The 1st wealth management session – The importance of defining the term “Rich”:

In any journey, if we do not define our destination, we will find it difficult to reach it.  

Similiarly, in the wealth journey, we all need to define the term “rich” – otherwise we will not reach it. The reason why many people do not reach the “rich” stage is that their definition of rich is not a very clear cut definition.  

The class discussed a few common definitions of the term “rich” (two of which are in the ppt) – obviously everyone has a different take of this term - we then agreed that any goal needs to be Specific, Measurable, Achievable, Realistic and Time bound (SMART goal) – and so the definition of “rich” also needed to be SMART.

 I then introduced them to the definition by Robert Kiyosaki in his book “Rich Dad Poor Dad”. We went one level deeper and discussed the quantification of this term “rich” based on this definition. In order to quantify this definition, we discussed the case of an MBA couple (that my students can relate to) and tried to make a 20 year financial plan for them – this 20 year financial plan is not finalised yet as the students are supposed to work on it over the week and so I will share one or two of the finalised plans in my next week’s notes.

This was the key issue we discussed for 2 hours of the three hour session.

The last hour was devoted to an over view of the wealth management industry in India. Here we discussed the market estimates, the key players, the kind of business models and the current challenges that the wealth managers face today.

The ppt used can be viewed and downloaded at http://www.authorstream.com/Presentation/sgraja-1538228-session-1-financial-planning/