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Presented by:-
Vishal Thakkar
M.Com, CA, MBA(fin)
Managing Director
Both men started from the same background, with the same experience, and the same amount of money. The only difference was that the 1st man worked hard for his money and the second man had his money work hard for him.
The world is changing very fast. Big will not beat small anymore. It will be the fast beating the slow. Rupert Murdoch
Your Re.1 at work at the bank. Rs.10 for every Re.1. By RBI Rules, banks can lend out Rs.10 for every Re.1 that you give them. Meaning they have made up Rs.9 of borrow able money out of thin air. Where do I get some of that? They say open an account with us and well give you anywhere from 1% to 5% interest. Well even give you stuff! Then they then turn around and lend you the money right back saying borrow money from us and well only charge you 10% to 27% interest. And that is why banks have beautiful fountains, golden chandeliers, and marble floors. Your money paid for it!
Arbitrage
INCOME
INCOME
EXPENSE
EXPENSE
ASSETS
LIABILITIES
Your Mortgage
ASSETS
Your Mortgage
LIABILITIES
INFLATION is number two evil that eats away our money like a rodent
Having a hard time.think Europe.how about Denmark? Youre thinking of D right, you did get 4? At least you should have if you did the math right. How did we do that?
We follow the crowd because its easy and because we are just good at it!
No matter what number you were thinking of the equation would have led you to the number 4. When we invest, we are doing the same. The numbers start out differently, FDs, Post Office, PPF, KVP, IVP, NSC, Mutual Funds, yet your results are the same...dismal.
Power of Compounding
3500 2800 2100 1400 10% 700 0 0
Growth of Rs. 100/Difference is quiet significant in long run.
15%
8% 5 10 15 20 25
Years
1 year 28.57% 34.90% 25.52% -2.85% 15.99% 44.24% 62.24% -11.10% -21.94% 79.13% 9.45% 49.54% 266.88% -46.78% 65.71% -13.71% 3.24% -0.17% 15.82% -3.92% 33.73% -27.93% -3.75% -12.12% 83.38% 16.14% 73.73% 15.89% 10/28 27.85% 35.71%
3 years
5 years
7 years
10 years
12 years
1 31-Mar-80 128.57 2 31-Mar-81 173.44 3 31-Mar-82 217.71 4 31-Mar-83 211.51 5 31-Mar-84 245.33 6 31-Mar-85 353.86 7 31-Mar-86 574.11 8 31-Mar-87 510.36 9 31-Mar-88 398.37 10 31-Mar-89 713.60 11 31-Mar-90 781.05 12 31-Mar-91 1167.97 13 31-Mar-92 4285.00 14 31-Mar-93 2280.52 Harshad Mehta 4,285 15 31-Mar-94 3778.99 16 31-Mar-95 3260.96 17 31-Mar-96 3366.61 18 31-Mar-97 3360.89 19 31-Mar-98 3892.75 20 31-Mar-99 3739.96 21Tech31-Mar-00 5001.28 Boom 5,001 22 31-Mar-01 3604.38 22 31-Mar-02 3469.35 22 31-Mar-03 3048.72 23 31-Mar-04 5590.60 24 31-Mar-05 6492.82 25 31-Mar-06 11279.96 26 31-Mar-07 13,072.10 Probability of Loss Average Returns Probability of Loss (%)
Performance of BSE Sensex 29.61% 18.05% 12.25% 17.58% 39.49% 27.66% 4.03% 7.52% 15.24% 43.12% 81.76% 42.93% 47.90% -8.70% 13.86% -3.83% 6.08% 3.57% 14.17% -2.53% -2.47% -15.21% 15.76% 23.23% 54.67% 32.73% 5/26 19.94% 19.23%
28.36% 21.77% 12.61% 18.48% 20.52% 24.97% 42.80% 21.78% 33.11% 35.03% 24.81% 23.18% 18.77% -1.92% 11.87% -0.67% 0.89% -1.41% 7.54% 7.58% 17.08% 14.71% 3/22 17.36% 13.64%
22.73% 33.94% 23.95% 26.85% 25.60% 24.39% 20.63% 17.29% 18.05% 23.47% 14.45% 13.23% 8.32% 2.24% 9.11% 9.54% 12.27% 0/17 18.00% 0.00%
27.40% 24.05% 21.86% 20.02% 21.43% 19.92% 19.31% 13.03% 13.63% 14.53% 14.71% 15.16% 16.32% 7.72% 0/14 17.79% 0.00%
Rule of 72
If you Put your Money at X % then your Money is double in (72/X) years. For Eg: 1 Lac Invested for 36 Yrs Rate of Yrs to After 36 Interest Double Yrs 6 12 Yrs 8 Lacs
8 24
9 Yrs 3 Yrs
16 Lacs 40 Crs
EXPENSE
ASSET
LIABILITY
So what do we recommend
Take the Steering Wheel in your hand
Invest In Yourself First Learn the Language of Money Climb the Seven Steps of Retiring Rich & Young Make an Action Plan to religiously follow them
Starting Early
Ram
Savings Starting Age 25
Shyam
40
27 Crores*
Rs.5,000/-
Rs.15,000/-
35 years
Rs.57 lacs
20 years
Rs.62 lacs
4.90 Crores*
25 years
40 years
60 years
Assumptions: (a) Savings grows at 5% annually (b) Returns assumed at 20% CAGR
Investment Avenues
I know all of you have been waiting for this one But not too soon
Let us first understand the difference between good Loan & Bad Loan
Here are 5 great reasons to carry a big, long mortgage and never pay it off. - Ric Edelman, Author of The Truth About Money (1997 Book of the Year).
1.
Mortgages Dont Affect Home Value The value of your property is going to rise or fall regardless of whether or not you have a mortgage. You wouldnt keep Rs.100,000 between the mattresses, why would you keep it in your house?
Your Mortgage Is The Cheapest Money Youll Every Buy People have a ton of debt, i.e. credit cards, auto loans, student loans, etc. By far, the cheapest loan you can get is a mortgage loan. Why wouldnt you borrow against your house at 6% acquiring more assets to increase your R.O.I., instead of borrowing with a 18% credit card.
2.
3.
You Might Need The Cash Financial Troubles? i.e. retirement, job loss, medical, family, marital, college, etc. Banks only like to lend money when they know it can be paid back. Tax Law Encourages You To Have A Mortgage. Mortgage insurance and interest is tax deductible whereas interest on other loans are not. In essence the government rewards you with cash back for paying interest on your mortgage. Mortgages Become Cheaper Over Time Depending on the loan you choose, your mortgage payment stays the same over time. However your income increases making the payments easier to make.
4.
5.
Investment Avenues
Real Assets
Real Estate Commodities Oil, Gold and Silver
Paper Assets
Stocks and Shares Certificate of Deposits Government and RBI Bonds Foreign Exchange Mutual Funds Public Provident Fund
3.
Q: When you buy your Rs.10,00,000 worth of stock/property what can you personally do to increase the value? A: With stocks pray or write the C.E.O. of the company and ask him to ease up on the private jet trips. But with real estate you can paint, put in new flooring, landscape, or even add a room.
Q: Once you have bought Rs.10,00,000 worth of stock/property and it has doubled in value what must you do to enjoy the gain? A: With stocks sell them and pay capital gains, but with real estate you can sell, trade, refinance and enjoy limited and even sometimes no tax.
4.
Step 1:
Step 2:
Step 3:
Action Plan
Conclusion
So the question is.
What are you going to do with your time and your money?
Only a fool does the same thing over and over again and expect a different result. Albert Einstein
Questions
FAQs
Thank You