USER MANUAL
If God Was Your Financial Planner
Companion Calculators Workbook
A guide to the seven-sheet Excel workbook covering retirement, children's
education, real estate, life and health cover, and asset allocation.
Book by Suresh Sadagopan · Westland
Contents
1. About this workbook | 3 |
2. Reading the sheets | 4 |
3. Retirement — Ch. 17–18, p.173 & p.182 | 5 |
4. Education — Preface | 7 |
5. Real Estate — Ch. 4, p.26 | 9 |
6. Insurance — Ch. 11–12 & 19 | 11 |
7. Health Insurance — Ch. 11–12 & 19 | 13 |
8. Asset Allocation — Preface | 15 |
9. Snapshot | 17 |
10. Assumptions, scope and limitations | 18 |
11. Appendix: formula reference | 19 |
1. About this workbook
This manual explains how to use the companion.xlsx workbook built alongside “If God Was Your Financial Planner.” The workbook turns six decisions the book walks through — retirement, a child's education, buying versus renting a home, how much life and health cover to carry, and how to split savings across asset classes — into working calculators you can run on your own numbers.
Every number you see is produced by a formula, not typed in. Change an input and everything downstream — including the one-page Snapshot — recalculates immediately.
1.1 Who this is for
Readers of the book who want to work through their own numbers as they read, rather than just following the client stories. Each calculator carries the chapter and page number where the book covers that ground, so you can use the workbook alongside the book, section by section.
1.2 What's in the workbook
Start here | This sheet — legend, sheet list, and how-to-use instructions. |
Snapshot | One page that pulls the key result from each calculator once you've used it. |
Retirement | Corpus required at retirement and the monthly SIP to get there. Ch. 17–18, p.173 & p.182. |
Education | Future cost of a child's education goal and the SIP to fund it. Preface. |
Real Estate | Net wealth from buying versus renting-and-investing over your holding period. Ch. 4, p.26. |
Insurance | Life cover needed, by two different methods. Money-lessons chapters, Ch. 11–12 & 19. |
Health Insurance | Health cover needed, by a sum-insured benchmark and a needs-based method. Money-lessons chapters, Ch. 11–12 & 19. |
Asset Allocation | A starting-point split across equity, debt, gold and cash. Preface. |
RE Schedule | Hidden month-by-month workings behind the Real Estate sheet. See §6 to unhide it. |
2. Reading the sheets
2.1 Colour conventions
Every calculator sheet uses the same visual language:
- Yellow fill, blue text — an input cell. Type your own number here.
- Pale green fill, black text — a calculated result. These are formulas; leave them as they are.
- Dark navy bars — section headers separating “Your inputs” from “Results.”
- Green text on the Snapshot sheet — a value pulled live from another sheet.
2.2 General rules
- Only type into yellow input cells. Typing over a green results cell replaces the formula with a fixed number — if that happens, re-open the original file or retype the formula shown in the reference tables in this manual.
- Percentages are entered and displayed as percentages (e.g. 6.0%), not decimals — Excel stores 6% as 0.06 internally, which the formulas already expect.
- All currency is in Indian Rupees (₹), shown unabbreviated (e.g. ₹6,91,79,797) rather than in Cr/L shorthand, so figures paste cleanly into other sheets.
- The workbook opens with automatic calculation on. If a sheet ever shows old numbers after you change an input, press F9 (or Formulas → Calculate Now).
This workbook was built and tested in Excel; it also opens in Google Sheets and LibreOffice Calc, though chart styling may shift slightly between programs.
3. Retirement — Ch. 17–18, p.173 & p.182
Works out how large a corpus you need at retirement so today's monthly expenses, grown by inflation, can be funded for the rest of your life — and the monthly SIP that gets you there from what you've already saved.
