This document is an attempt to create financial literacy among salaried professionals who have begun their professional career. The intent of the document is to emphasize financial planning and create awareness about various asset classes. The sample financial plan is also available in excel format for you to experiment your financial needs. If your are interested in the excel based plan, please send an email to me. Should you need any clarification/help, just send an email. Happy learning!

1. Financial Planning 101
prepared and presented by –
Paresh Ashara
Email: par_ash@hotmail.com
All trademarks acknowledged. 1

2. Agenda
 Financial Planning
 Typical Asset Classes
 Risk Appetite
 Asset Risk Profile
 Financial Need Vs. Product
 Where to look for Investment Ideas
Disclaimer: This document has been prepared to create awareness about financial planning and the asset classes
available to achieve one’s financial goals. The views presented are based on reading relevant material from various
sources and personal experience. The numbers and returns presented are based on past performance and for learning
purpose only. Future returns are not guaranteed. Any resemblance to the available content is purely coincidental.
All trademarks acknowledged. 2

3. Financial Planning
Income
Tax
Planning
Goals &
Objectives
How can I reduce
my tax outgo?
Fringe
Benefits
Planning
Insurance
Planning
Investment
Planning
Retirement
Planning
Higher
Education
Planning
How will I be able
to fund my
Vacations, Car, etc.
How do I protect
myself from
devastating,
unforeseen events?
How do I save for a
rainy day? How can my
money grow?
How can I
continue enjoying
the same lifestyle
post retirement?
Live in my own
house?
How will I be able
to fund my
own/children
higher education?
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4. Typical Asset Classes
Fixed
Deposit
Gold
Bonds/
Debentures
Mutual
Funds
Real Estate
Equity
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5. Asset Classes – Details
Fixed Deposit
Bank FD
Corporate FD
(STFC,MFC)
Gold
Physical Gold
(Coin, Bar)
Jewellery
Exchange
Traded Fund
Mutual Fund
Scheme
Fund of
Funds
Bond/
Debentures
GoI Bond
Tax Free
Bond
Fixed Coupon
Bond
Non-
Convertible
Debentures
Convertible
Debentures
Mutual Funds
Liquid/Cash
Fund
Bond/Debt
Fund
Balanced
Fund
Equity Fund
Thematic
Fund
Sectorial
Fund
Equity
Direct Equity
Derivatives –
F&O
Private
Equity
Real Estate
Plot of Land
Independent
House
Flat/
Apartment
Commercial/
Office Space
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6. Risk Appetite
 How much risk do I need to take to get equivalent
return?
– High risk, high return
– Low risk, low return
Return
Risk
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7. Asset Classes – Risk Profile
Fixed
Deposit
Bonds
Gold
Mutual
Fund
Equity
Return
Risk
Real
Estate
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8. Financial Need Vs. Product
Tax Planning
Life Insurance
Investments in ELSS
Housing Loan – Principal Repayment
Infrastructure Bonds
Health/Medical Insurance
Home Loan – Interest Payment
Fringe Benefits
Planning
Direct Equity
Mutual Funds
Exchange Traded Bond/Debentures
Fixed Deposits (Bank, Corporate)
Gold (ETF, Coin, Bar, Jewellery)
Insurance Planning
Term Life Insurance
Medical/Health Insurance
Child's Education Plan (Endowment
scheme)
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9. Financial Need Vs. Product (contd.)
Investment Planning
Real Estate (Plot, House, Flat)
Direct Equity
Mutual Funds
Bond/Debentures
Gold (ETF, Coins, Bars, Jewellery)
Higher Education
Planning
Direct Equity
Mutual Funds
Children Education (Endowment)
Plan
Exchange Traded Bond/Debentures
Gold (ETF)
Retirement Planning
Real Estate (House/Flat)
Fixed Deposits (Bank, Corporate)
Mutual Funds
Direct Equity
Gold (ETF)
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10. Returns by Asset Class
Historical Mean Return
8.50%
8%
11%
13%
15%
17%
Equity
Real Estate
Mutual Funds
Gold
Bonds/Debentures
