WEALTH MANAGEMENT CASE STUDIES

amdprasad

Case let -1
Dave and Daksha , a newly married couple have plans of retiring in 20 years and travelling around the world. The money in their retirement accounts will be used to cover living expenses during post retirement, dont want use this money for travelling and hence go for savings. Both are working and they dont plan to have any children. They expect that the cost of their tour will be Rs.75.00 lac. Now they have a plan to save additionally Rs.0.10 lac a month. They have two savings alternatives in their mind.
Depositing in a Recurring at the rate of Rs. 0.10 lac per month and the Interest is @6% pa, monthly compounding Investing in equity schemes once in a year and interest on such deposit would be 9% pa.

1. 2. 3.

How much money will they have at the end of 20 years if they place Rs. 0.10 lac every month for 20 years in savings account? How much money will they have at the end of 20 years if they place Rs. 1.20 lac every year for 20 years in Equity fund? Which investment is good for them?

Mr. Jha is a Veterinary doctor in AP State Govt. He is aged 35 years. He joined in the service at the age of 30 years Mrs. Soumya Jha (Wife) is a Lecturer in a Private Management Institute and aged 30 years. At present Mr. Jhas monthly income is Rs. 30000 / - and his wife has got an income of Rs. 20000/- per month. Mr. Jha has good finance cense so the day he joined in employment he started making savings of Rs. 1.00 lac pa in a Money Back Insurance Policy. The policy is for 20 years. The policy promises him Rs.5.00 lac for every 5 years and as a Maturity Bonus of Rs. 5.00 lac in the year 21. Mr. Jha planned to invest the net amounts received by him for every five years , in a banks fixed deposit to match the maturity date of the LIC Policy. His wife Mrs. Jha has opened a month ago, a Recurring Deposit of Rs. 10000 pm for a period of 10 years , which will give her Rs.20.00 lac. Now they have a daughter of 5 years age. From the amount received by Mrs. Jha it is proposed to use Rs. 5.00 lac to daughters 10+2 education, and to purchase a car for Rs.10.00 lac , and the balance amount will be re deposited in a fixed deposit @10%, for a period of 5 years. The maturity amount will be used for the daughters marriage. TASK
What is the total savings possible as per the existing plan by Mr. Jha What is the IRR on the investments made in the Insurance Policy What is the total savings available in Mrs. Jhas Account for daughters marriage What is the ROI on Recurring Deposit

Mrs. Verma is aged 30 years. She is a widow of Mr. Verma , who had worked in Railway as a Senior Guard. He met with an accident and died last year, when he was 35 years. He joined in the service at the age of 25. His wife has sought your help in finalizing the amounts available for her survival. As a consultant you have gathered the following details.
She has a son of 3 years age , and planned to send him for a Medical education and the possible expenditure is Rs. 50.00 lac. She also has a daughter of 5 years age and proposed to allocate an amount of Rs. 15.00 lac for marriage purpose when daughter is at the age of 25. Mr. Vermas salary on the date of his death was Rs. 26000.00 pm His PF was @ Rs. 1500 pm , which gave him 6% interest, the deposits were till last month of his death He has invested in the SSS (Insurance) an amount of Rs.200 pm , the policy is for Rs. 10.00 lac He had a Savings Bank Account with a PSB , which covers an accidental insurance cover of Rs. 5.00 lac He had a outstanding Housing loan of Rs. 25.00 lac , the market value of the building is Rs. 40.00 lac and the Housing Loan is covered under liability Insurance for full value His employer gave an accidental coverage of Rs. 10.00 lac for his cadre officers The employer pays an exgratia of Rs. 5.00 lac if any employee dies in harness The employer gives a gratuity of month salary for every completed year of service

TASK What is the money received on Insurance , other sources by Mrs. Verma What is the Net worth of Mrs. Verma Mrs. Verma is willing to go for a risk free investments keeping her family situation in view. Pl offer your suggestions for future investments.

Mr. Preet Paul Singh retired as a military engineer on voluntary retirement at the age of 45 years . As a retirement corpus he received the following emoluments from the department as well as from his own investments. a. Provident Fund Rs. 10.00 lac b. Gratuity Rs. 6.00 lac c. Leave Encashment Rs. 0.80 lac d. Group Insurance Rs. 0.70 lac e. Insurance Withdrawal Rs. 10.00 lac He has a wife (House wife) 40 years, one son studying Engineering 2nd year and a Daughter studying 10+2. Pl advise him as a CFP on the following financial issues, by evaluating different options. His risk profile is Low Risk. Planning to create A fund of Rs. 10.00 lac to sons MS study in another 5 years A fund of Rs. 10.00 lac to daughters marriage in a period of 5 years An amount of Rs. 20.00 lac on the wifes name by the time she is 50 years Clear the education loan outstanding i.e Rs. 1.00 lac and not to avail any further loan to complete the education , which will be approx Rs. 1.50 lac. Generate a monthly income of Rs. 20000 , from the investments Options available. Fixed Deposit of a Bank which gives 10% ROI , Quarterly Compound Investment in NSC , which gives him 12% ROI , Half Yearly Compound GOI Bonds , yield 6% , Monthly Investment on GOLD , which gives 15% annually Investment on a House Rs. 10.00 lac , which has a promising capital appropriation of 15% , and guaranteed market for sales on any date. Also generates a monthly income of Rs. 5000.00 Pl give your answers with calculations and also your reasoning