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PERSONAL FINANCIALINSTRUMENTS

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It is not necessary to

do extraordinarythings, to get

extraordinary results.

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Financial planning is the process of successfully meeting

financial needs of life through the proper management of

finances.

It is your roadmap to Financial Health, & Sustainable

Wealth creation.

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Life withoutFinancial planning is like Unplanned Vacation.

If you wish to achieve your financial goals successfully &

peacefully you must plan your financial life.

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Birth & Education Earning Years Retirement

35 rs25 rs O er 25 - 30 rs

Housing

Childs Education

Childs Marriage

Phase I

Dependant PhasePhase III

Distribution Phase

Phase II

Accumulation phase

Age

Marriage

Children

25 yrs 60 yrsAge

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1. Liquid Assets Cash equivalents, Savings account,

Floating rate mutual fund. Ideal for short term goals.

2. Income generating Assets BankF.D.,PPF, NSC, Bonds.

Ideal for medium term goal.

3. Capital appreciation Assets Equity- Shares, Real

Estate, Gold. Ideal for long term goal.

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It is the conceptualization and implementation of a

comprehensive financial plan for the achievement of a

persons total financial objectives.

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Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

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OutlineInsurance is first & vital step in any financial

planning.

Aim Financial Compensation for any

unexpected loss. Cover the Risk.

Personal Risks--L

oss of income. Property Risks-- Damage to property.

Liability Risks-- Losses due to damage to

others.

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

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Life Insurance

Aim Financial protection to your

dependents in case of your premature

death. Life ofearning member of family,

NLY, should be insured.

Insurance should be taken for financial

risk protection only N T for Investment

or Tax planning.

Insurance

Life Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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Life Insurance

Which type of Policy?

Term Insurance

Whole life policy.

Pension Schemes.

Do not buy Endowment, Money back,

Capital protection plan or UnitLinked

PlansULIP.

Best option is Term Insurance + PPF /ELSS scheme of mutual fund.

Insurance

Life Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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General Insurance

Personal Risk protection

AccidentInsurance.

Mediclaim Insurance.

Critical illness Insurance

Insurance

Life Insurance

General Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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General Insurance

Property risk insurance

Business assets

Vehicles

Personal assets

Insurance

Life Insurance

General Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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Ensure that an amount equal to at least12

months living expenses is deployed in

highly liquid avenues like money marketaccounts, short-term mutual funds, short-

term floating rate mutual funds, flexi bank

deposits, etc.

This builds an excellent buffer in case ofunexpected shocks like job/earnings loss,

change of residential status, migration to a

different country, unexpected large

expenditure, etc.

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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Retirement doesn't mean stoppage of

work, it means freedom from compulsion

to work for money

Financial freedom.

Why?

To maintain same life style even after

retirement

Life expectancy is increasing. 8 + age not

unusual.Female spouse will live years

more then male.

Inflation will make difficult to maintain

same level of living standard.

You & your spouse may not like to remaindependent on children.

We dont have govt. social security

scheme.

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Increasing life

expectancy

Protect Post-Retirement

Lifestyle

Protection for

Spouse

/Dependents

FallingInterest

Rate Scenario

Increasing

Cost of

Health

Retirement Plan -

An essential

need

Why retirement planning

Breakdown

of traditionalsupport systems

Outline

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How Much?

If retirement 2 years from today

*existing monthly expense

+

Add provision for pending financial goals(children education, marriage etc.)

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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How ?

Start early

Retirement planning starts the day you get

your first income.

Invest regularly

Small amount invested regularly.

Stay invested

Power of compounding.

Best options are P.P.F., Pension schemes of

insurance co., Equity mutual fund & Real

estate.

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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Extinguishment of debt means getting rid of

debt, or not getting into debt in the first

place

A housing loan or vehicle loan is debt which

is repaid in installments and extinguishes

itself over the loan period.

The worst type of debt is credit card debt. In

India the rates of interest on this type of

debt presently vary between 24% & 48%

per annum. Every individual must guard

against ever getting into a debt trap.

All other types of undesirable loans should

be extinguished before embarking upon

investment.

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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Today, interest rates on housing loans are

reasonable and there are substantial taxadvantages attached to the repayment of

principal and the payment of interest on

these loans.

