WEALTH CREATION
- Fire bolt investments
TYPICAL INVESTMENT AND SPEND LIFE CYCLE
Retirement
Children
Marriage
Children
Education
Car
House
Children
Marriage
SAVINGS
Money saved from regular income after accounting for all expenditure
Income Expenses Savings
However, due to the effect of inflation the value of savings keeps decreasing!
INVESTMENT
In most cases the amount saved is to meet future needs of self and family.
It is important to make their savings work for them.
When savings start generating income, they become Investments!
Savings need to generate the maximum possible returns within the constraint of their
risk appetite and time horizon to be able to meet not only their needs, but wants and
desires too.
Hence the need to INVEST!
INVESTMENT MENU CARD
Investment Tax Benefit Return Duration
PPF Yes 7.8% Long Term
NSC Yes 7.5-7.8% Long Term
FDs Bank & Post Yes ( 5 years deposit) 6.25% Long Term
Office
Mutual Funds Yes Market Linked Long Term & Short
Term
ULIP Yes Market Linked Long Term
NPS Yes Market Linked Long Term
Direct Equity Yes Market Linked Long Term
Gold No Market Linked Long Term & Short
Term
Real Estate Yes Market Linked Long Term
COST OF MONEY LYING IDLE IN BANK
Money in Savings Account 4,00,000
Interest earned in 1 year (4% pa) 4,16,241
Compounded Quarterly
Tax on Interest (10%) 624
Impact of Inflation (4.75% pa) 19,000
Value at the end of year 3,96,617
OOPS!!! My
Savings
WHAT IS INFLATION???
Product 1991 2001 2017 CAGR
Coconut Oil (1 litre) 45 74 320 9.6%
Black Gram (Urd) 1kg NA 27 110 9.2%
Rice
Paste
Soap
Atta
Gingelly oil
If we consider actual average inflation is 9%... Our 4lac savings is equivalent
to Rs.378617
AVERAGE HOUSE HOLD EXPENSES
Reference Period
April 2015 March
2016
http://www.livemint.com/Consumer/O0I6Mgk5
VqBsrprjtDslOO/How-India-spends.html
INFLATION DATA
Year Inflation Year Inflation Year Inflation
2017 4.75 % 2008 9.7 % 1999 0.47 %
2016 2.23 % 2007 5.51 % 1998 15.32 %
2015 6.32 % 2006 6.53 % 1997 6.23 %
2014 5.86 % 2005 5.57 % 1996 10.41 %
2013 9.13 % 2004 3.78 % 1995 9.69 %
2012 11.17 % 2003 3.72 % 1994 9.47 %
2011 6.49 % 2002 3.2 % 1993 8.64 %
2010 9.47 % 2001 5.16 % 1992 8%
2009 14.97 % 2000 3.48 % 1991 13.07 %
Average Inflation Rate : 7.6% http://www.inflation.eu/inflation-rates/india/historic-inflation/cpi-inflation-india.aspx
GROWTH OF VARIOUS INVESTMENTS
Product Price in 1991 Price in 2001 Price in 2017 CAGR
GOLD 3,466 4,300 30,260 8.7%
Silver 7,332 7,447 35,666 6.27%
Sensex 1,000 4,100 32,300 14.3%
INFLATION VS FIXED DEPOSITS
Inflation (WPI) vs FD
18
16
14
12
10
Inflation (WPI) FD rate
SENSEX VS GOLD
SENSEX Vs GOLD
35000
GOLD SENSEX
30000
Making Charges -6 to -18% X
25000 Wastage @ Buy -10% X
20000
Wastage @ Sell -10% X
Brokerage @ Buy X -0.5%
15000
Brokerage @ Sell X -0.5%
10000
Dividend X +2%
5000
0
Considering these
factors which is the
Sensex Gold (10grams)
best investment???
CONFUSED???
Do we need to invest only in share market?
Here is the answer.
We dont recommend you invest your entire portion of your savings in share market.
Diversify Your Savings [ Real Estate, Gold, Deposits, PPF etc.,]
Based on age, return on investment, risk you can choose your investment portfolio
INVESTMENT OPTIONS
Specific company shares - Equity
Mutual funds
HOW MUTUAL FUND WORKS???
ADVANTAGES OF MUTUAL FUNDS
Professional Management
Diversification
Convenient Administration
Return potential
Low cost
Liquidity
Transparency
Flexibility
Choice of schemes
Well regulated
Tax benefits
INVESTMENT IN MUTUAL FUNDS THROUGH
SIP
SIP Systematic Investment Planning it is a method of investing a fixed sum, at a regular interval, in a mutual fund.
It is very similar to monthly saving schemes like a recurring monthly deposit / post office deposit
Advantages of Systematic Investment Planning
Encourages Regular Investments (just like recurring deposit schemes)
A Convenient way to invest regularly Lower initial investment without cutting into regular expense
Long term perspective
Rupee Cost Averaging Benefit to counter volatility - it brings down the average cost of your Investments
No timing the market!!!
Meet investment objective with investment needs
Helps to match the risk / return profile
PAST PERFORMANCE AND PROJECTION
Do you
want to
know how
much
wealth you
would have
created in
25years?
With this
CAGR???
Lets see
DO YOU WANNA KNOW THE MAGIC FORMULA???
Clue is its our middle level school formula
Guess???
Yes its our compound interest formula Hope you remember the formula
The investment is similar to it
t is the magic factor See t is the
position of power
Thats the power of compounding Compound interest is the eighth
wonder of the world. He who
understands it, earns it... he who
doesn't ... pays it
INVESTING IN EQUITY
We all Heard of some stories
If anyone would have bought the shares of Eicher Motors instead of a Royal Enfield
bike in 2001, is now worth 10crores
Now he could have bought Rolls Royce
Infy shares for Rs 9.5k in '93 now worth Rs 4 cr
How an investment of Rs.10000 grew to Rs.535 Crores in 34 years
Can You identify the company Yes it is WIPRO Yes its true
OMG!!! Good Company Good
Business, Good Returns
on your investment
STOCK MARKET SINCE 1900
Same pattern
for Indian
market
Huge Capital
gains in long
term
perspective
TAKE SMALL STEPS FOR A GOOD FUTURE
Advantages of Zerodha:
Zero brokerage on equity delivery
0.01% or 20rs (which ever is less) flat brokerage on F&O, Intraday Equity, Commodity
Choose 100s of direct mutual fund
Tools and study materials
To Open Account:
https://zerodha.com/open-account?c=ZMPJHR
For further details: write here https://fireboltinvestments.wordpress.com/contact/
Thank You
