FINERVA

Strategies for

Wealth Creation & Management

CRPF28 June 2007 | Coimbatore

The basics first

Assets Liabilities

Make a list of the following

The Basics again…

• What are Assets / Liabilities for Personal Wealth Creation?

– One that gives a POSITIVE CASH FLOW IS AN ASSET

– Others are Liabilities / Expenses.

What is growth / return?

• Time Value for Money

• Relative Growth

• Nominal Interest Rate Vs

Effective Interest Rate

What is Risk?

Actual Returns

Vs

Expected returns

What is Wealth?

Take 2 minutes. Close your eyes and imagine a wealthy person. Write what you see.

A person's wealth is defined

by how long a period of time

he/she can sustain their

lifestyle if they stop working.

The longer you can go on living your life without

working another day, the richer you actually are.

Your wealth is therefore defined by three things

• Your monthly expenses,

• Your liquid assets and

• Your passive income.

The MantraTIME

Start early

Use the power of compounding

Where do I Invest?

• EQUITY

• Current Yield – Low

• Capital Appreciation – High

• Typical Returns - 19.25% as per

SENSEX returns since 1979

• Risk – High

• Marketability / Liquidity – High

• Tax Treatment - No long term capital

gains tax after 365 days. Dividends

received are tax free

• Convenience - High

Where do I Invest?

BANK DEPOSITS• Current Yield – Moderate

• Capital Appreciation – Nil

• Typical Returns - 8% Average

• Risk – Negligible

• Marketability / Liquidity – High

• Tax Treatment - Section 80C benefits for 5 year

deposit. All interests are taxable

• Convenience - Very High

Where do I Invest?

MUTUAL FUND - EQUITY• Current Yield – Low

• Capital Appreciation – High

• Typical Returns - 39% Average over 3yrs Highest return - 69%

• Risk – High

• Marketability / Liquidity – High

• Tax Treatment - Section 80C benefits for Equity Linked Savings

Schemes. No long term capital gains tax after 365 days. No tax on

dividends received.

• Convenience - Very High

If spending money brings you

enjoyment, you will never be rich.

However if making money brings you enjoyment, then your wealth isguaranteed.