Understanding Investment basics along with benefits of savings and the power of compounding towards financial independence

1. First Steps towards
Financial
Independence
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2. Financial Independence
Financial Goal - I
● Start Early
● Establish clear investment objectives
● Identify your needs at different times of your life
●
Prepare an effective investment strategy for each
objective
● Decide on how much you can save regularly
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3. Financial Independence
Financial Goal - II
● Understand your risk taking capacity
● Don't put all your eggs in one basket
● Invest regularly
●
Monitor your Investment performance
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4. Financial Independence
Understand your Investment Objectives
● Capital Growth
●
Capital Preservation
●
Regular Income
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5. Financial Independence
Making the Right Choice
- Understanding the Basics
●
Inflation – and how does it impact returns?
● Nominal Income Vs Real Income
● The Power of Compounding
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6. Financial Independence
Inflation – its impact on you
Bread that used to cost Rs 7 in year 2000
costs Rs 13 in 2012
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7. Financial Independence
Nominal Income Vs Real Income
Nominal Income is your Return on Investment.
It is impacted both by Inflation & Taxes.
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8. Financial Independence
Real Rate of Returns from Investments
16 15
14
12
10 9
8
6 4.5
4
1.5
2
0
Return Inflation Tax Real Income
Nominal Return is 15% but the Real Return
due to the impact of Inflation & Tax is 1.5%
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*Assuming CAGR at 15%
(Compound Annual Growth Rate).

9. Financial Independence
Savings - Start Early
● Let the Power of Compounding work for you
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10. Financial Independence
Benefits of Starting Early- I
Savings Maya Max
Start age 25 yrs 30 yrs
Per month Rs 1,000/-
Wealth at age 60* Rs 14,86,08,456/- Rs 7,0,09,821/-
By starting early Maya is able to save double of Max's
Wealth.
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*Assuming CAGR at 15%
(Compound Annual Growth Rate).

11. Financial Independence
Benefits of Starting Early- II
Savings Maya Max
Per month Rs 2,000 Rs 9,000
From age 22-37 yrs 37-60 yrs
Amount at age 60* Rs 3,36,96,218 Rs 2,17,48,931
The benefits of starting early combined with the
Power of Compounding leads to more wealth in
the long run. Max saves more for a longer period
and yet accumulates less wealth.
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*Assuming CAGR at 15%
(Compound Annual Growth Rate)

12. Financial Independence
It's Your Decision
Plan in advance rather than leave it to chance.
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13. AbunDanze is enrolled as an AMFI Registered
Mutual Fund Advisor (ARMFA)
Under AMFI Registration No.: ARN-13377
Copyright August 2011:
Abundanze Wealth Management LLP.
All rights reserved.
Website:
abundanze.com
Email:
smile@abundanze.com
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