3.1 Inputs
Field | Default | What it means |
|---|---|---|
Your age now | 35 | Starting point for the projection. |
Retirement age | 60 | Age you plan to stop earning. |
Life expectancy (age) | 85 | How long the corpus needs to last. Err on the higher side — running out of money late in life is the risk being managed here. |
Current monthly expenses | ₹60,000 | What you spend today, in today's rupees. |
Expected inflation (% p.a.) | 6.0% | How fast your expenses will grow between now and retirement, and through retirement. |
Return before retirement (% p.a.) | 11.0% | Expected growth rate on savings while you're still investing, pre-retirement. |
Return after retirement (% p.a.) | 7.0% | Expected growth rate on the corpus once you're drawing it down — usually lower and safer than the pre-retirement mix. |
Retirement savings already set aside | ₹15,00,000 | What you already hold earmarked for retirement. |
3.2 Reading the results
- Corpus required at retirement — the target you're building toward, in retirement-day rupees.
- Monthly SIP required — what to invest each month between now and retirement, on top of what you already hold, assuming the pre-retirement return above.
The chart plots your current savings against the corpus target so the size of the gap is visible at a glance.
3.3 Method
Monthly expenses are grown at the inflation rate to your retirement date. The corpus is then sized using the real (inflation-adjusted) post-retirement return, applied as an annuity-due over your years in retirement — i.e. it assumes you draw the year's expenses at the start of each year, and the balance keeps earning the real return in between.
This is an illustrative calculation, not an actuarial one. It doesn't model sequence-of-returns risk, taxation on withdrawals, or a change in spending patterns after retirement (many households actually spend less in later retirement years).
3.4 Worked examples
Five different starting points, run through the same calculator, to show how much the required SIP moves with age, income and how late saving begins.
Case 1. Early-career saver
A 28-year-old software engineer wants to retire at 55 rather than the usual 60, with 27 years to build a corpus and an aggressive equity-heavy portfolio while young.
Inputs age 28 → retire 55, live to 85 · expenses ₹35,000/mo · inflation 6% · pre-retirement return 12% · post-retirement return 7% · savings so far ₹3,00,000
Result Corpus required ₹5.32 Cr · Monthly SIP ₹21,646
Case 2. Late starter, mid-career
A 45-year-old with only 13 years to retirement and long life expectancy in the family — shows how a late start and a longer runway in retirement both push the required SIP up sharply.
Inputs age 45 → retire 58, live to 88 · expenses ₹90,000/mo · inflation 6% · pre-retirement return 10% · post-retirement return 6.5% · savings so far ₹25,00,000
Result Corpus required ₹6.46 Cr · Monthly SIP ₹1.81 L
Case 3. Self-employed professional
A self-employed consultant with no employer pension plans to work till 65, giving a long accumulation window to offset an irregular income.
Inputs age 38 → retire 65, live to 85 · expenses ₹70,000/mo · inflation 6% · pre-retirement return 11% · post-retirement return 7% · savings so far ₹12,00,000
Result Corpus required ₹7.42 Cr · Monthly SIP ₹29,777
Case 4. Close to retirement
Five years from retirement with modest expenses and a sizeable corpus already — checks whether the existing savings alone can close the gap.
Inputs age 55 → retire 60, live to 82 · expenses ₹45,000/mo · inflation 6% · pre-retirement return 8% · post-retirement return 6.5% · savings so far ₹60,00,000
Result Corpus required ₹1.51 Cr · Monthly SIP ₹86,120
Case 5. Dual-income, under-saved
A dual-income household with high current expenses but relatively little set aside so far, and a long life expectancy assumption given family history.
Inputs age 40 → retire 60, live to 90 · expenses ₹1,10,000/mo · inflation 6% · pre-retirement return 11% · post-retirement return 7% · savings so far ₹8,00,000
Result Corpus required ₹11.12 Cr · Monthly SIP ₹1.28 L
4. Education — Preface
The preface names “funding children's education—and how one should not overreach for it” as one of the book's running themes. This calculator turns that into a number: what a course or school costs today, what it will cost by the time your child needs it, and the SIP to close the gap.
4.1 Inputs
Field | Default | What it means |
|---|---|---|
Child's current age | 6 | Starting point for the projection. |
Age when funds are needed | 18 | When the goal falls due — typically the start of undergraduate study, but change this for school admissions, postgraduate plans, etc. |
Cost of the goal today | ₹25,00,000 | What this course/school costs if your child started today. |
Education inflation (% p.a.) | 9.0% | Runs ahead of general inflation almost everywhere — don't reuse your household inflation assumption here. |
Expected investment return (% p.a.) | 11.0% | Growth rate assumed on money set aside for this goal. |
Already saved for this goal | ₹2,00,000 | Anything already earmarked specifically for this child's education. |
4.2 Reading the results
- Future cost of the goal — today's cost grown at education inflation to the year the goal falls due.
