SAINTWORDS
Your achievement is ours
CRORES PLANNERS
COURSE (CPC)
How to achieve seemingly
impossible financial goals without
any prior finance knowledge
Utpal KC
Course Director
(This booklet is a part of the Crores Planners
Course as a reference. To get the proper
knowhow one should attend the complete course)
!1
SAINTWORDS
Your achievement is ours
PREFACE
CRORES PLANNERS COURSE (CPC)
How to achieve seemingly impossible financial goals
without any prior finance knowledge
Everybody works hard to earn and wants to make the best out of their earnings. Unfortunately
90-98% people lose money particularly in equity investment and many more waste their hard-
earned money investing in inferior products, and they are not even aware of it.
People are intelligent, but they are busy in their daily jobs and businesses. Free knowledges are
neither always trustworthy, nor properly organised, nor give personalised answers.
Crores Planners Course (CPC) is a first step towards the missing links.
CPC is a combination of 4 video sessions and one live session
conducted by renowned investment expert Utpal KC. In addition to
that there is also a live q&a session with Mr Utpal.
For details you can visit the webpage via the following link or scan
the QR code.
https://www.utpalkc.com/croresplanners
!2
SAINTWORDS
Your achievement is ours
1st Edition
April 2022
!3
SAINTWORDS
Your achievement is ours
Crores Planners Course (CPC)
Level 1:
Compounding Using Spreadsheet
This is the beginning of scientific investment
After the end of the session you will understand,
(1) if you invest a lump-sum amount in any instrument like fixed deposit or
mutual fund, how much it will become after a certain period of time.
(2) if the frequency of interest payment is more than once in a year like quarterly
or half-yearly, then how to calculate the final amount receivable after a certain
period of time.
!4
SAINTWORDS
Your achievement is ours
1. If you invest Rs 1,00,000 today in a debt mutual fund how much
money will you get after 3 years? The mutual fund is expected
to give an annualised return of 9%.
The applicable spreadsheet function and working is as follows:
=FV(Rate%,NPER,0,PV)
=FV(9%,3,0,-100000)
=129,502.90
A spreadsheet can be Google Sheets or Microsoft Excel or Numbers for
Mac
How I did this?
!5
SAINTWORDS
Your achievement is ours
The basic steps for solving any investment issue are as follows:
Step #1: Draw the timeline
0 1 2 3 Years
Step #2: Place cashflows under the timeline & note rate (if any)
0 9% 1 2 3 Years
-Rs 100,000 Rs ?
Note, cash outflows are marked -Ve.
Step #3: Name the elements as per spreadsheet terminology
NPER
[Number of Periods]
0 9% RATE 1 2 3 Years
-Rs 100,000 Rs ?
PV [Present Value] FV [Future Value]
Step #4: Choose the right function
=FV(Rate%,NPER,0,PV) =FV(9%,3,0,-100000) =129,502.90
!6
SAINTWORDS
Your achievement is ours
How actually the amount adds upto its Future Value?
0 9% 1 2 3 Years
Amount Today Amount after 1 yr Amount after 2 yrs Amount after 3 yrs
Rs 100,000 Rs 100,000 + 9% x Rs 100,000
Rs 109,000 + 9% x Rs 109,000
Rs 118,810 + 9% x Rs 118,810
=Rs 100,000 (1+9%)
=Rs 109,000 (1+9%)
=Rs 118,810 (1+9%)
=Rs 109,000 =Rs 118,810 =Rs 129,502.90
Sometime interests are payable monthly, quarterly, half-yearly or any
interval shorter than a year. In that case we need to do adjustments in
RATE and NPER
!7
SAINTWORDS
Your achievement is ours
2. If you invest Rs 1,00,000 today in an investment scheme how
much money will you get after 3 years?
The rate of return is 9% per annum payable half yearly.
Notice: Payable half yearly.
This means:
(1) Number of periods is 6 half years (Years x 2)
(2) Rate is 4.5% per half year (Rate / 2)
NPER
RATE (Half yrs) 6
0 4% 1 2 3 4 5
- Rs 100,000 Rs ?
