By: Tarun Prakash Srivastava, Sr. Executive Editor-ICN Group
Success is the name of completing the journey at a much faster pace than the fixed speed of time. In the race, the winner is one who achieves his goal in the shortest possible time.
Goal No. 2
Thirteen years later – Higher education needs of daughter – approximately Rs 10 Lac :
For this stopover of the journey from today itself, there is a long time of thirteen years. Let’s try to understand the map of the realization of the second financial goal of Saksham:
SECOND FINANCIAL GOAL OF SAKSHAM
| Possibility of income from Five year to Thirteen years for Saksham | |||||||
| Available fund of five years | Rs. 7,39,010/- | ||||||
| Annual saving | Profit by interest | Total saving | Immovable property | ||||
| Sixth year | |||||||
| Purchased a plot of land/other appropriated investment | Rs. 7,39,010/- | ||||||
| On investment of Rs. 12,000/- 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. 1,44,000/- | Rs. 12,000/- | Rs. 1,56,000/- | |||||
| Seventh year | |||||||
| Deposit of sixth year | Rs. 1,56,000/- | ||||||
| 7% interest on deposit of sixth year | Rs. 10.920/- | ||||||
| On investment of Rs. 13,000/- 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. 1,56,000/- | Rs. 13,000/- | Rs. 1,66,000/- | |||||
| Total amount | Rs. 3,35,920/- | ||||||
| Eighth year | |||||||
| Deposit of sixth and seventh years | Rs. 3,35,920/- | ||||||
| 7% interest on deposit of sixth and seventh year | Rs. 23,515/- | ||||||
| On investment of Rs. 14,000/- 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. 1,68,000/- | Rs. 14,000/- | Rs. 1,82,000/- | |||||
| Total amount | Rs. 5,31,435/- | ||||||
| Ninth year | |||||||
| Consolidated deposit of sixth to eighth year | Rs. 5,31,435/- | ||||||
| 7% interest on said deposit | Rs. 37,200/- | ||||||
|
On investment of Rs. 15,000/- 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. 1,80,000/- | Rs. 15,000/- | Rs. 1,95,000/- | |||||
| Total amount | Rs. 7,63,635/- | ||||||
| Tenth year | |||||||
| Deposit of sixth to tenth year | Rs. 7,63,635/- | ||||||
| 7% interest on said deposit | Rs. 53,455/- | ||||||
|
On investment of Rs. 16,000/- 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. 1,92,000/- | Rs. 16,000/- | Rs. 2,08,000/- | |||||
| Sale of plot of land on 100% growth/100% profit earned in appropriated investments already made | Rs. 14,78,020/- | ||||||
| Total amount | Rs. 25,03,110/- | ||||||
| Eleventh year | |||||||
| Purchased a plot of land/made other appropriated investment | Rs. 25,03,110/- | ||||||
|
On investment of Rs. 17,000/- 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. 2,04,000/- | Rs. 17,000/- | Rs. 2,21,000/- | |||||
| Twelfth year | |||||||
| Deposit of eleventh year | Rs. 2,21,000/- | ||||||
| 7% interest of said deposit | Rs. 15,470/- | ||||||
|
On investment of Rs. 18,000/- per month saved on the basis of principal of ‘First Payment to Yourself’ through ‘fixed deposit’ or ‘Recurring deposit with benefit of an additional installments as interest’ |
|||||||
| Rs. 2,16,000/- | Rs. 18,000/- | Rs. 2,34,000/- | |||||
| Total amount | Rs. 4,70,470/- | ||||||
| Thirteenth year | |||||||
| Deposit of eleventh and twelfth years | Rs. 4,70,470/- | ||||||
| 7% on said deposit | Rs. 32,933/- | ||||||
|
On investment of Rs. 19,000/- 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. 2,28,000/- | Rs. 19,000/- | Rs. 2,47,000/- | |||||
| Sale of plot of land with 40% growth/40% profit earned in appropriated investments already made | Rs. 35,04,354/- | ||||||
| Total amount | Rs. 42,54,757/- | ||||||
| Second Goal (Rs. 10 Lack for higher education of the daughter) | |||||||
| Total assets made | Rs. 42,54,757/- | ||||||
| Success rate | 425.45% | ||||||
Let’s try to understand this picture too.
