course of action. Is your goal realistic or should it be reevaluated?

Slide 8: 

STEP 5 Create and Implement a Financial Action Plan In this step of the financial planning process, you develop an action plan. This requires choosing ways to achieve your goals. As you achieve your immediate or short-term goals, the goals next in priority will come into focus . Step 6: Reevaluate and Revise Your Plan Financial planning is a dynamic process that does not end when you take a particular action. You need to regularly assess your financial decisions. Changing personal, social, and economic factors may require more frequent assessments

MAKING FINANCIAL DECISIONS: 

MAKING FINANCIAL DECISIONS Decision making is a complex process because there are usually multiple choices with differing attributes. There are two economic concepts that are helpful in financial decision making. Marginal Analysis — involves the analysis of the changes in important variables Example: choosing between a public and private university; the public university costs $15,000 per year whereas the private university costs $40,000 per year. Does the private university provide benefits that compensate for the additional $25,000 ($40,000 – $15,000)? Opportunity Costs — the benefits given up when one alternative is chosen over another Example: putting money in a savings account rather than investing in the stock market. The opportunity cost is the higher return that could potentially be earned in the stock market.

THE BUILDING BLOCKS OF SUCCESS: 

THE BUILDING BLOCKS OF SUCCESS First, build a supporting foundation. Give time and attention to building a career, buying adequate insurance, buying a house, and building cash reserves Then invest in secure investments. Long-term savings deposits, government securities, and annuities Gradually take greater risks. High quality stocks and bonds, real estate Avoid very risky investments until you are secure at the lower levels. Growth stocks, gold, undeveloped land

Financial planning process: 

Financial planning process

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Head Office Address: 704, Sears Tower, Opp. IIPM, Gulbai Tekra, Ahmedabad. Managing Body: Managing Director: Mr. Sanjay Shah CEO: Mr. Shirish Patel Director: Mr. Chirag Shah HOD Details: IT Head: Mr. Yogi Kanani Accounts Head: Mr. Chirag Kothari HR Head: Mr. Dashrathsinh Chundawat Direct Sales: Mr. Deven Shah (Ahmedabad & North Gujarat Region) Mr. Rohit Patel (Baroda ) Mr. Satyesh Desai ( South Gujarat Region) Indirect Sales: Mr. Jigar Parekh ( North & West India) Mr. Manoj Singh (MumbaI) Mr. Bhanu Tomar (Pune Territory)

histroy: 

histroy Incorporated in 2000. More than 52 branches across India today. A clear vision of providing professional services in the area of personal and corporate investments.It has created a niche segment over a period to time with an excellent quality client base.

Research methodology: 

Research methodology

Slide 17: 

Statement of Problem : financial planning of individuals residing in Ahmedabad. Period of Study : 45 days, 2st June 2010 to 16 July 2011. Research tools : primary data : questionaries,survey secondary data :magazines, web sites, books.

RESEARCH METHODOLOGY: 

RESEARCH METHODOLOGY Data Sources : Primary data Sources : questionnaire method Secondary data sources : web sites, magazines. Research Objectives : Primary objectives : financial planning of individuals residing in ahmedabad. Secondary objectives : to study the awareness among the individuals about the allocation of finances in context to beat the inflation.

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Presentation of data : power point slides SAMPLE SIZE :100 Population : AHMEDABAD CITY Sampling technique : cluster sampling Sample size determination : N=(Z)^2* Pq/e^2. = 96.4

Age of the sample : 

Age of the sample 20-29 30-39 40-49 50-59 60-69 34% 26% 15% 6% 19%

Marital status : 

Marital status SINGLE MARRIED UNMARRIED 4% 31% 65%

Gender: 

Gender FEMALE MALE 25% 75%

Occupation : 

Occupation PROFESSIONAL 29% SERVICES 26% BUSINESS 23% RETIRED 16% STUDENT 9%

Income of the individual : 

Income of the individual >1,80,000 5% 1,80,000-4,19,988 21% 4,20,000-6,59,988 16% 6,60,000-8,99,988 21% 9,00,000-11,39,988 26% 11,40,000< 11%

