financial awareness

Financial AwarenessEssentials to know before Making Investments

TOPICS OF DISCUSSION

Savings, Investment & its ObjectiveBenefits of Early Investment

Inflation & its EffectsCurrent State of Inflation in India

Bank & Bank AccountsMutual Funds & its Benefits

Safety of Mutual Fund InvestmentsAsset Allocation, Risk Tolerance & their Interrelation

PRESENTATION ON FINANCIAL AWARENESS BY STUDENTS OF POST GRADUATE DIPLOMA IN FINANCIAL PLANNING, BATCH 2014-15

What are Savings & Investment?


PARAMETER SAVINGS INVESTMENT

MEANING Surplus of income over expenditure

Sacrifice of current consumption for future benefit

NATURE A natural occurrence A conscious activity

OBJECTIVE Securing one’s money Giving one’s money the potential to grow over time

OUTCOME Savings do not yield huge returns

Investments have the potential to yield huge returns

Why should one Save/ Invest?


To Create a Fund for Contingency

To Meet several important Goals of Life

To Maintain the current Standard of Living by beating Inflation

What are the benefits of early investment?


A Rupee invested today is worth more than a rupee invested tomorrow

Kaun Banega CrorepatiCOST OF INVESTING

LATER:The graph details the

“MONTHLY” investment required

in order to accumulate ` 1

CRORE at age 60 for investors of

different ages at a rate of return of 8%

p.a.

Age 50` 55,162Age 40

` 17,462Age 30` 7,054Age 20

` 3,085

What is Inflation and what are its Effects?

• Inflation is the rise in the price of goods andservices available in market.

• The purchasing power of money falls on account ofinflation.


Example:If there is a 8% inflation rate for next 15 years, a ` 100 buy today would become a ` 317 buy after

15 years.

What is the current State of Inflation in India?


Source: World Bank

What is a Bank?


DEPOSITSLOANS

LOANS AMT+

INTEREST

DEPOSIT AMT+

INTEREST

What are the different types of Bank Accounts?


Source: Reserve Bank of India

Savings

• This account is for common people

• The money is very liquid

• The current interest rate is minimum 4% p.a. in all banks

Basic Savings

• Also known as “No Frills” Account

• This account is for low income people

• The current interest rate is 4% p.a. in all banks

Current

• This account is basically meant for businessmen

• It is highly liquid in nature

• This account does not offer any interest.

Fixed Deposit

• This account has a fixed tenure

• Interest rate is high in comparison to the savings account

• The current interest rate for a 1 year or higher fixed deposit is 8.5% p.a.

Recurring Deposit

• Suitable for people with no lump sum amount to save, but are ready to save a small amount every month

• Interest rate is same as Fixed Deposit account

What is a Mutual Fund?


A Continuous Process of Wealth Creation & Redistribution

Source: Association of Mutual Funds of India

Benefits of Mutual Funds


Professional Management of Investments

Diversification

Low Cost

Liquidity

Wide Range

Regulatory Comfort

How safe are Mutual Fund Investments• Mutual Funds have becomeone of the preferredinvestment option for peoplewho can part with a smallsum every month.

• A regular investment will seethe corpus grow over yearsand come in handy when youneed the funds the most.

• However, investment inmutual funds is not withoutrisk.

• It all comes down to thescheme you have chosen toinvest in.


Source: Business Line

What is Asset Allocation & Risk Tolerance?• Asset allocation is an investment strategy thatattempts to balance risk versus reward (i.e.maximizing returns and minimizing risk) byadjusting the percentage of each asset in aninvestment portfolio.

• Asset allocation helps in risk reduction.•Asset Allocation primarily depends on the risktolerance of an investor.

• Risk Tolerance means the degree of variability ininvestment returns that an individual investor iswilling to withstand.


How does Asset Allocation change with Risk Tolerance?


REVIEW OF DISCUSSION


Savings has to be properly invested in order to earn returns

Returns are required not only to meet goals

but also to beat Inflation

The safest way to save is Bank Accounts

However many a times, Bank Deposits provide negative real

returns

Mutual Funds are an easy way of Wealth

Creation

Investments in Mutual Fund Investments are quite Safe provided

Investors do their due diligence

The best way to invest is through a suitable Asset Allocation

Asset Allocation is based on Risk

Tolerance & other factors

International College of Financial Planning

• The International College of Financial Planning (ICOFP)was promoted in 2002 by the Bajaj Capital Group, arenowned business house in the field of financialservices in India since last 50 years.

• ICOFP is the leader in Financial Planning education inIndia.

• ICOFP has several prestigious tie ups with bodies likeFinancial Planning Standards Board India, FinancialPlanning Association of Australia Ltd, The CharteredInsurance Institute London, The Chartered FinancialAnalyst, Center for Rural & Cryogenic Technologies(Jadavpur University) etc.


Post Graduate Diploma In Financial Planning

• Post Graduate Diploma in Financial Planning is an intensive one yearprogram which is offered jointly by ICOFP and CRCT, JadavpurUniversity.

• The objectives of this Program are:1. To teach students the techniques and tools useful for financial

planning.2. To improve students’ technical and interpersonal skills.3. To help the students jumpstart their careers in the fields of Banking,

Broking, Insurance, Mutual Funds, Research etc.• This program also incorporates the curriculum of all modules ofCFPCM certification, which is a global qualification with presence inaround 24 nations.


Thank you for your ParticipationYou are Invited to a

at our Campus on Saturday 21st February!

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