ByTheRupee - Personal Finance Show

Darshan
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Discover the path to financial freedom. Money traded for time, which is a definite resource everyone has. Together, we shall make a better decision with Time and Money, where I will share with you the path to chose and pitfalls to avoid thus giving you better control over time, bringing happiness to you and your family. For more info,please visit www.bytherupee.com

  1. 07/24/2021

    Episode 14: Financial planning for children

    How do you plan all the financial needs like paying for graduation, post-graduation or even marriage? How do you give financial education to your children? As a base rule, I shall take three mandatory things are taken care of : Emergency Fund - 6 months of monthly expenditure. Term & Health Insurance - to protect your family in case of unforeseen circumstances. Health insurance - for medical expenditure for you & family. Retirement Funds - you started planning and investing for your retirement. We shall approach this in two stages : How do you provide Financial education for children How do you invest for the Financial Needs for the future. Let’s see what are the ways to provide Financial education: Piggy Bank or Gullak: If kids are at age of 3-4, give them the piggy bank and teach them how to use it. Every week give a small amount and tech them to add in a piggy bank. This will help them to cultivate the habit of saving. Value of money:  Teach them the effort it takes to generate wealth. Give them the house chores at end of the chore give a small amount. With that, they will value time and money relation. This will also teach them to value the money and will not blow it on fancy toys. Pocket Money: As kids mature, they demand pocket money. Do not deny it. Give it with a cation that it’s limited to one month or one week and if they exhaust it they will not get more. This method will help them to understand budgeting and will allocate money for different needs. Talk about Money: Over dinner talk about money matters. Share information about money, savings and budgeting. Teach them how you budget monthly expenditure. If you are planning for a vacation teach them how you plan your budget on hotel stays, fuel and travel. With this, they will know money management skills and budgeting. Reading: Give them books on finance specially designed for the age group. With this, they will upgrade themself to the knowledge about money, savings and investments. Let’s talk about the tools for financial Investment : 1. PPF:  PPF is a govt back investment scheme started more than 50 years ago. And currently, the interest rate is 7.1% as of May 2021. It has a lock-in period of 15 years. This is a perfect time for the educational needs of your kids.   I have talked about the PPFin detail in my other episode/video/blog post - Do watch it. Link in description. 2. SSY: If you have a girl kid under 10 year, you can open a SSY account in the post office or any major bank. This is also similar to the PPF account, backed by the Govt of India and currently, the interest rate is about 7.6%. It has a lock-in period of 21 years and the maturity amount is tax-free which can be used for marriage or higher education. 3. SIP / Mutual Funds:  If you are comfortable with the stocks market then start a SIP as low as  500/monthly. The investment in mutual funds can beat inflation and provide better returns at 8-12% over the long run. If you are interested in opening an account, I have links in the description. It’s always to start the investment as early as possible in fact you can open these accounts on the day of the birth or max at 1 year, so that time and compounding can work in your favour. Take these steps as soon as 3 points of - emergency funds, term + health insurance & retirement planning is done. Good luck with your preparation.

