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How education inflation can hurt a child's future?

How education inflation can hurt a child's future?

Inflation has been a buzzword globally since Covid19 pandemic was over. Almost every country has been witnessing high inflation, and some are seeing skyrocketing inflation in a few decades.   The rise in the price of cars, electronics, food, and fuel only reminds us how household goods and consumption items are becoming costlier. While discussing the fuel price has been all the rage, there are some items where inflation has been hovering around for quite some time and that too consistently.   This is nothing but Education. Unfortunately, this area needs to be spoken about more, as people are aloof about how it is not only making a hole in your pocket but also denting your aspiration.  Education inflation is the silent killer and is for real. But why is it so critical?  Because it can demolish the dreams of a brighter future when taken lightly. Here's an example that proves this powerful statement - Despite the pandemic, IITs increased their fees in 2021-22 from INR 90K to INR 200K. This is over 100%.   So, a financially unprepared parent will face the heat of the situation with their child for admission!   Why is education inflation scary?  Below is the list of different segments and inflation over the last ten years. Source: MOSPI, EduFund Research  The data highlights the reality that the rise in education costs has surpassed all other necessities and consumables in the last decade. This rise is partial because the government is looking to reduce funding grants. Additionally, there has been growth in living standards and services offered by the Educational Institutes and thus the premium.   In addition to headline educational expenses, many hidden costs hurt a parent. For instance, exam registration fees saw an approximate 6.7% hike last year. Additionally, transportation and student accommodation costs contribute significantly to the overall increase in education costs. And finally, food costs are another major contributor that needs to be highlighted while planning for higher Education.   Increasing tuition fees in India   College tuition fees in India have seen an enormous rise over the years. Here is some data on total course fees for specific courses that help paint a clearer picture of how fast the tuition fees have risen over the years.  Source: EduFund Research  The figures are staggering, and one of the main reasons students drop out of college midway. According to recent data, approximately 39% of students aged 20-24 drop out of college to help their family increase their household income. Therefore, it is becoming increasingly apparent that there is a need for proper education planning in India, as many parents need to be aware of the rising tuition fee and how to tackle it.   Education costs abroad on the rise  If you want to send your child abroad, the cost will be higher, and you must be prepared to shell out much more to pay.  But why?  Because, in addition to inflation or price hike, currency depreciation also hurts you.  So, even if the college abroad doesn't increase the fees, you will pay higher Indian Rupee terms because of the depreciating Rupee. And, if the colleges increase fees (which they have done every year), the cost increases further in Indian Rupees. Cost of Education in Indian Rupee when fees don't increase      Jan-22 Jan-23 Change (%) Fees USD 79,540 79,540 0% USD | INR Rs 74.51 82.74 11% Fees Rs Lakhs 59.3 65.8 11% Note: The Fees are considered for Princeton University (Undergraduate Admission). The Fees is for 2022-23 and include - Tuition: $57,410, Housing: $10,960, Food: $7,670, and Estimated Miscellaneous Expenses: $3,500.Source: https://admission.princeton.edu/   Fees in the United States increased to nearly 5x from what it was in 1985. The scenario is similar for destinations like the UK, Canada, and Australia.   Despite the pandemic, some universities abroad announced increasing the tuition fee for this academic year (2022-2023). The University of Pennsylvania announced a 2.9% increase in tuition fees, while Arizona State University announced that tuition fees would increase by 5% for international students. The international students at all three campuses of the University of Illinois are likely to see a 1.5 to 2.5% hike in their tuition fees.  How are you planning for your life's most considerable expense before retirement?  Unfortunately, the depth of the issue only hits you once you are close to paying for your child's college, which is one or two years before. And suddenly, you are left with only two choices- compromising on the quality of Education or opting for loans with a high-interest rate which eventually increases your overall cost of Education (after including the interest component on loan). Both decisions will have a significant impact on your child's future.   But you can avoid it. How?  You can avoid financial stress by saving early for your child's college. The sooner you begin investing in your child's education expenses, the more time you give your savings to grow. Here is an example of how you could create an education fund for your child by investing early:   Unit 5 yrs. 10 yrs. 15 yrs. SIP Rs/month 10,000 10,000 10,000 Annual Returns % Per Annum 15 15 15 Total Outflow Rs 6,00,000 12,00,000 18,00,000 Accumulated Amount Rs 8,96,817 27,86,573 67,68,631 Note: The returns here are hypothetical and do not guarantee performance. Source: EduFund Research Find the right investment tool that suits your educational goal and start investing to achieve the goal. If you are overwhelmed with the available options, seek a financial expert to help you with your education investments.  
Why is the market falling ahead of the budget?

Why is the market falling ahead of the budget?

Look at the market fluctuations as your friend rather than your enemy; Profit from folly rather than participate in it.” Warren Buffet Market falling or fluctuation is extremely common. The market (NIFTY50 Index) has corrected by 6.31% from its recent peak of 18350 (17th Jan 2022) to 17149 (25th Jan 2022) & 7.82% from its all-time high of 18604 (19th Oct 2021).  Market movement for 15 days before & after the budget  Decoding the charts The EduFund Research Team has performed the study to determine the reason for the recent fall in the markets and here’s what they came up with.  Reasons for the fall Tightening of monetary policy by the US Fed department  Lower than expected results of major corporates  Tension on the borders of Ukraine-Russia  How the fall affects you?  According to Nifty50’s data for the past 2 years, we can see that the market has fallen by 6.56% in 2020 and 7.83% in 2021, just before the budget. And after these falls, the market rebounded 5.32% & 13.49% in 2019 & 2020 - in a short time frame from the correction.  This means that there is actually no need to be worried about the fall in the market. After the budget, we could see a positive movement in the market.  We believe such correction/volatility in the market is a great time for long-term investors.  Make the most of the recent market fluctuations  These short-term market fluctuations and volatility actually provide a good entry point in an otherwise rising market.   Also, if you are an investor investing through the SIP route, you should not panic about these volatile situations. Instead, let the rupee cost averaging work in your favor by topping up a lump sum during this time. India is currently trading at a PE of 24.84 (Median – 20.45).  Take a look at some of the top funds you can invest in Fund Name Category Annualized Returns (3-Years) Risk ICICI Prudential Corporate Bond Direct-Growth Corporate Bond 8.19% Low Tata Hybrid Equity Direct Growth Hybrid 15.28% Average Mirae Asset Large-cap Fund Direct-Growth Large-cap 18.61% Moderately High DSP Flexi-cap Fund Direct Growth Flexi-Cap 23.02% High  FAQs What is the reason of market going down? Tightening of monetary policy by the US Fed department  Lower than expected results of major corporates  Tension on the borders of Ukraine-Russia How the fall affects you?  According to Nifty50’s data for the past 2 years, we can see that the market has fallen by 6.56% in 2020 and 7.83% in 2021, just before the budget. And after these falls, the market rebounded 5.32% & 13.49% in 2019 & 2020 - in a short time frame from the correction. Should you stop your investments during market fluctuations? Yes, it is important to check on your investments when market fluctuates but stopping and/or pausing depends on the type of investment and the effect of the market on the industry. Consult your financial advisor before making changes to your portfolio. Consult an expert advisor to get the right plan TALK TO AN EXPERT
What is the value of 30 lakhs after 20 years?

What is the value of 30 lakhs after 20 years?

Surprisingly, due to inflation, INR 30 lakh in 2001 is only worth roughly INR 8.1 lakhs now. This indicates that because inflation occurs on top of inflation from the previous year, the result is exactly like compound interest. In this article, we'll look at the causes of this as well as what $30 lakh will be worth in 20 years. What is the value of 30 lakhs after 20 years? Simply put, 20 years ago, you could have purchased a lot more with 30 lakh rupees than you can now. As a result, even if you were to save for 15, 20, or 30 years and eventually be able to buy 30 lakh rupees or more, its actual worth would be far smaller. With today's inflation rate of 6%, it would be equivalent to Rs 9.35 lakh. As a result, at 6% inflation, if you wanted Rs. 30 lakhs in 20 years, you might get Rs. 9.35 lakh now. If nominal inflation were assumed to be 6%, this amount would increase to Rs 96.21 lakh. Therefore, in 20 years, the demand of 30 lakhs will be Rs 96.21 lakh. The solution is to save money that is inflation-adjusted. To establish the requirements for it, you must first inflate the cost of the aim. Start a SIP after that to begin saving for the inflated goal cost. Additional read: Value of 1 lakh after 20 years How can SIP make you rich? Long-term equity investments may be made via SIP. You may use it to consistently invest a little amount in mutual funds without trying to time the market. To build wealth, it would be good if you continued to make SIPs during both bull and down market times. Let's look at an illustration of how SIP might result in financial success. Consider making a monthly investment of INR 10,000 in an equities fund. If you invest just INR 10,000 per month through a SIP in an equities fund for 30 years, you might amass a corpus of INR 3.53 crore. Compounding power makes money grow and makes you richer. You must start saving early so that you may continue to do so throughout your working life if you want to build up a sizeable corpus for retirement. Please be advised that we expect the equities fund to yield an average of 12%. Actual outcomes might be impacted by the markets and the fund. What is inflation? Sometimes the amount of inflation is expressed in general terms, such as the overall rise in prices or the rise in the cost of living across the board. For some goods, like food, or services, like haircuts or travel costs, it may be calculated more accurately. Inflation is a measurement of how much a certain set of goods and services have increased in price over time, independent of the context. You should anticipate paying more for the same goods and services this year than you did last year due to inflationary pressure. If you owned the stocks or homes before the price increase, you may have benefited. But if your salary does not increase at the same rate as inflation, your purchasing power will decline. Your cost of living rises over time due to inflation, which can also have a negative impact on the economy if it is severe enough. High inflation has far-reaching repercussions on a country's economy. How to overcome inflation? The government attempts to control inflation via monetary and fiscal policies. You should, however, have a plan of your own to guard against it. The main reason people invest is so they can continue to live well in the future despite an increase in the cost of living. You must thus make investment decisions that will allow you to generate returns that outpace inflation. These investments do, however, involve a greater level of risk than traditional savings accounts. High-growth potential investments like stocks and mutual funds stand a good opportunity of generating better returns. These investments have frequently produced returns that have outpaced inflation.  You could also take into account other investment options to diversify your wealth. Money should also be invested rather than kept in savings accounts. Investors may consider buying stocks depending on how much risk they can tolerate. Investing in mutual funds has the potential to yield significant rewards in the long run. How to secure yourself and your family's future If you want to save money for your post-retirement lifestyle, you need to be more strategic and careful. You must consider the possibility of living past your anticipated retirement age as well as fluctuations in interest rates in addition to inflation. Your objectives should be reviewed and reevaluated. Working with real numbers is required. If you have questions regarding where to invest or how to do so, you may consult with financial specialists at EduFund. You may help your children achieve their goals by utilizing EduFund to invest your money. To schedule a free consultation call with the experts, download the EduFund app to your mobile. Parents may begin saving for their child's college education early on to avoid having their child's promising future wrecked by education inflation. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Benefits of Digital Gold

Benefits of Digital Gold

What is digital gold? What are the benefits of Digital Gold as an investment? How is it better than buying traditional gold? Digital Gold refers to the process of buying and investing in gold virtually. You can do all of this online; there is no need to go to a jewelry store. It’s the more suitable way of buying gold.  Investors who want to sell or buy gold can do it without any problems with one click. The minimum cost of buying or selling gold can be as low as Rs 1. Benefits of investing in Digital Gold  Safe storage: The best benefit is its hassle-free and secure storage, which can be guaranteed. The gold you buy will be stored in a secured vault.  The minimum limit for buying or selling gold: There’s no limit on buying costs. The minimum cost can be as low as Rs 1. The person who buys the gold will have it registered under his name.  Collateral: If you are looking to take out a loan, then you can keep the digital gold as collateral for the loan.  Authenticity: Virtually all gold bought today is 24 karats, and that’s why it’s 99.99% pure. The chances of fraud are low.  Easy exchange: Another advantage is that digital gold can be exchanged anywhere, anytime, for physical gold or coins.  Gifts: It can be the perfect gift for someone’s wedding or birthday day. You can gift anyone the digital gold you brought without worrying about its safety and physical transfer. Disadvantages of digital gold  The price at which you have invested doesn’t increase. It doesn’t increase your invested money.  There’s a maximum amount in which you can invest, which is Rs 2 lakh.  Even though when buying digital gold, you don’t need to pay making charges, you still have to pay 3% GST with it.  There is no regulation by SBI or SEBI.  Who should buy digital gold?  Anyone who cannot buy physical gold or cannot invest large sums of money at once can choose digital gold.  You can buy digital goods without worrying about their safety. You can buy digital gold in the Edufund app too. Link for the app (URL)  You can buy digital gold from any other source too.  Digital gold can be bought and sold anytime at market price without going to a jewelry shop.  You can buy other types of digital gold, such as gold bonds or ETFs. This is the best way to invest in gold.  Indians are in the second position in terms of buying gold. More than 100 million consumers own digital gold. FAQ Is investing in digital gold worth it?  Buying and storing digital gold makes it much easier, more useful, and more secure than buying physical gold How long can I not sell my digital gold?  Five years. Is there GST on digital gold?  There is a 3% GST on digital gold.Digital gold can be a good option for those who want to start their investment journey but are not ready to invest too much. One of the best benefits of digital gold is the flexibility and convenience of buying and selling Consult an expert advisor to get the right plan TALK TO AN EXPERT
How to invest in Digital Gold?

