Dr.

Anubha Gupta
nvestment Planning
A small story on
"Wish More at a Toss of a coin
Dr. Anubha Gupta
MR. Wishkar in the story is...........?
FINANCIAL PLANNING
Dr. Anubha Gupta
,9 is Fin,nci, p,nning & i9s
re,9ionsip wi9 Inves92en9
P,nning
inancial Planning is process of planning & managing
your money (current finances) to meet your life goals.
nvestment planning is a part of it, concerned with:
Why to invest
How to invest
Where to invest
When to invest
or whom to invest
Dr. Anubha Gupta
Le,rning Objec9ives
To Know about nvestment basics.
To understand the principles & startegies in
investment.
To know the relationship between
nvestment Planning & inancial Planning.
$9ocks 2,rke9s vo,9ie
In9eres9 r,9es c,nged 11 9i2es
since M,rc 2010
orries ,bou9 Europe Deb9 crisis & U$ recession
Dr. Anubha Gupta 9
Wby do we need to Invest? Wby do we need to Invest?
To beat Inflation
To fund future needs
To meet contingencies
To maintain same standard of living after retirement
Dr. Anubha Gupta
Inflation Robs your Purcbasing Power Inflation Robs your Purcbasing Power
21,500
46,600
100,600
217,200
10 years 20 years 30 years 40 years
#s. 10,000 9od,
,ssu2ing inf,9ion @ 8% p.,.)
Dr. Anubha Gupta
Inves92en9 vs $pecu,9ion
nvestment
nvestment requires long term commitment
Measured in years
Grow money over time ahead of taxes & inflation
Beat taxes & inflation
More predictable returns (averaged)
$peculating
$hort term
Unpredictable returns
Potentially very high or low returns
High risk
Direct Investing In Direct Investing
Principes of Inves9ing
f you can afford to see erosion of around 50% in your
investment you are high risk investor & if this is 10%, you are
low risk investor.
High risk takers can invest in technology stocks/ funds.
$ometimes risk is amplified in short run (less than 3 years) as
compared to long run.
$acrosanct that Risk Appetite = 100 nvestor's Age, is now
obsolete. But there is a link between age & risk appetite of
investor.
Risk appetite declines with age.
Kumar & Vivek are two customers.
Kumar is of 30 yr old who is married , no children.
Vivek is 55 yrs old, married with children who are on their own.
What should be there Asset Allocation ?
Asse9 ,oc,9ion for bo9
Kumar is young can invest:
30% in equities
10% in bonds/fixed deposits
50% in property
5% in gold
5% for emergencies
Vivek is aged can invest :
10% in equities
30% in bonds/fixed deposits
40% in property
5% in gold
Dr. Anubha Gupta
LIFE IN$U#ANCE
FO#M$ THE CONC#ETE BA$E OF
ANY FINANCIAL PLANNING)
PPF +N$C's
ULIP & EL$$
MUTUAL FUND$
DI#ECT
$TOCK$
Tax benefit
Tax benefit
Tax benefit
R