    7 min

  2. 07/17/2021

    Episode 13: Opening SSY account in Post offices or in Banks

    Give financial freedom to your daughter with Sukanya Samruddi account and empower her to achieve her goals.  The Sukanya Samriddhi Yojana or  SSY  is a small savings scheme backed by the Government of India exclusively for the girl child as a part of “Beti Bachao, Beti Padhao Yojana” was launched in 2015. Parents or the legal guardian can open upto two such accounts for their daughters in the family. The total tenure of this scheme is 21 years, of which 15 years of investment and 6 years of cooling period. In the Cooling-off period you need not make any investment, just wait for the investment to compound and give a better corpus. An SSY account also offers income tax benefits by way of deductions under Section 80C for up to Rs 1.5 lakh. The maximum age you can open an account for the girl child is 10 years. As soon as a girl child attains the age of 18, partial withdraw can be done for the purpose of marriage or higher education. The investment amount is very minimal at 250 rupees/year. The SSY model is preferred across India and especially beneficial for rural India so that the financial needs of the girl child can be taken care of. To open an account in the post office here is the process : Fill up the application form with your post office account details. This form to be addressed to PostMaster of that branch. Select SSA account in Account type and enter the details of the girl child. Make the minimum payment of 250. Provide Birth Certificate of girl child (mandatory) Identity proof (as per RBI KYC guidelines) Residence proof (as per RBI KYC guidelines) 2 photograph of the girl child. You can also open SSY account in major banks such as HDFC, ICICI, SBI and other banks. Fill out the SSY Account opening form Keep the documents ready such as birth certificate, aadhar card, address proof along with photographs. Pay the initial deposit amount of 250 You can give a standing instruction at the branch or you can set up automatic credit to SSY Account online. Make sure the SSY account is activated before setting up a standing instruction. SSY investment provides more returns than other small savings scheme and backed by the govt of India. The interest rate is fixed every quarter and the amount compounded yearly. This scheme is strictly regulated for the welfare of the girl child to provide financial stability in future. The maturity amount is under EEE category here one thing you need to understand is final amount is tax-free.

    8 min

  3. 07/10/2021

    Episode 12: Opening Savings account for minors in 2021

    Everyone needs a place to keep their savings it can be in a piggy bank or in a saving account. Today we will see how we can open an account for your kids and give them financial education. About 80% population have a savings account where you park your hard-earned money. If you are one of the parents who want to teach their children the importance of financial literacy, the first step is opening an account in their name.You can open an account for your children as a parent or legal guardian. The age of kids doesn’t matter here as you can open an account from the zeroth day of their birth as long as you have documentation such as a birth certificate with kids’ name. As soon as they attain the age of 18, the status of a minor account should be converted to a normal account with full-fledged features. Several top banks offer exclusive Savings Account for Minors, such as SBI, HDFC Bank, ICICI Bank, Kotak Bank, and others. This account is specifically made for minors and also offers a wide range of benefits like a Debit Card, Cheque Book. The minor account with tied with the parent or guardian account and you can monitor any kinds of transactions. These banks provide more or less the same features with zero opening balance or with the lowest average monthly balance. One thing to note is, always open an account for the minors where you have an account so that you get the majority of benefits. For Example: If you have an account in HDFC, open the minor savings account in HDFC so that your KYC is already taken care of, and it’s only a matter of linking the minor account to your account. Save time and hassle of opening multiple accounts in various banks. Let’s see what documents you need to open an account for your kids. But before that… Do check out www.bytherupee.com for more articles and podcasts on personal finance. Let’s dive back to the documentation… Your bank account details like account number and address Parent or guardian aadhar card details Parent or guardian - 2 Photographs Nominee details with phone number and address A cheque for the initial deposit Document of the minor - Birth certificate with the name or Bal aadhar card also it should show the parents names. For a guardian, the legal letter from the court declaration should be produced. Address proof - again birth certificate or aadhar card can be used. has

    5 min

  4. 07/03/2021

    Episode 11: Why children need investment lesson!

    Children get some sort of monetary benefits (like cash) from grandparents, relatives, or even parents.If this pocket money had been invested in the right way it would have turned into a few lakhs when your children start going to college. Do you see the importance of financial education to children? It’s a habit that when elders visit the kids or even baby they give some monetary benefits (like money) to children as a token of love or gratitude. Even grandparents give some money as a token of love to their grandchildren. Parents are no exception, right from birthday the children are given with toys, dresses or some money. Usually, as a kid, we used to save that money in the piggy bankdecisions. A study from the University of Cambridge has shown that children understand the concept of money as young as 7 years. But when compared to later years of their life the understanding of money seldom exists. It’s better to start a relationship with finance at a very young age so that as they mature they make a better financial decision. My Final recommendations, let the children be exposed to a financial discussion at an early n age. They will get comfortable with money and making them work in their favour. Have a conversation about money, stocks or SIP while having dinner. Open a minor saving account as young as a 1-year-old kid. Put all the money that relatives or friends gave or birthday money into that account. Open a Demat account, teach them to invest part of their pocket money in mutual funds SIP. Slowly it will grow into a huge corpus.