PV FV
=FV(Rate%,NPER,0,PV) =FV(4.5%,6,0,-100000) =130,226.01
!8
SAINTWORDS
Your achievement is ours
Crores Planners Course (CPC)
Level 2:
Future Value of Annuity (SIP)
After the end of the session you will be able to work out, how much you
can make by investing a fixed amount at a certain interval of time in any
instrument like mutual fund or deposits.
(Estimation of future value of a systematic investment plan (SIP))
!9
SAINTWORDS
Your achievement is ours
1. If you invest Rs 120,000 every year in an investment scheme,
how much money will you get after 3 years? The investment
scheme is expected to give an annualised return of 9%.
This is an annual systematic investment plan (SIP)
The applicable spreadsheet function and working is as follows:
=FV(Rate%,NPER,PMT,0,1)
=FV(9%,3,-120000,0,1)
=428,775.48
Let me explain:
!10
SAINTWORDS
Your achievement is ours
First, the time line then cashflows
NPER
[Number of Periods]
0 9% RATE 1 2 3 Years
-Rs 120000 -Rs 120000 -Rs 120000 Rs ?
FV [Future Value]
PMT [Payment]
The right spreadsheet function to solve this problem is:
=FV(Rate%,NPER,PMT,0,1)
=FV(9%,3,-120000,0,1)
=428,775.48
How the calculation is done manually?
!11
SAINTWORDS
Your achievement is ours
How actually the amount adds upto its Future Value?
0 9% 1 2 3 Years
Amount Today Amount after 1 yr Amount after 2 yrs Amount after 3 yrs
Rs 120,000 Rs 120,000 Rs 120,000
+
+
Rs 120,000 (1+9%)
Rs 250,800 (1+9%)
Rs 393,372 (1+9%)
=Rs 250,800 =Rs 393,372.00 =Rs 428,775.48
Like lump-sum investments, in case of SIP also we need to adjust the RATE and
NPER if the instalments are paid at an interval shorter than a year like in monthly
SIP, quarterly SIP or half-yearly SIP.
!12
SAINTWORDS
Your achievement is ours
2. If you invest Rs 10,000 every month in a scheme how much money will
you get after 3 years? The investment scheme gives a return of 9% per
year payable monthly.
This is a monthly systematic investment plan or monthly SIP. So our periods are
months not year.
There are (3 x 12 =) 36 months. So NPER is 36
Rate of return is 9% per year. So, per month return is (9% / 12 =) 0.75%
NPER (Months)
RATE
0 0.75% 1 2 3 35 36
- Rs 10,000 - Rs 10,000 - Rs 10,000 - Rs 10,000 - Rs 10,000
PMT FV?
=FV(Rate%,NPER,PMT,0,1)
=FV(0.75%,36,-10000,0,1)
=414,613.61
!13
SAINTWORDS
Your achievement is ours
Crores Planners Course (CPC)
%
Level 3:
Return On Investment (ROI) Estimation
After completing the session you will be able to work out the return on any kind
$
of investments like lump-sum investment, SIP or irregular investment patterns.
You will be able to use different methods of calculating ROI like RATE, IRR &
XIRR
!14
SAINTWORDS
Your achievement is ours
5 Prime Elements of Investments:
NPER
0 RATE 1 2 3 35 36
CF CF CF CF CF
PMT
CF CF
PV FV
The 5 prime elements are : RATE%, NPER, PMT, PV, FV
RATE is the interest rate or return on investment (ROI)
If you know other elements, then you can find out the RATE using the following
spreadsheet function:
=RATE(NPER, PMT, PV, FV, 1)
!15
SAINTWORDS
Your achievement is ours
1. If you buy a bond (a kind of investment) that will give you Rs
100 per bond after 5 years and the current price is Rs 65 per
bond, then what will be the return on investment (ROI)?
The timeline:
NPER (Years)
0 RATE (?) 1 2 3 4 5
- Rs 65/- Rs 100
PV FV
In this case,
RATE = ?
