Section C (4 Mark)

Ms. Nimita Shah, aged 34 years as on 2nd April 2010, is Vice President in a Mumbai-based firm. She has twin daughters Revati and Savitri of age 12 years and she is the sole guardian of her children pursuant to her recent divorce. She is currently residing in a rented house. Both her daughter are studying in the 6th Standard. She has approached you, a CWM®, for preparing her Wealth plan. She has shared the following financial information with you:

You, in consultation with Nimita have crystallized the following financial goals for her family and the preliminary roadmap to achieve them:

1.Send both daughters to a Boarding school – immediately – Outlay Rs. 1.80 lakh (present cost) per child p.a. – for 6 years – To be met on year to year basis by investing a suitable corpus.

2.Buy a house–in the next three years – Outlay of Rs. 80 lakh – Take a loan for 15 year term.

3.Invest suitably for the Higher Education of both children – Higher Education starts after 6 years – present cost Rs. 4.5 lakh p.a. for each child for a team of 5 year.

4.To invest monthly for Revati and Savtri’s wedding when they complete 24 years of age. The estimated present cost of one such marriage is Rs. 15 Lakh

5.Retirement Corpus for self – Corpus to be accumulated in 21 years – Corpus to sustain an annuity of Rs. 1.25 lakh p.m. (current cost) inflation linked for a post – retirement life of 25 years.

6.A world tour with both of her kids – After 11 years – outlay of Rs. 8 lakh at current prices.

7.A suitable Estate Planning to cover all her physical and financial assets.

Assumptions: