The document provides an overview of strategies for retiring rich and young presented by Vishal Thakkar. It discusses the importance of making one's money work harder through investment rather than just working hard. It outlines seven steps for retiring rich and young including deciding one's retirement age, buying liabilities based on needs not desires, linking liability and asset targets, planning liabilities in advance, increasing cash through knowledge and habits, making money work harder, and having job earnings and freedom ratio targets. Key investment avenues discussed include real estate, commodities, stocks, bonds, mutual funds, and more.

1. Retire Rich Retire Young…- An effort to make your money work harder…Presented by:-Vishal Thakkar M.Com, CA, MBA(fin)Managing DirectorBrianna Knowledge Resources Pvt. Ltd.

2. Time & MoneyLet’s begin with a story! There was a village with a drought. The Chief of the village found the two smartest men he could find and gave them each Rs.10,000. Their mission…..bring water to the people.

3. The 1st man was a hard worker and started a business.

4. The 2nd man was an investor and built a pipeline.And the winner is……Not only did the second man win the contest, but he found a way to have water (money) come in even when he wasn’t working.

5. Both men started from the same background, with the same experience, and the same amount of money. The only difference was that the 1st man worked hard for his money and the second man had his money work hard for him.“The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow.” – Rupert Murdoch

6. Retire Rich & Young…What?Different People have different meanings –Some say good lifestyle, no pressure to earn money etc.While others say pursuing hobby, not going to work.Retire Rich & Young, to us, means, “subscribing to an increasing standard of living, without having increasing effort to maintain it.”

7. Retire Rich & Young…Why?To do what I like to do & not just work for money.To pursue my hobbies, interests which were left behind in Rat Race.To spend more times with Loved ones, family & friendsTo help people, take up a social cause & to make this world a better place.Whatever be the objective, we all agree that there is a need….

8. Retire Rich & Young… How? That’s Precisely what this program is all about… Lets first Unlearn a few Concepts, that we have gathered during the course of our learnings in Life…

9. Let’s Get a Little Practical…Job EarningsOther IncomeMonthly Expense Lets See what Robert has to say on this one…3 Types of Income

10. You need a little help…House RentMilkPetrolElectricity Bill ClothingHousehold / Monthly ExpenseWeekend GetawaysHabitsTraveling ExpenseEating OutsideMoviesMobile / Telephone Bill.

11. Freedom / Wealth Ratio…Freedom Ratio = Other Income* Monthly Expense * The one which your money earns & you do not.

12. 3 Types of EducationAcademic

13. Professional

14. FinancialLets See what Robert has to say on this one…3 Types of Education

15. What Are Assets?Dream HouseSports CarGadgetsDiamond Jewellery “Anything that puts money into my pocket is an asset.”

16. INCOMEEXPENSE ASSETSLIABILITIES

17. What Are Liabilities?Housing LoanCar LoanPersonal LoanCredit Card “Anything that takes money out of my pocket is a liability.”

18. INCOMEEXPENSE ASSETSLIABILITIES

19. What Is Wealth? “Wealth- Number Of Days You Can Maintain Your Current Standard Of Living If You Lose Your Main Source Of Income.”Dream House Sports CarForeign TripsShoppingDiamond JewelleryLets See what Robert has to say on this one…Assets V/s Liabilities…

20. Why Middle Class Struggle?INCOMEEXPENSE LIABILITYASSET

21. Let’s Take a Break…

22. Savers Are Losers… How many of you have a Savings Account…?

23. What is the Rate of Interest that you get on your Savings Account…?

24. What about the average Inflation Rate…?

25. Do You recommend Fixed Deposits…?“If Savers are Losers, Borrowers would Win”Lets Look at borrowing…Lets See what Robert has to say on this one…Savers are Losers

26. ArbitrageYour Re.1 at work at the bank.

27. Rs.10 for every Re.1. By RBI Rules, banks can lend out Rs.10 for every Re.1 that you give them. Meaning they have made up Rs.9 of borrow able money out of thin air. Where do I get some of that?

28. They say open an account with us and we’ll give you anywhere from 1% to 5% interest. We’ll even give you stuff!

29. Then they then turn around and lend you the money right back saying borrow money from us and we’ll only charge you 10% to 27% interest.

