The Road to Financial Freedom

The Road toFinancial Freedom [ 9 roadblocks to overcome ] Manish Jain April 23, 2011

Welcome Time Duration Description 11:00am - 45 min. Introduction and ﬁrst half 11:45am 11:45am - 15 min. Break 12:00pm 12:00pm - 45 min. Second half 12:45pm 12:45pm - 15 min. Q&A and wrap-up 1:00pmhttp://www.mproﬁt.in 2

What is Financial Freedom? “having enough money to make decisions or choices that YOU want to make”http://www.mproﬁt.in 3

What Is Not Covered “Have any good stock tips” “Is Bajaj Auto a good buy at Rs. 1600” !"#$%&$!"#$(")$*+,-./% 0,,-$1,+$23http://www.mproﬁt.in 4

1. Overcome Fear • People are afraid to talk about their personal ﬁnances because they don’t know where to begin “Take a deep breath”http://www.mproﬁt.in 5

2. Financial Inventory • Compile a list of all your assets and liabilities Insurance Policies Bonds FDs Gold Loans Investments Property Credit Cards Equities PPF/EPFhttp://www.mproﬁt.in 6

3. Define Your Goals • Short term >> Specific Event • Long term >> Retirement Planning House Education Wedding Flat Car Vacationhttp://www.mprofit.in 7

Your Money Map 10% Salary* PF 90% * for simplicity I Savings have ignored 5% - SIPs 40% Bank taxes, mediclaim, etc... 5% - Education 10% - Emergency Account 10% - Housing 10% - Wedding 60% Credit Misc. EMIs Cards Billshttp://www.mproﬁt.in 8

4. Insurance • Protect your wealth • Auto • Health • Home • Life Tip Don’t mix products: Equity+Insurance = ULIPshttp://www.mproﬁt.in 9

5. Asset Allocation • Maximizing your returns and minimizing the risk Alt. Investments Tip 7% Cash Guideline for equities, Equity 13% (100 - your age) = the 35% amount in equities Real Estate 14% Fixed Income 31% * Model Asset Allocation: Merrill Lynch Wealth Management, World Wealth Report 2010http://www.mproﬁt.in 10

Investments • Are you a risk taker? More Risk Private Equity Equities Tip Equity Risk Level:Risk Bonds Level 1 = Index Funds Real Estate Level 2 = Mutual Funds Gold Level 3 = Direct Equities FDs PPF Higher Returns Returnshttp://www.mproﬁt.in 11

6. Control Your Debt • Payo loans and/or credit cards that have the highest interest rates Tip Carrying a credit card balance is VERY expensive. A better option is a debit card.http://www.mproﬁt.in 12

7. Monitor Your Money Short Term Long Term [ expense tracker ] [ portfolio manager ] Create a Track your budget investments to track on a monthly your daily Financial or quarterly Dashboard expenses basishttp://www.mproﬁt.in 13

Use Technology Free Paid Artha Intuit Excel Short Term Money MM Perfios [ expense tracker ] Pen & Paper Money MProfit Control RupeeX Perfios Long Term[ portfolio manager ] EasyLife Artha Money InvestPlus Value Reseach Data Security - Web vs. Desktophttp://www.mprofit.in 14

8. Review Your Progress • Review your expenses and portfolio on a regular basis • Hiring a financial advisor is a good idea if you don’t have the Tip discipline If you need a financial advisor, select someone that is a Certified Financial Planner (CFP)http://www.mprofit.in 15

9. Read Magazines, Papers & Blogs Read 1-2 hours every month Capital Mind http://CapitalMind.in Jago Investor http://JagoInvestor.com The Financial Literates http://TFLindia.inhttp://www.mproﬁt.in 16

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The Road to Financial Freedom

by Manish Jain

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