What's the Price of your Financial Freedom?

Two levels of financial dream-

1. Financial Security
2. Financial Freedom

1 Financial Security

Basic Needs (Monthly Expenses) Amount

House Hold Expenses

Kirana (Groccery) + Vegetables 5,000
Rent 10,000
Milk 1,200
Gas 1,000
Water Bill 400
Electricity Bill 3,000
Phone Bill 600
Wifi Bill 800

Loan
Home Loan EMI 20,000
Bike Loan EMI
Car Loan EMI 10,000
TV/ Freeze /Mobile EMI -
Personal Loan EMI -
Credit Card EMI 3,000

Transportation
Petrol Exp. 2,000
Train Ticket 500
Bus Ticket 500

Fees
School Fees
Tuition fees -
Extra Class Fees -

Medical Expenses -
Any Medical Exp.
Term Insurance 1,000
Health Insurance 1,000

Total Monthly Expenses 60,000

Total Yearly Expenses 720,000

Total Money Required to achieve

18,000,000
financial security in life
nancial Freedom?

cial dream-
ial Security
ial Freedom

2 Financial Freedom

Basic Needs (Monthly Expenses) Amount

House Hold Expenses

Kirana (Groccery) + Vegetables 5,000
Rent 10,000
Milk 1,200
Gas 1,000
Water Bill 400
Electricity Bill 3,000
Phone Bill 600
Wifi Bill 800

Loan
Home Loan EMI 20,000
Bike Loan EMI
Car Loan EMI 10,000
TV/ Freeze /Mobile EMI -
Personal Loan EMI -
Credit Card EMI 3,000

Transportation
Petrol Exp. 2,000
Train Ticket 500
Bus Ticket 500

Fees
School Fees
Tuition fees -
Extra Class Fees -

Medical Expenses -
Any Medical Exp.
Term Insurance 1,000
Health Insurance 1,000
60,000

Wants (Monthly Expenses) Amount

Vacation (thrice a year) 10,000

Miscellaneous shopping 5,000
iPhone 10,000
MacBook 12,000
DSLR 10,000
Branded clothes 3,000
Branded shoes 3,000
Health & Fitness 5,000
Food & Restaurants 5,000
Miscellaneous expenses 7,000
70,000

Total Monthly Expenses 130,000

Total Yearly Expenses 1,560,000

Total Money Required to achieve

39,000,000
financial freedom in life
 7 steps to achieve your fina

1 Invest in yourself/skills

2 Start Early Investing

Rate of return 12%

Investment at the age of 60 years

Age of Investor Investing Time Monthly Savings

25 years 35 years ₹ 8,600
30 years 30 years ₹ 10,000
35 years 25 years ₹ 12,000
40 years 20 years ₹ 15,000
45 years 15 years ₹ 20,000

3 Choose the right Investment Option

Monthly Investment ₹ 10,000

Time Duration 30 years
 Savings Account Life Insurance Policy Fixed Deposits
3% 4.50% 6%

58.01 lakhs 74.99 lakhs 97.95 lakhs

4 Take Inflation seriously

Inflation 6%

Time Monthly Expenses

Today ₹ 50,000
After 5 years ₹ 67,000
After 10 years ₹ 90,000
After 20 years ₹ 160,000
After 30 years ₹ 287,000

5 Save more and Invest

 Rate of return 12%
Time Duration 30 years
Monthly Income ₹ 100,000

Corpus after 30 years

Savings rate Monthly Savings
(A)
10% ₹ 10,000 3.08 crores
20% ₹ 20,000 6.16 crores
30% ₹ 30,000 9.25 crores
40% ₹ 40,000 12.33 crores
50% ₹ 50,000 15.42 crores

https://www.thecalculatorsite.com/fina
https://cleartax.in

6 Earn more and Invest

Rate of return 12%

Time Duration 30 years
Monthly Income ₹ 200,000

Corpus after 30 years

Savings rate Monthly Savings
(A)
10% ₹ 20,000 6.16 crores
20% ₹ 40,000 12.33 crores
30% ₹ 60,000 18.50 crores
40% ₹ 80,000 24.66 crores
50% ₹ 100,000 30.84 crores

https://www.thecalculatorsite.com/fina
https://cleartax.in
chieve your financial freedom

Calculator
Total Investment Corpus at maturity
₹ 3,600,000 4.74 crores Round off https://www.thecalcul
₹ 3,600,000 3.08 crores
₹ 3,600,000 2.02 crores
₹ 3,600,000 1.36 crores
₹ 3,600,000 94.3 lakhs
Debt Mutual Funds Stocks/Mutual Funds
9% 13%