How to invest in Digital Gold?

Digital Gold is a great way to invest in gold without having to block large sums of capital that you need when investing in physical gold. It is easy to invest in, easy to store, and easy to sell when you want your money back.  Investing in gold as an asset class has been a key factor in traditional portfolios. But the rising gold prices have made the minimum investment in this asset class quite steep. This is one of the reasons why many young investors are unable to invest in this class. Why invest in Digital Gold?  Here are some benefits of investing in digital gold:   Invest in small amounts and quantitiesKept safe in secured lockersEasy to buy, sell, monitorAll investment details on one screenDigiGold investing at the click of a button Start investing small amounts today Today one gram of gold costs around Rs. 5200. Of course, with gold prices constantly rising, it becomes challenging for investors to put in huge blocks of money required today to purchase even 10 gms of gold. To help investors continue investing limited funds in this precious commodity, Digital Gold is a great alternative.  You can start by investing Rs.100 or more every month and increase the amount whenever you want.   Buy according to value or weight With the Digital Gold option, you can instantly buy DigiGold from Rs. 10 onwards. You can choose to buy DigiGold by its value in rupees or define the quantity in gms. You also get to see the live rate of gold, which refreshes every 5 minutes. Selling digital gold is also easy and hassle-free. Click here to start your digital gold investment! Additional read: Invest in the Metaverse Why invest in Digital Gold on the EduFund App? EduFund allows you to buy and sell digital gold from the comfort of your home. All you need to do is download the App and start saving in gold at just Rs. 10!  You can also get amazing offers and rewards.   1. User- Friendly interface The EduFund DigiGold interface is extremely simple to understand and easy to manage and navigate. On a single screen, you get to see the amount invested, the current value of your investment, and the % returns on the same. You can also check the quantity of gold you hold in your locker. 2. Stored safely for you The DigiGold you purchase is kept safe in secured lockers at no extra cost to you. And you can buy and sell this gold easily from the convenience of your app, simply at the click of a button. So there are no certificates to maintain, and no worry about the purity of your gold, as all DigiGold traded on this app is 99.9% purity certified. You can check on your investments regularly and if you decide to sell your DigiGold, your physical assets will be liquidated and you will get your money in less than 48 hours. That is as quick as selling your mutual fund holdings! Consult an expert advisor to get the right plan TALK TO AN EXPERT
Navi Mutual Fund Skyscraper Returns | Educase

Navi Mutual Fund Skyscraper Returns | Educase

Every investor is looking for a well-diversified portfolio. But due to a lack of knowledge, investors can't do it themselves.  Here, EduFund comes in to solve your problem at no extra cost. How? Let's find out in this blog Why Educase? There are different educases to meet the requirement of every level of investor. Every educase is made with proper diversification and the right asset allocation. For aggressive risk or long-term category of investors, the exposure is more in the equity asset class to provide good returns and for an investor with a short-term view (6 months), the exposure is more in the debt asset class. So, these educases meet the requirement of every investor. What is Navi Skyscraper Returns Educase? Navi Educase is a pack of multiple equity mutual funds investing across market capitalization and sectors, with most of the Index funds. Navi Skyscraper Returns is an aggressive risk category educase that invests your money in equity funds having high growth potential. This educase comes up with relatively low volatility and stable returns because this educase invests majorly in Index funds. Additional read: What are educases? Why Navi Skyscraper Returns Educase? It provides you with a well-diversified portfolio from a wide range of large, mid, and small-cap companies at a very low cost with the benefit of annual rebalancing. The past data on educases has been back-tested before implementation. The strategy behind Aggressive Educase This educase is designed in such a way that it beats inflation and helps you to create wealth over a long-term period. Index funds have been given more weightage to provide consistency in returns and match the market returns. Who should invest in? Early parents who have just started savings for their toddlers and have more than 7 years to save. Since the educase only consists of equity funds, the returns may not be seen in a shorter period, but in a longer period, returns will be more than average. Advantages No extra cost - There is no hidden or extra cost being charged to invest in educase. Annual rebalancing - All the Navi educases are rebalanced annually if required.  Continuous monitoring - Navi educases are tracked and monitored continuously. Lowest expense ratio – Navi as an AMC (Asset Management Company) offers the lowest expense ratio in the industry. So this educase has the lowest expense ratio because of the Index fund. Experienced Research Team – EduFund research team has a total experience of more than 35 years collectively. Due Diligence – Educases are made after proper research and due diligence is done by EduFund research team. How can you invest in Navi Educase? The process is simple and paperless: Download the EduFund app from the apple store or android play store. Complete the KYC process. Calculate your risk appetite. Explore the Navi Educase under Educases. And place your order. Consult an expert advisor to get the right plan TALK TO AN EXPERT
Ultimate guide: Financial mistakes you are making as a parent