- Monthly SIP required — what to invest each month, over and above what's already saved, to reach that future cost.
Run this once per child, per goal. School fees, undergraduate study, and postgraduate or overseas study are usually different goals with different time horizons — duplicate the sheet if you're tracking more than one.
4.3 Worked examples
Five education goals at different ages and horizons — including one case that shows what happens when saving starts too late.
Case 1. Newborn, engineering goal
A newborn with a full 18-year runway to save for an engineering degree — shows how much a long horizon reduces the monthly burden.
Inputs child's age 0 → goal at 18 · cost today ₹20,00,000 · education inflation 9% · return 12% · already saved ₹0
Result Future cost ₹94.34 L · Monthly SIP ₹13,255
Case 2. 10-year-old, medical goal
A costlier medical-education goal with only 8 years left, and some savings already in place.
Inputs child's age 10 → goal at 18 · cost today ₹60,00,000 · education inflation 9% · return 11% · already saved ₹5,00,000
Result Future cost ₹1.20 Cr · Monthly SIP ₹71,706
Case 3. 15-year-old, study abroad
Just 3 years to a study-abroad goal — a short horizon forces a conservative return assumption and a much steeper SIP or lump-sum top-up.
Inputs child's age 15 → goal at 18 · cost today ₹45,00,000 · education inflation 8% · return 8% · already saved ₹10,00,000
Result Future cost ₹56.69 L · Monthly SIP ₹1.09 L
Case 4. 6-year-old, private school track
A mid-range schooling and undergraduate goal with a moderate 12-year runway.
Inputs child's age 6 → goal at 18 · cost today ₹15,00,000 · education inflation 8% · return 11% · already saved ₹1,50,000
Result Future cost ₹37.77 L · Monthly SIP ₹11,272
Case 5. 16-year-old, underfunded goal
Only 2 years left and very little saved — illustrates what happens when education planning starts too late, and why the book cautions against overreaching.
Inputs child's age 16 → goal at 18 · cost today ₹30,00,000 · education inflation 8% · return 7% · already saved ₹1,00,000
Result Future cost ₹34.99 L · Monthly SIP ₹1.31 L — a reminder that a two-year horizon leaves little room to close a large gap without other trade-offs
5. Real Estate — Ch. 4, p.26
“Real Estate: The Real Story” makes the case for looking past the emotional pull of owning a home to the arithmetic underneath it. This calculator compares two paths over the same holding period: buying with a home loan, versus renting an equivalent home and investing the money that buying would have tied up.
5.1 Inputs
Field | Default | What it means |
|---|---|---|
Home price | ₹80,00,000 | Purchase price of the home you're considering. |
Down payment (%) | 20.0% | Share of the price paid upfront, in cash. |
Home loan rate (% p.a.) | 8.5% | Interest rate on the home loan for the balance. |
Loan tenure (years) | 20 | Full length of the loan, even if your holding period is shorter. |
Current monthly rent for equivalent home | ₹28,000 | What renting a comparable home costs today. |
Annual rent escalation (%) | 5.0% | How much rent typically rises each year in that market. |
Property appreciation (% p.a.) | 6.0% | Expected growth in the home's value. |
Return if invested instead (% p.a.) | 11.0% | Return assumed on the down payment and monthly savings if you rent instead of buy. |
Holding / comparison period (years) | 10 | How long you'd hold the home — or how long you're comparing the two paths — before the comparison is read. |
5.2 Reading the results
- Net wealth if you buy — projected home value at the end of the holding period, minus any loan balance still outstanding.
- Net wealth if you rent & invest — the down payment plus the monthly gap between EMI and rent (whenever EMI is higher), invested and compounded at your assumed return.
- Edge — the difference between the two, so you can see which path wins and by how much.
