Creating The Life You Want: Achieve Your Goals, Redesign Your Life
How to achieve Goals in Life
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Transcript of How to achieve Goals in Life
How to achieve Goals in Life
Let us begin with a little quiz
25 Years
What is the Average Age when one starts Earning?
What is the Average Retirement Age?
60 Years
Rs.15,000/- p.m.
What is an Average Income of anMiddle-Class House-hold?
Rs.5,000/- p.m.
How much can a personsave on a regular basis?
If a person can save Rs.5,000/- per monthWhat will be his wealth when he retires?
Assuming:
He increases his investments by 5% every year
Invests in an Asset class that gives returns of 20%
At Age 60 his wealth would have been
Rs.27 Crores
Creating Wealth is Easy
We can all be Wealthy
THE TRUTH
Start Saving Early
The longer you save, the more you make
Save in the Right Asset Class
This will dictate how much wealth you create …
Save Regularly
Even a small amount saved regularly, is good
How can you create wealth?
4.90 Crores*
27 Crores*
40 years25 years 60 years
Ram Shyam
Savings Starting Age 25 40
Savings - Monthly SIP Rs.5,000/- Rs.15,000/-
Saving Years till age 60 35 years 20 years
Total Amount Saved (appx.) Rs.57 lacs Rs.62 lacs
Starting Early
Give time to your investments rather than timing
Assumptions: (a) Savings grows at 5% annually (b) Returns assumed at 20% CAGR
Power of Compounding
0
1,000
2,000
3,000
4,000
5,000
6,000
1990-
91
1991-
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1992-
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1993-
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1994-
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1995-
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1996-
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1997-
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1998-
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1999-
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2002-
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2004-
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Sensex
Company Deposits
Bank Deposit
s
Inflation
Gold
Equity market (represented by BSE Sensex) has outperformed all other investment avenues
Selecting Right Asset Class
In past 27 years BSE Sensex has given about 18% returns
Past Performance (BSE Sensex)
Year Sensex Investment Rs.
1979 100 1,00,0000
2006 10,000 1,00,00,000
This is in spite of …
• Two wars• At least three major financial scandals• Assassination of 2 prime ministers
• At least 3 recessionary periods• 10 different governments and• An unfair share of natural disasters
Years YEAR END SENSEX level 1 year 3 years 5 years 7 years 10 years 15 years
0 31-Mar-79 100.00
1 31-Mar-80 128.57 28.57%
2 31-Mar-81 173.44 34.90%
3 31-Mar-82 217.71 25.52% 29.61%
4 31-Mar-83 211.51 -2.85% 18.05%
5 31-Mar-84 245.33 15.99% 12.25% 19.66%
6 31-Mar-85 353.86 44.24% 17.58% 22.44%
7 31-Mar-86 574.11 62.24% 39.49% 27.05% 28.36%
8 31-Mar-87 510.36 -11.10% 27.66% 18.58% 21.77%
9 31-Mar-88 398.37 -21.94% 4.03% 13.50% 12.61%
10 31-Mar-89 713.60 79.13% 7.52% 23.81% 18.48% 21.72%
11 31-Mar-90 781.05 9.45% 15.24% 17.16% 20.52% 19.77%
12 31-Mar-91 1167.97 49.54% 43.12% 15.26% 24.97% 21.01%
13 31-Mar-92 4285.00 266.88% 81.76% 53.04% 42.80% 34.71%
14 31-Mar-93 2280.52 -46.78% 42.93% 41.76% 21.78% 26.84%
15 31-Mar-94 3778.99 65.71% 47.90% 39.57% 33.11% 31.45% 27.40%
16 31-Mar-95 3260.96 -13.71% -8.70% 33.09% 35.03% 24.87% 24.05%
17 31-Mar-96 3366.61 3.24% 13.86% 23.58% 24.81% 19.35% 21.86%
18 31-Mar-97 3360.89 -0.17% -3.83% -4.74% 23.18% 20.74% 20.02%
19 31-Mar-98 3892.75 15.82% 6.08% 11.29% 18.77% 25.60% 21.43%
20 31-Mar-99 3739.96 -3.92% 3.57% -0.21% -1.92% 18.02% 19.92%
21 31-Mar-00 5001.28 33.73% 14.17% 8.93% 11.87% 20.40% 19.31%
22 31-Mar-01 3604.38 -27.93% -2.53% 1.37% -0.67% 11.93% 13.03%
22 31-Mar-02 3469.35 -3.75% -2.47% 0.64% 0.89% -2.09% 13.63%
22 31-Mar-03 3048.72 -12.12% -15.21% -4.77% -1.41% 2.95% 14.53%
23 31-Mar-04 5590.60 83.38% 15.76% 8.37% 7.54% 3.99% 14.71%
24 31-Mar-05 6492.82 16.14% 23.23% 5.36% 7.58% 7.13% 15.16%
25 31-Mar-06 11279.96 73.73% 54.67% 25.63% 17.08% 12.85% 16.32%
28.29% 19.43% 17.41% 17.48% 17.85% 18.57%
10/27 5/25 3/23 3/21 1/18 0/13Probability of Loss
PERFORMANCE OF BSE SENSITIVITY INDEX - Equities not risky in long run
Rolling Returns - Growth
Average Returns
18.57%
0 / 13
Equities:Not Risky in Long Run
Twin Benefits of Investing Regularly
Disciplined Investing through Systematic Investment Plans (SIPs) is the ideal way to reduce risk
Rupee Cost AveragingAverage Purchase cost
will be less
Automatic TimingAt higher prices – less unitsAt lower prices – more units
Rising Market Falling Market
Market Units Purchased MarketUnits Purchased
Save Regularly
You do an SIP of
Rs.10,000 per month
Total Amount Invested
Mutual Fund Equity Schemes
BSE Sensex
Invt. ValueAnn.
