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1. EFFECTIVE PERSONAL
FINANCING STRATEGIES
By: Group 2
Subin Panta
Nimesh Mani Risal

2. Overview
● Developing a personalized budgeting plan
● Retirement Plan for effective financial management.
● Investment options
● Risk management in personal finance.

3. Introduction
Personal finance encompasses the whole universe of managing
individual and family finances, taking responsibility for your current
and future financial situation, and setting financial goals. It also
includes handling individual financial tasks and saving for
emergencies.

4. 5 areas of personal financing
● Income
● Spending
● Saving
● Investing
● Protection

5. Developing a personalized budget plan
● Creating a budget,tracking and reducing expenses
● Build an emergency fund(3-6 months of expenses)
● Employer-sponsored matching funds (SSF Employee-11, Employer
20% /EPF Employee-10%, Employer 11%)
● Pay down high interest debts (avalanche method/snowball
method)
● Contribute to an IRA
● Save for other goals(Investments and protection)

6. INVESTMENT

7. Investments
● Allocation of Capital
● Risk and Return
● Long-term / Short-term Gain

8. Purpose of Investment
● Wealth Generation/Growth
● Income Generation
● Achieving Financial Goals

9. Where to Invest ?
● Stock Market
○ Pros: Potential for high return, liquidity
○ Cons: Market Volatility, Risk of Loss
● Bonds
○ Pros: Regular interest payments, relatively lower risk.
○ Cons: Lower potential returns compared to stocks

10. Where to Invest ?
● Real Estate
○ Pros: Tangible Asset, Potential for rental income
○ Cons: Illiquidity
● Mutual Funds
○ Pros:Diversification, relatively lower risk.
○ Cons: Management fees

11. Where to Invest ?
● Saving Accounts
○ Pros: Safety of principal, liquidity
○ Cons: Low Interest Rates
● Precious Metals
○ Pros: Hedge against inflation, store of value.
○ Cons: Price Volatility

12. Where to Invest ?
● Venture Capital
○ Pros: Potential for high returns, supporting innovation.
○ Cons: High Risk
● Retirement Accounts
○ Pros: Tax Benefits, long-term growth
○ Cons: Withdrawal Restrictions

13. ● Fixed Deposits
○ Pros: Safest option in context of Nepal,Risk free,high interest rate
○ Cons: Less liquidity, tax implications

14. RISK MANAGEMENT

15. Compounding matters but

16. RISK MANAGEMENT
● Definition: Addressing identification, assessment, and mitigation of
potential risks.
● Purpose: Safeguarding financial well-being and protecting assets
against unforeseen challenges.
● Essential Types of Risks: Market risks, credit risks, inflation risks etc.

17. ● Balancing Act: Recognizing that great potential rewards often
accompany calculated risks.
● Smart Approach: Not about avoiding risk entirely, but understanding
and navigating it intelligently.
● Strategic Decision-Making: Encouraging a mindset where risk becomes
an ally rather than an enemy.
RISK VS. REWARD

18. Risk Tolerance and Diversification
● Self-awareness: Assessing individual risk tolerance crucial for
making informed financial decisions.
● Diversification's Role: Treating a diversified portfolio as a shield
against market volatility.
● Investment Wisdom: Spreading investments intelligently to
minimize the impact of unforeseen events.

19. Conclusion
So, if you are not, something is wrong