It has been a year since the integrated financial planning template with which you can create your own financial plan, and print it on one side of an A4 sheet, was released.
Glad to note that this is now the most popular Excel sheet at freefincal. Not so glad to know that the Chit fund calculator is in the top 3 (made it to show why Chit funds are bad!)
I have now added two graphs to the planning template a Year by year Pie Chart with which the user can now view the cash flow pie for every year from the present to slated retirement.
What you must invest and what you can invest
This gives you a perspective of the investment amount needed for all goals (long-term, short-term and recurring) and the amount free for investment (investible surplus). For those with liabilities, the investible surplus will grow with time.
I have deliberately not factored in this cash that will free up for investment down the line. For example if your child goes to college 10 years before you retire, after his education is complete, the money tagged with the education goal is free.
That can now be tagged with your retirement goal. Some planners prefer to take into account this extra cash flow while planning for retirement. Doing so will reduce the initial monthly investment needed for retirement.
I choose not to do this. The future is uncertain and we cannot assume our lives will pan out as it does on an Excel sheet. I would prefer to use this planner each year and re-evaluate my goals.
So the best strategy would be to not worry about the investment amount required and focus on investment what we can by keeping expenses and liabilities at check. It is the best strategy because not much else can be done anyway!
Updated Jan. 15th 2016. Integrated Financial Planning Template Corrected an error in the insurance sheet as pointed out by Guru Rudagi.
(Excel 200 file, Macros needed only for printing plan)
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