BASICS OF WEALTH CREATION

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THIS PRESENTATION IS REGARDING INVESTMENTS

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BASICS OF WEALTH CREATION :

BASICS OF WEALTH CREATION Get 100-150 Cr. At the Time of Retirement

Huge Difference !!!!!!!:

Huge Difference !!!!!!! Savings Investment Preservation of Capital or Asset Appreciation of Capital or Asset Low Perceived Risk / Low Returns High Perceived Risk / High Returns Ex. FDs, MIS , Bonds Ex. Stocks , Mutual Funds, Commodity etc Low Returns don’t cover Inflation and Tax Returns are more then Inflation Safe for Short Term / Risky for Long Term Risky for Short Term / Safe for Long Term Loss in Purchasing Power Increase in Purchasing Power Preferable in Less then 3 Years Preferable in More then 3 Years

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Cost of Living / Inflation

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1985 Balcony Ticket : Rs. 15/- 2011 Balcony Ticket : Rs. 150/- Inflation Meter : 9.26%

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1985 Hotel Bill : Rs. 100/- 2011 Hotel Bill : Rs. 1200/- Inflation Meter : 10.00%

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1985 Petrol Price : Rs. 8 / L 2011 Petrol Price : Rs. 70 / L Inflation Meter : 08.70%

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1985 MBA Course : 40,000/- 2011 MBA Course : 8,50,000/- Inflation Meter : 12.50%

Some Future Cost:

Some Future Cost Events - 30 Years Old Man Current Future Child Education – 20 Years 3,00,000 20,00,000 Child Marriage – 25 Years 5,00,000 54,00,000 Retirement Expenses – 30 Years 25,000 4,30,000 Taken Inflation Rate at only 10% Our Investment Return should be higher then Inflation !!!!

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Inflated Value of 1,00,000 in Future Inflation Rate taken 10% Inflation Robs Your Purchasing Power

Now What ?:

Now What ? Fundamentals of Investment

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Rs. 1 Invested for 100 Years at the return of 18%

3.35 Cr.:

3.35 Cr. 0 1 4 2 8 4 12 8 16 16 20 32 24 64 28 128 32 256 36 512 40 1024 44 2048 48 4096 52 8192 56 16384 60 32768 64 65536 68 131072 72 262144 76 524288 80 1048576 84 2097152 88 4194304 92 8388608 96 16777216 100 33554432 Power of Compounding

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17 Invest Regularly Regular investment can help you generate large sums Investment of Rs. 1000 p.m. invested over a period of time 30 Years 70 Lac * Assuming 15% returns p.a.

Earn More !!!!! It can make huge difference:

Earn More !!!!! It can make huge difference 5000 15 20 25 8% $1,730,191 $2,945,102 $4,755,132 10% $2,072,352 $3,796,844 $6,634,167 15% $3,342,534 $7,486,197 $16,217,648 20% $5,578,500 $15,548,259 $42,426,434 25% $9,579,354 $33,595,569 $116,350,734

Formula for Wealth Creation:

Formula for Wealth Creation Make Your Money work hard for you

What are available investment options:

What are available investment options

Real Returns:

Real Returns

What Sounds Better ?:

What Sounds Better ? Adding your wealth Or Multiplying your wealth 10 + 10 = 20 or 10 x 10 = 100

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Adding your wealth (FD, PPF , NSC, KVP) Risk of Inflation Multiplying your wealth (Stocks , Mutual Funds) Risk of Market

