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Introduction
Finerva
⢠Indiaâs First Company dedicated to Personal
Finance Education
⢠3 core values:
⢠Simplifying Personal Finance
⢠Make Meaning
⢠Create Value
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⢠Basics of Cash Flow
⢠Is there a difference between assets for
Companies and Individuals?
⢠Asset Vs Liability Chart
⢠Mark the table in your workbook appropriately
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⢠What is risk?
⢠Any deviation from expectation is risk
⢠Which has higher risk?
⢠When I expected 10 % I got 9%.
⢠I expected 35% I got 31.5%
⢠I expected 100% I got 90%
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Which decision is better?
If he fights:
⢠The probability to lose 37,500 persons is 50%
⢠The probability to lose 43,750 persons is 25%
⢠The probability to lose 31,250 persons is 25%
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Which decision is better?
⢠If he retreats he will lose only 15% of his
army.
⢠Which decision will reduce the loss of lives?
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RiskâŚ
â˘Is there zero risk?
â˘No. That is why Countries are rated too.
â˘Sometimes the sovereign rating can be
lesser than some companies in the
country.
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âŚTools to Create Wealth
â˘Tools to meet my requirement
⢠Comparision chart for
different investments
⢠Increase the sources of
Income
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Sources of Income
⢠Myth to break: Salary has to be my main source of
income.
â Types of People â Employed, Self Employed,
Businessman, Investor
â Be an Businessman / Investor
â Leverage OPM, OPT
â Leverage Technology
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Planning for My Milestones & Retirement
⢠Have I planned for
â My Childrenâs Education?
â My House?
â My Car?
â My Parents?
â My Business?
â My Retirement?
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Where is the money?
⢠I know I need to save. But where is the
money?
âThis month my in-laws were in town
âThe TV / Washing Machine / Fridge
failed this month
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Where is the money?
âSurprise hospital expense came up
âChildâs School Term Fees had to be paid
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Where is the money?
âSoft Loan had to be repaid
âSurprise Trip from Company. Claim will
take one month for reimbursement.
âAadi Month / Deepavali / Ramzan /
Chirstmas / Pongal / New Year / School
Holiday Purchases
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Budget â Myths And Reality
⢠A plan does not ensure that the goal is
achieved.
⢠Plan is required to first set a goal and then
to remind you to reach it
⢠And alert you when there is a deviation
⢠A company has become big because they
have a budgetâŚ
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Budget is for big companies.
⢠Any company has become big because it
functioned on a budget
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Budget Myths & Reality
⢠Anything on sale can be
bought
⢠A sale is profit for the sales guy
⢠Is the thing on sale what you
want?
⢠Buy anything based on a list of
needs and excess cash.
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There is not enough money for
everyone to be rich
⢠Money is not a limited quantity commodity
(at least at our level)
⢠The more value you create for your
company and others, the more money you
have.
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That guy is filthy rich! He should have done some
criminal activity some time in life.
⢠This is a statement out of guilt and jealousy / envy
⢠Sometimes used to protect our image in front of our
children.
⢠âMoney is not evil after all â in good handsâ â Swami
Vivekananda
⢠âJealousy is the root of all evil, and a most difficult thing
to conquerâ â Swami Vivekananda
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Creating a Surplus for My Goals
⢠Can you see where your goals are being SPENT?????
⢠Identify expenses which can be reduced
⢠Identify loans which need to be closed immediately
⢠Identify investments that need to be started
immediately
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Symbols of Social Status Vs Wealth
⢠Wealth is generally associated with the
ownership of social status symbols such as
Huge Cars, Palatial Houses, Servants, Jewels,
Silk Sarees, etc.
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Symbols of Social Status Vs Wealth
⢠Social status symbols are more often, than
thought, liabilities.
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Wealth Defined
⢠A person's wealth is
defined by how long a
period of time one can
sustain oneâs lifestyle if
he/she stops working.
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Wealth Defined
⢠The longer you can go
on living your life
without working
another day, the
wealthier you actually
are.
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Your wealth is therefore defined by three things
⢠Your monthly expenses
⢠Your liquid assets and
⢠Your passive income.
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Myths Summarised
⢠Safest option in life is to get a secure job and stay there always
⢠Only doctors make a lot of money
⢠Sale! Sale! I buy always when there is a sale
⢠I will never understand how investing works
⢠They have a big house, they must be richâŚ
⢠There is not enough money for everyone to be rich
⢠People who make mistakes are stupid
⢠Fixed deposits are safer than stocks
⢠I will never be richâŚ
⢠Investing in stocks is gambling.
⢠Only crooks become crorepathis
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Mantra 1
Time
The largest of trees
start from the small
seeds. Allow time and
nurture your
investments.
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Mantra 2
Income â Investment = Expenses
If spending money brings you enjoyment, you will never be rich.
However if making money brings you enjoyment, then your wealth
is guaranteed.
Make list based purchases
Given a choice â see what the excess amount could be
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Invest with a Goal and Make Goal Based
Investments
If your goal was 10% gain sell once you get
it. Donât get Greedy.
Life Goals give clarity for the quantum and
term of investment.
A purpose will ensure money is not used
otherwise or spent.