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www.finerva.com | [email protected] | +91-9787-11-11-66
The basics first
Assets Liabilities
Make a list of the following
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The Basics again…
• What are Assets / Liabilities for Personal Wealth Creation?
– One that gives a POSITIVE CASH FLOW IS AN ASSET
– Others are Liabilities / Expenses.
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What is growth / return?
• Time Value for Money
• Relative Growth
• Nominal Interest Rate Vs Effective Interest Rate
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What is Risk?
Actual Returns Vs
Expected returns
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What is Wealth?
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Take 2 minutes. Close your eyes and imagine a wealthy person. Write what you see.
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A person's wealth is defined by how long a period of time he/she can sustain their lifestyle if they stop
working.
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The longer you can go on living your life without working another
day, the richer you actually are.
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Your wealth is therefore defined by three things
• Your monthly expenses,
• Your liquid assets and
• Your passive income.
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The Mantra
TIME
Start early
Use the power of compounding
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Where do I Invest?• EQUITY• Current Yield – Low
• Capital Appreciation – High
• Typical Returns - 19.25% as per SENSEX returns since 1979
• Risk – High
• Marketability / Liquidity – High
• Tax Treatment - No long term capital gains tax after 365 days. Dividends received are tax free
• Convenience - High
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Where do I Invest?
BANK DEPOSITS
• Current Yield – Moderate
• Capital Appreciation – Nil
• Typical Returns - 8% Average
• Risk – Negligible
• Marketability / Liquidity – High
• Tax Treatment - Section 80C benefits for 5 year deposit. All interests are taxable
• Convenience - Very High
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Where do I Invest?
MUTUAL FUND - EQUITY
• Current Yield – Low
• Capital Appreciation – High
• Typical Returns - 39% Average over 3yrs Highest return - 69%
• Risk – High
• Marketability / Liquidity – High
• Tax Treatment - Section 80C benefits for Equity Linked Savings Schemes. No long term
capital gains tax after 365 days. No tax on dividends received.
• Convenience - Very High
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If spending money brings you
enjoyment, you will never be rich.
However if making money brings you enjoyment, then your wealth isguaranteed.
www.finerva.com | [email protected] | +91-9787-11-11-66