An Investor Education presentation customised for salaried professionals.

1. Financial Wellness Enhancement
Program

2. What do we do with Money?
Earn Invest
Spend Borrow

3. Income – Expenses : Impact

4. How to increase Earnings?
Earn
1. Enhance Skills
2. Monetise Hobbies
3. Income from Investments
4. Save Tax
Invest
Spend Borrow

5. Monetising
Hobbies
Kris Sanchez
www.twitter.com/KrisSanchez
141,000 Followers on twittwers
www.twitter.com/UberFacts
75,00,000 Followers
Tweets Facts with sponsored links
Earns $ 500,000 in a year
Full time Job : After School Counsellor
– Earns $ 50,000
Took 5 years to get Follower base

6. Save Tax or Increase Net Income
80 C (Maximum Savings of Rs. 50,000 per year - 30% of Rs.1,50,000)
1. EPF
2. PPF (or for those with Self Discipline ELSS from Mutual Funds)
3. Company Sponsored NPS
4. Principal Repayment on Housing Loan
5. School fees for upto 2 children
Interest Payments on Housing Loan or Education Loan
1. Max of Rs.60000 Savings (30% of Rs.2,00,000) for Self Occupied house
2. Unlimited for Rented House
3. Unlimited for Education Loan
Medical Insurance Premiums
Rs.5000 for Self and Rs.6000 for Sr. Citizen Parents (30% of Rs.15,000 and
Rs.20,000)
Have more Exempt Income
HRA, Dividend, Other Tax Free Income

7. Where does Insurance Fit in this?
Earn
1. Enhance Skills
2. Monetise Hobbies
3. Income from Investments
4. Save Tax
Invest
Spend Borrow

8. Insurance
What happens to Premium we pay for Car or two wheeler ?
What happens to Premium we pay for Health Insurance every
year ?
Why do we pay this ?
What should logically happen to life insurance premium we
pay ?

9. Insurance is an Expense (most important)
Earn
1. Enhance Skills
2. Monetise Hobbies
3. Income from Investments
4. Save Tax
Invest
Spend
1. Insurance Premium (Less than 5% of Net
Income)
1. Life Insurance (6 times Net Income)
2. Accident Insurance (6 times Net
Income)
3. Health Insurance (Upto Rs 5 Lakh)
4. Critical Insurance (Age > 35, 20
Lakhs)
5. Motor Insurance (depending on
vehicle)
Borrow

10. What are the Investment Products ?
Earn
1. Enhance Skills
2. Monetise Hobbies
3. Income from Investments
4. Save Tax
Invest
1. Banks (FD, RD)
2. Retirement (EPF, PPF, NPS)
3. Mutual Funds (Debt Funds, Index Funds,
Equity Funds, Gold Funds)
4. Real Estate (Flat, Land, Commercial
Property)
5. Metals (Gold, Silver etc)
Spend
1. Insurance Premium (Less than 5% of Net
Income)
1. Life Insurance (6 times Net Income)
2. Accident Insurance (6 times Net
Income)
3. Health Insurance (Upto Rs 5 Lakh)
4. Critical Insurance (Age > 35, 20
Lakhs)
5. Motor Insurance (depending on
vehicle)
Borrow

11. Investment Basics
No Risk – No Return
Medium Risk – Medium Return
High Risk – High Return
But, Taking Risk does not guarantee Return

12. No Risk – No Return Products
FD/RD/Debt Mutual Funds
Interest – 9%
Tax – 30% of 9% = 2.7%
Net Interest = 6.3%
Inflation = 7%
Return after adjusting for Inflation : -0.7%
Hence – NO RISK – NO RETURN
Why Invest ?
Atleast Capital is protected and can be withdrawn in emergency without loosing
capital
Invest only minimum amount – (Say 6 months Net Income)
Advantage of Debt Mutual Funds over FD – If no withdrawal happens for 3 years
tax is less than 1%

13. Medium Risk – Medium Return Products
EPF, PPF
Interest Rate : 8.75%
Tax : 0%
Net Interest – 8.75%
Inflation – 7%
Return over inflation = +1.75%
Why they offer more return than FD?
For taking Risk
Risk – Liquidity (Can’t be withdrawn), Interest rate (Not guaranteed)

14. Any Other Medium Risk – Medium
Return Products ?
Stock Market Index – NIFTY or SENSEX

15. Stocks Can Loose – Stock Market (NIFTY) will not
loose
(RISK is only Time)
Year NIFTY Year NIFTY Year NIFTY
Jul-94 1226 Jul-04 1537 Jul-14 7634
Jul-95 938 Jul-05 2211
Jul-96 1109 Jul-06 3150
Jul-97 1200 Jul-07 4313
Jul-98 942 Jul-08 3896
Jul-99 1183 Jul-09 4340
Jul-00 1495 Jul-10 5251
Jul-01 1100 Jul-11 5627
Jul-02 1068 Jul-12 5278

16. Worried about ups and downs of NIFTY –
Why it is good?
Year Value Amount
Invested
Units Bought
1 10 10000 1000
2 8 10000 1250
3 5 10000 2000
4 2 10000 5000
5 1 10000 10000
6 2 10000 5000
7 5 10000 2000
8 8 10000 1250
9 10 10000 1000
10 12 10000 833
Total 1,00,000 29333
Value at the end of 10
years = 29333 * 12 =
Rs 351996
Rs 100000 has
become 3.5 times
On the other had if Rs
1,00,000 is invested in
Year 1 – It would have
become only Rs
1,20,000

17. High Risk – High Return
Diversified Mutual Funds
Expected Returns : 12-15% CAGR over 7+ years
Tax : 0
Net expected returns : 12%-15%
Return over inflation : 5-8% (expected)