    8 min

  5. 06/26/2021

    Episode 10 : Should you invest in PPF or in Mutual Funds ! Let's find out.

    Public Provident Fund or in short PPF means an investment-cum-tax-saving instrument backed by the government. It was introduced more than 50 years ago and is quite popular even today. Since PPF is guaranteed by the government, it is completely secure with current interest at 7.1%. You can open a PPF account in a post office or a designated bank. Let's see the main features of PPF which make it attractive even today: Duration : PPF has a minimum tenure of 15 years. It can be extended in blocks of 5 years if you wish. Investment limit: PPF minimum amount for investment starts from ₹500. The maximum amount in PPF that can be invested is ₹1.5 lakhs in a financial year. Tax-saving: Investments made under PPF are eligible for tax deduction up to ₹1.5 lakhs per year inclusive of all investment instruments under Section 80C of the Income Tax Act, 1961. Deposit frequency: Individuals must deposit into their PPF account at least once a year for the next 15 years. Mutual Funds are an accumulation of many individual company stocks such as Infosys, Exide, TATA, and many other companies. When you buy a mutual fund for a certain amount, you buy a certain portion of those company stocks. In many cases, the mutual fund's investment return on average of 12% over the long term, as companies reinvest that money in projects which generate revenue. We all aware of one famous line “Investment in mutual funds…(I will give you 5 second, complete the sentence in the comments section. ) ” Let me complete for you, “Investment is subject to market risk. Please read the brochure for more details” We have seen a glimpse of Mutual Fund's. We shall explore in future videos to come. Let us see the features of Mutual Fund Investment and why it should be in your investment portfolio : Return: If one invests in debt funds, one can expect to get at least 8 percent return while in equity mutual funds for the long-term the expected return would be at least 12 percent. But when investments are considered for a long term the ups & downs will average out and give a better return. Patience is a most important asset while investing in the stock market. Liquidity: Mutual funds are highly liquid. The units can be redeemed at any time with a few clicks of the buttons and the money will be deposited into the bank account within two-three working days with almost no charges when selected debt funds are chosen Taxability: In Mutual Fund investment, We shall consider two aspects : In long-term investment, long-term capital gains are levied on debt-fund investments,  here irrespective of your income tax slab, you need to pay 20% tax. Whereas short-term investments less than 3 years are taxed as per the income tax slab of the investor. Do check out www.bytherupee.com for more articles and podcasts on personal finance. Also, comment below on what topic you would like to know more about. Keep Subscribed to the channel Let’s dive back to the conclusion… If the investment is for 15 years or more, equity mutual funds should be chosen ahead of PPF. On average, the equity investment has given double-digit growth for an investment made for a period more than 15 plus years. But there are different ways of minimizing one’s risk by splitting into 75:25 % profile or even 50:50% but it all depends on an investor risk appetite.

    6 min

  6. 06/19/2021

    Episode 09 : FD versus Mutual Funds - A classic battle !