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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Warren Buffett

The first rule of investment

is, do not lose.

The second rule is, do not

forget the first rule.

And thats all the rules thereare.

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The Investment Tripod

Parking funds

Earning regular returns

Growth

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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Pure Parking & Emergency Funding

Savings bank accounts

Flexi accounts in banks

Liquid, short-term, short-term floating

rate mutual funds

Long-term bankFDs with no prepayment

penalty.

The same investments can be used for

keeping emergency funds.

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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Investment for regular returns

8% Post ffice Monthly Income Scheme

8% Taxable Government of India Savings

Bonds

9% Senior Citizens Savings Scheme (for

persons of 6 years and above)

Post office time deposits

Bank fixed deposits

Short and long-term floating rate mutual

funds and Fixed Maturity Plans

Regular withdrawals from your PPF

account.

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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Investment for Growth

Equity (stock market investment) and Real

Estate are the only two avenues of

investment that have consistently beaten

inflation and increased the wealth of

investors in the long run

(1 -year plus time horizons).

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

ther objectives

Outline

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If you have a special talent for real estateinvestment, by all means invest in it,bearing in mind that the time horizon forreal estate is ten years.

If not, most good Indian real estateconsultants advise that you invest in realestate only to the extent that you have a

use for it.

An apartment

A plot of vacant urban land

An independent house on a plot of land

Commercial space showrooms, shops,offices, warehouses

Agricultural land

Real estate mutual funds

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

Real Estate

ther objectives

Outline

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"The best protection against inflation

is your own earning power.

If you are the best teacher, you will

command earning power and get

your share of the national economicpie, regardless of the value of the

currency.

The second best investment is in a

good company."

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In the long-run, the market always goes up

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The rate of growth of equity investments

comfortably exceeds the rate of inflation.

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Four ways of investing in equity

1. Invest in a well diversified portfolio of

blue chip stocks

2. Invest in well diversified equity mutual

funds, index funds and ELSS funds

. Use systematic investment plans (SIPs)to invest in diversified equity funds,

index funds and ELSS funds.

4. Use systematic transfer plans (STPs) to

transfer funds from safe debt funds to

diversified equity and ELSS funds.

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

Real Estate

Equity

ther objectives

Outline

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BSE Sensitive Index

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

Real EstateEquity

ther objectives

1stApril 1979 : 1

28th April 2 1 : 17,69 .62

CAGR : 18. %

Gold

January 19 : 1

27th April 2 1 : 17, 9CAGR : 9%

Outline

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Systematic Investment

It simply means investing Fixed Amountevery month

A method of investing regularly to benefitfrom the stock market volatility

The first step that may take you a long

way towards achieving your financialgoals and objectives.

Systematic investment automaticallyenables right pricing.

Systematic investment makes investmenta habit.

If you work on an investment,

It will work for you.

Insurance

Emergency Fund

Retirement Planning

Extinguishment of Debt

Housing

Investment

Real EstateEquity

ther objectives

Outline

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Normal SystematicQty Ra te Am o unt Am t Ra te Qty

+100 @100 10,000+100 @70 7,000+ 100 @ 40 4,000

+300 21,000

7,0007,000

7,000

21,000

@ 100 70@ 70 100

@ 40 175

345

+300 @ Rs. 70/- per share +345@ Rs. 60.87 per share

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HighModerateHighModerate to HighMutual Funds

LowHighModerateLow to HighReal Estate

ModerateModerateHighModerateGold

LowLowHighLow to ModerateLife Insurance

ModerateLowHighModeratePPF

HighLowHighLow to HighBank Deposits

ModerateModerateHighModerate to HighBonds

Low to highHighLowModerate to HighEquity

LiquidityVolatilitySafetyReturn

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Investing is not Rocket Science. Keep it simple.

Start investing early in life.

Save & invest regularly, systematically.

Stay invested for long term till your goal achieved.

Stick to asset allocation.

Monitor -6 monthly.

If necessary take expert help.

You have worked hard to earn money, now make the money work hardfor you.

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THANKYOU

Ashok.G

Gokul.CMaheedhar.K

Sandeep.L