AMITY BUSINESS SCHOOL, NOIDA
PSDA OF FINANCIAL MANAGEMENT
TOPIC – FINANCIAL PLANNING FOR 35 YEARS
SUBMITTED TO: Dr. Lakhwinder Kaur Dhillon
SUBMITTED BY:
STUDENT NAME
Shubh Kurich
COURSE
ENROLMENT NO.
MBA (Retail Management) A0116220001
SUBJECT OF THE ACTIVITY
The subject of this PSDA is to create a sound financial plan for next 35 years of
life.
GOAL/OBJECTIVE OF THE ACTIVITY
The objective is to attain financial stability in the next 35 years of life.
ASSUMPTIONS TAKEN
1) Salary package 15 lakh per annum.
2) Salary increases by 20% after every 5 years. (Considering slow economic
growth as per current scenario in India)
3) Dividing the financial plan into 6 stages.
4) Minimum risk and diversification of risk.
STAGES OF FINANCIAL PLAN
STAGE 1: START OF CAREER (2021 to 2026)
ASSUMPTIONS: 1) Starting Salary Rs 15,00,000 per annum
BUDGET MODEL
20%
NEEDS
50%
30%
NEEDS – Such as housing, food, necessary utilities, healthcare.
WANTS – Such as entertainment, travel, hobbies, personal care.
WANTS
SAVINGS
SAVINGS – Such as personal savings, emergencies, investment, insurance.
SALARY BAR DIAGRAM
EXPENDITURE (IN LAKHS)
7,5
4,5
3
NEEDS
WANTS
SAVINGS
SALARY DIVISION
STAGE 2: MARRIAGE AND CAREER GROWTH 2027-2032
ASSUMPTION: 1) Salary increases by 20%, i.e., 18 lakh per annum.
2) Savings will increase as an individual become more mature and wants are
reduced.
3) Marriage takes place.
The budget model will now change in this stage.
BUDGET MODEL
30%
NEEDS
50%
WANTS
20%
SAVINGS
In the pie chart, savings are now 30%, i.e., Rs 5,40,000, which are now divided into different
things.
Since the savings are increased, here is a graph that represent savings distribution.
SAVINGS GRAPH
MONEY (IN PERCENTAGE)
60%
20%
10%
5%
MUTUAL FUND
FIXED DEPOSITS
REAL ESTATE
CASH
SAVINGS DIVISION
STAGE 3: FAMILY AND WEALTH GROWTH (2033-2038)
ASSUMPTIONS: 1) Children introduction
2) Wealth creation starts
3) Salary increases by 20%, i.e., 22 lakhs per annum.
The budget model in the stage 3 becomes like this:
BUDGET MODEL
45%
45%
NEEDS
WANTS
SAVINGS
10%
SAVINGS GRAPH
MONEY (IN PERCENTAGE)
40%
20%
10%
10%
10%
RETIREMENT
PLAN
EDUCATION
FUND
5%
MUTUAL FUND FIXED DEPOSITS
REAL ESTATE
CASH
SAVINGS DIVISION
STAGE 4: FOCUS ON RETIREMENT PLAN (2039-2044)
ASSUMPTION: Salary increases by 20%, i.e., Rs 26,40,000 per annum
BUDGET MODEL
40%
NEEDS
50%
WANTS
SAVINGS
10%
The savings distribution is as follows:
SAVINGS BAR DIAGRAM
MONEY (IN PERCENTAGE)
40%
15%
10%
10%
10%
10%
5%
MUTUAL FUND
FIXED
DEPOSITS
REAL ESTATE
CASH
RETIREMENT
PLAN
EDUCATION
FUND
INSURANCE
SAVINGS DIVISION
STAGE 5: POWER OF COMPOUND INTEREST (2045-2050)
ASSUMPTION: Salary increases by 20%, i.e., Rs 31,68,000 per annum.
BUDGET MODEL
40%
NEEDS
50%
WANTS
SAVINGS
10%
The savings distribution is as follows:
SAVINGS BAR DIAGRAM
MONEY (IN PERCENTAGE)
40%
20%
15%
10%
10%
5%
MUTUAL FUND
REAL ESTATE
CASH
RETIREMENT
PLAN
EDUCATION
FUND
INSURANCE
SAVINGS DIVISION
STAGE 6: PAYBACK TIME (2051-2056)
ASSUMPTION: Salary increases by 20%, i.e., Rs 43,00,000 per annum.
BUDGET MODEL
40%
50%
NEEDS
WANTS
SAVINGS
10%
The savings distribution is as follows:
SAVINGS BAR DIAGRAM
MONEY (IN PERCENTAGE)
40%
25%
20%
10%
5%
MUTUAL FUND
CASH
RETIREMENT PLAN
EDUCATION FUND
INSURANCE
SAVINGS DIVISION
WEALTH CREATION: ATTAINING FINANCIAL STABILITY IN THE
END
WEALTH CREATION
SAVINGS (IN LAKHS)
68,84
47,34
31,5
21,5
18,3
3
2021-2026
13,2
8,4
5,4
9,9
2027-2032
2033-2038
2039-2044
15,84
2045-2050
YEAR RANGE
PER 5 YEAR SAVING
CUMMULATIVE SAVING
2051-2056