5.3 The hidden schedule sheet
The comparison is built from a full month-by-month loan and investment schedule, not a shortcut formula. It lives on a hidden sheet called RE Schedule so the main sheet stays readable.
To see it: right-click any sheet tab → Unhide… → select RE Schedule → OK. Column K (Home equity) and column I (Invest pool closing) are the two lines plotted on the Real Estate sheet's chart.
Both sides exclude maintenance, property tax, society charges, brokerage, stamp duty and registration — all of which favour renting in practice, and none of which are trivial on a home purchase. Treat the “Edge” figure as a starting comparison, not the full cost picture.
5.4 Worked examples
Five buy-vs-rent comparisons across different cities, holding periods and financing structures — note how the verdict flips depending on the price-to-rent ratio and how long the property is held.
Case 1. Metro high-price home
A Bengaluru-type apartment at ₹1.5 crore against a comparable rent of ₹45,000/month — the classic high-price, high-rent metro comparison.
Inputs price ₹1,50,00,000 · down payment 20% · loan rate 8.5% · tenure 20 yrs · rent ₹45,000/mo, escalation 5% · appreciation 5% · invest return 11% · hold 10 yrs
Result EMI ₹1.04 L/mo · Net wealth if buy ₹1.60 Cr vs. if rent & invest ₹1.90 Cr — renting ahead by ₹29.36 L
Case 2. Tier-2 city, buying favoured
A smaller Tier-2 city home where the price-to-rent ratio is far more favourable to buying, held for the full loan tenure minus five years.
Inputs price ₹45,00,000 · down payment 25% · loan rate 8.5% · tenure 15 yrs · rent ₹12,000/mo, escalation 4% · appreciation 7% · invest return 10% · hold 15 yrs
Result EMI ₹33,235/mo · Net wealth if buy ₹1.24 Cr vs. if rent & invest ₹1.20 Cr — buying ahead by ₹4.53 L
Case 3. Short 5-year hold
The same metro-style home as Case 1, but compared over just 5 years — shows how a short holding period changes the buy-vs-rent verdict versus a 10 or 20-year hold.
Inputs price ₹90,00,000 · down payment 20% · loan rate 8.5% · tenure 20 yrs · rent ₹30,000/mo, escalation 5% · appreciation 6% · invest return 11% · hold 5 yrs
Result EMI ₹62,483/mo · Net wealth if buy ₹56.99 L vs. if rent & invest ₹53.49 L — buying ahead by ₹3.49 L
Case 4. Large down payment
A 50% down payment sharply cuts the loan and EMI, changing how much is left over each month to invest under the renting scenario.
Inputs price ₹80,00,000 · down payment 50% · loan rate 8.5% · tenure 15 yrs · rent ₹26,000/mo, escalation 5% · appreciation 6% · invest return 11% · hold 10 yrs
Result EMI ₹39,390/mo · Net wealth if buy ₹1.24 Cr vs. if rent & invest ₹1.30 Cr — renting ahead by ₹6.28 L
Case 5. Full tenure, 20-year hold
Held for the entire 20-year loan tenure — the loan is fully repaid by the comparison date, so the buy side keeps 100% of the home's value.
Inputs price ₹70,00,000 · down payment 15% · loan rate 8.5% · tenure 20 yrs · rent ₹22,000/mo, escalation 5% · appreciation 6% · invest return 11% · hold 20 yrs
Result EMI ₹51,635/mo · Net wealth if buy ₹2.24 Cr vs. if rent & invest ₹2.52 Cr — renting ahead by ₹27.64 L, even fully owning the home outright
6. Insurance — Ch. 11–12 & 19
The book's money-lessons chapters work through financial products, including how much protection a household actually needs, without anchoring the whole discussion to one formula. This sheet shows two standard methods side by side so you can see where they agree and where they diverge.