Ultimate guide: Financial mistakes you are making as a parent

It's crucial to raise children and make plans for their future. However, it may be difficult to balance a family's requirements and aspirations with considerations like savings, pensions, and budget. In this blog, we will address the financial mistakes you are making as a parent. 1. Not tracking finances It is challenging to set aside money at the end of each month due to the escalating costs. However, surviving paycheck to paycheck is a bad idea and might lead to debt. Drawing up a budget and keeping track of income and spending at the end of each month is the best course of action for young families. Apps may help you analyze and restructure your family budget so you can cut out wasteful spending.  Your children should be taught that spending what is left over after saving is more essential than saving what is left over after spending. 2. Not building a safety net For new parents, creating an emergency fund must be a top financial priority. You must plan ahead to create a financial safety net in case of job loss, a medical emergency, house repairs, or a family disaster. Depending on the number of income earners, save enough money to meet your costs for three to six months.  Investing in a savings and investments plan, which provides several opportunities for financial growth, is an excellent method to protect your family. You may speak with our specialists at  EduFund if you're unsure about where or how to invest. Install the EduFund app on your device to book a free consultation call with the experts. 3. Not saving for your child's education The worst parenting blunder would be being unable to support your child's education. No matter how young your child is, it is always preferable to begin saving for their education as soon as possible.  Saving for their future will snowball the longer you put it off. Additionally, the high levels of non-performing assets serve as the primary explanation for the collapse (NPAs). Therefore, it is suggested that you begin saving for your child's higher education as soon as your child is born in order to avoid any last-minute trouble. 4. Not teaching your children about money As vital as educating your kids to read and write is to teach them financial literacy. Parents who don't invest time in their kids' financial education might suffer serious repercussions on the road. By regularly talking to your kids about money, you may prevent them from making this money error. You can begin by demonstrating how to establish a budget for them and letting them make a monthly budget on their own. This will assist them in learning how to save money and achieve their financial objectives. 5. Not having a retirement plan All parents frequently engage in this behavior, and practically all parents in India are no exception. All of your material decisions, especially those involving money, revolve around your children as soon as they enter your life.  However, it would be beneficial if you kept in mind to save away money for the future. Retirement savings issues may arise if you don't start saving now. It is not a good idea to rely on your children to support you as you age since it may put an additional financial strain on them.  Therefore, it is advised to begin setting aside money in a retirement or pension plan at a young age that will enable you to maintain your financial independence after retirement. In addition to this, contributing money to a retirement plan enables you to accumulate a corpus and protect your finances from unanticipated financial hazards. 6. Using your kids as an excuse for lifestyle inflation Children should not be a justification for living a lavish lifestyle. Some parents may use having children as a justification to rent or purchase a home that they are unable to afford comfortably. Even if there are more affordable options available, some parents may still decide to enroll their kids in pricey private schools in the belief that they would receive a better education.  There is absolutely nothing wrong with wanting to provide your kids with the greatest education and upbringing possible. The issue arises when you spend more than you can afford to, leaving you with a little left over to save and invest for the future or retirement. Many parents make common financial blunders, maybe out of a desire to give their children the best possible living. It's quite simple to commit all or some of the financial blunders listed above when being a parent, trying to balance paying the bills, providing for your family, saving money, and investing. The good news is that you can fix these mistakes and go forward in life with better and more stable financial foundations.  Consult an expert advisor to get the right plan TALK TO AN EXPERT
5 financial things to consider before child planning.

