Millionaires dont eat cakes,

they make them

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Confidence & Belief- The Basic to Finacial

Planning

If I were to make statement that practically anyone of you can become a millionaire, first reaction
would be , YOU MUST BE KIDDING.

Why??????

Because do not have the belief in your abilities.

Because you think you dont have the resources to make millions.
Because you feel that money can be made mainly through dishonest means.
If you do not remain rich despite getting good money or if you think low incomes constrain you to
only dream of becoming rich, YOU NEED TO GET YOUR BASICS RIGHT i.e. you have to learn
to manage your moneysmartly.
To realize millionaire dreams, you dont stop regular contribution to portfolio & willing to be
patient

MILLIONAIRE VALUE SYSTEM

Choosethe
theright
rightvocation
vocation
Choose
Bethe
theBest
Best
Be
Valueevery
everyrupee
rupeespent
spent
Value
Makeevery
everyrupee
rupeedeliver
deliver
Make
Multiplyby
byleveraging
leveraging
Multiply
Avoidavoiding
avoidingrisks
risks
Avoid
Waitandwin
Waitandwin

Where is the Difference?

Difference is in the focus, While millionaire aspirants focus on eating & spending, Millionaires
focus on making & building wealth.
You must first make cakes before you start eating them, you must first build wealth, before you
think of spending.
If the Focus is on eating, then the fruits you have will soon be over. Focus, however on growing a
tree and you could enjoy the fruits endlessly.
Three things to grow a plant..
- Inputs such as seed, water, sunlight, manure, etc.
- Gardening skills and
- Time, discipline & patience.
The same goes with becoming a millionaire too.

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Practical Approaches of Financial

Planning & Wealth Management

Income is NOT Wealth.

Formula does test ones patience and commitment. But assure you, it the only beginning thats
difficult. Later the growth will be exponential, this is the magic of compounding.
Dont stop your regular contributions to the portfolio and
Willing to be patient

INCOME
Earn
Energy
Controlled
Make
Cease

WEALTH
Own
Assets
Controller
Keep
Continue

EARN vs. OWN : Income is the money that you EARN.

Wealth is ACCUMULATION of money.
ENERGY vs. ASSETS: You get income money by utilizing ENERGY.
You get Wealth money by utilizing your ASSETS

You are the MASTER of YOUR FINANCIAL destiny .

CONTROLLED vs. CONTROLLER: SOMEONE ELSE is CONTROLLING your financial well

being
MAKE vs. KEEP: Income may MAKE you rich, but may not KEEP you rich.
Wealth, however, has the potential to KEEP YOU (and even your future
generations) RICH
STOP vs. CONTINUOUS: Income would, in many cases, STOP.
Wealth, however, has the potential to provide CONTINUOUS income

INCOME TO WEALTH RECIPE

Step 1: Collect all incomes from various sources.

Step 2: Filter out the Wealth Dissipaters
Step 3: Build protection against Wealth Destroyers
Step 4: Channelize your income through Wealth Creators and Wealth preservers.
Step 5: Reap your Wealth.

AVOID AVOIDING RISK

Most people equate risk with loss.

If you prefer safety, you have to compromise on returns.
Without risk, theres going to be no riches
Due to inflation in future, your purchasing power may reduce, Therefore, there is no such thing
as no risk or zero risk
Risks are of various types. You must understand the nature of each risk and how to protect your
money so that such risks do not cause a major loss to you.
Without fire, theres going to be no delicious dishes.
Same goes with risk too. Just as fire doesnt necessarily mean damage, risk doesnt
necessarily mean loss.

Rather Understand Risk

TYPES OF RISKS

Default

Do not get assured return &

capital too
PRECAUSIONS AGAINST DEFAULT
RISK:
The moment some offers you returns which
are much higher as compared to those
offered by other banks or companies, your
alarm bells should start ringing. The more
the difference the louder should be the ring.
And beyond a point, it should be like a fire
alarm, warning you to run awayimmediately

Asset liability
Mismatch

Mismatch in the timing between when

you need money and when the money
can be available to you

Volatility

THIS ROLLER COASTER RIDE OF

THE MARKETS CAN BOTH BE A
SOURCE OF PROSPERITY AND
POVERTY.

HOPE WONT MAKE YOU MONEY

ONLY YOUR ACUMEN WILL DO SO.

Unpredictable twists and turns of the

Equity markets from minute to minute

Interest Rate

Rates are market determined

Interest rates change quite frequently
Economic Situations demand, rates can
be changed in the interim too

THREE NOTE WORTHY

POINTS
1. Must continue to invest even
when the markets are going down.
2. If the market keep rising, lump
sum investing would deliver
better returns.
3. If the market never recovered,
you will lose in both cases but
SIP will usually be lesser.

Wealth Dissipaters

Certain things will slowly but surely eat into your income and/or wealth. Therefore, as time goes
by, you will experience a gradual reduction in your wealth.
Imprudent Habits
Difficult to control spending as
emotional value attached.

Unreal assets
Assets loose value with time
While you own them, you have to
spend money on them.

Wealth

Wealth
Inflation
Purchasing power of your money is
gradually eroded away by inflation,
so things become expensive over time.
Taxes
Taxes are unavoidable
inconvenience and cost

SOME POINTERS.To live life happily

IF YOU ARE BUYING THINGS YOU DONT NEED
SOON YOU HAVE TO SELL THINGS YOU GREATLY
NEED .

