Savings investments

1. Session 1

2. Savings is the process of putting cash aside
and parking it in extremely safe and liquid.
portion of current income not spent on
consumption.

3.  Investing is the process of using money to buy an
asset that you think will generate a safe and
acceptable return
 purchase of assets with the goal of increasing future
income.

4.  FD’s and FMP
 Bonds/Debenture
 Shares
 Derivatives
 Mutual Funds
 Real Estate
 Gold and Silver

5.  Short-term: Ready
to go
 Ready access to
cash
 Minimal risk
 Earn interest
 Long-term: Achieve
major goals
 Harder to access
cash
 Always involves risk
 Potential for profit

6.  Return
 Investments are made with the primary objective of
deriving a return.
 The return may be received in the form of
 Capital appreciation and
 Dividend yield

7.  Percentage Return =
Ending Price- Beginning Price + Dividend
-------------------------------------------------------
Beginning Price
= Capital gain yield + Dividend yield

8.  Assume we purchased one share of ABC
LTD at Rs.25 and received Rs.2 in
dividend for the year. After one year the
stock price increased to Rs.31.What is
the percentage return we achieved?
 Calculation :
 Percentage Return = capital gain yield + DividendYield
= (31-25)/25 + 2/25
= 24% + 8%
= 32%

9.  Risk
 Possibility of variation of the actual return from the
expected return is termed risk.
 Safety and
 Liquidity

10.  Maximization of return
 Minimization of Risk
 Hedge against inflation

11.  Risk
• The chance that the value of an
investment will decrease.
 Return
• The profit or yield from an investment.
 Liquidity
• The ability of an investment to be
converted into cash quickly without loss
of value.

12. Today, a large soft drink at
your favorite fast-food place
.also you decide to save some
money for the future as well.
So you put a Rs.100 in your
savings account, where it earns
8%.
NEFE

13. The point? Inflation can work
against your money. You need
to learn to invest wisely, follow
the rate of inflation, and make
sure your investment rates are
higher than those of inflation.

14.  The time value of money refers
to the fact that the money in
hand today is worth more than
the same value of money
promised at some future time.

15. Refers to the amount of money to which
an investment will grow over a finite
period of time at a given interest rate.
Put another way, future value is the cash
value of an investment at a particular
time in the future.

16.  What is the relationship between
risk and return?

17.  Step 1: Meeting Investment Prerequisites
a. Make certain necessities of life are provided for
b. Adequate protection against losses from death,
illness and disability
 Step 2: Establishing Investment Goals
a. Accumulating retirement funds
b. Enhancing current income
c. Saving for major expenditures
d. Sheltering income from taxes

18.  Step 3: Adopting an Investment Plan
a. Develop a written investment plan
b. Specify target date and risk tolerance for each
goal
 Step 4: Evaluating Investment Vehicles
a. Assess potential return and risk
 Step 5: Selecting Suitable Investments
a. Research and gather information on
specific investments
b. Make investment selections

19.  Fixed Deposit is a Good Investment
Option to Begin With
 Insurance Policy Investment is also a
Popular Option
 Public Provident Funds has High Returns
 National Saving Certificate (NSC) is a
Widely Common Option
 Mutual Fund Investments is a Safe.
 Investing in IPO’s
 Stock Investments is the Best for Risk
Takers
 Investment in Gold & Silver is Healthy

20. ?
Thank you

21.  I am 35 and my wife is 33. Both of us are employed
 My parents aged 68 and 66 are dependent on us.
 Our daughter are aged one and two
 I plan to work till I turn 65 but my wife may stop
working after few years
 I need to save Rs.15 Lakh for each of my
daughter’s education and Rs.20 Lakh each for
their marriage
 Home loan Rs.29 Lakh – EMI amounts to Rs.49100
 I earn Rs.125000 and my wife earns Rs.75000
 Monthly expenses (Rent & Household) Rs.50000
 PF balance is Rs.7,96,200