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Strategies for

Wealth Creation & Management


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 Mantra

TIME

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


• 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


• 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.
