1. HOW TO INVEST YOUR MONEY
WISELY

2. OUTLINE
 Why invest?
 Golden rules for investment
 Survey
 Fixed deposits
 PPF
 Bonds
 Gold
 Stock markets
 Mutual fund
 Conclusion
 Recommendations
 References

3. INVESTING BASICS: THE IMPORTANCE OF
STARTING EARLY
Ramesh—age 25
 Assumes a 7% return
 Invests $4,500 a year for 10
years
 Total invested is $45,000
 Has $62,174 by age 35
 Stops contributing at age 35
 He has $337,445 at age 60
Suresh—age 25
 Waits 10 years to start investing
 Invests $4,500 for 25 years
 Total invested is $112,500
 He has $284,621 at age 60

4. GOLDEN RULES OF INVESTMENT
FIX GOALS DIVERSIFY REASSES

5. SECTOR PERCENTAGE
BANK 30
BANK F.D’S 25
STOCK MARKET 30
MUTUAL FUNDS 10
OTHERS 5
SURVEY FINDINGS

6. BANK ACCOUNTS
TYPES OF BANK ACCOUNTS
SAVINGS BANK ACCOUNTS
CURRENT ACCOUNTS
FIXED DEPOSIT ACCOUNT
RECCURING ACCOUNT

7. FIXED DEPOSIT ACCOUNT
• Fixed deposit is meant for fixed period
1.
• Money is deposited for fixed period six months, one
year, five year , ten year2.
• Rate of interest varies from time to time3.
• Rate of interest is high in fixed deposit on surplus funds4.

8. RECCURING DEPOSIT
• Recurring deposit is meant for future savings
1.
• It is opened by individuals who save at regular
intervals and earn higher rate of interest at fixed
rate
2.
• The rate of interest is higher3.
• It provides loan facility4.

9. PPF
• PPF is the short name for Public Provident
Fund1.
• Public Provident Fund scheme is a savings-
cum-tax-saving instrument in India2.
• Gives you tax benefits and decent returns3.

10. INVESTMENT AND RETURNS FOR PPF
• A minimum yearly deposit of Rs 500 and a
maximum of Rs 100000 can be invested.
1.
• The amount can be invested either in
installments or lump sum payment.
2.
• The current interest rate decided by the
government is 8.80% p.a3.
• The minimum tenure of the PPF account is 15
years
4.

11. GOVERNMENT BONDS
 Bond issued by government is called government bond
 Money raised is used to finance public works
 In return the govt pays a fixed rate of interest to the investor
 Govt Bonds are usually denominated in the country’s own currency
 A bond is a type of investment that represents a loan between a
borrower and a lender.
 Type of debt which a company/govt undertakes

12. ADVANTAGES AND DISADVANTAGES
ADVANTAGES DISADVANTAGES
Risk free bonds Generates low interest
No anticipation and anxiety Long duration
Some bonds are exempted
from Income Tax
Limitations on redeeming
the bond early

13. GOLD
Investment
in Gold
Diversification
Ensures
Liquidity
Store of value
In Inflationary
Times

14. INVESTMENT OPTIONS FOR GOLD
Physical Gold
Gold exchange-traded products
•Exchange traded funds
• Closed end funds
• Exchange traded Notes
Gold price variation over 10 years

16. WHAT IS STOCK MARKET??
 For an investor,
Stocks shares in a company
certificate of ownership of a corporation
 For a company,
One of the most important sources to raise money
 Public entity for the trading of company stock and derivatives at an
agreed price

17. BENEFITS OF STOCK MARKET INVESTMENT
 High potential returns
 Time value of money
 Diversification
 Tax deferral
 Transparency
 Easy review & research
 Dividends

18. PROCEDURE FOR INVESTMENT
Broker
Seller
Buyer
BuyerSeller
Company Broker
Primary market
Secondary market

19. RISKS INVOLVED IN INVESTMENT
 Market risks
 Industry Risks
 Regulatory risks
 Business Risks

20. STOCK CHART
ICICI Bank- Stock chart

21. STOCK CHART
RIL- Stock chart

22. MUTUAL FUNDS
 What is a Mutual Fund?
 Mutual fund is a mechanism for pooling the resources by issuing units
to the investors and investing funds in securities in accordance with
objectives as disclosed in offer document.

23. CONCEPT
 A Mutual Fund is a trust that pools the savings of a number of investors
who share a common financial goal.
 The money thus collected is then invested in capital market instruments
such as shares, debentures and other securities.
 The income earned through these investments and the capital
appreciation realized are shared by its unit holders in proportion to the
number of units owned by them.
 Thus a Mutual Fund is the most suitable investment for the common
man as it offers an opportunity to invest in a diversified, professionally
managed basket of securities at a relatively low cost.

24. MUTUAL FUND OPERATION
FLOW CHART

25. ORGANISATION OF A MUTUAL FUND

26. ADVANTAGES OF MUTUAL FUNDS
 Professional Management
 Diversification
 Convenient Administration
 Return Potential
 Low Costs
 Liquidity
 Transparency
 Flexibility
 Choice of schemes
 Tax benefits
 Well regulated

27. TYPES OF SCHEMES
 By Structure
• Open Ended Schemes
• Close Ended Schemes
• Interval Schemes
 By Investment Objectives
• Growth Schemes
• Income Schemes
• Balance Schemes
• Money Market Schemes
 Other Schemes
• Tax Saving Schemes
 Special Schemes
• Index Schemes
• Sector Specific Schemes

28. FREQUENTLY USED TERMS
 Net Asset Value (NAV)
Net Asset Value is the market value of the assets of the scheme minus
its liabilities. The per unit NAV is the net asset value of the scheme
divided by the number of units outstanding on the Valuation Date.
 Sale Price
Is the price you pay when you invest in a scheme. Also called Offer
Price. It may include a sales load.
 Repurchase Price
Is the price at which a close-ended scheme repurchases its units and it
may include a back-end load. This is also called Bid Price.
Contd…

29. FREQUENTLY USED TERMS
 Redemption Price
Is the price at which open-ended schemes repurchase their units and
close-ended schemes redeem their units on maturity. Such prices are
NAV related.
 Sales Load
Is a charge collected by a scheme when it sells the units. Also
called, ‘Front-end’ load. Schemes that do not charge a load are called
‘No Load’ schemes.
 Repurchase or ‘Back-end’ Load
Is a charge collected by a scheme when it buys back the units from the
unit holders.

30. CONCLUSION

31. RECOMMENDATIONS

32. RECOMMENDATIONS
BEFORE AFTER
SECTOR RETURN SECTOR RETURN
BANK 31200 BANK F.D 27125
BANK F.D 27125 PPF 5040
STOCK MARKET 33000 MUTUAL FUND 33000
MUTUAL FUND 11000 STOCK MARKET 22000
OTHERS 5250 METAL 5500
- - OTHERS 16500
TOTAL 107575 TOTAL 110195

33. REFERENCES
 BYU Personal Finance Website: http://personalfinance.byu.edu
 Advanced Course: Advanced Investing
 http://morningstar.com
 www.mutualfundsindia.com
 www.rupeemanager.com
 www.wikipedia.com
 www.money.msn.com
 www.chartmaker.mathwarehouse.com
 www.sharekhan.com
 www.abcofinvestments.com
 www.googleimages.com

34. QUESTIONS…???

35. Thank you!!!