My Plan
Protect Hard-Earned Money First...
In order to achive financial goals in life, it is important to protect an individual’s
hard-earned money before deploying it across asset classes
F
rank Immanueldino
Sterling, aged 36 years is
married and is blessed
with a daughter, Tziona
Frank, aged 4 years. He lives in his
own house in Chennai with his
wife, daughter and his mother. He
is an Engineer working in a private
sector company. We ran Frank’s
through our trade-marked DRAWN
Model of financial planning and
added clarity to the entire money
management exercise.
Dreams : His essential goals are his
daughter’s higher education, her
marriage, mother’s operation and
building his retirement corpus. He
also desires to add a lifestyle goal
(i.e. – International Vacation with
his family). As a part of our exercise
we essentially add an Emergency
Fund, this ensures that one does not
prematurely withdraw or discon-
tinue his long-term investments.
Assets – 71.37 Lakh; Liability – 24.34
Lakh; Networth – 47.03 Lakh.
nient to achieve the goals. After his
household expense, the home & car
loan EMI, he is left with adequate
cash-flow to investment on a month-
ly basis to fund all his goals and also
add adequate risk-protection (i.e.
- Life & Health Insurance Policy).
Way Forward : For designing the
action plan we follow our trade-
marked process called ERGRE. It
is a process where we protect the
hard-earned money (Emergency &
Risk Protection), grow it to achieve
the goals (Goal & Retirement Plan-
ning) & then it can be transferred
seamlessly to the loved ones (Estate
Planning).
The asset allocation is skewed
towards Real Estate. This will take
some years to re-align. Frank had
started exploring with Mutual Fund
SIP with small amounts though it
was ad-hoc. We re-structured his
The asset allocation suggested is based on his risk
profiling and time horizon of investment.
Existing
2%
Reality Check : Frank had the habit
of saving his money regularly but
most of his investments followed
the typical conventional style.
▶ Most of it was parked in
conventional products such as Real
Estate, Endowment Policies, PPF
and a very small portion on Equity
Mutual Fund.
▶ He did not have adequate risk
protection – (i.e. - Term Insurance
Policy) and Health Insurance Policy.
12%
Recommended
7%
5%
4%
1%
12%
4%
77%
76%
Available Resources : Recurring
monthly cash-flow makes it conve-
Insurance
Cash
Debt
Equity
Realestate
Hybrid
Disclaimer
Financial Planning of Frank Immanueldino Sterling is based on the “personal opinion and experience” of Fincart, and that it should not be
considered professional financial investment advice. No one should make any investment decision without first consulting his or her own
financial advisor and conducting his or her own research and due diligence.
80
Outlook Money April 2018 www.outlookmoney.com