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SEBI has put up an extensive help for investor Protection and education.

SEBI has put up an extensive help for investor Protection and education.

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  • 1. Financial education for middle income investorsAn initiative of SEBI & NISM
  • 2. Agenda Importance of learning about money What is financial planning SMART goals Understanding net worth Protecting wealth Concepts of budgeting & saving Investment Some do’s and don’ts
  • 3. Importance of learning about money◦ Enables us to take informed decisions about money
  • 4. Money matters: What is wrong? Investment, insurance or tax planning? Peer advice Emotion driven Greed and fear Overspending
  • 5. WHAT IS FINANCIALPLANNING?
  • 6. The financial planning process Gather financial data Identify goals and risk appetite Identify gaps Prepare a plan to bridge the gaps Implement the plan Review periodically
  • 7. Soundfinancial plan Financial freedomRegularreview
  • 8. • What is a Goal? o Goals are statements about where we want to end up o They are what you want to achieve
  • 9. • Are all goals achieved o No, Most of our Goals are not achieved
  • 10. What prevents you?• Are these goals clearly defined ?• The goals seem to be vague• They need to be clearly defined• Convert them in to SMART goals
  • 11. Let us restate /revise your goals1. __________________2. __________________3. __________________4. __________________5. __________________
  • 12. Steps to Achieve Goals1. Understand Current Networth2. Protect Current Networth3. Manage Regular Expenses4. Generate Surplus to Invest
  • 13. Exercise: Mr. Dipak Shah’s family
  • 14. What is your current net worth ?Networth = Assets - LiabilitiesAssets : All those you ownLiabilities : All those you owe1. List down all those things you own2. List down all those things you owe
  • 15. Calculating your net worth Assets ◦ Assets or possessions? Liabilities
  • 16. So, What is your net worth today ?Remember, your net worth canchange every day, depending on thevalue of your assets
  • 17. Remember once again:◦ Net worth is your wealth◦ Net worth is the difference between your assets and liabilities
  • 18. Change in net worth◦ Change in value of assets◦ Change in liabilities◦ Savings / spendings
  • 19. Protecting your wealth◦ Personal risks Life Health Liability◦ Property Home Vehicles◦ Liability
  • 20. Quick Recap• Importance of Setting Goals• Steps to Achieve Goals• Understanding net worth• Protecting the net worth to ensure that our net worth is not eroded
  • 21. BUDGETING
  • 22. Budget enables you to become aware ofhow money comes in and where it isspent
  • 23. • Importance of budgeting • Managing regular and irregular expenses • Generating surplus for investments / savings
  • 24. MAKING A BUDGET
  • 25. Mantras for success Prepare the budget Stick to the budget ◦ Check out of budget expenses Ensure there is a surplus ◦ If not, have a serious look at some of the expenses.
  • 26. INVESTING THEMONEY
  • 27. SURPLUS INVESTMENT
  • 28. Investment mantras Understand the power of compounding Diversify your investments Do your own homework or hire wise experts Understand the fundamentals In case of doubt, ask. Do not sign the dotted line till you get satisfactory answer
  • 29. Understand power of compounding• If you save Rs 1000 a year for 10 years at a bank which gives you interest at 8% per year, how much money you will have at the end of 10 years?
  • 30. Saving per year Rs. 1,000Rate of return (per 8%year)No. of years 10Wealth Rs. 14,487accumulated
  • 31. Understand power of compounding• If you save Rs 1000 a year for 10 years at a bank which gives you interest at 8% per year, how much money you will have at the end of 10 years?• If you save similar amount for 20 Years how much it will be ?
  • 32. Saving per year Rs. 1,000 Rs. 1,000Rate of return (per 8% 8%year)No. of years 10 20Wealth Rs. 14,487accumulated
  • 33. Saving per year Rs. 1,000 Rs. 1,000Rate of return (per 8% 8%year)No. of years 10 20Wealth Rs. 14,487 Rs. 45,762accumulated
  • 34. Understand power of compounding• What do we understand from this ?• Why is the difference between 10 Year investment and 20 Year investment so much ?
  • 35. Remember inflation What is inflation? How does it impact us?
  • 36. Steps to Wealth CreationHave a goalStart todayInvest regularly
  • 37. Be Careful before investing• Do not believe if someone promises high returns.• Do not get carried away by the commission agent promises• Identify a trusted advisor• Do reference check of the advisors• Do your own research about the product before you buy,• Learn Basics skills of Money Management• Know the costs• Only invest in regulated options through regulated intermediaries.
  • 38. Creating wealth is not difficult.All you need is self discipline in yourspending and investing habits
  • 39. THANK YOU!