Goal Planning Case Study: Hum Do Hamare Do
Case Study: How does a young 28-year old plan a simple path to retirement, his young ones’ education & a Second honeymoon?
Ashutosh is a 28 year old IT professional from Pune. He is married with two kids, a 3-month-old boy and a 3-year-old girl. He came to Kuvera seeking financial advice and wanted to plan for a better financial future.
As a first step, Ashutosh sets up his profile on Kuvera with simple yes or no answers.
By interpreting his responses, our deep-learning contextual goal planning engine intelligently recommends financial goals that he might want to plan for.
Ashutosh used these recommendations to choose his goals and see a customized financial plan taking shape. Of course, he can always add custom goals.
Let’s add goals one by one.
Goal 1: Retirement, in 32 years.
Ashutosh’s monthly household expenses are Rs 45,000. He also wants to invest Rs70,000 in surplus savings for retirement. Based on this information, our retirement planning calculator suggested he will need an estimated Rs 2.4 crores to maintain his current lifestyle during retirement. Investing just Rs 70,000 today and Rs 5,400 per month till retirement helps achieve this goal.
See how waiting just for 5 years, increases the monthly investment amount to Rs 7,940 or close to 50% higher. Invest early.
Lets add Goal 2 now: Daughter’s college, in 14 years.
Ashutosh wanted to peg the cost to a 4 year college in Pune including living and boarding expenses, but used higher inflation for higher education of 8%.
Note that for shorter term goals, waiting for 5 years increases the monthly investment amount required by more than 120%.
Add Goal 3: Son’s college, in 17 years.
Ashutosh used the same assumption for his son’s college too, except he has 17 years to save for this goal. He added a custom goal for his son’s education – you can add custom goals once you click on the show more button in the goal planning page.
Add Goal 4: Car, in 5 years.
Ashutosh wants to upgrade to a Maruti Brezza in 5 years but doesn’t want to take a loan for that – smart chap.
Finally, we summarize his goals and recommend investment options:
We combine all your goals and show you a single investment plan to attain all your goals. Our unified portfolio approach has two distinct advantages:
1. Easy to track – you only need to track one portfolio. You can choose as many or as few goals as you want to track. Your investments are then intelligently assigned to your goals and you can track their progress as you make newer investments.
2. Lower investment amount – A single SIP for multiple goals is less than the sum of SIPs needed for each goal. The amount you invest for your near-term goals continues to get invested towards your longer term goals when the near-term goal is achieved. This reduces the overall SIP amount needed to achieve all your goals.
For Ashutosh, the sum of individual SIPs is Rs 34,200 per month. But once we use our optimized single portfolio approach, the same goals can be achieved with a SIP of Rs 30,400 per month.
Ashutosh had another option. He could start an IMT for Rs 18,700 today and increase the monthly investment amount every year by 10% to achieve the same goals. This way he could start smaller and invest more as his income increases. That’s smarter. Learn more about IMT here.
Ashutosh chose the SIP route as he was earning enough to be able to put aside Rs 30,400 every month.
And that’s it! In a few minutes, Ashutosh was able to craft an actionable financial plan for himself. With all his current goals planned for and a unified investment amount to save every month, Ashutosh is happy knowing what he needs to save. Further, Ashutosh was able to put this plan into action and start investing in just about 5 minutes. You can too!