My advice here is that at the end of the fifth year, Saksham should purchase a suitable plot of land or he should make some beneficiary investments out of his initial capital of Rs. 7,39,010 / – to make profits at higher rates.
Sixth year
In this section of the scheme also, Saksham following the principle of “first payment to self,” pays himself one thousand rupees more than the previous year and deposits in the form of a fixed or recurring deposit (fixed or recurring deposit) this amount of rupees i.e., Rs.12000 / – per month. Finally, with an additional installment, he will get an additional income of Rs. 1,56,000 / -.
Seventh year
Saksham earns Interest @ 7% on the money generated in the sixth year as an additional income of Rs.10,920/ – and as per the preliminary plan, he, this year, pays himself an amount of Rs.13000/ – per month and deposits the same in the shape of fixed or recurring deposit and as such, at the end of the seventh year, he generates income of Rs 1,69,000/ – with an additional installment at the end of the year. This year’s total assets will be Rs 3,35,920/ -.
Eighth-year
This year, Rs. 23,515 / – as 7% interest will be received as additional income on the amount created in the seventh year and as per the preliminary plan, Saksham pays himself Rs.14000 / – per month and deposits it in a shape of fixed or recurring deposits monthly and earns an additional income of Rs 1,82,000 / – with an additional installment at the end of the year. This year’s total assets will be Rs 5,31,435 / -.
Ninth-year
This year, Rs. 37,200 / – as 7% interest will be received as additional income on the amount created in the seventh year and as per the preliminary plan, Saksham pays himself Rs. 15000 / – per month and deposits the same in shape of fixed or recurring deposit and receives an additional income of Rs. 1,95,000 / – with an additional installment at the end of the year. This year’s total assets will be Rs 7,63,635 / -.
Tenth year
This year, Rs. 53,455 / – as 7% interest will be obtained as additional income on the amount created in the seventh year and as per the preliminary plan, Saksham pays himself Rs. 16,000 / – per month and deposits the same in shape of fixed or recurring deposit and receives an additional income of Rs 2,08,000 / – with an additional installment at the end of the year. At the end of this year, the plot acquired in the past (or other beneficial investment) may be disposed off with 100% profit potential, i.e., Rs 14,78,020 / – in the form of the sale price or on investment return and thus at the end of this year, the total assets will be of Rs 25,03,110/-.
Eleventh year
In this year, the total assets created in the previous year should be invested in purchasing a legally valid land or any other suitable beneficiary investment so that profit at a higher rate can be acquired. Saksham, further, to make an additional income, following the same principle, pays himself an amount of Rs. 17,000 / – per month and deposits the same in the shape of fixed or recurring deposits as usual and earns an additional income of Rs 2,21,000 / – with an additional installment at the end of the year.
Twelfth year
On the assets created during the eleventh year, the interest @7% shall be obtained which comes to Rs. 15470 / -. In order to make an additional income following the “first payment self”, according to the preliminary plan, by raising Rs 1000 / – monthly this year, Saksham pays an amount of Rs 18,000 / – per month to himself and deposits the same in the shape of fixed or recurring deposits as usual and earns an additional income of Rs 2,34,000 / – with an additional installment at the end of the year and thus, the total income, including the deposits of last, year, shall be Rs. 4,70,470/-.
Thirteenth year
On the amount of consolidated savings for last two years, i.e., Rs. 4,70,470/-, Interest income @ 7% will be obtained as additional income of Rs. 32,933 / – and by the preliminary scheme, by raising Rs. 1000 / – monthly, this year Saksham pays Rs. 19,000 / – per month to him and deposits the same in the shape of fixed or recurring deposits as usual and earns an additional income of Rs 2,47,000 / – with an additional installment at the end of the year. Saksham may sell his plot of land this year on 40% profit, and as such, he shall get an amount of Rs. 35,04,354/- only as sale consideration and as such, his total income, by the end of this year, shall be Rs. 42,54,757/- only.
Just look at the financial map of Saksham once again. His second financial destination was to earn only Rs. 10 Lac s in the thirteenth year for his daughter’s higher education, but his total income, this year, has gone up to Rs.42,54,757/-. It means if he spends Rs 10,00,000/ – for his daughter’s higher education, even after that, the balance of Rs. 32,54757/- is left to him.
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