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Sensex V/S Gold,Silver,F D.& P.P.F.From 1981 To 2011 Inflation CPI Rate Gold Value % Change Silver Value % Change F.D.Value F.D PPF Value PPF BSE- Sensex %Change Valution Date index (UNME) of inflation (per 10 gms.)(Rs.) (yoy) (per 1 kg,)(rs.) (yoy) value (Rs.) Rate(%) Value (Rs.) Rate(%) Index Value (yoy) 3/31/1981 100 11.80% 1,670 2,715 1.00 8.50% 1,000 8.0% 173 3/31/1982 112 11.90% 1,645 -1% 2,680 -1% 1.085 9.00% 1,080 8.5% 218 26% 3/31/1983 125 8.00% 1,800 9% 3,105 16% 1.183 9.00% 1,172 8.5% 212 -3% 3/31/1984 135 10.30% 1,975 10% 3,570 15% 1.289 9.00% 1,271 9.0% 245 16% 3/31/1985 149 8.70% 2,130 8% 3,955 11% 1,405 9.00% 1,386 9.5% 354 44% 3/31/1986 162 7.00% 2,140 0% 4,015 2% 1,532 9.00% 1,517 10.0% 574 62% 3/31/1987 173 7.50% 2,570 20% 4,794 19% 1,669 9.00% 1,669 12.0% 510 11% 3/31/1988 186 9.60% 3,130 22% 6,066 27% 1,820 10.00% 1,870 12.0% 398 -22% 3/31/1989 204 7.90% 3,140 0% 6,755 11% 2,002 10.00% 2,094 12.0% 714 79% 3/31/1990 220 6.60% 3,200 2% 6,463 -4% 2,202 10.00% 2,345 12.0% 718 1% 3/31/1991 235 11.00% 3,466 8% 6,646 3% 2,422 10.00% 2,627 12.0% 1,168 63% 3/31/1992 261 13.70% 4,334 25% 8,040 21% 2,664 12.00% 2,942 12.0% 4,285 267% 3/31/1993 296 10.40% 4,140 -4% 5,489 -32% 2,984 11.00% 3,295 12.0% 2,281 -47% 3/31/1994 327 6.90% 4,598 11% 7,142 30% 3,312 10.00% 3,690 12.0% 3,779 66% 3/31/1995 350 9.70% 4,680 2% 6,335 -11% 3,642 11.00% 4,133 12.0% 3,261 -14% 3/31/1996 384 9.30% 5,160 10% 7,346 16% 4,044 12.00% 4,629 12.0% 3,367 3% 3/31/1997 420 9.30% 4,725 -8% 7,345 0% 4,529 12.00% 5,184 12.0% 3,361 0% 3/31/1998 459 6.90% 4,045 -14% 8,560 17% 5,073 11.00% 5,807 12.0% 3,893 16% 3/31/1999 490 11.30% 4,235 5% 7,615 -11% 5,631 11.00% 6,503 12.0% 3,740 -4% 3/31/2000 546 4.50% 4380 3% 7,900 4% 6,250 9.50% 7,284 12.0% 5,001 34% 3/31/2001 570 5.60% 4,190 -4% 7,215 -9% 6,844 9.50% 8,158 9.5% 3,604 -28% 3/31/2002 602 5.10% 5,010 20% 7,875 -9% 7,494 8.50% 8,933 9.0% 3,469 -4% 3/31/2003 633 3.80% 5,310 6% 7,695 -2% 8,131 6.00% 9,737 8.0% 3,049 -12% 3/31/2004 657 3.70% 6,065 14% 11,770 53% 8,619 5.25% 10,516 8.0% 5,591 83% 3/31/2005 681 3.60% 6,180 2% 10,675 -9% 9,072 5.50% 11,357 8.0% 6,493 16% 3/31/2006 706 4.70% 8,490 37% 17,405 63% 9,571 6.50% 12,265 8.0% 11,280 74% 3/31/2007 739 6.60% 9,395 11% 19,520 12% 10,193 9.00% 13,247 8.0% 13,072 16% 3/31/2008 788 5.90% 12,125 29% 23,625 21% 11,110 8.75% 14,306 8.0% 15,644 20% 3/31/2009 861 9.30% 15,105 25% 22,165 -6% 12,082 8.75% 15,451 8.0% 9,709 -38% 3/31/2010 989 14.90% 16,320 8% 26,928 21% 12,955 6.75% 16,784 8.0% 17,527 81% 2/28/2011 NA - 20,800 27% 49,600 84% 13,804 6.2% 21,067 7.30% 17,823 2% CPI-Inflation--> 8.30% CAGR 8.79% 10.19% 9.17% 10.72% 16.75% 3/31/1981 10000 10000 10000 10000 10000 10000 3/31/2010 112372 96,999 92,674 124,670 166334 968272

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What is Equity ?

Stock Selection:

Stock Selection EPS P/E PEG

Power of Equity:

Power of Equity Unbelievable but it has happened

Investor :

Investor

Facts About Sensex:

Facts About Sensex 1979 2011 CAGR No. of Yrs 100 16000* 17.50% 32 What is Stock Market ? Gambling for Gamblers Wealth Creation Opportunity for Investors

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In Spite Of …… Two Wars Two Prime Ministers murders Three Scandals Four Recession Periods 10 different Governments US subprime 9/11 Attack Lehman Brother Natural calamities

Long Run Equity is not Risky?:

Long Run Equity is not Risky?

Probability of Losses:

Probability of Losses

Time in Market is Important not Timing the Market:

Time in Market is Important not Timing the Market From 1979 – 2010 Who has Invested Year’s Peak got = 15% & Who has Invested Year’s Bottom got = 18%

Future Market:

Future Market

Who are not able to Manage Direct Equity:

Who are not able to Manage Direct Equity Mutual Funds

Returns of Mutual Fund Schemes:

Returns of Mutual Fund Schemes Fund AAUM (Rs Cr) Launch NAV Since Launch DSPBR Top 100 Equity Reg 2850.42 Mar-03 93.46 30.05 Franklin India Bluechip 3841.20 Dec-93 200.63 24.30 Birla Sun Life Frontline Equity 2908.97 Aug-02 80.27 25.93 HDFC Top 200 10507.61 Oct-96 191.49 23.58 ICICI Prudential Dynamic 3782.81 Oct-02 97.73 29.33 Birla Sun Life Dividend Yield Plus 882.50 Feb-03 82.25 27.99 Birla Sun Life Mid Cap 1624.03 Oct-02 102.28 29.70 Reliance Growth 6864.17 Oct-95 412.17 26.29 Sundaram Select Midcap Reg 2151.27 Jul-02 148.11 34.27 DSPBR Equity 2381.06 Apr-97 45.67 23.15 Tata Equity PE 732.56 Jun-04 43.14 22.51 Reliance Equity Opportunities 3016.72 Mar-05 33.84 20.72

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Invest Just 5,000/- Monthly For 35 Years In a Scheme with CAGR 25% Get 140 CR

Moral of The Story:

Moral of The Story Inflation is the Biggest enemy of Money . Manage your Money Properly (Like : Money in cash, savings account, extra expenses etc.) Savings Account :- 25,000/- 30 Yr - 59,34,000/- Recovery of :- 10,000/- 30 Yr – 63,48,000/- Do Investment not Savings for more then 3 Years horizon. Start Early, Invest Regularly, Earn More for wealth Creation. Do your financial planning proper to avoid critical situations.

Wrong Formula:

Income – Expenses = Savings Wrong Formula

Right Formula:

Right Formula Income – Investment = Expenses

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Thank You !!!!!!! Be Wealthy

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