Money Series: Part 31

By: Tarun Prakash Srivastava, Sr. Executive Editor-ICN Group

Let us once again examine a Financial Map and study the financial depiction of Saksham’s life for example. You know the Saksham with whom we met at the last halt who is of the age of 35 years, got married, has a three-year-old daughter, and he earns Rs 30,000/- per month while doing the job:

Financial Map of Saksham’s Life
Liabilities Tentative year Estimated amount Plan for required fund
Own Bank Balance After five years Rs. 5 lac only  ?
Higher education of the daughter    After thirteen years Rs.10  lac only  ?
To start own business   After fifteen years Rs.10  lac only  ?
A big and comfortable house After twenty years Rs. 40  lac only  ?
Daughter’s marriage   After twenty two years Rs. 20  lac only  ?
Retirement After thirty years Rs.100  lac only  ?
Health Uncertain/any time Rs.10  lac only  ?

Now, pay attention to the column for the arrangement in which the liability question is marked with each obligation. Although the circumstances of each person vary, but only if we try to answer every question of instant Financial Map with the purpose of understanding, there may be the following options:

Five years later – own bank balance – the requirement is about Rs 5 Lac :

The first goal for Wealth Journey of Saksham is his bank balance of five Lac  rupees in five years from now onwards. This is a future goal, and we have to achieve this goal not only by marking the destination (bookmark), but we also have to create a path for it.

Please try to understand the building of the first financial road to achieve his first economic goal in the first five years:

FIRST FINANCIAL GOAL OF SAKSHAM

Possibility of income  from the fist year to five years for Saksham
Annual saving Interest  earned Total saving Immovable property  
First Year
On investment of Rs. 7000/- per month saved on the basis of principal of ‘First Payment to Self’ through ‘fixed deposit’ or ‘Recurring deposit with benefit of an additional installments as interest’
Rs. 84,000/- Rs. 7,000/- Rs. 91,000/-
Second Year
Deposit of first year Rs. 91,000/-
On investment of Rs. 8000/- per month saved on the basis of principal of ‘First Payment to Self’ through ‘fixed deposit’ or ‘Recurring deposit with benefit of an additional installments as interest’
Rs. 96,000/- Rs. 8000/- Rs. 1,04,000/-
Total Rs. 91,000/- (First year saving)

+ Rs. 1,04,1000/-

Total : 1,95,000/-

Third Year
Consolidated deposit of first and second years Rs. 1,95,000/-
Interest @7% on consolidated amount  of first and second years Rs. 13,650/-
On investment of Rs. 9000/- per month saved on the basis of principal of ‘First Payment to Self’ through ‘fixed deposit’ or ‘Recurring deposit with benefit of an additional installments as interest’
Rs. 1,08,000/- Rs. 9,000/- Rs. 1,17,000/-
Total Rs. 1,95,000/- (First & second year saving) + Rs. 1,17,000/-

Total : Rs. 3,25,650/-

Fourth Year
Purchased a plot of land/made an appropriate investment     Rs. 3,25,650/-
Rs. 1,20,000/- Rs. 10,000/- Rs. 1,30,000/-
Fifth year
Saving of fourth year Rs. 1,30,000/-
Interest @7% on saving of fourth year Rs. 9,100/-
Rs. 1,33,000/- Rs. 11,000/- Rs. 1,44,000/-
Sale of plot of land with 40% profit/profit on appropriate invest already made Rs. 4,55,910/-
Grass income Rs. 7,39,010/-
First Goal (Bank balance of Rs. 5,00,000/-
Total earned asset   Rs. 7,39,010/-
Success rate    147.80%

Keep in mind that Saksham is doing a job with a salary of thirty thousand rupees per month only, and in every job, there is also a salary increase of about five percent to ten percent per annum. One thing we must keep in mind is that Saksham is offering only eight to ten hours per day in his job and if necessary, by doing additional work as per his qualification for two to four hours a day or ten to twelve hours per week, in addition to the income earned from his job, he can add up to five thousand rupees and thus he will receive about seven thousand rupees from the first month.

Tarun Prakash Srivastava

From my book ‘Science of Money’ available on Amazon.com in English at http://bit.ly/Science-Of-Money  and in Hindi at http://bit.ly

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