financial wellness bma.pptx
TRANSCRIPT
Financial Wellness
Financial Wellness
Welcome AllDefining WellnessWellness is an active process of becoming aware of andmakingchoices toward a healthy and fulfilling life. UC Davis
"a conscious, self-directed and evolving process of achieving full potential. - The National Wellness Institute
Financial Wellness is achieving wellness on the financial side !
Why think about financial wellnessConnection with overall sense of well being
Focus on Do what you love as well
Preparing for golden years today
Making the most of power of compounding
A reality check
Survey involved morethan 2000 working professionals acrossvarious cities in India.
Source : Arthyantra.com
A reality check
Any guess aboutthe state of seniorLevel professionals?
Source : Arthyantra.com
imoneyplant.com surveyMore than 90% of the respondents were getting less than 10% return on their investments.
Less than 10% of the respondents made profits by selling Investments after 5 years. For rest, returns are still on paper or the paper gains have vanished.
Less than 1% of the respondents have planned their post-retirement cash flows.
More than 80% of respondents are looking for solutions to increase their monthly savings.(Survey of 1000 Employees in the age group of 25-40 working in HPCl, BPCl, Thermax, RCF, Mazagon Dock, and 3 Pvt. Sector companies in Chennai/Bangalore conducted between 1st May 2012-31 May 2013)We are sitting on a time bomb !Thinking patterns
Medical science advancements : boon or bane
Neural association with money
YearAverage Household Monthly Expenses1920Re.11940Rs.101960Rs.1001980Rs.10002000Rs.100002020Rs. 1000002040Rs. 10000002060????????Approximate Information, based on Estimates Expenses are going at 12% per annumCII CAGR of 7.1% + lifestyle expenses like Mobile 3G, car replacement, etc... Financial Wellness PyramidLevel 5: One now focuses on implementing the plan to share wealth with society by creating and providing jobs. At this stage one is secure on Short term and Long Term Financial Needs. This is the highest level of Financial Wellness. Level 4: Financial Freedom is achieved, but now savings and investment are being done primarily for accumulating wealth for the next generation
Level 3: Savings have reached a stage where they is more than what one needs to achieve for financial freedom. However, one is now saving & investing to meet ones aspirational needs. Level 2: Primary focus is on implementing the plan to make Financial Freedom a reality. One has started to save & invest enough consistently each month so as to achieve Financial Freedom in the near future
Level 1: One is able to comfortably meet normal financial needs even if pay cheque is delayed up to 3 months. However one is still over-dependent on the monthly pay cheque, and monthly savings are far lesser than what is needed to make Financial Freedom a reality
Level 0: Even if salary is delayed by one day, one is put to a lot of stress, due to committed monthly cash outflow like Insurance Premium, mortgage EMI, etc.What drives our financial decisions?
It is in your moments of decision that your destiny is shaped.-Tony Robbins
Recency Effect Take decisions based on what we see in Newspaper today Today Stock market went up by 500 Our decision it will now rise and I must investOrTodays stock market went down by 500- Our decision stock market is always like this , never invest in stock marketGold is rising fast, let me also invest in gold
Economy is not doing well now, Itis going to be like this only now
Anchors Real Estate prices willcome down, let me wait Gold is the best investment I must own a big car Buy 1 get 1 is a excellentscheme, I must buy If I leavethis I wont get a better offerInsurance + Investment + Tax Savings is a mega offer I must not let it go
Herd MentalityWho should I follow ?My BossMy Brother-in-LawMy FriendMy NeighborMy ColleagueMy CousinWhat ever is good forthem is good for me too ?
ProcrastinationWhen do we file our IncomeTax Returns ?When did we prepare forexams ?When do I complete my work ?Why do we put off everything for tomorrow ?Fear of Failure ?Uncertainty ? Or Just Parkinsons Law Work tends to expand to fill up the time available.
Lack of Self ControlMarshmallow TestResearch conducted over 40 yearsKids 6-10 years of age are asked to goto a room where chocolate is kept andasked to wait for 15 minutesIf they resist 15 min without eatingchocolate, they will get 2.Every Kid wanted to have 2 chocolatesGuess how many walked with 2?Just 1%
10 years later same kids who walkedaway with 2 chocolates got bettergrades in the exam
Another 10 years later they hadbetter jobsAnother 10 years later they had betterinvestmentsWhat prevents us from being in that 1%
4 factors to consider while investingTake a long term view Do everything you can to save Consider index funds for 10+year outlookBalance risk with returns. Avoidshort term risks.ReturnsTaxInflation
RiskSteps to financial wellnessIncome expenses = SavingsConsider : Income savings = expensesBalance investment v/s consumptionEducate yourself and take informed decisionsMeasure savings as % of income every yearStart early to maximize the power of compounding
Steps to financial wellnessTake maximum benefits ofEmployer sponsoredRetirement benefits (EPF, NPS, Super AnnuationSchemes)Improve Savings % by 2-5%every yearAim for 30:30-40:50-50:100(for Pvt Sector) and 30:3040:40-50:50-60:100 (for PSU)
About imoneyplantA Dyota solutions pvt. Ltd. initiative.
Mission to reach 10 lac salaried people for financial wellness education by 2020.
We conduct SEBI/NSE approved financial wellness programs at no cost to the organization/participants.
Conduct family financial quiz program to build awareness amongst school children and parents at no cost to school/children.
Offer family financial counseling for a nominal fee.
www.imoneyplant.comAbout United MindsWe at United Minds, live with a purpose : lets create new possibilities.We draw our life energy from seeing clients perform and live better. We are moved when our client moves closer to his/her goals.We are executive coaches, business coaches, life coaches and transformational project specialists.
+91 99099 13 669 / 99099 89 66921Thank you for your time and attention !Wishing you a focused and fulfilling journey towards financial wellness !
www.imoneyplant.com www.unitedminds.co.in [email protected]
+91 99099 13 669 / 99099 89 669