Fixed Deposit
 Investment in Sensex 1980-2014
 1980-2014 period in Delhi
 Equity+Debt+Liquid ~10 yr period
 1980-2014 period
 Yield on 10yr GoI bond over 10 yrs
 A 5-yr FD for 1980-2014 period
Mean Return data based on publicly available information over internet.
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11. Products for Various Life Stages
Young &
Single
•Investment allocation: 80% Equity, 10% fixed income, 10% in cash; Buy a Term Life Insurance Cover (5x Salary)
•Buy health insurance cover for yourself and parents; Start saving and investing towards specific goals like marriage,
purchase of house, etc.
Newly
Married
•Build adequate emergency fund by investing in Liquid Mutual Fund schemes; Ideal allocation could be: 80% Equity,
10% fixed income, 10% in cash; Increase Term Life Insurance Cover proportionate to income
•Start investing in retirement plans (VPF or other schemes); Family floater health cover (include wife)
Starting a
family
•Start saving for c hildren’s educ ation and marriage; Inc lude c hildren in health insuranc e c over
•Ideal allocation could be: 70% Equity, 20% fixed income, 10% in cash; Increase Term Life Insurance Cover
proportionate to income
Grown-up
Children
•Buy critical illness cover for self and wife;
•Ideal allocation could be: 60% Equity, 30% fixed income, 10% in cash
Retired
•Ensure adequate health insurance; Ideal allocation could be: 20% Equity, 70% fixed income, 10% in cash
•Enhanc e protec tion with a fund alloc ated for emergenc y requirements; foc us on safety, however you c an’t avoid equity
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12. Goal Planning – Sample Exercise
Goals
Short-term Medium-term Long-term
Going on a
Vacation
Buying a Car
Child's Higher
Education
Buying a
House
Child's
Marriage
Retirement
Time horizon (years) 1.5 3 5 7 20 25
Corpus Required (FV) Rs. 2,00,000 Rs. 5,00,000 Rs. 10,00,000 Rs. 20,00,000 Rs. 25,00,000 Rs. 50,00,000
Assumed Returns (%) 9.50% 9.50% 10% 13% 15% 15%
Annual Investment (PV) Rs. 1,30,286 Rs. 1,51,790 Rs. 1,63,797 Rs. 1,92,222 Rs. 24,404 Rs. 23,497
Monthly Investment (PV) Rs. 10,382 Rs. 12,058 Rs. 12,914 Rs. 14,717 Rs. 1,670 Rs. 1,542
Liquid MF Bank/Corp FD
Bond Fund/
Debentures
Bond/Balanced
Fund
Equity Fund Equity Fund
Liquid MF Balanced Fund Equity Fund Direct Equity Direct Equity
Debt MF Equity Fund Direct Equity Gold ETF Gold ETF
Equity Fund Direct Equity Gold ETF
Where to Invest
Proposed Allocatioin
60% Debt
40% Equity
40% Debt
60% Equity
80% Equity
20% Gold
90% Equity
10% Gold
90% Debt
10% Equity
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13. Where to look for investment ideas?
 http://economictimes.indiatimes.com/wealth
 http://www.morningstar.in/default.aspx
 http://www.moneycontrol.com/
 http://content.icicidirect.com/newsiteContent/Research/Overview.asp
 http://www.livemint.com/Query/B5rH9IkIyAjA13Jf0DVWTO/mint-
50.html
Disclosure: I’m a registered user at economictimes.com, moneycontrol.com and icicidirect.com. These links have
been shared to create general awareness on the financial planning subject. There is no intention to promote these
websites sites, whatsoever.
All trademarks acknowledged. 13

14. First Step to Financial Planning: Safeguard your family…
 Buy a Term Insurance plan for yourself
– Life cover worth minimum 5x your annual gross salary
 Revisit the Term Insurance Cover every 5 years, or
 When your Salary doubles from last cover
 Whichever is earlier
 Applicable till age of 40 years; assuming 65 years of
working life
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15. Thank You!
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16. Appendix – Gold Price Movement 1980-2013 (per 10gm)
28,450
Source: http://zeenews.india.com/business/bullion/bullion-news/gold-price-india-in-last-88-years_74354.html
1330
All trademarks acknowledged. 16

17. Appendix – BSE Sensex Movement 1980-2013
21,170
Source: http://www.tradingeconomics.com
113
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