18. Very High Risk and Very High Return
Real Estate
Individual Stocks

19. Guaranteed ways to loose money
Earn $ 1000 in 3 days –
F & O Gambling
Vanila Plantation
Cattle and Ghee
Scheme
Teak Wood Plantation
Solar Power Generation

20. Home and Education Loans – A Must have
Home Loan Interest : 10%
Tax Benefit on Interest : 30%
Net Interest Rate : 7% only
Even if money is available, it is better to invest at 9%
and pay 7% on home loan
Similarly Education Loan Interest : 12%
Tax Benefit : 30%
Net Interest on Education Loan : 8.4%
Still there is a benefit in borrowing for Education Loan

21. When borrowing is not good?
No Credit Card Outstanding
Even if you one month full payment is missed, credit card has to be surrendered
No Personal Loan
No Car Loan
4 lakh car loan for 5 years – EMI : Rs.8700
To accumulate Rs.4 Lakhs in 5 years (@12%) – Need to Invest only Rs.4900 p.m.
3 Cars required today for life time – If first car is bought on loan all cars will be
bought on Loan
No Interest Free EMI’s
Strictly No Loans for any depreciating asset

22. Why Invest ?

23. Why Invest?

24. Prioritize Investment
No 1 Priority – Emergency & Short term
No 2 Priority –
Retirement Savings : No other Need is bigger
No 3 Priority Aspirations
Home, Education :
Vacations/Car/Celebrations

25. Invest based on Priority to maximize return
For Emergency Need Choose NO RISK NO
RETURN
Invest in RD/FD/Debt Mutual Funds
For Retirement choose MEDIUM RISK – MEDIUM
RETURN
Invest in NIFTY MF, EPF, PPF, NPS
For Aspirations
Home & Education : Borrow
For Vacations/Car/Celebrations
Diversified Mutual Funds

26. What are the Investment Products ?
Earn
1. Enhance Skills
2. Monetise Hobbies
3. Income from Investments
4. Save Tax
Invest
1. Emergency (Short term) FD/RD/Debt
Funds
2. Retirement (Long Term) EPF, PPF,
NPS, NIFTY MF
3. Aspirations (Medium Term) Diversified
Equity, Gold Funds
1. Down payment for home
2. Car, Vacation, Festivals
Spend
1. Insurance Premium (Less than 5% of Net
Income)
1. Life Insurance (6 times Net Income)
2. Accident Insurance (6 times Net
Income)
3. Health Insurance (Upto Rs 5 Lakh)
4. Critical Insurance (Age > 35, 20
Lakhs)
5. Motor Insurance (depending on
vehicle)
2. EMI or Rent
3. Food & Clothing
4. Bills
5. Unplanned Expenses
Borrow
1. Home
2. Education

27. How do I break up my Income ?
Earn
1. Enhance Skills
2. Monetise Hobbies
3. Income from Investments
4. Save Tax
Invest Monthly
1. Short term Aspirations (Mobile, Gadgets,
Festivals, India Travel) -10% of Net
Income in RD/Debt Funds
2. Retirement (Long Term) Age < 30 – 10%
else 25% of Net income in PPF, ELSS,
Index Funds
3. Aspirations (Medium Term) 10 % of Net
Income in Diversified Mutual Funds
1. Down payment for home
2. Car, Vacation Abroad, Big Family
Functions
Spend
1. Insurance Premium (Less than 5% of Net
Income)
1. Life Insurance (6 times Net Income)
2. Accident Insurance (6 times Net
Income)
3. Health Insurance (Upto Rs 5 Lakh Sum
Assured)
4. Critical Insurance (Age > 35, 20 Lakhs,
Sum Assured)
5. Motor Insurance (depending on
vehicle)
2. EMI or Rent
3. Food & Clothing
4. Bills
5. Unplanned Expenses
Borrow Rightly (EMI to be Max 25% of Net
Income)
1. Home
2. Education

28. Caveat Emptor
Fine Prints while buying Financial products
0% EMI
Guaranteed Returns
Promise of high returns
Fixed Interest on home loans

29. Finance Basics
To understand fine prints

30. Fixed Deposit doubles in 9 years – What is
the return?
What is the formula for calculating
returns ?
A = P(1+r)n
There is no other formula in Money
Management

31. If money is doubling – Apply Rule of 72
72
---------------------- = r where n= No. of years taken to double money
n

32. Why Returns are important?
2014 100000
2022 200000
2030 400000
2038 800000
2014 100000
2020 200000
2026 400000
2032 800000
2038 1600000
Return on Investment – 9%
Years taken to double – 8 years
What happens to Rs.1 lakh investment
In 24 years
Return on Investment – 12%
Years taken to double – 6 years
What happens to Rs 1 lakh investment
In 24 years

33. Every 3% improvement in Return doubles wealth
Or
Every 3% decrease in Returns makes one poorer by half

35. 5 Level Model – To Enhance Financial Wellness

36. Measuring your Financial Wellness
Simple Spreadsheet – Soon a Mobile ap

37. What Next?
Keen to Enhance your Financial Wellness of Self and others
Activities you must do today
1. To download ppt visit
www.slideshare.net/imoneyplant/fwep
2. Automate your Savings – 10%-10%-10% (If it is not done
today, it will never be done. Less than 1% of the
participants do it the same day and succeed, rest succumb
to Procrastination behavior). If you need forms to start your
SIP visit www.imoneyplant.com/forms
3. Be part of PM’s Jan Dhan Yojana – Make it mandatory for
your servant maid’s to have JDY bank A/c (benefits : Free
Insurance cover) – Credit their salary directly to their Bank
to make Financial Inclusion a success

38. Your Valuable Feedback
Please fill in the feedback forms to help us improve the program