6.1 Inputs
Field | Default | What it means |
|---|---|---|
Your annual income | ₹15,00,000 | Gross annual income today. |
Your age now | 35 | Starting point for the income-replacement projection. |
Age you'd have stopped working | 60 | Used to work out how many years of income need replacing. |
Own consumption (% of income, excluded) | 25.0% | Share of income you spend on yourself, which your family wouldn't need replaced if you weren't there. |
Discount rate for future income (% p.a.) | 6.0% | Rate used to bring future years of income back to a present value. |
Outstanding loans | ₹20,00,000 | Home loan, personal loans, etc. — debts a payout would need to clear. |
Annual household expenses | ₹7,00,000 | What the household spends per year today. |
Years dependents need support | 15 | How many years of expenses a payout should cover — e.g. until children are financially independent. |
Existing savings & investments | ₹10,00,000 | Assets that could already fund part of these needs. |
Existing life cover | ₹50,00,000 | Life insurance already in force. |
6.2 Reading the results
- Human life value method — the present value of the income your family would need replaced, net of what you'd have spent on yourself.
- Needs-based method — outstanding loans plus years of household expenses, net of existing savings.
- Recommended cover — the higher of the two, on the principle that cover should meet whichever need is larger.
- Gap over existing cover — how much more cover, if any, is worth considering.
This sheet covers life cover only. Health insurance — adequacy of your mediclaim, family floater sizing, or employer cover gaps — is not modelled here and would need a separate worksheet; needs vary too much by city, employer policy and pre-existing conditions for a single rule of thumb to be useful.
6.3 Worked examples
Five household profiles — notice how the two methods sometimes agree closely and sometimes diverge sharply, and why the calculator always recommends the higher of the two.
Case 1. Young single earner
A 26-year-old with no dependents yet — shows how modest the need looks before a family and a home loan enter the picture.
Inputs income ₹8,00,000/yr · age 26 → works to 60 · self-consumption 50% · discount rate 6% · loans ₹0 · household expenses ₹2,50,000/yr, 5 yrs of support · savings ₹2,00,000 · existing cover ₹10,00,000
Result Human life value ₹57.47 L · Needs-based ₹10.5 L · Recommended ₹57.47 L · Gap over existing ₹47.47 L
Case 2. Sole breadwinner, two kids
A single-income household supporting two young children and a home loan — the highest-need profile of the five.
Inputs income ₹18,00,000/yr · age 36 → works to 60 · self-consumption 20% · discount rate 6% · loans ₹35,00,000 · household expenses ₹9,00,000/yr, 18 yrs of support · savings ₹8,00,000 · existing cover ₹60,00,000
Result Human life value ₹1.81 Cr · Needs-based ₹1.89 Cr · Recommended ₹1.89 Cr · Gap over existing ₹1.29 Cr
Case 3. Dual-income household
Both partners earn, so each partner's individual cover need is lower — this is one partner's number, not the household total.
Inputs income ₹12,00,000/yr · age 34 → works to 60 · self-consumption 30% · discount rate 6% · loans ₹15,00,000 · household expenses ₹6,00,000/yr, 12 yrs of support · savings ₹15,00,000 · existing cover ₹30,00,000
Result Human life value ₹1.09 Cr · Needs-based ₹72 L · Recommended ₹1.09 Cr · Gap over existing ₹79.23 L
Case 4. Self-employed, no employer cover
A self-employed professional with no group cover from an employer to fall back on, and an existing policy that looks adequate until checked against the needs-based number.
Inputs income ₹15,00,000/yr · age 42 → works to 62 · self-consumption 25% · discount rate 6% · loans ₹25,00,000 · household expenses ₹8,00,000/yr, 14 yrs of support · savings ₹12,00,000 · existing cover ₹20,00,000
Result Human life value ₹1.29 Cr · Needs-based ₹1.25 Cr · Recommended ₹1.29 Cr · Gap over existing ₹1.09 Cr
Case 5. Near-retirement, grown children
Children are financially independent and the loan is repaid — tests whether existing cover has become more than what's actually needed at this stage.
Inputs income ₹20,00,000/yr · age 56 → works to 60 · self-consumption 40% · discount rate 6% · loans ₹0 · household expenses ₹7,00,000/yr, 4 yrs of support · savings ₹50,00,000 · existing cover ₹20,00,000
Result Human life value ₹41.58 L · Needs-based is negative (savings exceed the need), so the calculator floors it at ₹0 · Recommended ₹41.58 L · Gap over existing ₹21.58 L
7. Health Insurance — Ch. 11–12 & 19
The Insurance sheet in §6 covers life cover only. Health cover works differently — it depends heavily on where you live, how many generations a policy needs to protect, and whether anyone in the family has a condition insurers price differently — so it gets its own sheet and its own two-method comparison, built the same way as life cover.