5 financial things to consider before child planning.

Both life and wallet will never be the same once you decide to have a baby. No event in your life will signify financial change quite the way this one does, from the first prenatal appointment to the day of their college graduation (and beyond). 5 financial things to consider before child planning 1. Create a budget Before you start child planning, you need to have a budget in place. You and your partner may need to create a realistic budget based on your expenses and your streams of income. Once you know how much you can afford to spend, you will be able to tackle the costs easily. A new child is a new family member that needs space! So if you need extra space once the baby is born, figure out what kind of home you can afford, whether it's a slightly larger apartment, a warm cottage, or a pricey house. Will you want the latest baby things or your sister’s passed-on ones? Think about what sort of child care would you require and get candid with your expenses before you start making any purchases. 2. Costs associated with birth As new parents, you need prenatal vitamins, alternative therapies, labor and delivery alternatives, and screening tests. Give yourself enough time to change or upgrade insurance plans should you need more comprehensive coverage. Good health insurance is vital in this economy. Hospital bills, medical fees, and maternity costs can be high. According to estimates from the industry, a straightforward delivery could cost between Rs 50,000 and Rs 70,000, but a private specialty hospital could charge up to Rs 2-3 lakh. A cesarean delivery could result in a cost rise of up to Rs 4-5 lakh. Before having a kid, you should make financial arrangements for the costs associated with the delivery and child care. 3. Consider maternity leave The vast majority of Indian employees are not entitled to paid family leave. If the mother is employed, you might need to think about taking a lengthier (unpaid) maternity leave or a sabbatical for a year or two. This can be a huge financial loss for families that rely on both streams of income. Paid parental leave is not always an option. Find out if your workplace offers paid leave for new parents and if there are any policies in your favor that you can utilize. Determine the number of weeks covered and the proportion of your salary that is used. Do you have to use your sick and vacation days first? If you don't have access to paid time off or you're going to take more unpaid time off, you might want to cut costs or rely on your savings. Additional read: Money management tips for homemakers 4. Purchase life and health insurance You'll want your child to be stable financially if something were to happen to you or your partner. A life insurance policy can assist pay for things like child care, housekeeping, cooking, and more. Purchasing maternity insurance is the first action you can take to cover maternity costs. When purchasing health insurance, (even for a couple), it is important to confirm that the policy includes coverage for maternity costs and, if applicable, any applicable waiting periods. Additionally, by paying a larger rate, you might add pregnancy coverage to a current insurance policy. Buying health insurance is most important when considering having a child. Get your health covered in your plan so that you are not financially burdened in case of a health emergency. 5. Plan for child’s education Just like the prices of lemons and oranges are growing, the cost of education is skyrocketing. Saving for your child’s college is a necessity. When it comes to saving money for college, time and compound interest are your best friends. Even while inflation is an unavoidable fact, keep in mind that education inflation is far higher. Utilizing the force of compounding is one approach to combat this, but it will only be effective if you have a long-term strategy in place. You indeed have no idea what career path your child will take, but you still need to put aside a portion of capital that can be utilized when the time comes. Right now, you need to think about the type of education you would like to offer because the practical costs of studying engineering in India vs the US would be very different. From giving birth to seeing them off to college, watching your child grow and thrive is every parent’s dream! So give those dreams wings by planning ahead and investing for their bright future!  Consult an expert advisor to get the right plan TALK TO AN EXPERT
What are the components of financial planning?

What are the components of financial planning?