SPEND MONEY ON YOUR NECESSITIES

DONT FRITTER IT AWAY ON YOUR EGO.

YOUR CARS, GADGESTS, ETC. EAT MONEY

THEY ARE NOT YOUR ASSETS.

BE WARY OF SILENT KILLER.INFLATION

Wealth Destroyers
Credit Card /
Personal
Loans

High rates wash

away all your
income

Loans

Home loans,
Education
loans are good,
enhance your
wealth. But
beware of cost
of borrowing &
mistake of
focusing on the
present.

Calamities

Natural disasters such

as earthquake, floods,
hurricanes or tsunamis.
Man related events
such as fire, terrorism,
war or accidents.
Medical Problems
such as stroke, cancer,
heart attack, etc.

Wealth
Wealth

Short term
Trading
Prediction
MANS
FASCIATION
WITH
GAMBLING IS
LEGENDARY.
Margin
Psychology
Short Selling

Bad Decisions
Lack of Right
knowledge:
DIFFERENCE BETWEEN
DISCISION GOING BAD
AND BAD DECISION
Lack of right attitude
SERIOUS LACK OF
SERIOUS ATTITUDE
lack of Right record
Lack of Right Approach
Lack of Right Advisor.

Wealth Preservers
FDs / Bonds /
Debentures

Insurance
Keep aside for any exigencies
Medical
cover

Life
Cover

Complete
Household protection
Accident
cover
cover
Mortgage
cover

Inflow for day to day needs

to buy a house within 6
months to 1 year
If income is uncertain,
liabilities take care of

Pure Protection

Protection cum
investment

Debt Mutual
Funds

Bank deposits
Government / Corporate bonds
Debentures
Post Office Scheme
Senior Citizen Scheme

Wealth

Long term Income funds: Invest in Long dated instruments.

Short term income funds: invest in short dated instruments.
Floating rate funds: invest in instruments with variable rates
Gilt Funds: Invest in government securities
Fixed maturity plans: Invest in debt instruments of matching maturity profile
Ultra short term funds: Invest in very short term instruments
Monthly income plans: Invest in both debt & equity

Gold

physical & tangible asset

It can not be destroyed
It can be bought & sold anywhere in the world
Gold acts as a store of value.

INSURANCE SHOULD BE BOUGHT FOR

INSURANCE ONLY, NOT FOR INVESTMENT

FDs WILL NOT MAKE YOU RICH;

DONT PUT TOO MUCH MONEY IN FDs

GOLD IS MORE AN INSURANCE THAN AN INVSETMENT

Wealth Creators

Business

The financial Leverage: To make money using

other peoples money
The System Leverage: Transformation of business
from person-based to System-based
The Knowledge Leverage: use other
peoples knowledge and expertise

Wealth
Equity
Make money by investing in other people s business
by buying shares.

Large- cap funds: invest in large companies

Mid cap funds: invest in medium sized companies
Diversified funds: invest irrespective of the size of the co.
Sector / Thematic funds: invest only in specific sectors or themes
International funds: invest outside India.
Balanced funds: invest in both equity & debt.

Property

Space is the money

Return in form of..
Rental income
Value appreciation in property
Under valued property: Buy properties that are going cheap
Valued property: Buy an old run down property & reconstruct
Good location: Buy in up coming locations

BUSINESS IS A GREAT WEALTH CREATOR

EQUITY IS NOT GAMBLING

MFs & ULIPs MAKE INVSESTING IN EQUITY A CHILDS PLAY

Financial Planning is like cooking NOT a Rocket Science

Part 1. Ascertain whether your proposed investment / expense is a wealth creator, preserver, dissipater or a
destroyer.
Part 2. i.e. begin the actual cooking.
Basic Rules..
1: Check if all systems are Ok (PUT A PROTECTION PLAN IN PLACE)
2: Plan your menu (MAKE YOUR PERSONAL FINANCIAL ROADMAP)
3: Learn how to cook (EQUIT YOURSELF WITH RIGHT KNOWLEDGE)
4: Buy good ingredients (BUY HIGH QUALITY ASSETS)
5: Dont overpay for your ingredients (KEEP A TIGHT REIN ON COSTS)
6: Throw away rotten ingredients (WEED OUT THE UNDERPERFORMERS)
7: Use the right proportion of ingredients (JUDICIOUS ASSET ALLOCATION)
8: Give adequate cooking time (LET THE INVESTMENTS MATURE)
9: Eat and relish (CELEBRATE YOUR MONEY)
10: Change with times (REBALANCE YOUR PORTFOLIO REGULARLY)

We will learn about..

b) Mutual funds: Building the right portfolio

(a) Your investment time horizon

(b) The interest rate scenario and
(c) Your tax status.
() Large cap / Diversified funds
() Mid cap funds
() Theme / Sector funds

Criteria.
() The past track record
() Portfolio composition
() Portfolio characteristics
() Fund house
() Expenses

a)Insurance: Selection of policies

) How much cover
) Which type of policy to buy
) What risks you need to cover

c) Real Estate: Other financing options

) Seller as your financer
) Buyer as your financer
) Lessor as your financer

d) Gold: Physical or Exchange traded fund

Low cost
Price transparency
Purity
Security
Capital Gains Tax
Wealth Tax
Convenience

e) Rebalancing: A periodic exercise

Rebalancing once in 6 months to 1 year.
Dont be greedy and book your profits if the equity
Market be good for you. Likewise, dont be fearful
And make sure to buy equity even if the markets
have treated you badly.

Thank You !!

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