7.1 Inputs
Field | Default | What it means |
|---|---|---|
City tier | Metro | Healthcare costs, and the sum-insured levels advisors typically recommend, run noticeably higher in metros than in Tier-2 or Tier-3 towns. |
Adults in family floater | 2 | Self and spouse, typically covered together under one floater policy. |
Children in family floater | 1 | Included in the same floater — doesn't change the benchmark directly, but is here for your own record-keeping. |
Senior-citizen dependents (60+) | 0 | Parents or in-laws you support. These are best priced and held separately from a young family's floater — see the note below. |
Pre-existing condition in family? | No | A Yes applies a loading to both methods, reflecting higher likely claims and the waiting periods insurers apply to pre-existing conditions. |
Existing employer floater cover | ₹5,00,000 | Group health cover through your (or your spouse's) employer. |
Existing personal health policy | ₹0 | Any individually-owned policy, separate from an employer floater. |
Medical inflation (% p.a.) | 12.0% | Healthcare costs typically run well ahead of general inflation — this is deliberately higher than the Retirement sheet's default. |
Years until policy review | 10 | How far ahead you're sizing cover for — shorten this if you review your health cover annually and just want today's number. |
7.2 Reading the results
- Sum-insured benchmark — a family-floater base for your city tier, plus separate cover for each senior dependent, with a loading if anyone has a pre-existing condition.
- Needs-based (future illness cost) — today's cost of a serious illness in your city tier, grown at medical inflation to your review horizon, with the same loading.
- Gap over existing cover — the higher of the two methods, minus what you already hold through an employer or personal policy.
Employer cover is convenient but not permanent — it usually ends with the job, often at exactly the age health cover becomes hardest to newly buy. Treat it as a supplement to a personal policy you control, not the foundation of the family's health cover.
Senior-citizen dependents are priced separately deliberately. Folding a 65-year-old parent into a floater built for a young family tends to either under-price the parent's real risk or inflate the whole family's premium — a standalone senior-citizen policy is usually the more efficient structure.
7.3 Worked examples
Five households across city tiers and life stages — including one already adequately covered, to show the calculator isn't just built to find a gap.
Case 1. Young couple, no kids
A metro couple early in their careers, relying mostly on an employer floater so far.
Inputs metro · 2 adults, 0 children, 0 seniors · no pre-existing condition · employer cover ₹3,00,000, personal ₹0 · medical inflation 12% · 10-year horizon
Result Sum-insured benchmark ₹15.00 L · Needs-based ₹24.85 L · Gap over existing ₹21.85 L
Case 2. Family with a senior parent
A Tier-2 city family supporting one senior parent on the same household budget, with a modest personal policy alongside the employer floater.
Inputs Tier-2 city · 2 adults, 1 child, 1 senior dependent · no pre-existing condition · employer cover ₹5,00,000, personal ₹3,00,000 · medical inflation 12% · 15-year horizon
Result Sum-insured benchmark ₹17.00 L · Needs-based ₹27.37 L · Gap over existing ₹19.37 L
Case 3. Pre-existing condition in family
A metro family of four where one member's pre-existing condition pushes both methods up by the 25% loading.
Inputs metro · 2 adults, 2 children, 0 seniors · pre-existing condition: yes · employer cover ₹5,00,000, personal ₹0 · medical inflation 12% · 8-year horizon
Result Sum-insured benchmark ₹18.75 L · Needs-based ₹24.76 L · Gap over existing ₹19.76 L
Case 4. Two senior dependents, smaller town
A Tier-3 town household supporting both parents — the senior-dependent loading dominates the benchmark even though the needs-based number stays modest.
