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Batch 2019-21 - Semester II Specialization - MHR Subject: Submitted To

The document describes a case study of Shikhar, a 24-year-old who has just begun his career. It outlines his current financial situation, goals for the future which include marriage, a car, house, retirement, and children's education. An analysis of Shikhar's emergency fund, liabilities, risk profile, and recommendations are provided for investments and savings needed to achieve each goal over different timeframes. The conclusion states that Shikhar has planned well for his and his family's future through disciplined savings and the right investment choices.

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Mamata Sreenivas
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56 views4 pages

Batch 2019-21 - Semester II Specialization - MHR Subject: Submitted To

The document describes a case study of Shikhar, a 24-year-old who has just begun his career. It outlines his current financial situation, goals for the future which include marriage, a car, house, retirement, and children's education. An analysis of Shikhar's emergency fund, liabilities, risk profile, and recommendations are provided for investments and savings needed to achieve each goal over different timeframes. The conclusion states that Shikhar has planned well for his and his family's future through disciplined savings and the right investment choices.

Uploaded by

Mamata Sreenivas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Batch 2019-21 - Semester II

SPECIALIZATION - MHR

Subject: MARKETING OF BANKING AND FINANCIAL SERVICES

Submitted To:

AVR MAHADEV

Assignment 3:
A Group Report on CASE STUDY FINANCIAL PLANNING
Submitted by:
s.no Name Registered no. Marks
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Faculty Signature:
INTRODUCTION:

The Case Study illustrates the Financial Plan of Shikhar 24 years aged who has just
completed his studies and has entered into the corporate world. He lives with his parents, so
he has no rent expense. his education fees were paid by his parents, so no loans are there to
pay. He takes care of his own expenses and also helps out a little with the household
expenses. A typical urban for a better future, thanks to him being a finance graduate.

He has a few plans for the future. He wants to start saving for his wedding though he does not
plan to get married for another 4-5 years. His wedding budget is about 10 lacs. Before that he
wants to buy a decent car. He wishes to buy a house in the next 10-11 years. He believes that
a decent house today can be bought in around 50 lacs. Obviously saving for his retirement is
an important goal, something he has learnt from his parents.

Before his wedding he had to save 79200 to achieve his goals which would reduce once his
term goals like car and wedding is achieved. He has to save around 50,000 per month
roughly. For Shikhar this was a huge amount but he was prepared to save that much.
He knows there are many free tools available online that will help him plan for the future. A
quick search leads him to the MoneyWorks4me’s Financial Planning Tool, which he finds
and allows him to plan for all his goals and also make changes with ease. After watching
a short demo video, he fills up his details, eager to find out what his plan would look like.

Current situation of Shikhar

 He lives with his parents and has no rent expense


 His education was funded by his parents and thus has no loans.
 He takes care of his own expenses and also helps out a little with the household
expenses.

Goals of Shikar

 Wedding with a budget of 10lakh (immediate)


 Buy a car (immediate)
 Buy a house in the next 10 or 11 years (moderate)
 Save for retirement (long term but saving should be done from beginning)
 Child education (long term)
 Child marriage (long term)
ANALYSIS:

Emergency fund: Apart from the savings account, the fixed deposits provide a decent back
up in case of any emergency

Liabilities: Presently there are 0 loans.

Risk Profile: Moderate

RECOMMENDATIONS:

Emergency fund: Shikhar needs to maintain an emergency fund of Rs. 1.75 lakhs, which
should take care of nearly 3 months of expenses.

Health Insurance: The present cover is adequate as per his age. He should include his wife’s
name when he gets married next year.

1. Marriage (2023):

Shikhar does not want to spend too much on marriage and considering the fact that the
marriage expenses will be shared with his spouse, he would not like to exceed Rs. 10 lakhs. A
part of the Fixed deposits can be used for this goal.

 2. Buying a car (2021):

He needs to start Sip of Rs. 3734 in ultrashort debt funds for a period of 36 months to achieve
this goal.

3. Educational funding for 1 child (2043):

Considering the long-term nature of this goal, Shikhar needs to invest Rs. 9211 per month for
25 years in a combination of large cap and balanced funds. Due to the present surplus, he can
easily invest for this goal. If this plan makes burden on Shikhar he can postpone it to later
after he achieved his immediate goals.

4. child marriage (2048):

Considering the long-term nature of this goal, Shikhar needs to invest Rs. 2521 per month for
30 years in a combination of large cap and balanced funds. Due to the present surplus, he can
easily invest for this goal.

5. Retirement Planning (2049):

Most of us plan retirement when there are either 10 or less years for one to retire. That leaves
very little time to enable compounding of your investment and the savings and investments
required in the short time will also be huge.
Shikhar needs to invest Rs. 10628 per month for 31 years this is for a long term so he can
save more for his retirement.

6. HOUSE (2029):

As per Shikhar knowledge he thinks a decent house comes at Rs. 500000/- lakhs. But he is
only able to save Rs. 8612/- per month for 11 years which makes 2138000/- lakhs. This
amount is not sufficient to buy a house. So, he needs to save more on this.

CONCLUSION:

Shikhar is a typical urban Indian youngster with crucial difference. He lives with his parents
thus has no rent expense, his education was funded by his parents, so no loans to worry about.
He takes care of his own expenses and also helps out a little with the household expenses. He
knows the importance of saving early for better future. He is a finance graduate.
He knew he had to work a lot and reduce his expenses to meet the target and he was ready to
do it. He decided to invest in any future lump sum received towards his goal.

It was very clear that Shikhar wanted to secure his family and kids future and wanted to retire
in peace. And he took every step possible for that. He chooses the right plans to invest money
and at the right time he started making plans and saved for the future. He further was ready to
study about more investment plans. His plans where well planned and with the current
situation of the economy SIP and investing in retirement is the best option rather than real
estate and other investment.

Shikhar has moulded him to be a better saver and investor. At his age, he had done a fairly
good job of creating a good investment basket. There are several like him who have an
opportunity to choose what is right. Many of his age, having similar salary may not have
accumulated as much as he has. In this age of uncertainty, it’s very critical that the younger
generation focuses on saving and building up a good corpus right from the first salary.

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