NPER = 5
PMT = 0
PV = - 65
FV = 100
Spreadsheet function is:
=RATE(NPER,PMT,PV,FV,1) =RATE(5,0,-65,100,1) =9.00%
!16
SAINTWORDS
Your achievement is ours
2. You have been investing Rs 1,000 per month in an SIP for 5
years. After 5 years the value of your investment is Rs 84,400.
What is the return on investment (ROI)?
The timeline:
NPER (Months)
RATE
0 ? 1 2 3 59 60
- Rs 1,000 - Rs 1,000 - Rs 1,000 - Rs 1,000 - Rs 1,000
PMT
Rs 0 Rs 84,400
PV FV
In this case,
RATE = ?
NPER = 60
PMT = -1000
PV = 0
FV = 84400
Spreadsheet function is:
=RATE(NPER,PMT,PV,FV,1) =RATE(60,-1000,0,84400,1) =1.07%
Thus, ROI = 1.07% per month
= 1.07% x 12 = 12.84% per year
!17
SAINTWORDS
Your achievement is ours
3. Suppose you invest in a mutual fund in the following pattern:
1st year: Rs 100,000/-
2nd year: Rs 110,000/-
3rd year: Rs 90,000/-
4th year: Rs 120,000/-
5th Year: Ra 100,000/-
At the end of 5th year the value of your investment is Rs 775,000/-.
What is the ROI?
The timeline: NPER (Years)
0 RATE (?) 1 2 3 4 5
- Rs 100,000 -Rs 110,000 -Rs 90,000 -Rs 120,000 -Rs 100,000. Rs 775,000
FV
In this case there is no PMT, because cashflows are not uniform. So we can’t use RATE
function.
In this case, we use IRR (Internal Rate of Return) function as follows:
=IRR(CF1,CF2,CF3,………) However, in spreadsheet we need to give
the inputs in a different way.
!18
SAINTWORDS
Your achievement is ours
Calculating IRR using spreadsheet
B2
B7
=IRR(B2:B7)
Note that IRR can be used when periods are uniform, but cashflows are not
uniform. Cashflows can be +Ve, -Ve or zero.
!19
SAINTWORDS
Your achievement is ours
4. Consider, you have been investing in different shares. Some time
you invest, sometime you withdraw. You have been maintaining
your diary as follows:
10 Apr 2017: Rs 100,000/- Invest
15 Oct 2018: Rs 25,000/- Invest
05 Jun 2019: Rs 112,000 Invest
30 Mar 2020: Rs 125,000 Invest
20 Apr 2021: Rs 90,000/- Withdraw
12 Sep 2021: Rs 100,000/- Invest
On 31 Mar 2022 the value of your portfolio is Rs 692,850/-.
What is your ROI?
In this case time interval of cashflows are not uniform. So we can’t use IRR
function.
In such cases we use XIRR function, which is as follows:
=XIRR(CF1,CF2,CF3,………, Date1,Date2,Date3….)
Like in IRR, in XIRR also we need to give the inputs in a different way in
spreadsheet.
!20
SAINTWORDS
Your achievement is ours
Calculating XIRR using spreadsheet
B2
A2
A8 B8
=XIRR(B2:B8,A2:A8)
XIRR can be used when we know the date of each cashflow.
!21
SAINTWORDS
Your achievement is ours
Crores Planners Course (CPC)
Level 4:
Mutual Fund Return Optimisation
After completion of the level you will be able to explain different kinds of mutual
funds based on investments. And how different kind of mutual funds give
different kind of returns under different circumstances.
!22
SAINTWORDS
Your achievement is ours
• Mutual fund is the best investment instrument
for non-professional investors
• It is the most efficient product for financial
planning
• Mutual fund is a big subject and one should
devote more time and effort to master it
thoroughly
!23
SAINTWORDS
Your achievement is ours
• Mutual fund companies collect money from the investors and then
the entire pool of money is invested in different types of assets.