30. And that is why banks have beautiful fountains, golden chandeliers, and marble floors. Your money paid for it!Your Expense, Bank’s IncomeYOUTHE BANKINCOMEINCOMEEXPENSEEXPENSE ASSETSLIABILITIESASSETSLIABILITIESYour MortgageYour Mortgage

31. What is your interest rate……. really?Buy Rs.100,000 Home, make a down payment of 20% (Rs.20,000) and borrow the remaining balance Rs.80,000 at 8% interest with a 30 year term fixed loan.

32. In five years you will pay a total of Rs.35,220 to the bank, Rs.31,276 for interest (that is only Rs.3,944 for Principal Repayment).

33. With the loan taken to term, 30 years, you will have paid Rs.211,323 total principal and interest (Rs.131,323 paid in interest).

34. Rs.131,323 more like 160% not 8%.

35. You’re getting the truth, just not the whole truth.Top Two Money Eaters…TAXES & Death are the two things which we cannot avoid, so we defer them ALAP.INFLATION is number two evil that eats away our money like a rodent

36. Why do we follow the crowd?We are going to read your mind. That’s right read your mind! Ready…..Pick a # between 1 and 10.Now multiply that # by 2.Add eight to that #.Divide that # by 2.Now subtract the # you started with from that #.Now what ever # you have in your mind, match it up with its corresponding letter in the alphabet. i.e. 1=a, 2=b, 3=c, d=4, etc.O.K., Now think of a country that starts with that letter. I’ll give you a second.Having a hard time……….think Europe………….how about Denmark? You’re thinking of D right, you did get 4? At least you should have if you did the math right. How did we do that?

37. We follow the crowd because it’s easy and because we are just good at it! No matter what number you were thinking of the equation would have led you to the number 4. When we invest, we are doing the same. The numbers start out differently, FDs, Post Office, PPF, KVP, IVP, NSC, Mutual Funds, yet your results are the same……...…dismal.

38. How Do We Get Out?“Albert Szent-Gyorgyi, a brilliant scientist who won the Noble Prize twice in his lifetime, stated, “Discovery consists of seeing what everybody has seen, but thinking what nobody has thought.” People often make the mistake of asking people who are trapped inside the same box (or way of thinking) how to get out of the box. What they don’t realize is, the instructions on how to escape that box are written on the outside.* Andrew, Douglas (2005). Missed Fortune 101 Warner Business Books, pg. 122

39. Practice What They Preach?Ask your banker/financial planner these questions!

40. Where is the majority of your money coming from? i.e. commission, fees, salary vs. investments.

41. How long did it take you to become a broker?

42. Can you guarantee that return on my investment? i.e. the prospectus and small writing.

43. You see, they are called brokers because they are broker then you are.“Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those that take the subway.” – Warren Buffet

44. Time Is Your FriendTime: a young person’s biggest asset

45. Compound interest is awesome

46. For every decade that savings is delayed, the required investment triples

47. Example: Rs.500,000 at 65; 10% yield

48. Age 25: Rs. 79 per month

49. Age 35: Rs. 219 per month

50. Age 45: Rs. 653 per month

51. Age 55: Rs. 2,141 per monthDifference is quiet significant in long run.Power of CompoundingGrowth of Rs. 100/-

52. More About TimeTime diversification reduces investment volatility

53. The Rule of 72

54. 72/interest rate = doubling period

55. 72/doubling period = interest rate4,285Harshad Mehta5,001Tech BoomPerformance of BSE Sensex - Equities not risky in long runAs Time IncreasesVolatility & RangeDecreases

56. Sensex Growth from 1979 - 2007After all, in the last 25 years, we’ve seen ….Two wars

57. At least three major financial scandals

58. Assassination of 2 prime ministers

59. At least 3 recessionary periods

60. 10 different governments and

61. An unfair share of natural disasters, yetHowever had one invested in the Sensex Rs 1 lacs in 1979 it has grown to 1.30 crs earning a return of 19% compounded annualized return.

