Wealth creation strategies

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Wealth creation strategies

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

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