• For our personal finance purpose we focus on only mutual funds
that invest in shares, debts and money market
Equity Fund: Mutual funds that invest only in shares (also called equities)
Debt Fund: Mutual funds that invest only in debt markets like bonds and
debentures
Balanced or Hybrid Fund: Funds that invest both share and debt
markets
Money Market Fund: Funds that invest in money markets
From the above classification you can understand that to master mutual fund you
should have proper knowledge of shares, debt markets and money markets.
!24
SAINTWORDS
Your achievement is ours
• All mutual funds are good, but all mutual
funds are not good at all the time
• All fruits are good, but all fruits are not
good to eat at all the time
A huge majority of investors (estimated 90-98% in equity market)
lose money. This is because they don’t know when to buy which
asset class.
If you buy an equity mutual fund at very high valuation, then there is
very high risk. When there is very high risk, then there is very high
probability of losing money and vice versa
Price is different from valuation. Valuation of a share can be very
low even if the price is very high
!25
SAINTWORDS
Your achievement is ours
Equity Valuation & Risks
• Equity market, simply, is a market where shares
(understand as partnership) of companies are
traded.
• There are n number of methods to decide the right
value of a company.
• One simple method is P/E ratio or Price to Earning
ratio, where price is the price of the share and
earnings is the per share net profit of the company
!26
SAINTWORDS
Your achievement is ours
Equity Mutual Fund
• For non-professional investors we suggest to check only Nifty PE
ratio before buying equity fund
• Higher the PE higher the risk and vice versa
• Different types of equity mutual funds have different risk level
Equity Mutual Funds
Market Index Fund: Invest in index stocks. Moderate risk. Good when
market risk is moderate
Large Cap: Invest in large companies. Moderate to high risk. Good when
market risk is moderate to low
Mid Cap: Invests in medium sized companies. Higher risk. Good when
market risk is low
Small Cap: Invests in smaller companies. Very high risk. Good when
market risk is very low
!27
SAINTWORDS
Your achievement is ours
When equity valuation is very high, then we suggest people to
switch to debt funds
Debt funds are also risky, measured by duration, but they don’t
fluctuate as widely as equity funds
Depending upon return and risks you must decide whether you
want to go with equity or debt funds. Amongst equity or debt you
need to decide what kind of equity or debt funds.
Remember, if you want higher return then you should be ready to
take higher risks.
!28
SAINTWORDS
Your achievement is ours
Debt Valuation & Risks
• From mutual fund perspective, the major risk in debt
market is change in interest rate.
• When future value (maturity amount) and time period is
fixed, you enjoy higher return when you buy at lower price.
• Because of that fact, when interest rate goes up market
value of debt instruments goes down and vice versa.
• The price sensitivity of debts (including debt mutual funds)
to interest rate change is measured using Duration. That
indicates risk.
!29
SAINTWORDS
Your achievement is ours
Debt Mutual Fund
• One must look at the duration of a debt mutual fund before
investing
• Longer duration means higher sensitivity to interest rate
change implying higher risk.
• Longer duration funds normally give higher return given that
risk is also higher.
!30
SAINTWORDS
Your achievement is ours
Money Market Mutual Fund
• Money market is short-term debt market. The tenure of a money
market instrument is 365 days or less at the time of issue.
• Money market mutual funds have very short duration meaning
they are very safe with minimal fluctuation.
• They are also called liquid funds and they are very useful for
businessmen to park idle short-term cash.
!31
SAINTWORDS
Your achievement is ours
In October 2018 Saintwords was founded by Utpal KC to
transform people and organisations through training,
coaching and consultancy.
The name, ‘Saintwords’, came from Assamese word
‘Xadhukatha’. In Assamese ‘xadhu’ means a sage or
saint and ‘katha' means words. Assamese 'xadhukatha'
actually means fables or stories.
Since 2018 we have transformed many lives and
businesses that include 20,000 plus paid trainees.
Google rating: 4.9
Utpal KC
Utpal KC has been into the field of equity research &
investment banking since 1997. He served the
corporate in various capacities at leadership
positions from 1997 to 2016. Since 2016 he has been
training people on leadership, investment and
management.
Utpal authored books on finance and was featured
regularly in national and international media.
https://saintwords.com https://utpalkc.com