Inputs Tier-3 town · 2 adults, 0 children, 2 senior dependents · no pre-existing condition · employer cover ₹2,00,000, personal ₹5,00,000 · medical inflation 12% · 5-year horizon
Result Sum-insured benchmark ₹21.00 L · Needs-based ₹6.17 L · Recommended ₹21.00 L (benchmark wins here) · Gap over existing ₹14.00 L
Case 5. Well-covered household
A metro family that has already bought a substantial personal policy on top of an employer floater — the calculator confirms there's no gap rather than manufacturing one.
Inputs metro · 2 adults, 1 child, 0 seniors · no pre-existing condition · employer cover ₹15,00,000, personal ₹10,00,000 · medical inflation 12% · 10-year horizon
Result Sum-insured benchmark ₹15.00 L · Needs-based ₹24.85 L · Existing cover ₹25.00 L · Gap over existing ₹0 — already adequately covered
8. Asset Allocation — Preface
The preface lists “asset allocation” and “active versus passive investments” among the concepts the book sets out to make concrete. This sheet turns age, horizon and risk comfort into a starting-point split across equity, debt, gold and cash.
8.1 Inputs
Field | Default | What it means |
|---|---|---|
Your age | 35 | Used for the base equity allocation (100 minus age). |
Investment horizon (years) | 15 | How long before you're likely to need this money. |
Reaction to a 20% portfolio drop | 3 (Hold and watch) | A dropdown from 1 (sell everything) to 5 (buy more) — answer honestly, based on how you've actually behaved in a fall, not how you'd like to. |
Income steadiness | 3 (Fairly steady) | A dropdown from 1 (irregular) to 5 (very secure) — steadier income supports a higher equity share since you're less likely to need to sell in a downturn. |
8.2 Reading the results
Equity, Debt, Gold and Cash are shown as percentages, and as a pie chart. The formula starts from the classic “100 minus your age” equity rule, then adjusts it up or down for your stated risk reaction, income steadiness and horizon, bounded between 15% and 90% equity so the answer never suggests something extreme.
This is a starting point for a conversation — with yourself or an advisor — not a finished portfolio. It doesn't know your existing holdings, tax situation, or specific goals; the Retirement and Education sheets are where those goals get sized.
8.3 Worked examples
Five risk profiles across the age and temperament spectrum — the same rule of thumb, adjusted five different ways.
Case 1. 25-year-old, aggressive
Long horizon, high risk tolerance, and a stable job — the profile that pushes equity allocation to its upper bound.
Inputs age 25 · horizon 30 yrs · reaction to a 20% drop: buy more · income steadiness: very secure
Result Equity 90% · Debt 0% · Gold 5% · Cash 5% — capped at the calculator's 90% ceiling
Case 2. 50-year-old, conservative
Closer to a specific goal with a low tolerance for drawdowns — equity allocation drops well below the simple '100 minus age' rule.
Inputs age 50 · horizon 8 yrs · reaction to a 20% drop: sell some · income steadiness: fairly steady
Result Equity 47% · Debt 38% · Gold 10% · Cash 5%
Case 3. 35-year-old, moderate
A textbook middle-of-the-road profile — close to the unadjusted '100 minus age' baseline, nudged up slightly by the long horizon.
Inputs age 35 · horizon 15 yrs · reaction to a 20% drop: hold and watch · income steadiness: fairly steady
Result Equity 73% · Debt 17% · Gold 5% · Cash 5%
Case 4. 60-year-old, near retirement
Short horizon and capital preservation matter more than growth at this stage.
Inputs age 60 · horizon 5 yrs · reaction to a 20% drop: sell some · income steadiness: irregular
Result Equity 26% · Debt 59% · Gold 10% · Cash 5%
Case 5. 30-year-old freelancer, irregular income
High personal risk tolerance, but irregular income pulls the allocation back — a reminder that income steadiness matters as much as temperament.
Inputs age 30 · horizon 12 yrs · reaction to a 20% drop: stay the course · income steadiness: irregular
Result Equity 73% · Debt 17% · Gold 5% · Cash 5% — the irregular-income adjustment offsets what the high risk tolerance alone would have suggested
9. Snapshot
The Snapshot sheet pulls the key result from each of the six calculators into one page — the “working knowledge of your own finances” the preface argues every reader should have, in one view.
