strategies for wealth creation
TRANSCRIPT
FINERVA
Strategies for
Wealth Creation & Management
CRPF28 June 2007 | Coimbatore
The basics first
Assets Liabilities
Make a list of the following
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.
What is growth / return?
• Time Value for Money
• Relative Growth
• Nominal Interest Rate Vs
Effective Interest Rate
What is Risk?
Actual Returns
Vs
Expected returns
What is Wealth?
Take 2 minutes. Close your eyes and imagine a wealthy person. Write what you see.
A person's wealth is defined
by how long a period of time
he/she can sustain their
lifestyle if they stop working.
The longer you can go on living your life without
working another day, the richer you actually are.
Your wealth is therefore defined by three things
• Your monthly expenses,
• Your liquid assets and
• Your passive income.
The MantraTIME
Start early
Use the power of compounding
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
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
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
If spending money brings you
enjoyment, you will never be rich.
However if making money brings you enjoyment, then your wealth isguaranteed.