There are various methods to choose from when it comes to developing a financial plan, but the proper plan needs a few components, regardless of the process utilized for creating it. Here are the eight kinds of components for financial planning.   1. Your net worth statement  Every financial plan demands a baseline. So, it is worthwhile to determine the net worth before finding a financial plan. Make sure to note down all the assets and debts. This will include investment accounts, bank accounts, valuable personal property, real estate, mortgages, student loans, and credit cards.   Make sure to deduct your liabilities from your assets to find your net worth. If you find that your liabilities are outweighing the assets, make sure to not be discouraged because when people are starting to establish a solid financial plan, it is something that happens. So, it needs to be considered when looking for the components of financial planning.   2. Financial goals  You cannot consider making a financial plan until you understand what you are going to do with your money. Your plan needs to begin with a complete list of goals, both small and big.   A proper list can help you organize all the goals. Be aware that your short-term goals will be those that you are hoping to achieve in the next 2-5 years. When it comes to medium-term goals, those are the ones that you want to achieve in the next 7-8 years. Finally, your long-term goals will be those that you want to achieve in the next 10 to 50 years. Listing down financial goals is one of the primary components of financial planning.   3. Debt management  Having a debt management strategy is something that can help you reach your financial goals. If there is high-interest debt, ensure creating a strategy that can assist you to pay them quickly. You can also hire a financial professional advisor if you are not certain about where to begin. They will help you determine the amount from your budget that should be spent on the debts every month.   4. Cash flow and budget planning  Your budget assists you to find out where all your money is going and it helps you cut back to meet your goals. You can make use of a proper budget calculator to be sure that you do not ignore the important expenses. While jotting down your list, make sure to separate the expenses into two categories when considering the components of financial planning.   One category will have must-have items and the other will have luxury items. When you are considering how the financial goals will fit within the budget, make sure to consider all your expenses. You can also take the help of any advisor that offers procedures and tips that enable you to adjust particular assumptions to check how they would affect the savings plan.   5. Retirement plan  You are going to need 80% of the income you're earning today in your retirement. But, you can also assume that retirement can free you from taxes and other work-related expenses. You must consider that medical insurance does not cover everything. You need to keep those expenses under long-term health care expenses. Make use of a savings calculator for your retirement to help you understand what you might require during your retirement period.   6. Insurance coverage  Insurance refers to an integral part of safeguarding your financial downside. Disability insurance, health insurance, life insurance, and home insurance are some of them. When it comes to life insurance, it is a good concept for people having dependents. Make sure to talk to an insurance professional to acknowledge what kind of coverage works best for you.   When it comes to disability insurance, just like the components of financial planning, it safeguards you and your family when you are not able to work. It replaces approximately 60% of your monthly salary. If you have a home or a car and you cannot afford to pay the entire bill from your pocket, ensure that you have adequate protection. The same is true with health insurance which can get you back thousands of money during a severe injury.   Wrapping Up  These components of financial planning are growing effectively to confirm that the present plans in your life are in a positive direction.   In a nutshell, you need to -  Keep a regular check on your enrolled plans, mutual fund, and assets;  Analyze your essential expense; Cut down excess expenses for your future investment to be more structured; Optimize your goals.   So, follow the above-mentioned components of financial planning to make your financial goals realistic as well as achievable. It is one of the best and workable ways to help take a step toward your financial goals. Consult an expert advisor to get the right plan for you  TALK TO AN EXPERT
What is inflation? And how does it affect us?

What is inflation? And how does it affect us?

In the previous article, we read about how to save your child from the student debt trap? In this article, we will read what is inflation and how does it affect us? According to International Monetary Fund (IMF), "Inflation is the rate of increase in prices over a given period.   What is inflation? Inflation is typically a broad measure, such as the overall increase in prices or the increase in the cost of living in a country. But it can also be more narrowly calculated for certain goods, such as food, or services, such as a haircut or travel cost.   Whatever the context, inflation represents how prices of the relevant set of goods and services have increased over a certain period.   Inflationary pressure suggests that you will have to pay more for the same goods and services this year compared to last year. If you possess the assets before the price rise, such as homes and stocks, this can help you.   But if your income does not keep up with Inflation, your purchasing power diminishes. Inflation raises your cost of living over time, and it can be harmful to the economy if it is high enough.  High Inflation has far-reaching consequences for a country's economy. Let us see some ways how inflation affects us Erodes purchasing power Inflation causes a decrease in purchasing power of your currency due to a rise in prices across the economy. With the increase in the general price level (without an equivalent rise in your income), your ability to purchase goods with the given money decreases.  Causes more inflation When Inflation is stepping in, people tend to buy more stuff in the anticipation that the prices will rise further in the future. So, this desire to spend produces a potentially disastrous loop in the face of this desire to spend.   People and businesses are spending faster and more to limit the amount of time they hold their deteriorating money, resulting in an abundance of cash that no one wants.   In other words, the supply of money exceeds the demand, causing the price of money and the purchasing power of currency to fall at an increasing rate.   People grow frantic to get rid of their money, so every payday becomes a frenzy of spending on anything that isn't becoming increasingly worthless.  Lowers the cost of borrowing When a business borrows money, it may pay back the cash it received with the cash it earns later. The basic rule of Inflation says that the value of a currency tends to decline over time.   So, in other words, the cash now is worth more than the cash in the future. Thus, Inflation lets debtors pay lenders back with money worth less than when they originally borrowed it.   Inflation and the cost of living The cost of living rises when prices rise. People have less money to meet their responsibilities if they spend more money to live (assuming their incomes haven't increased).   People's purchasing power falls due to rising costs and stagnant income. As a result, consumers may require more time to repay earlier loans, allowing lenders to collect interest for a longer time.   Also, it is worth noting that some inflation is good for the economy. In its mild form, inflation has a positive effect as well. People who anticipate inflation are more likely to spend now rather than later since they know prices will rise in the future. Consumer spending is the engine that propels economic growth forward.  As general consumers in the economy, to beat the brunt of inflation, we need to keep our money in safe assets and as little as possible in terms of cash. If we keep our money in assets that provide higher returns than the inflation rate, our money will grow over time. Consult an expert advisor to know the right plan for you  TALK TO AN EXPERT
What investors can look forward to in 2023?

