4. Time Value of Money
If you had Rs.1 Lakh in 1978 and had :
Bought Gold : Current* worth would be Rs. 37.17 lakhs
Left as cash : Current* worth would be Rs. 7k in terms of PPP
Invested in Sensex: Current* worth would be Rs. 1.88 crores
*- As of March 31st
2012
5. Goal Planning – Step 1
Identify and prioritize specific life goals
Calculate what you need to achieve each goal
Determine your risk tolerance
1.EstablishYour Goals and Expectations
7. Goal Planning– Step 2
Allocate resources to each goals
Choose instruments aligning with the risk appetite
Invest regularly and systematically
2. Make Investments
8. Best time to start saving for retirement is the day you start earning
Save at least 10% of income for retirement
At the peak of earnings save 40-50% of income
Retirement
Graph source : Internet -
9. Prepare for the costliest education (Medical, Graduation/Masters Overseas etc.)
MBA that costs 10L today would cost 67L in 20 years at 10% education cost inflation
Diversify your investments across geographies to factor in overseas education
Education
Graph source : Internet -
10. Above cost is derived by factoring in 10% marriage cost inflation
Above cost is excluding the gold cost
Buy gold regularly via ETF , GSBs ( a gram/month or quarterly)
Kid’s Marriage
Kid’s
Marriage
Graph source : Internet -
11. Time not timing is the key to investment success
The best time to invest is whenever you have money
Wealth Creation
Graph source : Internet -
12. Goal Planning – Step 3
Establish benchmarks
Compare performance to expectations
Be vigilant and update your expectations/strategies
3. Monitor and MaintainYour Portfolio
17. Defined Contribution Pension system open for all citizens of India
Tax exemption of upto 2 lacs + 10% of basic salary
Mandatory annuity purchase of atleast 40% of accumulated pension wealth
National Pension System
18. Defined Contribution Pension system open for all citizens of India
Tax exemption of upto 2 lacs + 10% of basic salary
Mandatory annuity purchase of atleast 40% of accumulated pension wealth
National Pension System
19. Mutual Funds
Professionally managed investment fund with Products for all risk appetite
No tax on long term capital gain
ELSS is a very good tax saving instrument
20. Franklin India Smaller Companies Fund
CAGR Return since Inception : 17.89%
Small Cap Fund
26. 1. Establish Your Goals and Expectations
ShortTerm
• Emergency fund
• School/College fees
• Premium payments
MediumTerm
• New Car
• Downpayment for House
• ForeignVacation
LongTerm
• Child’s Education
• Child’s Marriage
• Retirements
Goals Years to Achieve Risk Appetite
<< 1Year
1Year – 5Year
5Year – 25Years
No Risk
Low Risk
Medium to High Risk
27. 2. Making Your Investments
ShortTerm
• Emergency fund
• School/College fees
• Premium payments
MediumTerm
• New Car
• BookingAmount for House
• ForeignVacation
LongTerm
• Child’s Education
• Child’s Marriage
• Retirements
Goals Investment
Options
Expected Rate of
Return
Recurring Deposits
Liquid Funds
8%
8-10%
9-12%
9-15%
11%
12-20%
>>16%
Debt Funds
Balanced Funds
Gold
Equity Funds
Stocks