$
K

&

R
E
T
U
R
N
Tbe Flow Tbe Flow
Risk profiles
$hort Term Medium Term Long term
Buying a car
Overseas vacation
Birthday GiIt Ior
spouse
Child's education
Buying a house
$etting up
Business
Child marriage
Retirement
Clearing all Loans
ife Goals
Dr. Anubha Gupta
!arameters Wealth Management Financial !lanning Investment
!lanning
Breadth
Depth
Holistic, all Inclusive
Intimate & Individualised
for HNIs & Affluent
Holistic approach
for mass market
sometimes Un-
customised
Approach.
Construction
of portfolio
of clients o
the basis of
their life
goals. !art of
F!
!roducts &
Services
One stop shop for HNIs -
includes Financial
!lanning for wealthy,
estate planning, Tax
planning. Alternative
assets, structured products
Only Basic
Financial services
- Managing the
Finances
Asset
!lanning
Objectives Wealth preservation &
wealth transfer along with
growth.
Making up of
Financial !lan, Tax
!lanning,
Investment
Advice &
devising
portfolio
r. Anubha Gupta
Client segmentation
The mass market (investible surplus U$ 5,000 to U$ 25,000
The mass affluent (investible surplus U$ 25,000 to U$ 1 million)
The high-net-worth (investible surplus U$1 million to U$ 30
million) and
The ultra-high net worth (investible surplus greater than U$ 30
million)
Inves92en9 & P,ssive s9r,9egies
The term "passive can be
used to reflect both a type of
"security and an investment
"strategy. Thus an index
fund that has a strategy of
mirroring a chosen index will
be called a "passive
security. An investor who, in
turn, tries to hold a
How to make and maintain money
A $tudy of the book "Rich ad Poor ad , Robert T. Kiyosaki
25
Poor
The love of money is the root of all
evil
can't afford it The brain stops
working
$tudy hard so you can find a good
company to work for
The reason 'm not rich is because
have you kids
The poor and the middle class
work for money
How to write an impressive
resume so could find a good job.
$ource of income = job /
profession
#ic
The lack of money is the root of all
evil
How can afford it?-Brain starts
working
$tudy hard so you can find a good
company to buy.
The reason must be rich is
because have you kids
The rich have money work for
them
How to write strong business and
financial plans so could create
jobs
$ource of income = Assets
Poor v/s Rich
26
1. The Rich on't Work for Money
2. Why Teach inancial iteracy?
3. Mind Your own Business
4. The History of Taxes and the Power of
Corporations
5. The Rich nvent Money
6. Work to earn on't Work for Money
Fin,nci, educ,9ion essons
27
earn from life pushing you.
Change yourself instead of blaming others and trying to change
them.
on't be affected by fear or greed. esire is good.
Get out of rat race.
Passion = anger + love. With passion, true learning happens.
Emotions = Energy in motion . Use emotions to your advantage . Be
an observer than a reactor to emotions. Use emotions to think, don't
think with emotions.
A job is only a short-term solution to a long-term problem.
4n't w47k f47 m4ney , have m4ney w47k f47 y4:.
Work for knowledge / experience / learning.
1.Te ric don'9 work for 2one
28
Golden rule to be rich Know the difference
between an Asset and iability , and buy Assets.
Asset Puts money in your pocket.
iability Takes money out of your pocket.
mprove your financial aptitude .
What you do with the money once you make it
How to keep people from taking it from you
How long you keep it
How hard that money works for you.
llnanclal LlLeracy
2.Be fin,nci, i9er,9e [1/4]
29
nd resulL ln maklng a declslon Lo own a house LhaL ls Loo expenslve ln lleu
of sLarLlng an lnvesLmenL porLfollo early on lmpacLs an lndlvldual ln aL leasL
Lhe followlng Lhree ways
1 Loss of t|me durlng whlch oLher asseLs could have grown ln value
Loss of add|t|ona| cap|ta| whlch could have been lnvesLed lnsLead of paylng
for hlghmalnLenance expenses relaLed dlrecLly Lo Lhe home
Loss of educat|on 1oo ofLen people counL Lhelr house savlngs and
reLlremenL plan as all Lhey have ln Lhelr asseL column 8ecause Lhey have no
money Lo lnvesL Lhey slmply do noL lnvesL 1hls cosLs Lhem lnvesLmenL
experlence MosL never become whaL Lhe lnvesLmenL world calls a
sophlsLlcaLed lnvesLor"And Lhe besL lnvesLmenLs are usually flrsL sold Lo
sophlsLlcaLed lnvesLors" who Lhen Lurn around and sell Lhem Lo Lhe people
playlng lL safe
Loan a house urawbacks
8e flnanclally llLeraLe $
0
ducaLed Man's llnanclal SLaLemenL
lncomexpense
AsseL LlablllLy
8lch uads llnanclal SLaLemenL
lncome xpense
AsseL LlablllLy
lncome AsseLs More lncome
xpenses are low LlablllLles are low
8e flnanclally llLeraLe $
1
As an employee who ls also a homeowner your worklng
efforLs are generally as follows
1 ?ou work for someone else MosL people worklng for a
paycheck are maklng Lhe owner or Lhe shareholders rlcher ?our
efforLs and success wlll help provlde for Lhe owners success and
reLlremenL
?ou work for Lhe governmenL 1he governmenL Lakes lLs share
from your paycheck before you even see lL 8y worklng harder
you slmply lncrease Lhe amounL of Laxes Laken by Lhe governmenL
mosL people work from !anuary Lo May [usL for Lhe
governmenL
?ou work for Lhe bank AfLer Laxes your nexL largesL expense ls
usually your morLgage and credlL card debL
8e flnanclally llLeraLe $
2