What investors can look forward to in 2023?

As the festivities of the year-end begin, the world of finance is going to look back at this year as one that brought hordes of new investors, one that witnessed rapid recovery from the pandemic, and one that renewed the investor’s sense of optimism in the markets.   The markets have hit all-time highs this year and it is natural to wonder what is to be expected of the new year. In this article, we dive into the trends that might continue, and some that might fade away.   1. Another year of the bulls?  The markets might have recovered well from the historical lows of the pandemic but the supply chains are still yet to function at a hundred. In the new year, companies around the world would look at consolidating their supply chains and getting back to leaner ways.  The profitability that took a hit for most companies due to their logistical inability to meet demand, would likely get back on track with most of the world opening back up. And if there is one thing that drives a bull run, it is profits and dividends.   2. New investors this new year   According to the NSE, over 5 million new investors registered on its platform since April of this year. This is partly to be credited to the emerging platforms that have made investing accessible to the common man. Another key factor has been the educational efforts from various agencies to bring the markets to the people.   For India, it is a bright sign of advancement as more capital is being poured into the equities market by newer investors. This is a trend that we might see more of in the coming year and thankfully so.   3. The focus on goal-based investing   A rising trend among Indian investors has been goal-based investing. For some, the goal is long-term like their retirement, for others, it is medium-term goals like housing and education.   With EduFund, our education-focused investment platform, we’ve seen more and more parents starting an education fund to beat the rising education inflation worldwide. It has been through SIPs, where they set aside a small sum each month to generate that education corpus for their children.   As is with any action, with a purposeful goal, investing too becomes easier. This trend might be here to stay for the next year and beyond.  4. The Web 3.0 phenomenon  It does seem like an eternity ago when investment vehicles were limited. Today, the number of options available for investment is nearly countless, with new ones emerging every passing day.   From NFTs and the Metaverse to cryptocurrency and other resultant products of Web 3.0, the investor of today is exposed to many newer options. Naturally, the volatility of these untested waters is a concern. It is surely wise to restrict these investments to a small percentage of your portfolio, and stick to the tried and tested regulated markets.   Nevertheless, the coming year is sure to see more capital poured into channels emerging from Web 3.0.   5. The Internet educators   If India has to see a large percentage of its population participating in the markets, content creators creating shorts, reels, slides and long-form videos are going to play a key role.   A delightful addition to the financial realm this year has been internet content creators who have been making exceptional content on finance and educating the young and old. This wave of creators has seen their following and influence increase and the coming year is sure to see more creators emerging and driving educated decisions from investors.  Conclusion   Timing the markets is an art form that hasn’t been mastered yet. Wise investors are ones that are disciplined and invest regularly despite market ups and downs. The all-time highs are going to be sooner or later surpassed, and that’s us counting on India and its vast potential - this year, this coming year, this decade and beyond.   FAQs What are some best investment options for 2023? Some of the top investment options for the year 2023 are S&P 500 Index Funds, real estate, Dividend Stock Funds, mutual funds, cryptocurrency, High-yield Savings Accounts, etc. What will the stock market be like in 2023? Although the performance of the stock market varies highly due to various factors, most of the stock market forecasts have predicted a moderate improvement for the year 2023. Which sector is expected to boom in 2023? For the year 2023, the govt. is focused on the following sectors - capital goods, manufacturing, defense, railways, sustainability, and public sector banks.
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