Financial Planning Query for Chandra Sekhar

June 20, 2012   ·   0 Comments


I am sharing with readers about Stockssavvy helped Chandra Sekhar in his and how he achieved financial success.

Below mentioned is the transcript which he had with me when he contacted me through our Contact us page.

Though it is bit lengthy, but it could really be useful to the people who are planning to start their financial planning.

People-financial-queriesChandra Sekhar:

I find your approach to savings as quite straight forward and easy to understand.  Would like to get a financial planning advise for myself.

Please let me know the costs involved and approach and information needed.

Rajesh Singla:

Hi Chandra,

I am glad that you found the content of the website useful. I will advise you to follow the website either on facebook/RSS/Twitter & e-mail in order to keep you updated on financial world.

I am really pleased that you want to start you financial planning.

As far as cost is involved, I am earning my bread & butter through the job i am pursing. I don’t charge any advisory fees to my readers. All you have to do is get your investments though me, That way i will be able to track your portfolio & will be able to guide you whenever it will be required.

I will need few information as your current salary, monthly savings, investments details(if any), insurance(if any). This will help me to decide you on your financial goals such as retirement planning, securing children future etc.

You can refer this link to know more about financial planning and power of Regular Savings: Power of Regular Savings

Chandra Sekhar:

Glad to receive your email response quite fast.  I am providing certain details.  

 your current salary : 1.4 Lakhs post Tax and PF (Gross 1.8 Lakhs)

monthly savings: Voluntary Provident Fund 6K; PPF 2000(not regular); PF as usual

Loans: Housing Loan Payment (gets completed in 2016)

investments details(if any): Few FDs; 

insurance(if any): one money back for 1L; one Jeevananand 1L; Term Insurance for 50Lakhs.

Medical insurance covered by office; 

Kids 8 yrs and 1 year; Wife home maker.


I have few key questions listed below:

  • Children Education Plans and Children Fund?
  • Best retirement plan approach?
  • Would move to Consulting(Self Empoyed) how to create family security fund?
  • How do we plan for essential luxories(my terminology)like Car?
  • How do we do reverse planning?  Eg.  Need about 1 Crore at the time of retirement, how much one must save quarterly and annually? How do we take care of Inflation factor?
  • How do create parents fund? (Did already create about 3-4 lakhs and kept it for them in Post office MIS)
  • Please suggest one balanced investment Port folio?  I will rethink on my financial goals once again. 
  • Suggest approach for Safe investment in Equities, Mutual Funds?
  • Best approach on Gold investment?
  • For my parents they kept everything in Monthly MIS and FDs, is there a better source where they can get better returns?
  • Avenues where we can expect 15-20% returns?
  • Overall what is best %ge for me that need to be saved Quarterly, Hly, Yly?


I am looking for someone who can really track the investment patterns and suggest changes, highlight new things etc., like personal Financial planner.  Maintains and keeps managing and driving me for investments.  I am sure HDFC do offer that but again it is very much surrounds about their offerings?  Do you see anyone in this space?


I am glad to know that you dont take consulting charges, Much appreciated. The other sentence I did not understand, do you want to route investments made through you?  



Rajesh Singla:

Hi Chandra,

Nothing excites me much than an informed investor. It makes my job much easier to do their financial planning as those people can relate when i talk about their financial goals & the math involved in it. 🙂


You have given a real good thought about your financial goals & i am really glad to see it. In fact i have attached sheet of my Stockssavvy financial planning   which talks about financial goals & financial health of a person. I generally don’t send it in my first interaction as most of the people find it hard to fill.

Coming back to your current investments & insurance, There seems to all your investments right now are Debt oriented which yields low interest when we talk long term investments. There is no asset allocation towards equity which needs to be corrected. Moreover, your insurance amount is decent of 50 Lacs but in ideal case you will need to increase to more than 1 crore.


Even the Tax saving part is inclined towards all the debt oriented instruments. Tax saving infrastructure bonds are missing which should be added for additional cover of 20k apart from 1 Lac savings.

My job here is to show you the current status & the correct path which should be taken to optimize your returns, One should have a balanced portfolio of equity & debt.

Refer this link to know how to invest in Gold and the returns offered by Gold:

Equity oriented investment like selected mutual funds yields return of more than 15% if done systematically over a longer tenure period of time. Long term here means investment should be more than 8 years or more. There are mutual funds which have shown a return of more than 25% for a tenure of last 15 years. I ask my clients to not expect 25%, but we should expect a return of 15-20%. For conservative basis, i do the calculation considering it 15%

Refer this link to know more about Systematic Investment Plans and to check out the Performance of different SIP of best performing mutual funds:

If one invest 1000 rs regularly in a selected mutual fund, over 30 years & assuming rate of interest to be 15%, the total investment of 3,60,000 Rs. becomes around 70 Lac Rs. but just imagine with 20% return, the same investment goes to staggering 2 crores 33 lacs but if for same investment, interest is  considered to 10%, the corpus grows to only 22 Lac. 10% or return comes basically from debt funds like FD’s etc.

Check this link where i talked about financial goals taking into account inflation:  Power of Regular Savings – Part 2


In financial terms, large amount of money such as parents retirement money is taken as Wealth planning where one’s risk appetite is less & hence asset allocation is more inclined towards debt instruments.

The only way i will be able to track your portfolio as you have desired below of having someone to keep track of your portfolio is only when you will route your investments through me.


For retirement planning, we need to think about corpus of much more than 1 Crore. In order to give me accurate figures, please provide me your EMI & your present age & the age at which you want to retire. The car you are planning to buy & the amount it will cost, your monthly savings after taking out all the expenditures, EMI & investment related money.

I would be able to talk more numbers after this handful information.

