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refers to the concept of deferred consumption, which involves purchasing an asset, giving a
loan or keeping funds in a bank account with the aim of generating future returns. Various
investment options are available, offering differing risk-reward Y
 offs. An understanding
of the core concepts and a thorough analysis of the options can help an investor create a
portfolio that maximizes returns while minimizing risk exposure.


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he various types of investment are:

×c xash investments: hese include savings bank accounts, certificates of Y (x s)

and treasury bills. hese investments pay a low rate of interest and are risky options in
periods of inflation.

×c ebt securities: his form of investment provides returns in the form of fixed periodic
payments and possible capital appreciation at maturity. It is a safer and more 'risk-
free' investment tool than equities. However, the returns are also generally lower than
other securities.

×c tocks: 0

Y (also called equities) makes you a part-owner of the business and
entitles you to a share of the profits generated by the company. tocks are more
volatile and riskier than bonds.

×c G Y

  :
his is a collection of stocks and bonds and involves paying a
professional manager to select specific securities for you. he prime advantage of this
investment is that you do not have to bother with tracking the investment. here may
be bond, stock- or index-based mutual funds.

×c ¦ 
Y :
hese are financial contracts the values of which are derived from
the value of the underlying assets, such as equities, commodities and bonds, on which
they are based. erivatives can be in the form of futures, options and swaps.
 erivatives are used to minimize the risk of loss resulting from fluctuations in the
value of the underlying assets (hedging).

×c xY: he items that are traded on the commodities market are agricultural and
industrial commodities. hese items need to be standardized and must be in a basic,
raw and unprocessed state. he trading of Y is associated with high risk and
high reward. rading in commodity futures requires specialized knowledge and in-
depth analysis.

×c ^eal estate: his investment involves a long-term commitment of funds and gains that
are generated through rental or lease income as well as capital appreciation. his
includes investments into residential or commercial properties.

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Adhere to trusted ñ
Y


Y practices from top firms like Goldenree Asset
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  is a service provided by financial institutions to help high Y
ñ Y
individuals protect and grow their wealth. his advanced YY


discipline
involves providing a diverse range of services, such as financial planning, investment
management, tax planning and cash flow and debt management, based on client
requirements.

here are two aspects to the wealth management process; protecting assets from creditors,
market crashes or slowdowns, taxes, lawsuits and other unexpected events, and growing asset
values through methods that actively manage risk and ñ
 profiles to clients needs.

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ealth management helps people determine their monetary goals and develop actionable
strategies that could help them realize their goals. It also defends their 
 against risks.
ealth management is a service designed specifically for high net worth individuals. he
threshold for high net worth varies by country and institution, but the most common
definition is individuals who have more than U
million in assets, not including their .
ome high net worth individuals have done well in growing their assets from a low base to
their current levels, and may feel that they can continue to manage their own portfolios.
However, as a person¶s wealth grows and/or the markets get more challenging, it becomes
increasingly difficult to realize the expected returns.

ith greater wealth comes greater YY options as well as more complex risks and
threats in terms of legal regulations, taxation issues and opportunities for loss. he level of
fear or even outright panic that can be experienced grows with the size of the investment
involves. Greater diversification is needed than in earlier stages of investing. his is where
independent financial advisers or large corporate entities help their clients through
professional wealth management.

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ealth management offers the following services:

×c Investment planning: assists you in investing your 
into various investment
markets, keeping in mind your investment goals.

×c Insurance planning: assists you in selecting from various types of insurances, self
insurance options and captive 


.

×c ^etirement planning: is critical to understand how much funds you require in your old
age.

×c Asset protection: begins with your financial advisor trying to understand your
preferred lifestyle and then helping you deal with threats, such as taxes, volatility,
inflation, creditors and lawsuits, to maintaining this lifestyle.

×c 


 : helps in minimizing tax returns. his might include planning for
charity, supporting your favorite causes while also receiving tax benefits.

×c Estate planning: helps in protecting you and your estate from creditors, lawsuits and
taxes. his service is critical for every person whose net worth is high.
 ×c 0usiness planning: his service aims at optimizing the tax free advantages of running
your own business.

