This document summarizes the agenda and content of a personal finance workshop. The workshop covers tools for creating wealth such as cash flow analysis and balancing risks and returns in investments. It also discusses budgeting myths and creating a budget to have surplus funds for goals. Various investment options like equity, debt funds, bank deposits, real estate, etc. are compared in terms of returns, risks, tax treatment and other factors. Retirement and insurance planning tools are also introduced.

1. Personal Finance Workshop A G S Infotech Hotel Fariyas, Lonavla 24 th June & 1 st July 2008

2. Agenda Introductions Tools to Create Wealth Budgeting to Create Surplus

3. Introduction Finerva Finerva = Finance + Minerva (Roman Goddess for Wisdom) India’s First Company (also only one till now) dedicated to Personal Finance Education 3 core values: Simplifying Personal Finance Make Meaning Create Value

4. …Introduction Trainer – J.Karthikeyan Promoter Director of Finerva BE, MBA, AFP 10 years experience in Manufacturing and Services Over 3500 hours of training experience Visiting Faculty in Anna University & Bharathiar University for MBA students

5. Tools to Create Wealth a. Basics of Cash Flow Asset Vs Liability Chart Mark the table in your workbook appropriately

6. PAGE 5 WORKBOOK

7. Asset - Liability Cash Flows WORKBOOK PAGE 6

8. Applying Cash Flow to our lives Exchange of phones Bike with high resale value Having assets and heavy loans House that we live in Vehicle loans Borrowing for tax saving investment

9. Tools to Create Wealth… Balancing Return & Risk What is risk? Any deviation from expectation is risk Which has higher risk? When I expected 10 % I got 9%. I expected 35% I got 31.5% I expected 100% I got 90%

10. Which decision is better? An army general has 100,000 soldiers. If he fights he will lose 20,000 persons. If he retreats he will lose only 20% of his army. Which decision will reduce the loss of lives?

11. Risk… Is there zero risk? No. That is why Countries are rated too. Sometimes the sovereign rating can be lesser than some companies in the country.

12. …Tools to Create Wealth Tools to meet my requirement Comparision chart for different investments

13. Equity Shares Current Yield – Low Capital Appreciation – High Typical Returns - 19.25% as per SENSEX returns since 1979 Risk – High Marketability / Liquidity – High Tax Treatment - No long term capital gains tax after 365 days. Dividends received are tax free Convenience - High

14. Debentures Current Yield – Moderate Capital Appreciation – Moderate Typical Returns - 8% depending on company Risk – Low Marketability / Liquidity – Average Tax Treatment - Interest received is taxable Convenience - Average

15. Mutual Fund - Equity Current Yield – Low Capital Appreciation – High Typical Returns - 39% Average over 3yrs Highest return - 69% Risk – High Marketability / Liquidity – High Tax Treatment - Section 80C benefits for Equity Linked Savings Schemes. No long term capital gains tax after 365 days. No tax on dividends received. Convenience - Very High

16. Mutual Fund - Debt Current Yield - Moderate Capital Appreciation – Low Typical Returns - 8% Average over 1yr Risk – Low Marketability / Liquidity – High Tax Treatment - Dividends received are tax free Convenience - Very High

17. Bank Deposits Current Yield – Moderate Capital Appreciation – Nil Typical Returns - 8% Average Risk – Negligible Marketability / Liquidity – High Tax Treatment - Section 80C benefits for 5 year deposit. All interests are taxable Convenience - Very High

18. Public Provident Fund Current Yield - Moderate but locked till end of the term Capital Appreciation – Nil Typical Returns - 8% Risk – Negligible Marketability / Liquidity – Low Tax Treatment - Section 80C benefits. Maturity tax free. Can not be attached in case of insolvency Convenience - Low

19. Life Insurance Policies Endowment Current Yield - Moderate but locked till end of the term Capital Appreciation – Nil Typical Returns - 5.5% Average Risk - Moderate Marketability / Liquidity – Average Tax Treatment - Section 80C benefits and Section 10 (10)D benefits Convenience - Low

20. Rent from house Current Yield – Low Capital Appreciation – High Typical Returns - 5% Maximum Risk – Negligible Marketability / Liquidity – Low Tax Treatment - Expenses can be deducted before calculating tax Convenience - Fair

21. Gold and Silver Current Yield – Nil Capital Appreciation - Moderate Typical Returns - Matching inflation Risk – Average Marketability / Liquidity – High Tax Treatment - No tax benefits capital gains tax applicable Convenience - High

22. ULIP's with minimum 5 times cover Current Yield – Nil Capital Appreciation – High Typical Returns - 28% Average over 3 yrs Risk - Can be adjusted based on market conditions Marketability / Liquidity - High (but after three years) Tax Treatment - Section80C and Section 10(10)D benefits Convenience - High

23. ULIP Pension plans Current Yield – Nil Capital Appreciation – High Typical Returns - 28% Average over 3 yrs Risk - Can be adjusted based on market conditions Marketability / Liquidity - High (but after three years) Tax Treatment - Section 80C benefits & 1/3 tax free commutation on maturity amount. Pension received is taxable Convenience - Average

24. Insurance Planner Income replacement method workbook page 8

25. Retirement & Milestone Planner workbook page 9

26. Budgeting to Create Surplus Budget – Myths And Reality What ever I plan does not work? So why plan? A plan does not ensure that the goal is achieved. Plan is required to first set a goal and then to remind you to reach it And alert you when there is a deviation A company has become big because they have a budget…

27. Budget Myths & Reality Anything on sale can be bought A sale is profit for the sales guy Is the thing on sale what you want. Buy anything based on a list of needs and excess cash. Budget is for countries and big companies .

28. Budget – Myths and Reality There is not enough money for everyone to be rich Money is not a limited quantity commodity (at least at our level) The more value you create for your company and others, the more money you have.

29. Budgeting – Myths and Reality That guy is filthy rich! He should have done some criminal activity some time in life. This is a statement out of guilt and envy Sometimes used to protect our image in front of our children.

30. My Present Budget Fill in your Budget Worksheet budget worksheet

31. PAGE 14-15 WORKBOOK

32. Creating a Surplus for My Goals Can you see where your goals are being SPENT????? Identify expenses which can be reduced Identify loans which need to be closed immediately Identify investments that need to be started immediately

33. Thank you