Wealth creation strategies
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This document provides strategies for wealth creation and management. It discusses key concepts like assets, liabilities, growth, risk, and definitions of wealth. Specific investment options are outlined like equity, bank deposits, and mutual funds. The mantra emphasized is to start investing and taking advantage of compounding returns early. Wealth is defined as being able to sustain one's lifestyle without working through liquid assets and passive income exceeding monthly expenses.
Wealth creation strategies
- 1. Strategies for Wealth Creation & Management
- 2. The basics firstMake a list of the following
- 3. The Basics again…What are Assets / Liabilities for Personal Wealth Creation?One that gives a POSITIVE CASH FLOW IS AN ASSET Others are Liabilities / Expenses.
- 4. What is growth / return?Time Value for MoneyRelative GrowthNominal Interest Rate Vs EffectiveInterest Rate
- 5. What is Risk?Actual Returns Vs Expected returns
- 7. Take 2 minutes. Close your eyes and imagine a wealthy person. Write what you see.
- 8. A person's wealth is defined by how long a period of time he/she can sustain their lifestyle if they stop working.
- 9. The longer you can go on living your life without working another day, the richer you actually are.
- 10. Your wealth is therefore defined by three thingsYour monthly expenses, Your liquid assets and Your passive income.
- 11. The MantraTIME Start early Use the power of compounding
- 12. Where do I Invest?EQUITYCurrent Yield – LowCapital Appreciation – HighTypical Returns - 19.25% as per SENSEX returns since 1979Risk – HighMarketability / Liquidity – HighTax Treatment - No long term capital gains tax after 365 days. Dividends received are tax freeConvenience - High
- 13. Where do I Invest?BANK DEPOSITSCurrent Yield – ModerateCapital Appreciation – NilTypical Returns - 8% Average Risk – NegligibleMarketability / Liquidity – HighTax Treatment - Section 80C benefits for 5 year deposit. All interests are taxable Convenience - Very High
- 14. Where do I Invest?MUTUAL FUND - EQUITYCurrent Yield – LowCapital Appreciation – HighTypical Returns - 39% Average over 3yrs Highest return - 69%Risk – HighMarketability / Liquidity – HighTax Treatment - Section 80C benefits for Equity Linked Savings Schemes. No long term capital gains tax after 365 days. No tax on dividends received.Convenience - Very High
- 15. If spending money brings you enjoyment, you will never be rich.However if making money brings you enjoyment, then your wealth isguaranteed.