Ins Agrani Wealth Creation

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Ins Agrani Wealth Creation

  1. 1. Strategies for Wealth Creation & Management INS Agrani 24 July 2008 | Coimbatore
  2. 2. The basics first Make a list of the following Liabilities Assets
  3. 3. The Basics again… <ul><li>What are Assets / Liabilities for Personal Wealth Creation? </li></ul><ul><ul><li>One that gives a POSITIVE CASH FLOW IS AN ASSET </li></ul></ul><ul><ul><li>Others are Liabilities / Expenses. </li></ul></ul>
  4. 4. What is growth / return? <ul><li>Time Value for Money </li></ul><ul><li>Relative Growth </li></ul><ul><li>Nominal Interest Rate Vs Effective Interest Rate </li></ul>
  5. 5. What is Risk? <ul><li>Actual Returns </li></ul><ul><li>Vs </li></ul><ul><li>Expected returns </li></ul>
  6. 6. <ul><li>What is Wealth? </li></ul>
  7. 7. Take 2 minutes. Close your eyes and imagine a wealthy person. Write what you see.
  8. 8. A person's wealth is defined by how long a period of time he/she can sustain their lifestyle if they stop working.
  9. 9. The longer you can go on living your life without working another day, the richer you actually are.
  10. 10. Your wealth is therefore defined by three things <ul><li>Your monthly expenses, </li></ul><ul><li>Your liquid assets and </li></ul><ul><li>Your passive income. </li></ul>
  11. 11. The Mantra <ul><li>TIME </li></ul><ul><li>Start early </li></ul><ul><li>Use the power of compounding </li></ul>
  12. 12. Where do I Invest? <ul><li>EQUITY </li></ul><ul><li>Current Yield – Low </li></ul><ul><li>Capital Appreciation – High </li></ul><ul><li>Typical Returns - 19.25% as per SENSEX returns since 1979 </li></ul><ul><li>Risk – High </li></ul><ul><li>Marketability / Liquidity – High </li></ul><ul><li>Tax Treatment - No long term capital gains tax after 365 days. Dividends received are tax free </li></ul><ul><li>Convenience - High </li></ul>
  13. 13. Where do I Invest? <ul><li>BANK DEPOSITS </li></ul><ul><li>Current Yield – Moderate </li></ul><ul><li>Capital Appreciation – Nil </li></ul><ul><li>Typical Returns - 8% Average </li></ul><ul><li>Risk – Negligible </li></ul><ul><li>Marketability / Liquidity – High </li></ul><ul><li>Tax Treatment - Section 80C benefits for 5 year deposit. All interests are taxable </li></ul><ul><li>Convenience - Very High </li></ul>
  14. 14. Where do I Invest? <ul><li>MUTUAL FUND - EQUITY </li></ul><ul><li>Current Yield – Low </li></ul><ul><li>Capital Appreciation – High </li></ul><ul><li>Typical Returns - 39% Average over 3yrs Highest return - 69% </li></ul><ul><li>Risk – High </li></ul><ul><li>Marketability / Liquidity – High </li></ul><ul><li>Tax Treatment - Section 80C benefits for Equity Linked Savings Schemes. No long term capital gains tax after 365 days. No tax on dividends received. </li></ul><ul><li>Convenience - Very High </li></ul>
  15. 15. If spending money brings you enjoyment, you will never be rich. However if making money brings you enjoyment, then your wealth is guaranteed .

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