FINANCIAL PLANNING

Setting Financial Goals for Your Future

Setting short-term, mid-term and long-term financial goals is an
important step toward becoming financially secure. 

# Establish a budget How much to save from your earnings?

# Create an emergency fund.
# Get Term insurance & Health Insurance.
# Pay off student loans.
# Think about your dreams & Set Goals.
# Invest for goals.
# Identify your requirements.
# Estimate your retirement needs.
Different Investment Avenues

• Equities, Mutual Funds

• Gold
• Real Estate
• FD, Savings Bank Account
• Insurance
• PPF
WHY TO INVEST IN EQUITY
If you had kept Rs.100
• Pocket Rs.6

• Equity Rs. 27800

Cumulative Annualized Returns 1985-2015
Equity is best investment option over long term on
combined parameters or risk, reward, liquidity and
amount required for investment
FD’s Vs Gold Vs Stock Market
WHAT IS AN EQUITY, SHARE OR STOCK MARKET?
STOCKS
• Stocks or Shares represent the ownership of
a company in proportion to stocks or shares
held

• Stock represents a claim on the company's

Assets , Earnings and have Voting Rights

• Holding a company's stock means that you

are one of the many owners
Primary and Secondary Market

• The primary market is where securities are

created (by means of an IPO)

• In the secondary market, investors trade

previously-issued securities without the
involvement of the issuing-companies

• When we talk about markets we refer to

secondary market
Ministry of Finance

SEBI

Stock Exchange

Broker

Advisor
How Rich Can you become by
investing ?
• How much can you make in 34 years by just investing
Rs.10,000 initially in any of the financial instruments ?

Take a wild guess ???

Let us look at the real example…

If you have subscribed in 100 shares of ________ company
with a face value of Rs. 100 in 1980…

Total Investment 100 Sh * Rs.100 / Sh = Rs.10,000

• In 1981 company declared 1:1 bonus = you have 200 shares
• In 1985 company declared 1:1 bonus = you have 400 shares
• In 1986 share Split from Rs. 100 to Rs.10 Face Value = 4,000 sh
• In 1987 company declared 1:1 bonus = you have 8,000 shares
• In 1989 company declared 1:1 bonus = you have 16,000 shares
• In 1992 company declared 1:1 bonus = you have 32,000 shares
• In 1995 company declared 1:1 bonus = you have 64,000 shares
• In 1997 company declared 1:2 bonus = you have 1,92,000 shares
• In 1999 again Share split from Rs.10 to Rs. 2 FV = 9,60,000 shares
• In 2004 company declared 1:2 bonus = you have 28,80,000 shares
• In 2005 company declared 1:1 bonus = you have 57,60,000 shares
• In 2010 company declared 2:3 bonus = you have 96,00,000 Shares
That's 96 Lakh Shares !!!
As on 6-OCT-2016 …

You have 96,00,000 shares of the company

Any guess about the company ?

(Hint : Its an Indian company)

Any guess about the present valuation ?

Rs.10,000 invested in 1980 is today worth
Rs. 460,00,00,000
(460.00 Crores) &
The company is

‘WIPRO’
Current Price = Rs.480* 96,00,000 Shares = = 460.00 Crores as on 25/10/2016
Whereas a 10000 investment in Bank FD
for 36 years @ 8%
would have grown to just Rs.2,55,477 ( Two Lakh Thirty Two Thousand Only
 Real Examples
Company Name From No of Invested Today's Multibagger Annualized
Year Years Value Market Returns
Value
Multi Bagger
Stocks
Colgate 1984 31 1 lacs 1.65 Cr 165 19.26%
HUL 1984 31 1 lacs 3.56 Cr 356 22.50%
SK Consumer 1984 31 1 lacs 8.50 Crore 850 26.20%
Hero Honda 1985 30 1 lacs 5.70 Cr 570 25.40%
sian Paints 1984 31 1 lacs 17.67 Cr 1767 29.40%
Bharti 2002 13 1 lacs 14 Lacs 14 27.10%
MCdowell 2003 12 1 lacs 22 lacs 22 18%
 Recent IPO Performers

Company Name LTP (Rs.) Issue Price Rs. List Price List Date Chg (%)

Ujjivan Fin.Ser. 450.80 207.00 227.00 10-May-16 98.59

Advance. Enzyme. 2,348.35 896.00 1,210.00 01-Aug-16 94.08

Parag Milk Foods 313.90 215.00 215.70 19-May-16 45.53

Mahanagar Gas 769.10 380.00 540.00 01-Jul-16 42.43

RBL Bank 344.55 225.00 273.70 31-Aug-16 25.89

Narayana Hrudaya 361.60 250.00 291.00 06-Jan-16 24.26

Equitas Holdings 178.00 109.00 145.10 21-Apr-16 22.67

Quess Corp 594.80 317.00 499.00 12-Jul-16 19.2

Health.Global 240.70 205.00 209.80 30-Mar-16 14.73

Precision Camshf 184.15 186.00 163.10 08-Feb-16 12.91

S P Apparels 339.00 268.00 305.00 12-Aug-16 11.15

Endurance Tech. 624.95 472.00 570.00 19-Oct-16 9.64

Bharat Wire 48.95 40.00 47.35 01-Apr-16 3.38

How to make your first million before 30

Here’s your plan:

Year 1: Save Rs. 5,000 per month and invest in Ultra Short-term Debt funds.

  Year 2: Increase your savings by 10% annually, to Rs. 5,500 per month (We’re
sure you’ll get a salary hike!) and invest it in Ultra Short-term Debt funds.

Year 3-8: Again increase your savings by 10% every year, but now start investing
it into equity funds.
So, Rs. 6,100 in year 3, Rs. 6,700 in year 4, and so on.

By the time you are 30, you can expect to have more than Rs. 10. lakhs!

Note: We’ve assumed an 8% return on your debt fund investments and 14% on equity funds. The
historical returns for equity are higher but assuming a lower return is good for planning as the rates of
return are not fixed.
Bombay Stock Exchange (BSE) in India has the highest number of listed
companies in the world with an estimated 5,689 companies. National
Stock Exchange (NSE) of India has around 1,750 companies.
What is Good is not always popular !!!
SethuShankar.M 
Motilal Oswal Securities Ltd 
M/s Risk Free Investment service,
No.139/1, 1st Floor,
Near Club Melange, Perundurai Road,
Erode - 638011, TAMILNADU, INDIA.
Mobile: +91-9976065437
E Mail: sethumosl@gmail.com |