ReturnsInvt. Value
Ann. Returns
During last 5 years Rs. 6 lacs 18.64 lacs 47.09 13.96 lacs 34.93
During last 10 years Rs.12 lacs 89.94 lacs 37.89 30.65 lacs 17.92
Past Performance (SIP)
Performance of Systematic Investment Plans (SIPs) in Mutual Fund Equity oriented schemes
Also Equity Mutual Funds have outperformed Sensex, as shown above
Figures are as on 30th June 2006. For MF SIP performance for 5 year & 10 years around 30 and 5 large schemes respectively, have been considered. Mutual fund investments are subject to market risks. Past performance may
or may not be sustained in future. Please read the offer document offer investing.
• “We do not need to be wealthy to be an investor …But we can be wealthy if we are investors”
• The Right way to create wealth …
Buying potential big winning stocksSuccessfully timing the marketsFollowing Expert Advisors recommendationsSaving a lot of money
• Wealth can be successfully created if we just follow the three basic principles ...
Starting early and saving for longInvesting in the right asset classInvesting Regularly – big or small
Wisdom
XXXX
Child Marriage
We all have goals in life like…
Car
Child Education
Dream House
Using the Wisdom
Using the Wisdom
We can direct our savings in such a manner that we achieve our goals,
the way we wish
DISCIPLINED SAVINGS +
SUFFICIENT TIME+
RIGHT ASSET CLASS=
GOAL ACHIEVEMENT
Penetration of Financial Products
Investor Base Across Various Financial Products
240
16 40 17
110
15 1.50
50100150200250
Banking
Credit
Cards
Debit
Cards
Mutual
Funds
Life
Insurance
General
Insurance
Online
Trading
Penetration of Mutual Funds is very low … Going forward, the opportunity is big …
Source: www.rbi.org.in www.irdaindia.org www.sebi.gov.in
Customers in millions
Few people have been exposed to the idea & advantages of mutual funds and even fewer actually invest in mutual funds, because of lack of adequate no. of advisors
*Figures are approx.*for House Holds savings
Low Penetration
Measure US India
Rupees invested in Mutual Funds out of 100
> 30 < 2
MF Industry size as % size of economy (GDP)
83% 6%
Total size / value of MF industry (Rs. Lac Crores)
> 469 > 3.4 Opportunity to offer such products to clients …
Every person can be a customer !!
In past 28 years Equities have outperformed all asset classes giving over 19% returns (BSE Sensex) every year, making every 1 Re. grow 130 times.
Last 28 Years - Over 18% Annual Returns
Index Rs.
1st April 1979 100 1 Lac
1st April 2007 13,072 130 Lacs
Mutual Fund Equity schemes have delivered very attractive returns in last 5 years, giving over 39% returns annually
Excellent Past Performance
Mutual Fund Equity schemes have delivered very attractive returns in last 5 years, giving over 39% returns annually
Opportunity for you to offer your clients with such equity-related products for long-term wealth creation
Scheme Name 3 Years
5 Years
7 Years
10 Years
Average of Diversified Mutual fund Schemes
35.17 39.32 19.72 29.66
BSE 30 (Sensex) 32.76 30.17 14.71 13.96
NSE 50 29.23 27.41 13.99 14.33
No. of Diversified Schemes considered
33 23 17 8
Excellent Past Performance
Superior earnings for Mutual Funds V/s Other products
Assuming 2% upfront 0.30% trail in MF, 4% upfront in Postal, 1% upfront on NSC & PPF and 20%, 10%, 5% for 1, 2 & subsequent years in Insurance
Comparison (Rs. In Lacs)
15th Year 20th Year 25th Year 30th Year
Insurance 9.50 12.00 14.50 17.00
PPF / NSC 1.50 2.00 2.50 3.00
Postal 6.00 8.00 10.00 12.00
Mutual Funds 10.79 23.40 48.83 100.06
Sustainable Earnings
Yearly mobilisation of 10 Lacs in each Insurance, PPF, NSC & Postal Schemes vs. only 1 Mutual Fund SIP of Rs.10 lacs (yearly) for 30 years
For illustrative purpose only … Total Earnings for the Year
Professional Management
Portfolio Diversification
Reduction in Risk
Choice of Products
Flexibility and convenience
Liquidity
Transparency
Low Transaction Cost
MFs also offer great tax benefits :
• no long term capital gains on equity funds,
• tax free dividends &
• eligibility u/s 80C
Mutual Funds – A Great Product
Great product for investment, wealth protection, creation, preservation …
Mutual Funds is suitable for any investor
I. big or small,
II. aggressive or conservative &
III. long-term or short-term
IV. with any investment objective
There are over 30 AMCs with hundreds of schemes for choice
You can offer any product / asset class of choice - equities (domestic & international), debt, gold, commodities, derivatives, etc
Suitability for Any One
For clarification and more details please dial -8986636047. 9031326165 or write to us on yourinvestment@rediffmailcom .
Contact for all types of Investment and Financial Advice
Sanchita Dey
(ARN – 82297) N J Investments – 63285
Sanjeev Dey
9204065873
Thank you very much