Financial awareness

Financial Awareness
Essentials to know before Making Investments

TOPICS OF DISCUSSION
Savings, Investment & its Objective
Benefits of Early Investment
Inflation & its Effects
Current State of Inflation in India
Bank & Bank Accounts
Mutual Funds & its Benefits
Safety of Mutual Fund Investments
Asset Allocation, Risk Tolerance & their Interrelation
PRESENTATION ON FINANCIAL AWARENESS BY STUDENTS OF POST GRADUATE DIPLOMA IN FINANCIAL PLANNING, BATCH 2014-15

What are Savings & Investment?
PARAMETER SAVINGS INVESTMENT
MEANING
Surplus of income over
expenditure
Sacrifice of current consumption
for future benefit
NATURE A natural occurrence A conscious activity
OBJECTIVE Securing one’s money
Giving one’s money the potential
to grow over time
OUTCOME
Savings do not yield huge
returns
Investments have the potential
to yield huge returns

Why should one Save/ Invest?
To Create a Fund for Contingency
To Meet several important Goals of Life
To Maintain the current Standard of Living by beating Inflation

What are the benefits of early
investment?
A Rupee invested today is worth more than a rupee invested tomorrow
Kaun Banega Crorepati
COST OF INVESTING
LATER:
The graph details the
“MONTHLY”
investment required
in order to
accumulate ` 1
CRORE at age 60 for
investors of
different ages at a
rate of return of 8%
p.a.
Age 50
` 55,162Age 40
` 17,462Age 30
` 7,054Age 20
` 3,085

What is Inflation and what are its Effects?
• Inflation is the rise in the price of goods and
services available in market.
• The purchasing power of money falls on account of
inflation.
Example:
If there is a 8% inflation rate for
next 15 years, a ` 100 buy today
would become a ` 317 buy after
15 years.

What is the current State of Inflation in
India?
Source: World Bank

What is a Bank?
DEPOSITS
LOANS
LOANS AMT
+
INTEREST
DEPOSIT AMT
+
INTEREST

What are the different types of Bank
Accounts?
Source: Reserve Bank of India
Savings
• This account
is for
common
people
• The money
is very liquid
• The current
interest rate
is minimum
4% p.a. in all
banks
Basic
Savings
• Also known
as “No Frills”
Account
• This account
is for low
income
people
• The current
interest rate
is 4% p.a. in
all banks
Current
• This account
is basically
meant for
businessmen
• It is highly
liquid in
nature
• This account
does not
offer any
interest.
Fixed
Deposit
• This account
has a fixed
tenure
• Interest rate
is high in
comparison
to the
savings
account
• The current
interest rate
for a 1 year
or higher
fixed deposit
is 8.5% p.a.
Recurring
Deposit
• Suitable for
people with
no lump sum
amount to
save, but are
ready to
save a small
amount
every month
• Interest rate
is same as
Fixed
Deposit
account

What is a Mutual Fund?
A Continuous Process of Wealth Creation & Redistribution
Source: Association of Mutual Funds of India

Benefits of Mutual Funds
Professional Management
of Investments
Diversification
Low Cost
Liquidity
Wide Range
Regulatory Comfort

How safe are Mutual Fund Investments
• Mutual Funds have become
one of the preferred
investment option for people
who can part with a small
sum every month.
• A regular investment will see
the corpus grow over years
and come in handy when you
need the funds the most.
• However, investment in
mutual funds is not without
risk.
• It all comes down to the
scheme you have chosen to
invest in.
Source: Business Line

What is Asset Allocation & Risk Tolerance?
• Asset allocation is an investment strategy that
attempts to balance risk versus reward (i.e.
maximizing returns and minimizing risk) by
adjusting the percentage of each asset in an
investment portfolio.
• Asset allocation helps in risk reduction.
• Asset Allocation primarily depends on the risk
tolerance of an investor.
• Risk Tolerance means the degree of variability in
investment returns that an individual investor is
willing to withstand.

How does Asset Allocation change with
Risk Tolerance?

REVIEW OF DISCUSSION
Savings has to be
properly invested in
order to earn returns
Returns are required
not only to meet goals
but also to beat
Inflation
The safest way to save
is Bank Accounts
However many a
times, Bank Deposits
provide negative real
returns
Mutual Funds are an
easy way of Wealth
Creation
Investments in Mutual
Fund Investments are
quite Safe provided
Investors do their due
diligence
The best way to invest
is through a suitable
Asset Allocation
Asset Allocation is
based on Risk
Tolerance & other
factors

International College of Financial Planning
• The International College of Financial Planning (ICOFP)
was promoted in 2002 by the Bajaj Capital Group, a
renowned business house in the field of financial
services in India since last 50 years.
• ICOFP is the leader in Financial Planning education in
India.
• ICOFP has several prestigious tie ups with bodies like
Financial Planning Standards Board India, Financial
Planning Association of Australia Ltd, The Chartered
Insurance Institute London, The Chartered Financial
Analyst, Center for Rural & Cryogenic Technologies
(Jadavpur University) etc.

Post Graduate Diploma In Financial
Planning
• Post Graduate Diploma in Financial Planning is an intensive one year
program which is offered jointly by ICOFP and CRCT, Jadavpur
University.
• The objectives of this Program are:
1. To teach students the techniques and tools useful for financial
planning.
2. To improve students’ technical and interpersonal skills.
3. To help the students jumpstart their careers in the fields of Banking,
Broking, Insurance, Mutual Funds, Research etc.
• This program also incorporates the curriculum of all modules of
CFPCM certification, which is a global qualification with presence in
around 24 nations.

Thank you for your Participation
You are Invited to a
at our Campus on Saturday 21st February!

Financial awareness

More Related Content

What's hot

Viewers also liked

Similar to Financial awareness

Recently uploaded

Financial awareness