Download Sample Financial Plan - Consolidation Of Investments

If you straightaway want to download the sample financial plan in PDF file without reading further, scroll to the article’s end. But I’d suggest you read the article before jumping on to see what a financial plan looks like.

Secondly, if you’re expecting a 30-40 page report in a financial plan, I’m very sorry. I wouldn’t be able to meet your expectations. The plan is of merely 10 pages but, trust me, it covers everything that’s needed to simplify your financial life.

I started writing a 15-article series on 31^st March 2020 about how to become a Do IT Yourself (DIY) investor? This is the 13^th article of that series. If you’ve missed any previous article, no worries, you can read it here.

Before getting started with DIY planning, I’d advise you to take care of a couple of things.

Insurance

Understand the importance of importance be it term insurance, health insurance or personal accident insurance. Before even making the investments, the first thing you should do is purchase these 3 important covers. You’ll have your entire life to earn returns on different investments. But your family won’t have the opportunity to live a dignified life if something unfortunate happens to you in between. This is the reason why term insurance and personal accident policy is suggested. You’ll never realize how big a dent an illness can make in your savings and investments until you face it. This is the reason why a health insurance policy is suggested.

Emergency Funds

If you still haven’t understood the importance of emergency funds in the current coronavirus crisis, don’t try to be a DIY investor. If you’re still thinking of investing emergency funds in equity markets since they’re down, don’t try to be a DIY investor.

When it comes to financial planning, the very first step is creating emergency funds and taking insurance. If you cannot understand this first step, it’d be very difficult to move forward by yourself. You definitely need a helping hand.

Analyze Your Risk Profile

Everyone seems to be a risk-taker as long as the markets keep moving in the upward direction. But the moment markets start going downwards, the real risk profiling comes into the picture. People stop their investments, start withdrawing their investments and that too at a major loss.

Before investing, analyze your risk profile first. If you find it tough, there’re a lot of questionnaires available on google to check your risk profile.

Expectation Of Returns And Inflation

See to it that you’ve a moderate expectation of returns. People assume that mutual funds are magic and their money will get doubled in a span of 3/4/5 years. This is actually not the case. Even if you’re expecting 15% returns from equity mutual funds, try to moderate it to 12% pre-tax and 10% post-tax. Moreover, the golden era of 15/17% returns in equity mutual funds seems to have come to an end.

At the same time, also have a moderate expectation of inflation. You can take 8% for higher education and 6% in general.

Deciding Goals And Making A Balance

Decide your goals as per your income and make a balance. You cannot have a child`s education goal amounting to 2 Crores in today`s cost. Especially if your available monthly surplus to invest is 40,000.

Prioritize Your Goals

You cannot spend everything on child`s higher education and marriage and have nothing left for your retirement. Even if you’ve to prioritize between retirement and child`s education goal, choose retirement as your first goal. The reason is that your child can go for an education loan whereas you cannot go for any retirement loan.

So, prioritize your goals in the best way possible.

Asset Allocation

Do asset allocation as per the time frame required to achieve your financial goals, not by age and returns.

Don’t be greedy.

Don’t invest in equity instruments for less than 5-year goals, no matter how aggressive an investor you are.

Download Sample Financial Plan PDF

There’re tens of things I want to add here, but it’s better to stop now. If you’re now aware of what a financial plan looks like – here’s the link to download the sample financial plan in PDF format.

To add a disclaimer here – I work with Mr. Melvin Joseph as a paraplanner at Finvin Financial Planners. So, I’ve attached the sample plan of Finvin. Do let me know if you have any queries, till then, enjoy reading the financial plan!

Download Sample Financial Plan PDF

[qsm quiz=3]

35 Shares

Share35