62. Rule of 72If you Put your Money at ‘X’ % then your Money is double in (72/X) years.

63. For Eg: 1 Lac Invested for 36 YrsInvesting is NOT Risky…What is Risky is an “Investor” & not an “Investment”Fundamental InvestingTechnical InvestingBuying InsuranceLets See what Robert has to say on this one…Investing Isn’t Risky

64. Managing Investor’s Psyche Wrong emotion dominates at wrong time

65. Financial Status of Rich PersonINCOMEASSETLIABILITYEXPENSE

66. So what do we recommend…Take the Steering Wheel in your hand…Invest In Yourself First…Learn the Language of Money…Climb the Seven Steps of Retiring Rich & Young…Make an Action Plan to religiously follow them…Review your progress at reasonable intervals…

67. Let’s Take a Lunch Break…

68. Investment Avenues…I know all of you have been waiting for this one…But not too soon…Let us first understand the difference between good Loan & Bad Loan

69. “Here are 5 great reasons to carry a big, long mortgage and never pay it off.” - Ric Edelman, Author of The Truth About Money (1997 Book of the Year).Mortgages Don’t Affect Home Value The value of your property is going to rise or fall regardless of whether or not you have a mortgage. You wouldn’t keep Rs.100,000 between the mattresses, why would you keep it in your house?Your Mortgage Is The Cheapest Money You’ll Every Buy People have a ton of debt, i.e. credit cards, auto loans, student loans, etc. By far, the cheapest loan you can get is a mortgage loan. Why wouldn’t you borrow against your house at 6% acquiring more assets to increase your R.O.I., instead of borrowing with a 18% credit card.

70. You Might Need The Cash Financial Troubles? i.e. retirement, job loss, medical, family, marital, college, etc. Banks only like to lend money when they know it can be paid back.Tax Law Encourages You To Have A Mortgage. Mortgage insurance and interest is tax deductible whereas interest on other loans are not. In essence the government rewards you with cash back for paying interest on your mortgage.5. Mortgages Become Cheaper Over Time Depending on the loan you choose, your mortgage payment stays the same over time. However your income increases making the payments easier to make.Lets See what Robert has to say on this one…Good Debt V/s Bad Debt

71. Investment AvenuesReal AssetsReal EstateCommoditiesOil, Gold and Silver Paper AssetsStocks and SharesCertificate of DepositsGovernment and RBI BondsForeign ExchangeMutual FundsPublic Provident Fund

72. The Beauty of Real Estate!Phantom Cash Flow (Depreciation) – Make money and count it as a lossBanks Lend You Money – Try that with stocksLeverage – Get more for your moneySec - 54 Tax Deferred Exchange – No capital gains taxThe Bigger the BetterNegotiations – Something is worth only what someone else will pay for itAppreciation

73. Dolf De Roos’s Four QuestionsQ: How many Rupees worth of stock/property can you buy with Rs.10,00,000? A: Rs.10,00,000 with stocks, but with real estate a whole lot more!2. Q: The moment you buy your Rs.10,00,000 worth of stock/property, how much is it worth? A: Rs.10,00,000 with stocks, but with real estate it could be a whole lot more!3. Q: When you buy your Rs.10,00,000 worth of stock/property what can you personally do to increase the value? A: With stocks pray or write the C.E.O. of the company and ask him to ease up on the private jet trips. But with real estate you can paint, put in new flooring, landscape, or even add a room.4. Q: Once you have bought Rs.10,00,000 worth of stock/property and it has doubled in value what must you do to enjoy the gain? A: With stocks sell them and pay capital gains, but with real estate you can sell, trade, refinance and enjoy limited and even sometimes no tax.

74. CommoditiesBuy and Sell Commodity FuturesNew to Indian MarketTiming of PurchaseKnowledge and Skills

75. Oil, Gold and SilverOil Futures can be traded as a commodityTiming of PurchaseKnowledge and Skills

76. Stocks and SharesDo it on your ownGive in for Portfolio Management Service (PMS)Discretionary V/s Non-Discretionary PMSLet us do a Mass Role Play

77. Which Company will you choose to invest in?Name of Company: Wise Co. Prudent Co.Sales Rs. Crore 1000 800 Net Profit 120 200Profit Margin 12% 25% Equity Capital 200 500Debt Funds 200 100Return on Equity 60% 40%There are other financial / non-financial factors that would influence investment decisions.

78. Certificate of DepositsUse Rule of 72 for your advantageBanks, Corporates, Post-Office etc.Even Indira Vikas Patra and Kisan Vikas Patra come Under this asset classificationLacks Liquidity and FlexibilityYields meager Return post inflation and taxes