Saving generally means putting money aside. It is the amount left over when the person's consumer expenditure is subtracted from the amount of disposable income that he or she earns in a given period of time. Saving = Disposable Income – Expenditure Why Saving is important? We save because we can't predict the future. If we could, we would know precisely how much money we would need for the things that we want and need in the future. But because we can't do this, the need to save money for the future is vital. Few Reasons for Saving... 1.It acts as an emergency cushion. 2.It provides liquidity.

Who is our worst enemy TO SAVE?

Investment means putting your saving to work to earn more money. Investment is the choice of the individual. THROUGH PROPER INVESTMENT ONLY, YOU CAN CONVERT YOUR WORST ENEMY INTO YOUR BEST FRIEND. Why Investment is important? 1. Creating wealth over the long term 2. Acquiring assets like a dream house or a dream car 3. Fulfilling your need for financial security To fight inflation You do not have to be wealthy to be an investor but you need to be an investor to become wealthy

Invest ment AvenuesRange of returnTaxabilityLiquidityTenureRiskFeature FINANCIAL INVESTMENT AVENUES Bank Fixed Deposits #9-10%Interest TaxableVery Low No of days to yrsLow Senior Citizen Saving Scheme9%Interest TaxableMedium5 yrs ^^^Low National Savings Certificate8%Interest TaxableMedium6 yrsVery Low Investment eligible for rebate U/S 80C. Annual acrued interest is also eligible for rebate U/S 80C. PPF8%Tax FreeVery Low15 yrsLow Kisan Vikas Patra8.25% Interest Taxable, No TDSMedium8 yrs 7 mVery LowDeposits are exempt from Wealth Tax Post Office RD7.50% Interest Taxable, No TDSLow5 yrsVery Low Monthly Income Savings8% Interest Taxable, No TDSHigh6 yrsVery LowDeposits are exempt from Wealth Tax Company FD %Interest TaxableLow3-5 yrsHigh Mutual Fund DebtVariable^^ 10%(20% with Indexation)*Low1m-5 yrsLow Mutual Fund Equity15%NilHigh Direct Equity15%NilHigh Very High PHYSICAL INVESTMENT AVENUES Gold Very High MediumGold has always proved as a good hedge against inflation Real Estate LT Capital Gain Tax applicable on Indexation costLow Medium * LT Capital Gain Tax # 5 Yrs Bank FD eligible u/s 80C ^^ Depending on product ^^^ Tenure is extendable by 3 Yrs COMPARISION OF VARIOUS TYPES OF INVESTMENTS

AFTER GOING THROUGH VARIOUS MEANS OF INVESTMENT IT IS CLEAR THAT MAXIMUM RETURNS CAN ONLY BE GAINED FROM EQUITY MARKET BUT IN GENERAL WE FEAR TO TAKE THE RISK BURDEN, HOWEVER IF WE ANALYSE THE TRACK RECORD OF STOCK MARKET SINCE ITS INCEPTION WE WILL SURELY GET RID OF THE FEAR FACTOR AND INVEST SMARTLY IN THE EQUITY MARKET. ACCORDING TO THE WORLDS RICHEST MAN Mr WARREN BUFFET: In the short term the market is a popularity contest; in the long term it is a weighing machine We should ensure that our investment should be able to earn (CAGR) CAGR > INFLATION + GDP Growth For example : If INFLATION Rate = 6% and the predicted growth of GDP = 9% We should invest in an instrument which gives us a CAGR > 15% (6% + 9%) EQUITY MARKET IS THE ONLY INSTRUMENT WHICH CAN GIVE A GUARANTEED RETURN (CAGR) OF MORE THAN THE SUMMATION OF INFLATION AND GDP GROWTH

After studying the last Table we can be well assured that with an investment horizon of 7 years or more the risk factor in investing in EQUITY is almost NIL. THERE FORE The ultimate truth is that we should shred our FEAR and start investing in EQUITY.

Wealth can ONLY be created through an EQUITY investment as it can only surpass the inflation index. As the Indian stock market is the only financial instrument which has given 19.86% CAGR since inception in Entry to the equity market can be done in the following ways: 1.Direct Equity (Through DEMAT a/c). 2.Mutual Fund (Through Equity Fund or ELSS). 3.PMS (Through Portfolio Manager). 4.ULIP (Through Insurance Companies).

PMSDIRECTMFULIPProducts 95% - 100%100%90% - 100%70% – 80% Exposure 1% - 2%0.5%No25%Load 2% - 3%0.5% %2% -2.5%5% - 10%Expense Ratio No 5 yrsLock in Period Fund MgrSelfFund Mgr Management Not ReqReqNot Req Time/ Knowledge COMPARISION AMONGST THE VARIOUS ENTRY PROCEDURE TO THE EQUITY MARKET DIRECT INVESTMENT GETS MAXIMUM EXPOSURE, HAS THE LEAST LOAD, LEAST EXPENSE RATIO, NO LOCKING PERIOD BUT THE ADDITIONAL BURDEN OF MANAGEMENT, TIME & KNOWLEDGE IS DIRECTLY IMPOSED ON THE INVESTOR.