1.71 crores 3.76 crores

Inflation Calculator used-

https://www.advisorkhoj.com/tools-and-calculators/future-v
 Inflation 5%

If savings are increased

Present Value of (A) Present Value of (B)
by 10% every year (B)
8 crores 71.3 lakhs 1.85 crores
16 crores 1.42 crores 3.70 crores
24 crores 2.13 crores 5.55 crores
32 crores 2.85 crores 7.40 crores
40 crores 3.56 crores 9.25 crores

ecalculatorsite.com/finance/calculators/compoundinterestcalculator.php
https://cleartax.in/s/present-value-calculator

Inflation 5%

If savings are increased

Present Value of (A) Present Value of (B)
by 10% every year (B)
16 crores 1.42 crores 3.70 crores
 32 crores 2.84 crores 7.40 crores
48 crores 4.26 crores 11.1 crores
64 crores 5.70 crores 14.8 crores
80 crores 7.12 crores 18.5 crores

hecalculatorsite.com/finance/calculators/compoundinterestcalculator.php
https://cleartax.in/s/present-value-calculator
 Calculator used-

https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php
ulator used-

and-calculators/future-value-inflation-calculator
 Step 1- Calculate Future Value of your dream

Every Rs 1 lakh required today will become (due to Inflation)

After these many years With Inflation @ 4%

2 108,160
3 112,486
4 1,16,986
5 121,665
6 126,532
7 1,31,593
8 1,36,857
9 142,331
10 148,024
12 160,103
15 180,094
18 202,582
20 219,112
25 266,584
30 324,340
35 394,609

Every Rs 1 lakh required today will become (due to Inflation)- Roundin

After these many years With Inflation @ 4%

2 109,000
3 113,000
4 1,17,000
5 122,000
6 127,000
7 1,32,000
8 1,37,000
9 143,000
10 149,000
12 161,000
15 181,000
 18 203,000
20 220,000
25 267,000
30 325,000
35 395,000

Step 2- Money you need to save each month to achieve 1,00,00

Monthly Investment Req

With constant contribution throughout
Years to reach the goal With low risk @ 8%
2 4,006
3 2,567
4 1,849
5 1,420
6 1,136
7 934
8 783
9 667
10 575
12 439
15 307
18 223
20 182
25 114
30 74
35 48

Step 3- Identifying the right Investment Options

Short-Term Goal :
Long-Term Goal :

Risk Profile :
Example 1 - Rohan's goal is to buy a car after 5 years

Today's cost =
Projected Inflation =
Time for the goal =
Future cost of the goal =

Constant Contribution, high risk taker

Monthly Invst. (1 lakh) =

Monthly Invst. (13.4 lakh) =
Risk Profile, Quadrant

Investment Options example-

Balanced Mutual Funds =

Corporate FDs =
Flexi Cap Mutual Funds =
Example 3 - Abhit's goal- Down-payment of a house after 10 years

Today's cost =
Projected Inflation =
Time for the goal =
Future cost of the goal =

Lumpsum amount , high risk taker

One time Invst. (1 lakh) =

One time Invst. (54 lakh) =
Risk Profile, Quadrant

Investment Options example-

Index Funds A =
Large Cap Stocks =
Mid Cap Mutual Funds =
Small Cap Mutual Funds =
late Future Value of your dream

uired today will become (due to Inflation)

With Inflation @ 6% With Inflation @ 8%

112,360 116,640
119,102 125,971
126,248 136,049
133,823 146,933
141,852 158,687
150,363 171,382
159,385 185,093
168,948 199,900
179,085 215,892
201,220 251,817
239,656 317,217
2,85,434 399,602
320,714 466,096
429,187 684,848
5,74,349 1,006,266
768,609 1,478,534

day will become (due to Inflation)- Rounding off

With Inflation @ 6% With Inflation @ 8%

113,000 117,000
120,000 126,000
127,000 137,000
134,000 147,000
142,000 159,000
151,000 172,000
160,000 186,000
169,000 200,000
180,000 216,000
202,000 252,000
240,000 318,000
 2,86,000 400,000
321,000 467,000
430,000 685,000
5,75000 1,007,000
769,000 1,479,000

ed to save each month to achieve 1,00,000

Monthly Investment Required

stant contribution throughout With 6% increase every year
With high risk @ 11% With low risk @ 8% With high risk @ 11%
3,949 3,894 3,840
2,493 2,426 2,359
1,769 1,700 1,630
1,338 1,271 1,201
1,053 990 922
852 793 728
703 648 586
588 538 480
498 453 397
367 329 280
242 215 174
165 146 113
130 115 86
73 65 45
42 39 24
24 23 13