    India’s most prefered investment tool is FD, but can it provide the inflation-beating returns The concept of “My money is safe in my Bank account ” has been followed from generation to generation when Interest rates were 12%. Given the current FD interest of hardly 4-5% and steep inflation rate @  6%, can your FD beat it to give you bang for the buck? Let's find out. We all are aware of how FD works, For those who are starting out, hear me out… Let's say you have 1Lakh rupees and you keep it in the bank for a certain duration of 1 year for a 5% Interest rate. For banks to give 6% interest, what they do is take that money and invest in low-risk projects such as govt infrastructure projects or govt backed projects in a safe way. The small %ROI derived from such investment is passed on to consumers who park their money in the bank. Now you know how FD works, let's get into mutual funds. Mutual Funds are an accumulation of many individual company stocks such as Infosys, Exide, TATA and many other companies. When you buy a mutual fund for a certain amount, you buy a certain portion of those company stocks. In many cases, the mutual fund's investment return on average of 12% over the long term, as companies reinvest that money in projects which generate revenue. We all aware of one famous line “Investment in mutual (I will give you 5 second, complete the sentence in the comments section. ) ” Let me complete for you, “Investment in mutual funds is subject to market risk. Please read the brochure for more details” We have seen a glimpse on Mutual Funds. we shall explore in future videos to come. We shall evaluate your investment in three factors - Returns, Liquidity, and Tax Returns. I will share another factor at end of the video as it determines your capability to invest. 1.Returns: As I explained in the previous section about FD & mutual funds and how it works, it's very clear that Mutual Funds return more bang for your buck. But why are people not investing in mutual funds? As in FD, banks guarantee return upfront on your money invested for a certain duration. But where as in mutual funds there is no guarantee on your investment and is governed by stock markets up & down. But when investments are considered for a long term the ups & downs will average out and give a better return. Patience is a most important asset while investing in the stock market. 2.Liquidity: Mutual funds are highly liquid. The units can be redeemed at any time with a few clicks of the buttons and the money will be deposited to the bank account within two-three working days with almost no charges when selected debt funds are chosen. Whereas, if the FD is broken before the Maturity date then a penalty of 0.5 to 1 % needs to be paid back to the bank.  This penalty amount will be deducted from the return amount. 3.Taxability: A true investor will look into the return after paying taxes. In the case of FD, the amount generated will be taxed as per your tax slab. If you fall under the 20% income tax slab then  you will pay 20 percent tax on FD return. This applies to people falling under 30% as we We shall consider two aspects : Long term of 3 years and above Short term of 1-2 years or less In long-term investment, long-term capital gains are levied on debt-fund investments,  here irrespective of your income tax slab, you need to pay 20% tax. Whereas short-term investments less than 3 years are taxed as per the income tax slab of the investor. If you have made it to the end of the video, it means you really want to take control of your finances.

    10 min

  7. 06/12/2021

    Episode 08 : 6 Essential things to do at the start of the Financial year !

    Hello Ramesh, It's Suresh here , Listen It's March, I got to save taxes and you suggest to me where to invest to save taxes? Ramesh : Invest in GetRich scheme and LostMoney Scheme.You shall save Tax. Suresh: Alright I shall do it. … Is your life also very similar to this? Then let's start the financial journey from Start of April New Financial Year, Let's take the right step ahead : Review life insurance cover:  Following significant life events like marriage, becoming a parent, buying a house, etc., your responsibilities increase significantly.  You need to make sure that your life cover is sufficient to cover all these additional responsibilities. As a thumb rule make sure you are insured with 10 to 15 % of your term insurance and also have cover for your debt such as a housing loan or any other loan. Review Health insurance:  With ever-growing hospitalization costs, it's always good to see how much health insurance you have. Always have health insurance cover  for your family.Also, with the life events such as marriage or becoming a parent make sure to cover your spouse or children from day 1. The most convenient way to achieve this is by converting your health policy into a family floater and increasing the cover. This ensures continuity of the policy, and you don’t miss out on any benefits. Start Tax planning: It is best to start your tax planning early in the financial year. That’s because you have enough time to calculate how much you need to invest to save the maximum tax possible and evaluate all options available. Having a SIP or NPS or PPF that helps you save tax over the year will ensure that you benefit from the ups and downs the markets might experience. Pay off excessive Debt: Do you have high-interest personal loans or credit card debt that you are rolling over by paying a Min payment every month? Plan ahead to close the debt at the earliest with careful planning and use of bonus in closing high interest 18-30% loans. Also, with this not only are you going to save a lot of money but also get a chance to improve your credit score. Increase SIP by 10% With a salary hike, increase your monthly investment such as mutual fund SIP or NPS or EPF by 10% every year. By this, you can achieve your financial goal early. Review your Goals : The start of the financial year is a good time to review your progress towards your goals. For instance, if you were planning to buy a car, the prices might have seen an above-average increase due to high input costs. In such a scenario, you will need to recalculate the amount you will need to invest every month to have the amount you need when the time comes. Additionally, if there is a big change in your life stage in the last year like marriage, buying a home or even becoming a parent,  you might have to rework the priority or add new goals. Before concluding, Do check out www.bytherupee.com for more articles and podcasts on personal finance. Also comment below on what topic you would like to know more about. Keep Subscribed to the channel Let’s dive back to the preparation for the financial year… Summary,  Taking these steps will help you better your financials and ensure a smooth financial journey in the years to come.