Every value on this sheet is a live formula pointing back to the relevant calculator sheet. Nothing needs to be entered here directly. If a row looks blank or shows a starting-default number, it simply means that calculator's inputs haven't been changed yet — go to that sheet, enter your own numbers, and the Snapshot updates on its own.
9.1 What's on it
Retirement corpus required & monthly SIP needed | From the Retirement sheet. |
Education — future cost of goal & monthly SIP needed | From the Education sheet. |
Real estate — net wealth if buy / if rent & invest | From the Real Estate sheet. |
Insurance — recommended cover & gap over existing cover | From the Insurance sheet. |
Health cover — recommended cover & gap over existing cover | From the Health Insurance sheet. |
Asset allocation — equity : debt : gold : cash | From the Asset Allocation sheet. |
10. Assumptions, scope and limitations
To keep the workbook usable in one sitting, every calculator makes simplifying choices. Read this section before treating any output as a final number.
- No taxation is modelled anywhere in the workbook — not on investment gains, EMI interest deductions, HRA, or insurance payouts.
- Returns and inflation are entered as single flat assumptions, not ranges or year-by-year variation — real markets don't move in a straight line, and neither will your actual outcome.
- The Real Estate comparison excludes maintenance, property tax, brokerage, stamp duty and registration (see §5.3).
- Both the Insurance and Health Insurance sheets use rule-of-thumb sizing methods, not underwriting-grade calculations — an actual insurer's assessment will differ (see §6 and §7).
- The Asset Allocation sheet is a rule-of-thumb starting point, not a personalised recommendation (see §8.2).
- All six calculators are independent of each other except through the Snapshot sheet — changing your age on the Retirement sheet, for instance, does not automatically update your age on the Insurance or Health Insurance sheets.
Educational tool, not advice. This workbook illustrates the concepts covered in the book using simplified formulas. It is not a substitute for a financial plan built around your full picture. As the book itself argues, that's the job of a fee-only, fiduciary advisor — not a spreadsheet.
11. Appendix: formula reference
For anyone who wants to see exactly how each result is built, or adapt the workbook further.
11.1 Retirement
Monthly expense at retirement | = Current expense × (1 + inflation) ^ years to retirement |
Real rate (post-retirement) | = (1 + post-return) / (1 + inflation) − 1 |
Corpus required | = Annual expense at retirement × [1 − (1+real rate)^−years in retirement] / real rate × (1+real rate) |
Monthly SIP required | = Corpus gap / {[(1+monthly rate)^months − 1] / monthly rate × (1+monthly rate)} |
11.2 Education
Future cost of goal | = Cost today × (1 + education inflation) ^ years to goal |
Monthly SIP required | = Funding gap / {[(1+monthly rate)^months − 1] / monthly rate × (1+monthly rate)} |
11.3 Real Estate
Monthly EMI | = Loan × monthly rate × (1+monthly rate)^months / [(1+monthly rate)^months − 1] |
Net wealth if buy | = Projected home value − outstanding loan balance, at end of holding period |
Net wealth if rent & invest | = Down payment and monthly (EMI − rent) gap, compounded monthly at the assumed return |
11.4 Insurance (life cover)
Human life value | = Income to replace × [1 − (1+discount rate)^−years left] / discount rate |
Needs-based cover | = Outstanding loans + (annual expenses × years of support) − existing savings |
Recommended cover | = MAX(Human life value, Needs-based cover, 0) |
11.5 Health Insurance
Sum-insured benchmark | = City-tier floater base + (senior dependents × senior cover each), × 1.25 if a pre-existing condition |
Needs-based cover | = City-tier illness cost today × (1 + medical inflation) ^ years, × 1.25 if a pre-existing condition |
Recommended cover | = MAX(Sum-insured benchmark, Needs-based cover) |
Gap over existing cover | = MAX(Recommended − existing cover, 0) |
11.6 Asset Allocation
Base equity | = 100 − age |
Equity (final) | = MIN(90%, MAX(15%, base + adjustment for risk, horizon & income)) |
Gold | = 5% if equity ≥ 70%, else 10% |
Debt | = 100% − equity − gold − cash (cash fixed at 5%) |