Do you go for any kind of your own financial planning : 

Do you go for any kind of your own financial planning YES NO 94% 6%

how much percentage of income do you invest for financial planning of you and your family : 

how much percentage of income do you invest for financial planning of you and your family 0-10% 47% 10-20% 45% 20-30% 6% 30-40% 2%

At what age should an individual start his/her financial planning? : 

At what age should an individual start his/her financial planning? 20-29 90% 30-39 5% 40-49 4% 50-59 0% 60-69 1%

What kind of investment would you like to prefer??? : 

What kind of investment would you like to prefer??? LONG TERM,LOW RISK,MODERATE RETURN 31% LONG TERM,HIGH RISK,HIGH RETURN 50% SHORT TERM,NO RISK,STAGNANT RETURN 10% SHORT TERM,HIGH RISK MODERATE RETURN 9%

What is your primary investment purpose??? : 

What is your primary investment purpose??? RETIREMENT PLANNING 14% CHILD EDUCATION 10% CHILD’S MARRIAGE 5% WEALTH CREATION 38% STABLE INCOME 18% ECONOMIC GROWTH 15%

What type of investment would you like to go on for???: 

What type of investment would you like to go on for??? SHARES 4% MUTUAL FUNDS 7% REAL ESTATE 9% ULIP 9% FIXED DEPOSIT 20% GOLD 15% INSURANCE 20% SAVINGS 5% PFI 6% POST OFFICE 10%

do you consult your friends or relatives before making investment choice???? : 

do you consult your friends or relatives before making investment choice???? EVERYTIME 20% OFTEN 17% SOMETIMES 30% RARELY 13% NEVER 20%

What factor do you prefer on your investment??? (Rank the following) : 

What factor do you prefer on your investment??? (Rank the following) BENEFITS SECURITY COMPANY HIGH RETURN RISK LIQUIDITY 3% 25% 15% 30% 22% 5%

Are you aware about the general statutory rules and regulations in case of managing personal finances? : 

Are you aware about the general statutory rules and regulations in case of managing personal finances? YES NO 40% 60%

do you monitor your investment???? : 

do you monitor your investment???? YES NO 90% 10%

Do you calculate returns on investments??? : 

Do you calculate returns on investments??? YES NO 30% 70%

Do your investment give you returns as per our expectations?? : 

Do your investment give you returns as per our expectations?? NEVER RARELY SOMETIMES OFTEN EVERYTIME 29% 36% 26% 7% 2%

If no, would you like to change your investment product???? : 

If no, would you like to change your investment product???? yes no 54% 48%

Modes of investments?????? : 

Modes of investments?????? agents/brokers/AMC 42% company 35% Financial advisor 23%

frequency of investment????: 

frequency of investment ???? Lump sum Regular 42% 58%

Findings: 

Findings Absence of awareness about the relationship between the interest rates and the inflation rates . Ahmedabad residents are still afraid of their funds being smashed away in the regular investments due the market uncertainity. In the present market scenario many people have change there kind of investment from fixed deposits to mutual funds and stock market,but still there are many of them who prefer stable returns along with minimum amount of risk It is even being observed that if the present investment product is not good or efficient enough to give a good amount of return on investment than people switch over to other financial product under the guidance of efficient financial planner.

suggestions: 

suggestions People should be updated with latest financial tools and techniques. To minimize the risk an individual should assist on for a good efficient financial planner. investors should be made aware of the relationship between the different interest rates and the investment rates prevailing in the market and the impact on the savings of the individual . Individuals should invest in such a kind of investments which would yield them a higher rate of interest ,irrespective of the risk factor as its natural that where there is hugh return there is higher amount of risk

conclusion: 

conclusion Savings and investment are the most important aspects for a person’s life in the present scenario where the inflation rates are at its peak. Money cannot be only built by hard work, it has to be properly managed and saved by brains . There is always a dilemma within an investor .not every person is an expert to know where he should invest so that he gets a higher return on his invested money. For this distribution channels are the best way as expertise knowledge is present . And with so many different funds coming in the market it is very necessary to have an advise from experts like Prudent CAS.

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thank you