    6 min

  8. 06/05/2021

    Episode 07 : Seven mistake I made in 20s and How you can avoid them !

    We all make mistakes with money, especially in our 20s, and I was no different. Let's check out the top 6 mistakes I made during my college days and early on in my career. As I graduated from college, getting a job was not easily combined with the recession that happened in 2008 was the worst year anyone can graduate. Over these years, I have grown better with finance and learning new ways to make peace with past mistakes. This is a personal financial journey mistake that I have made and how you can avoid them. Not starting investing early: I strongly recommend if you are in college, define a financial goal like buying a high-end computer or even for retirement (no joke !) and start investing towards it in mutual funds as SIP. Get the benefit of time and power of compounding work in your favor.  May the POWER of COMPOUNDING be with you Using responsibility on a Credit card: We all have used the credit card for some of the other scenario and have made wrong or unnecessary purchases or even making the minimum payments. But if used correctly by managing the payment on time it can really build up your credit score. Use of a selected credit card can even access the airport lounges or points can be used to redeem to satisfy the desire of buying a shiny toy without guilt. But Yes, Responsibility sucks! Useless luxury - watch or iPhone: 20s is all about I care for myself or treat me first. With the power of purchase, I brought expensive phones- which I never needed or other luxury items to show off to my friends or impress someone. In other words, to keep up with someone who recently brought a fancy new toy - what we call FOMO Syndrome - Fear Of Missing Out. Buying a new car /Bike - You are never too young to talk about Cars or bikes. Especially in your 20s when riding past the highway with the wind passing through you. I'm definitely not against buying bikes or cars, I had about 5 different bikes in the past and now I have 1-superbike which I take it out occasionally for a spin. But the problem is purchasing right out of the showroom, as soon as you drive the vehicle out of the showroom gates, the cost of the vehicle depreciates more than 25%. Have patience, and find a neatly used vehicle that fits your bill perfectly. Not investing in yourself - Pay yourself first. Do invest in yourself. Commit to a schedule of doing SIP for retirement or invest in self-help or do advanced In courses that will give the edge in advancing your career. Thus giving the ROI. Make this a habit of investing in yourself first. It can be both financially and academically. Not traveling enough - At the 20s, we are young and carefree to travel across the world. When young, don’t travel as a tourist but as a traveler. If possible travel alone, spend time with local people and explore local cuisine. Don't be addicted to just books as in college, work, or office. Get out of that cubicle or college regime and explore that beautiful world out there. It took some time for me to realize that but I started way back in college traveling across India. Wishing you luck in exploring the country before making any international trips. Where there is a will, there is a way! To sum it up, you cannot learn from your mistake alone. See others' mistakes and overcome them.

    6 min
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Discover the path to financial freedom. Money traded for time, which is a definite resource everyone has. Together, we shall make a better decision with Time and Money, where I will share with you the path to chose and pitfalls to avoid thus giving you better control over time, bringing happiness to you and your family. For more info,please visit www.bytherupee.com

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