×c 0usiness succession planning: assists in planning for the inevitable to maximize

returns.

×c ealth transfer: helps you pass on your wealth to your dependents.

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ealth management helps in:

×c ^educing taxes associated with income, capital gains and estate.

×c Protecting assets from misjudgments and creditors.

×c Improving yields with more diversification and less risk.

×c Managing liabilities such as mortgages and   

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entails identifying the |
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all current and future expenses, with an aim to meet an individual¶s financial goals. he
primary aim of a budget planner is to ensure savings after the allocation for spending.

0udget is an important concept of microeconomics and can be understood as an

organizational plan stated in monetary terms. 0usiness start-up budget, corporate budget,
event management budget, government budget and personal or family budget are some
variations of this concept.

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In a personal or family budget, the sources of all income (inflows) are identified and the
expenses or outflows are planned for. he final plan seeks to match the outflows to inflows.
he equation that restricts an individual or a household from spending more than the
available resources is known as budget constraint.


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0y following good budgeting strategies, one can ensure the successful management of his or
her expenditure and the recording of savings so that investments may be made for securing
one¶s future. Increased  expectancy has raised the amount of money one requires after
retirement. his means that there is a need for increased retirement savings, while most
people are living paycheck to paycheck or depending on credit card debt (which has a high
interest rate) to raise their standard of living. hus, there is a growing need for effective
personal budget planning.

tep
: xalculate your income: his should include income from all sources, including your
paycheck and interest from any |

.

tep 2: etermine your bill for essentials: List out your essential expenses, which may
include rent, grocery, clothing, telephone and electricity bills and gas and car maintenance.
xalculate the amount spent on each.

tep 3: etermine your debt elimination: Note down your total debts, including interest
 
| on the same.

tep 4: etermine your bill for non-essentials: Your list of non essentials may include
vacations, gifts and trips to restaurants. xalculate the amount spent on each.

tep 5: xalculate your savings: his is done by subtracting the figure obtained by adding
steps 2, 3 and 4 from the figure obtained in step
.

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ome of the major advantages of budget planning are:

×c It puts checks or balances in place in order to prevent overspending at various levels.

×c akes into account the unexpected need for funds.

×c Helps one maintain his/her standard of living post retirement.

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0udget planning has the following shortcomings:

 ×c Excessive emphasis on savings may affect the quality of life.

×c If the budget is planned too tight, adherence to it may become an issue.



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requires ñ
YY of a nest egg during your working life in
order to live comfortably during retirement. A survey published by the National Foundation
for xredit xounseling in April 2009 indicates that a third of the Americans surveyed had not
saved anything in the past year for Y Y

. he survey also found that while spending had reduced against the backdrop of the global
financial crisis of 2008, about 45% of the people surveyed considered their thrift behavior as
temporary and planned to revert to their old spending habits once the economy improved.

Almost a third of U citizens do not 



Y Y and enter their retired life with little or
no wealth. However, it is very important to begin retirement planning early. ^etirement
planning takes into account:

× Inflation: As inflation can erode the value of 
, it is important that your retirement
investment is planned to make the returns inflation proof.
× Greater life expectancy: Life expectancy has risen globally, resulting in an increase in the
number of years post retirement.
× Medical emergencies: Unexpected medical events warrant the need for more money.

×c Personal financial goals: Establishing concrete financial goals also requires obtaining
precise figures that reflect future changes in expense.

here are several options in retirement planning, which include market-linked YY

Y and those providing flexible income and insurance cover. his provides the investor
greater control over his investments to customize plans to his needs.

^etirement planning also depends on age and 
Y

Y. hat is, investment options for
a 25-year-old investor are different from those for a 40-year-old investor. ^etirement
planning is not a onetime exercise. his plan should be tracked regularly to determine
progress and make changes, if necessary.



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he advantages of Y Y

 include:
 ×c Avoiding a dramatic hit to your lifestyle post retirement.

×c Providing financial protection to your dependents.

×c Most retirement accounts offer you significant tax benefits.



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Here are the disadvantages of Y Y

 :

×c xurbing current consumption.

×c May lock in funds for a period of time.

×c May have to forgo the possibility of earning higher returns for achieving security of
returns.