Financial Planning - The Need Of The Tough Time

Financial Planning

The NEED of the TOUGH TIME

Presented by, Kaushal Mandalia

Stock Market Down by 70%

The TOUGH TIME

Investors lost their Confidence. Higher Interest Cost for Corporate Higher Interest Cost for Corporate

Job CUT : Further Leads to Negative Impact on DEMAND Uncertain TIME, Uncertain FUTURE.

What are the EFFECTS?

1. Portfolio Value at Rock Bottom if Invested most of the money in Equity Market. Market 2. No Fresh Demand is Creating th through h IPO or Equity E it NFO. NFO 3. Supply is Higher than DEMAND hence, Increased possibilities of Stock Market Going Down further.

Do you NEED to WORRY?

If your Portfolio is UNSTABLE Y should You h ld be b worried i d If Your Portfolio is STABLE Sit and Relax.

Unstable P tf li Portfolio

Emergency  Fund

Equity  Market Mutual  Fund Debt  Instrument Emergency Fund Insurance / Protection Insurance  / Protection

Equity / MF / Debt  and Others d Oth

Insurance

Stable Portfolio

You can be WORRY‐FREE if  your Portfolio is STABLE

THREE Parameters to CHECK… GOAL or OBJECTIVE Must be linked with Emotions and Not LOGIC only Must be linked with Emotions and Not LOGIC only..

RISK APPETITE RISK APPETITE Lets define this Clearly, Don’t Expect 100% Return at 10% RISK

TIME HORIZON •The Shortest TERM possible to get RETURN is only  CALL Money Market y •Define Time Horizon CLEARLY 

GOAL or Objective of INVESTMENT Protection

Financial  Planning Insurance

Child’s education and  marriage Creation of wealth, so the best can  be provided to the family

Investment

Money for emergencies

An independent  retired life

Legacy for future  generations

Head + Heart = Buying DECISION

STRONG Emotional Connect Rational Thinking Guaranteed Return of 10% or  Non Guaranteed Return of 10%

Financial LOGIC Returns, Economic Conditions, Product Comparison

Recommendation by Advisor, Friends and Relatives

Emotions

Question Q

Denial

Nothing is going to happen to me

FEAR

God Forbid

C Concern

How much is enough to H hi h t Ensure  E Financial Security for my Family?

Love and  Affection

I love my wife and children very much.

Determination

I want my dreams for my family to be  Ensured, regardless of what happens

Risk Appetite  “Only Dead Man Does not have any Worry or  Challenges”……. Anonymous 

Similarly, If you don Similarly If you don’tt have money,  you  have money you have ZERO risk of losing it… Risk Appetite is determined by “How much you are willing to give up with your investment if possibility arises” Hence it largely depends on.. on Returns Fixed Returns or Market Linked Liquidity With Lock in Period or Without

Investment Options

Insurance

Time Horizon

Short Term Investments  (1 Month to 2 Yrs) Avoid Market Linked and Prefer Fixed Return Schemes id k i k d d f i d S h Long Term Investments  (More than 2 Yrs) Must be Goal Oriented (Use of Head and Heart both) Must be Goal Oriented (Use of Head and Heart both) Can be Market Linked but having Diversified Asset Allocation

Risk  Management

Protecting your  GOALS and DREAMS  against Any  g y Uncertainty

Estate Planning state Planning Whole Life Policies MWP Act Nomination Absolute Assignment

Uncertainties Covered •Pre‐matured Pre matured Death Death •Accident •Disability •Sickness

INSURANCE

Retirement Planning  and Employee Benefits Pension Schemes Immediate Deferred Super Annuation

Choice of Asset  Allocation (Debt,  q y, Equity, Market  Linked Returns with  Capital Protection)

Tax Planning Section 80C Section 80D Tax Free Maturity

DYNAMIC FLOOR FUND

Bullish (Jan 07 to  ( Dec 07)

Bearish (Dec 07  ( to Dec 08)

Sensex

13827 to 20288

20286 to 9832

NAV of Dynamic  NAV of Dynamic Floor Fund

10.17  10.17 to  to 13.11

13.11 to  to 13.05

Bullish – ll h Jan’07 to Dec’07 ’ ’

Bearish – h Dec’07 to Dec’08 ’ ’

Fund in FOCUS di

Last 2 Years Performance

% CAGR

Dynamic Floor Fund – Unique Advantage Available with  Kotak Life  Insurance – Head  Start Plans

Capital Protection

Returns

1. Goal Oriented : Child Education, Marriage and Start in Life Expense 2 Risk Appetite : Low Risk – 2. i k i i k Moderate Return. Protection + Growth d i G h 3. Time Horizon : Advisable for Minimum Tenure of 10 Years 

Financial Independence.. Stable Portfolio Thoughtful Planning Thoughtful Planning Retirement  Planning Other  Investments

Disability

Financial  Independence

Emergency  Funds Critical  Ill Illness

Savings g

Income  Education Protection Protection  F d Funds upon Death Accident & Hospitalization

Sleep Better at Night With Right Financial Advise

P Prepared By, dB

Kaushal R. Mandalia Associate Financial Planner Risk Management & Insurance Planning [email protected]