ying the right Investment Options

Less than 5 years

More than 5 years

Low Risk Taker

High Risk Taker
s goal is to buy a car after 5 years Example 2 -

Rs 10 lakh
6%
5 years
Rs 13.4 lakh (1.34x10)

nt Contribution, high risk taker

Rs 1338
₹ 17,929
III

estment Options example-

₹ 5,000
₹ 5,000
₹ 7,929
wn-payment of a house after 10 years Template -

Rs 30 lakh
6%
10 years
Rs 54 lakh (1.8x30)

um amount , high risk taker

Rs 35,218
₹ 1,901,772
IV

estment Options example-

₹ 500,000
₹ 500,000
₹ 500,000
₹ 401,772
 Inflation Calculator used-

https://www.advisorkhoj.com/tools-and-calculators/future-value-inflation-calculator
 One time Lump-sum Investment

With low risk @ 8% With high risk @ 11%

85,734 81,162
79,383 73,119
73,503 65,873
68,058 59,345
63,017 53,464
58,349 48,166
54,027 43,393
50,025 39,092
46,319 35,218
39,711 28,584
31,524 20,900
25,025 15,282
21,455 12,403
14,602 7,361
9,938 4,368
6,763 2,592
 Rahul's goal is to start a grocery shop after 20 years

Today's cost = Rs 20 lakh

Projected Inflation = 4%
Time for the goal = 20 years
Future cost of the goal = Rs 44 lakh (2.20x20)

Increase monthly Contribution, low risk taker

Monthly Invst. (1 lakh) = Rs 115

Monthly Invst. (44 lakh) = ₹ 5,060
Risk Profile, Quadrant I

Investment Options example-

Index Funds A = ₹ 2,000

Index Funds B= ₹ 2,000
Gilt Bonds = ₹ 1,060
 Your goal with time duration

Today's cost =
Projected Inflation =
Time for the goal =
Future cost of the goal =

Type of contribution, ___ risk taker

Monthly Invst. (1 lakh) =

Monthly Invst. (44 lakh) =
Risk Profile, Quadrant

Investment Options -

Investment Options A -
Investment Options B -
Investment Options C -
Formula used-
 Fund Category Annualised Returns (%
Name

Equity
Large Cap Mutual Funds
Large and Mid Cap Funds
Flexi Cap Funds
Mid Cap Funds
Small Cap Funds
Value Oriented
ELSS Funds
Sectoral Banking
Different Investment Options (Equity, Sectoral Infrastructure
Debt, Hybrid) and their last 3, 5, and
10 years return Sectoral Pharma
Sectoral Technology
Thematic
Data as of Sep, 2021 Thematic Consumption
Thematic-Dividend Yield
Thematic Energy
Thematic ESG
Thematic MNC
Thematic PSU
International
NIFTY 50
NIFTY NEXT 50
S&P 500

Debt
Long Duration
Medium to Long Duration
Medium Duration
Short Duration
Low Duration
Ultra Short Duration
Liquid
Money Market
Overnight
Dynamic Bond
Corporate Bond
 Credit Risk
Banking and PSU
Floater
FMP
Gilt Funds
Gilt With 10 Year Constant Duration

Hybrid
Aggressive Hybrid
Balanced Hybrid
Conservative Hybrid
Equity Savings
Arbitrage
Dynamic Asset Allocation
Multi Asset Allocation
ualised Returns (%)
3 Years % 5 Years % 10 Years %

13.12 14.08 13.72

14.35 14.39 16.14
13.83 14.08 14.73
16.22 15 18.44
17.64 16.48 19.08
12.43 13.2 15.67
13.68 13.95 15.37
6.23 10.15 10.04
13.08 12 11.38
25.52 13.18 17.61
32.94 28.77 23.73
12.25 12.5 14.6
11.63 14.01 16
14.01 14.29 13.62
20.42 17.48 14.02
14.72 13.43 14.61
10.39 11.34 16.48
4.96 5.24 6.13
14.15 12.04 9.49
16.70 15.51 13.79
14.46 12.65 15.78
13.98 14.76 13.93

9.99 7.45 8.35

7.41 6.19 7.65
5.39 6.25 7.61
6.36 6.25 7.66
4.73 5.55 7.25
5.39 5.77 7.57
4.94 5.7 7.27
6.13 6.44 7.7
4.29 4.86 6.52
7.62 6.54 8.25
8.23 7.39 8.09
1.68 3.44 7.63
8.36 7.59 8.41
7.6 7.24 8
4.38 5.38 7.1
9.25 7.18 8.54
10.3 8.29 9.67

12.4 12.12 13.33

10.25 8.89 10.5
7.41 7.18 8.8
8.06 7.91 -
4.69 5.14 6.7
9.32 8.84 11.12
10.97 9.15 9.91