Mr. X would lose around 2 lakhs (Rs. 200,000) over 5 years by depositing Rs. 50,000 per month in a bank that provides an interest rate of 8% but charges a 10% account maintenance fee. The document discusses different ways people can generate wealth, such as through labor, creating assets, or investing. It argues that investing is the best way to achieve financial freedom because it does not have physical constraints like labor. The document presents data showing that stocks have consistently delivered higher returns than other assets like gold, government securities, and the rate of inflation over the long run in India.

1. Basics of Investing- 1

2. Somebody is taking your wealth away
from you Slowly and Silently ?
And May be you do not even know
about this…

3. MR. X earns 8 % interest on his money and has to pay 10 % as account maintenance
charges . Calculate his profit/loss in 5 years if he deposited 50,000/Month in his bank.
Money Growing
Wealth Reducing

4. Mr. X would loose around 2 Lakhs in 5 years
While you are working hard to
make money ;your money is
lazy .
It also need to work hard
to create wealth for you.

5. Its was just one of the reason, why you
should Invest ?
Its not ONLY about keeping your wealth
but also about something far more important
YOUR FREEDOM

7. Income from Labor
Income from Assets

8. Meet the Characters
Mr. Labor
Mr. Creator
Mr. Power
Mr. Investor

9. How Rich you think Mr. Labor can
become ????

10. Mr. Labor has physical capacity of doing work,
Other three do not have any such constraint

11. How Rich you think other three
characters can become????

12. Idea of Financial Freedom
Investing is your only Income source which is
independent of any physical constraint.

13. Gold Real estate
Fixed income, Bonds, Debt
Stock market

14. WRONG CLASSIFICATION
Store Wealth -> Non-productive
assets
Create Wealth->
Productive assets

15. Bank Example
Client -> FD safe
keeping
Bank -> Productive
assets

16. EQUITIES: THE ONLY ASSET CLASS CONSISTENTLY
DELIVERING HIGHER PURCHASING POWER
HISTORICAL 5-YR AVERAGE INCREASE (%) 5-YR AV RETURNS EX-INFLATION (%)
Inflation Gold Sensex G-Sec
1970-75 12 29
1975-80 4 17
1980-85 10 11 8
1985-90 8 10 11
1990-95 10 8 29 12
1995-2000 8 -1 9 13
2000-2005 4 7 5 8
2005-2010 8 21 22 8
2010-2014 10 12 6 8
1984-2014 CAGR 8 9 20 10
Gold Sensex G-Sec
1970-75 17
1975-80 13
1980-85 1 -2
1985-90 2 3
1990-95 -2 19 2
1995-2000 -9 1 5
2000-2005 3 1 4
2005-2010 13 14 0
2010-2014 2 -4 -2
1984-2014 CAGR 1 12 2
SENSEX AVERAGES 20% RETURNS VS 9% FOR GOLD,VS
10% FOR FIXED INCOME AND 8% INFLATION
Stocks also happen to be the only asset class attracting NO long-term capital gains tax
Source: RBI

17. 0
5,000
10,000
15,000
20,000
25,000
Mar-84
Mar-85
Mar-86
Mar-87
Mar-88
Mar-89
Mar-90
Mar-91
Mar-92
Mar-93
Mar-94
Mar-95
Mar-96
Mar-97
Mar-98
Mar-99
Mar-00
Mar-01
Mar-02
Mar-03
Mar-04
Mar-05
Mar-06
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
Mar-14
Cash (0% CAGR) Gold (9% CAGR) GSec (9.8% CAGR) Sensex (20% CAGR)
10% DELTA RETURN CAN MAKE YOU VERY RICH!
Mar-84 Mar-14
Gold 100 1333
Gsec 100 1,652
Sensex 100 22,386

18. WHO HAS MOST OF THE WEALTH?

19. Who is the owner of Corporate ?

20. That’s Why Inertia Recommends

21. Then Why Everyone who invested
in equities is not RICH?

22. Any Guesses ?

23. Check out this and more our next
session
Basics of Investing- 2
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25. QUESTIONS
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