Intro to FINANCE

Satish Jaiswal
Why do you
work?
Why should
you save
money?
How to become
RICH?
 I started late. . . very late.
I wish to share my experience to
touch someone’s life and make
that better. . .
so that I feel better.
Satish Jaiswal
Saving money is important because it helps
protect you in the event of a financial
emergency. Additionally, saving money can help
you pay for large purchases, avoid debt, reduce
your financial stress, and provide you with a
greater sense of financial freedom.
 Easiest of all
CHANGE YOUR NAME
 Ameer Chand
Seth Dhanpat Rai
Kirori Mal
Low Investment
& Little Risk
Idea
If odds are
not in favor
Is it possible to become RICH
If yes, then How?
Savings refers to the money that a person has left
over after they subtract out their consumer
spending from their disposable income over a
given period of time.
Savings
• Low risk
• Low return
• High liquidity
Risk
The chance that the value of an investment will
decrease.

Return
The profit or yield from an investment.

Liquidity
The ability of an investment to be converted into
cash quickly without loss of value.
Saving Vs Investment
An investment is essentially an asset that is
created with the intention of allowing money to
grow
Investments
• High risk
• High return
• Low liquidity
Time value of Money
If you hide ₹ 1 Lakh in a mattress for five years, It
will have less buying power when you retrieve it
because inflation would reduce its value.

If it is not invested, the value of the money

erodes over time.

Also, you will lose the additional money it could

have earned over that time if invested.
Image credit - Paisabazaar
 Do your own research
before investing your hard-
earned money!
Mutual Fund investments are subject to
market risks, read all scheme related
documents carefully. The Mutual Fund is
not guaranteeing or assuring any
dividend under any of the schemes and
the same is subject to the availability
and adequacy of distributable surplus.
 One must research and plan accordingly. Without proper
research and planning, investors tend to make unwise
decisions that eventually lead to losses.
Where to invest?
Do your own research
before investing your
hard-earned money!
Market capitalisation refers to the total
number of outstanding shares of a company
in the market multiplied by the current price
of each share. It is a measure of the
estimated valuation of a company.
Suppose that ABC Company has 20,000 outstanding
shares in the market and each share of ABC Company
is priced at Rs 20. Then, the market capitalisation of
ABC Company will be calculated as follows:

Outstanding shares x price per share

20,000 x 20 = Rs 4,00,000

Therefore, the market capitalisation of ABC Company

is Rs 4,00,000.
The companies that are traded on the stock
exchanges can be categorised into three
broad categories:
• Large-cap
• Mid-cap
• Small-cap
Large-cap companies are businesses that are well-established and
have a significant market share. Large-cap companies have market
caps of Rs 20,000 crore or more. These companies dominate the
industry and are very stable. They hold themselves well in times of
recession or during any other negative event. Besides, they will
usually have been functioning for decades and have good
reputations. If you want to invest in a company’s stocks by taking
less risk, then large-cap stocks are a good option. These stocks are
less volatile in comparison to mid-cap and small-cap stocks. The
lower volatility makes them less risky.

Reliance Industries and Infosys are examples of some large-cap

market companies
Mid-cap companies are companies whose market cap is above Rs
5,000 crore but less than Rs 20,000 crore. Investing in these
companies can be riskier than investing in large-cap market
companies. This is because mid-caps tend to be more volatile. On
the other hand, mid-cap companies also have the ability to turn into
large-cap companies in the long run. These companies offer a higher
growth potential than do large-cap stocks, and hence more investors
are attracted to investing in such companies.
Small-cap companies are those that have a market capitalisation of
less than Rs 5,000 crore. These companies are relatively smaller in
size and have significant growth potential. What makes them risky is
the low probability that they will be successful over time. This
makes the stocks of such companies volatile in nature. Small-cap
companies have a long history of underperformance but when an
economy is emerging out of a recession, small-cap stocks often
prove to be outperformers.
Sectors for Long-term Investment in India (Reference only)
Information Technology (IT)
Banking and Finance
FMCG (Fast-moving consumer goods)
Housing finance companies.
Automobile Companies.
Infrastructure.
Pharmaceuticals Stocks.
Power of Compounding
Homework
• Create an emergency fund and keep that separate
• Set a financial goal
• Reverse calculate the monthly contribution
required to achieve your goal
• Start saving/investing today
• Diversify your portfolio
• Forget your investment
Thank You!