my money harshit

7/31/2019 MY MONEY Harshit

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MY MONEY

From:

Harshit ShelatAhmedabad, India

[email protected]


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Agenda

MY MONEY

Money Management

Money Milestones

My Human Life Value

My Money Events

Mechanism to Meet


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MY Money

What is My Money?

Income Business/Self Expense

= Take home cash.

Take Home Cash

-Home expense

-Taxation

-Interest & Installment payments on loan taken

= Saving ( cash available for investment)


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Why Money Management?Basically to suit your individual circumstances in your life.To help

you:

Raise your family to the finest standards

Educate your children in the best institutions

Fulfill your personal ambitions and

Plan for your Retirement.

Personal financial planning will help you to achieve your dreams

and goals.


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Money Management

Planning, Execution & Control

Planning of MONEY with estimating income vs

expenditure equations

Observing the Plan being executed

Take immediate action to control

Provision for buffer


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Warren Buffets Rules

EARNING: Never depend on Single Income.Make Investment to create a second source.

SPENDING: If you BUY the things you dont

need, Soon You have to SELL things youneed.

SAVINGS: Dont save what is left after

spending, But Spend what is left afterSavings


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Warren Buffets Rules Continued

Taking Risk: Never Taste the depth of theriver with the both feet

Investment: Dont put your all the eggs in a

single basket.


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Diversification

Thumb rule #1 Never put all your eggs in one basket.

Different asset classes give better return forspecific time duration.

94% of portfolio return will depend on Assetallocation only.


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Tips for asset allocation Thumb rule # 2

100-Age in years = Maximum % allocation to

Equity.

Equity will give highest return in long run but

Equity is very risky product for < 2 years horizon.

Risk of capital loss in Equity investment almost zero if

invested for > 5 years but as high as 30% in 3 months.


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Emergency Kit

Thumb Rule# 3

Before planning new investment, it is very

important to prepare emergency kit toProtect your Current financialstatusInsuranceis first & vital step in anyMoney Management.

Liquid MONEY= 3* Monthly Income


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Money Milestones

Earning Goals

Personal Financial planning will form four distinct andspecific parts. Each part will relate to different aspectsof our lives.

1.Family and Income protection

2.Old age independence

3.Childrens well being and advancement

4.Life time aspirations

Anything and everything that we work for, live for and

dream about will fall in either of these four categories.


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My Life Value

Income based calculation.

10 times your annual gross income.

Need based calculation.200*Monthly home expense + Loan taken + Pending

Financial goals

- Current value of your financial assets (excluding your

residential premises).

You must take insurance = Loan taken.


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MY MONEY EVENTS

Mandatory Goals:-

(1) Children education

(2) Children marriage

(3) Retirement Planning. Pension.

(4) Purchase of residential premises.

(5) Purchase of vehicle.


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Optional Goals

Up gradation of Residence. Luxury Car.

Purchase of Luxury items at Home. Vacation Abroad. Wealth creation Crorepati, Billionaire. Charity Religious or Social. Inheritance Estate planning. Early Retirement - Financial freedom.

MY MONEY EVENTS

Fi i l Pl i d A t All ti


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MONEY PLANNING CHART

Birth & Education Earning Years Retirement

35 yrs25 yrs Over 25 - 30 yrs

Housing

Childs Education

Childs Marriage

Phase IIIDistribution Phase

Phase IIAccumulation phase

Age

Marriage

Children

22 yrs 60 yrsAge

Financial Planning and Asset Allocation

Phase I

Dependant Phase


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Mechanism to Meet

Specify amount required & approximate time period

when money required.

Types of goals.

(1)Short term Goals 1-2 years.

(2)

Medium term goals 3-5 years.(3)Long term goals 5-10 years.

(4)Distant goals > 15-20 years.


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Two types of Risk in any investment.

(1) Risk of Purchasing power loss.(2) Risk of Capital loss.

Strong correlation between risk & reward.

Aim of Money planning is to get maximum return

with minimum risk.

Mechanism to Meet


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Type of Assets

(1)

Liquid AssetsCash, Savings a\c, Floating ratemutual fund. Ideal for short term goals.

(2) Income generating AssetsBank F.D.,PPF, NSC,

Bonds. Ideal for medium term goal.

(3) Capital appreciation Assets Equity- Shares, RealEstate, Gold, Art.

Ideal for long term goal.


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Staying in Equity Market for Long Term reduces the risk of

Loss & gives average returns


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my money harshit

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