Professional Documents
Culture Documents
ON
FINANCIAL EDUCATION
FOR
YOUNG INVESTORS
SUJITH KUMAR S H
ASST. PROFESSOR
BIET-MBA PROGRAMME, DAVANGERE
(M)+91-9986029529
E:Mail: shsujith@yahoo.com
What is Money ?
What
is financial Planning ?
Financial
Why? Today
people are
Beyond Means
Credit card Debt
Irresponsible things
BUDGETING
Exercise
Cash flow
calculator
Identify Goals
SMART
GOALS
GOALS
IMPLEMENTIN
G
THE PLAN,
THE REAL
CHALLENGE
has
some
advantage
over
Definition
Capital
The
etc.
Capital
SECONDARY
MARKET
PRIMARY
MARKET
PUBLIC
ISSUE
RIGHT
ISSUE
BONUS
ISSUE
PRIVATE
PLACEMENT
STOCK
MARKET
Primary Market
In
The
(a)Net
Dematerialisation and
Demat Account
It is an account opened
with depository
institutions to
dematerlise securities
certificates.
Demat A/C opened with
NSDL OR CDSL
Depository
A depository is like a bank wherein the
deposits are securities (viz. shares,
debentures, bonds, government securities,
units etc.) in electronic form.
There are two types of Depository in our
country
NSDL
CDSL
Classification of Issues
Issues
Right
Publi
c
Initial Public
Offering
Fresh
Issue
Private
placement
Offer for
sale
Further Public
Offering
Fresh
Issue
Offer for
sale
PUBLIC ISSUE :It involves raising of funds directly from the public and get themselves
listed on the stock exchange
in case of new companies ,the face value of the securities is issue at
par, and
in
the case of existing companies, the face value of securities are issued
at premium
Initial public offer (IPO): When an unlisted company
makes either a fresh issue of securities or offers its
existing securities for sale or both for the first time to the
public, it is called an IPO. This paves way for listing and
trading of the issuers securities in the Stock Exchanges.
Further public offer (FPO): When an already listed
company makes either a fresh issue of securities to the
public or an offer for sale to the public, it is called a FPO.
RIGHT ISSUE:Right issue is the method of raising additional finance from existing
members by offering securities to them on pro rata bases.
The rights offer should be kept open for a period of 60 days and should
be announced within one month of the closure of books.
BONUS ISSUE:Companies
distribute
profits
to
existing
shareholders by way of fully paid bonus share in lieu
of dividend.
These are issued in the ratio of existing shares held.
The shareholders do not have to make any
additional payment for these shares
PRIVATE PLACEMENT:
Private Placement is an issue of shares
by a company to a select group of
persons under the Section 81 of the
companies act 1956. It is a faster way for
a company to raise equity capital.
Secondary Market
Secondary
Market refers to a
market where securities are traded
after being initially offered to the
public in the primary market and/or
listed on the stock exchange.
Secondary market comprises of
Equity market and Debt market.
It is the trading avenue in which
the already existing securities are
traded amongst investors.
Banks facilitate secondary market
transactions by opening direct
trading and demat accounts to
Secondary Market
STOCK
EXCHANGES IN
INDIA
India can boost of being one of oldest stock markets of
Stock Exchange
Meaning
Is capital market of stocks and securities
where in they can be exchanged
(purchased & sold) through the brokers
(members of stock exchanges) under
certain rules & regulations.
It represents the organised secondary
capital market
Einstein
called Compounding
?
THE POWER OF
COMPOUNDING
Yea Simple
r
interest @
10% p.a.
Compound
interest @ 10%
p.a.
1
2
3
4
5
20
25
30
1,10,000.00
1,21,000.00
1,33,100.00
1,46,410.00
1,61,051.00
6,72,749.99
10,83,470.59
17,44,940.23
1,10,000.00
1,20,000.00
1,30,000.00
1,40,000.00
1,50,000.00
3,00,000.00
3,50,000.00
4,00,000.00
Compounding
Power of Equity
Unbelievable
but it has happened
Just imagine
How much can you make in 26
years by just investing Rs.10,000
initially in any of financial
instruments ?
The result of
Power of Compounding
CIPLA
Investment of Rs. 10,000 in 1979 will fetch Rs. 95 cr.+
INFOSYS
Investment of Rs. 10,000 in 1992 will fetch Rs. 2.5 cr.+
RANBAXY
Investment of Rs. 10000 in 1980 will fetch Rs. 1.9 cr.+
THE RULE OF 72
Retirement Planning
Start
RETIREMENT CALCULATION
34575.00
Corpus amount
required if lives 20
years after retirement
6846077.
45
At 10% interest
Rs.
Retirement
Calculator
WHAT IS INFLATION?
Effects of
Inflation
Item
Sugar (1 kg)
Cooking oil (5
liters)
Rice (1 kg)
Petrol ( 1 liter)
Price
in
200102
Price in
200910
Rs. 16 Rs. 40
Rs. 290 Rs. 500
Rs. 14
Rs.
33.46
Rs. 35
Rs.
48.83
Inflation
calculator
Savings
Short term
Value remains
stable
Lower returns
over long term
Investing
Long term
Value moves up and
down in short term
Potentially higher
returns over long term
Price of procrastination
Twin
Price of procrastination
Twin
Rs. 49 lacs
LOANS V/S
INVESTMENTS
Before
you borrow:
Financial strength
Credit card debt and personal
loans
Low interest rates
Tax benefits
Loan for investments
THE
PRODUCTS
Protection Related
Products
Insurance
Life insurance
Term life insurance
Endowment policies
Annuities / Pension plans
ULIPs
Health insurance
Comprehensive health insurance
Hospitalisation policy
Critical illness plan
Specific condition coverage
Steps
to avoid excess
debt:
Set debt limits
Shop carefully for debts
Dont give into temptation
Automatically have money go
towards your bills
Ponzi schemes
Its a Ponzi!
Investment philosophies
Evaluate
PURCHASING
FINANCIAL PRODUCTS
Selection of intermediary
Registration
with regulator or a
body approved by regulator, e.g.
AMFI or stock exchange
Regulators
Various
regulators in Indian
financial markets are:
Securities & Exchange Board of
India (SEBI)
Reserve Bank of India (RBI)
Forward Markets Commission (FMC)
Insurance Regulatory &
Development Authority (IRDA)
Ministry of Corporate Affairs (MCA)
Ministry of Finance (MoF)
Advantages of Financial
Education
THANK YOU!
SUJITH KUMAR S H
ASST. PROFESSOR
BIET-MBA PROGRAMME
DAVANGERE