Chandra Sekhar:

Hi Rajesh,

Thanks for the detailed response.  I will take a look at the details you gave and revert to you.  

 Is ICICI Infrastructure bonds doing good?  What about investing about a Lakh, how are the returns?

 I did update the excel sheet Financial Planning, may be some more changes can be done but did only few changes.  I am excited to see a comprehensive plan. 

BTW: Recently I have signed up for HDFC Gold ETF and HDFC Equity Fund SIP.  How are they?  Will be going in for Tax saving infrastructure bonds suggest for good title.  

 SBI guys are chasing me for a pension plan and unit linked insurance

 Please take a look at the financial planner and advise.


 Rajesh Singla:


Thanks for the updated sheet.

IDFC Infrastructure bonds, L&T infrastructure bonds & IFCI Bonds are giving 8.7% interest in their Tranche-2. You can opt out for 20k of extra savings. If you wait for a day or two, i can send you the required form. Please don’t put more amount with these bonds as rate of interest compared to FD is quite less. Fixed deposit are providing anywhere b/w 10-11%. There are corporate FD’s which can provide interest upto 13% too.

Give me some time. I will try to capture all the details & come back with complete financial plan .

Also, don’t get involved in any ULIP or Endowment Pension plans as charges levied on these products are more. Hence, not worth for investing



Rajesh Singla after analyzing his Financial status and recommendation:

Hi Chandra,

 The power of money is in spending. I will never ask you to cut down on your expenses but at the same time, I want to make sure that you have adequate amount of funds at every important juncture of your life.

Right now, you investments are mainly debt oriented which needs to be corrected.  The other avenue where I want to work is . I envisage lot of money in your accounts which should be properly invested.

Debt instruments will provide take care of your liquidity needs & equity funds will create wealth for you.

First thing first. Let us start with financial planning where equity part needs to concentrated. I have planned for a corpus of around 3.3 crores much high than your expected 1 Crores. Let me tell you why? If your monthly expense is 25k per month & inflation continues to be 6.7% (average inflation rate from the time India was independent), your monthly expense will come to 1.9 Lac rs. per month.

For your children education, I have target 20 Lac for first Kid & 30 Lac for the second Kid.

Car is one goal where you will want to go in as early as possible. We will put this money in a balanced equity fund. After 3 years, we  should be able to make the down payment for 10 Lac car. After that you can convert 3.5 Lac as EMI. For 1 Lac, the interest comes around 1750 Rs per month for 7 year EMI which means almost 6,125 Rs EMI. Infact you can pick the amount after 2 years too & then convert the rest as EMI.

For Farmhouse,  again 8,000 Rs should give us a corpus at the end of 10 years which should be enough for a headstart. 

In a nutshell, we are putting 3.6 Lac per month in the equity Vs 1.7 Lac Rs. for Debt instruments.(PPF+ EPF + Infrastructure Bonds + Insurance) as 15k we are putting in balanced fund, I have not included that as equity oriented investments.

Apart from this, there will be bunch of FD’s for wealth management which will add to the debt part.  We will give an exposure of around 15% to gold & gold instruments in these equity investments.

Mutual Fund Systematic Investment Plan

Financial Goals Amount/Month Term Assumed Return on conservative Basis from past Nifty Returns Benefit
Retirement Planning 10,000 Rs. 25 Years 15% 3,30,00,000 Rs.
First Children Education 8,500 Rs. 10 Years 12% 19,75,000 Rs.
Second Children Education 3,500 Rs. 17 Years 15% 32,90,000 Rs.
Car 15,000 Rs. 3 Years 10% 6,30,000 Rs.
Farmhouse 8,000 10 Years 12% 18,6000 Rs.
Total 45,000 Rs      

 You need to be patient & disciplined investor to reap benefits from the stock market. There are mutual funds in India which has given a return of more than 25% consistently from the last 15 years. But we take conservative figures while doing the financial planning.

I have considered here 45k as you wrote 40-50k of performance based income.


Tax Saving

Instrument Name Amount Benefit
LIC 26,500 per year 50 Lac Insurance Cover till 2022
PPF 6,400 per year 8.6%
Infrastructure Bonds 20k per year 8.7%
EPF 3k 9.5% (Will change from next year to 8.4% tentatively)


Insurance Part:

We will need to add a Term Insurance from LIC. Your insurance cover is going to be over by 2022. Ideally you need to be insured till the time you retire which means around 2037.  We will add insurance cover of around another 50 Lac till the age of 60


Wealth Management Part:

Let us make sure that there is not more than 1 Lac Rs. of liquid money is in your account (total of Salary & Savings). You should open a savings account with Yes bank. They are offering 7% rate of interest right now on saving account. Even that 1 Lac rs which we have kept for any emergency purpose will yield you better returns.

We can categorize your wealth so far in 3 categories:


Corpus from PF Account is around 15 Lac which is pretty good. We will keep on building this & won’t change anything in it. This is Govt-securities where we are investing.


Amount from your parents, F.D. of around 9 Lac Rs. Next time if the FD matures, just let me know beforehand. We will concentrate more on reliable corporate F.D., NCD’s which offers higher interest rate than F.D. in bank

We will be in sync & will keep on reviewing & adding investments as you grew in stature over next few years.

Apart from this, I am happy to see your little portfolio in Stocks.

P.S. I enjoyed writing this article. I ust might feature more queries from different people. Is it something you would be interested in to read? Let me know your thoughts in the comments below.

Rajesh Singla

Rajesh is the founder & CEO of Stockssavvy, Stocks analyst,financial advisor by choice,software engineer by fate,biker,gamer,cricket lover n enthusiastic person. He believes in doing things not just to get by but to get Ahead...

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