Tag: Money Matters

Financial awareness — Understanding your relationship with money

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Even if you spend hours brainstorming ways to make more money, you may not pay much consideration to how you relate to money.

You must explore yourself to understand your relationship with money. You may utilise self-reflection to discover the meaning of money in your life. This will help you in identifying your money management ideals, attitudes, and behaviours. To do so, you must answer some questions truthfully.

Be Aware Of Your Net Worth

Your net worth consists of what’s left of your money after subtracting your debts and liabilities from your total assets. Your assets could come from many sources, including earnings, business income, gifts, and inheritance.

So you’re sitting down to calculate your net worth for the first time and you realise. you’re in debt. And not just a little debt, but DEEP debt. The kind of debt that has been weighing you down without you even realising it. But don’t worry, there are plenty of options for getting out of debt and getting your finances back on track. Alternatively, you may discover that you are in a position to be financially independent now.

You need to take into account all of your assets (what you own) and your liabilities (what you owe). This can be a daunting task, but it’s worth it to get an accurate picture of your financial situation.

When it comes to liquid assets, cash is king. But, all of your other options like stocks, mutual funds, and bonds are still important. Make sure to consider all of those at their current market value.

When it comes to listing your fixed assets, don’t forget to include your house, car, jewellery, art, and any other possessions that could be considered valuable. To find the market value of these items, just take a look around online to see what similar items are selling for. You might be surprised at how much your stuff is actually worth!

Finally, you need to deduct all of your liabilities. This will include things like bank loans, loans from relatives or friends, credit card debts, student loans, and unpaid bills. In other words, anything that you owe money on. Once you’ve deducted all of your liabilities, you’ll have a better idea of your net worth.

Be Aware Of How You Spend Your Money

Your relationship with money is a lot like your relationship with food. If you want to be aware of what you’re consuming, you have to be aware of every mouthful going in and every scrap coming out. The same is true of your finances – if you want to get a handle on your money behaviour, you have to be aware of each and every rupee coming in and going out.

There’s no one way to keep track of your finances. Some people like to use a pocket-size diary, others prefer expense monitoring mobile apps. Some people spend everything through credit cards or wallets or debit cards and everything is automatically recorded, which they can access at the end of the month. The important thing is to find a system that works for you and stick to it.

Have A Budget And Follow It

After tracking your spending for a few months, you might be surprised to find out how much you’re actually spending on things you don’t really need. Now is the time to create a budget and be more mindful about your spending habits, so that you can save up for your financial goals.

Use the simple 50-30-20 formula to figure out how much of your money to spend and save. 50 percent of your income goes to your needs 30 percent of your income goes to fun 20 percent of your income goes to your savings.

A budget is like a map for your money. It tells you where all of your funds are supposed to go so that you don’t accidentally spend your rent money on a new outfit or your utilities money on a shopping spree. Having a budget helps you to control your spending so that everything is covered every month.

Keep Track Of Your Finances

Money dates can assist you with this. You need a weekly “Money Date” just like you need a weekly date night with your mate to keep the romance alive. A Money Date is a pre-planned meeting with your finances to review important financial goals. This is the time to evaluate your savings, expenditures, and, most importantly, investing.

Developing Personal Financial Literacy

Just like anything else, financial literacy takes time and effort to understand. So set aside an hour each week to study up on topics like taxation, goal-planning, investing and portfolio management. You can think of it as your very own FinLit Hour.

Conclusion

Creating financial awareness is like creating a solid foundation for your dream of financial independence. Just as a house needs a strong foundation to support it, your dream needs a strong foundation of financial knowledge to support it. By increasing your financial awareness, you can lay the groundwork for a bright future.

The author, Vineet Patawari, is co-founder and CEO at ELEARNMARKETS and StockEdge. Thed views expressed are personal

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Key financial lessons we can learn from our parents

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Think about some of your most eminent habits and fundamental values. If you think long enough, chances are, you will realise most of them are things you’ve learned from your parents growing up. It could be something as basic as having an early dinner or something as meaningful as giving back to society. Hence, when starting out on your financial and investing journey, it will be just as helpful to reflect on all the financial habits of your parents and draw a few invaluable lessons.

Discipline is the key to success in life

The art of discipline can be learned the best from your parents – they know that the importance of discipline seeps into all aspects of life. Whether that’s waking up at the same time every morning even if it’s the weekend or finishing everything on your plate during mealtime even if you don’t like it. You must have also seen your parents be financially disciplined when it came to saving money and living comfortably within their means.

How to follow this lesson: An important aspect of financial discipline is goal setting and execution. Begin with financial goal-setting to map out details such as what your goal is, how much time you may have to meet it, and therefore, what the amount you need to save should be. You can then use the Appreciate app to get personalised recommendations and investment strategies so you know where and how to invest your money for maximum success.

Saving money no matter how little

At some point in your childhood, your parents would have gotten you a piggy bank of some sort. You must have also seen your mother trying to get the best possible price when shopping for groceries routinely. These amounts may have looked small but they never were irrelevant to your parents. That’s because they knew that little amounts have the power to amount to money that will come in handy in the future for important things.

How to follow this lesson: Every time you spend money, whether that’s on your daily coffee or the cab ride to work, save the change you get. In fact, with the Appreciate App, you can link your cards so that the change on all your transactions gets automatically invested in securities to bring you closer to your financial goals.

Don’t put all eggs in one basket

If you ever sit down to have a conversation about money and investing with your parents, you will realise that no matter their investment strategy, they never put all eggs in the same basket. Investing in the stock market is not enough – they may have gold, real estate, and other assets in their portfolio too. The reason for this is to diversify into different asset classes and reduce the risk of one asset not performing well.

How to follow this lesson: You may not have the knowledge or money to begin investing in real estate or other high capital assets just about yet. But you can still diversify your portfolio by investing in the global stock market. With Appreciate, you can access the US markets in a single click and choose from over 9,000 stocks and ETFs. This not only means reducing risk but also enhancing your returns.

Keeping it simple and cost-effective

Did you ever see your mother use excel sheets or some complicated formula to create and maintain the monthly home budget? Or did your father pay a fancy analyst to have hour-long discussions every day before making investment decisions? And yet they managed to make strategic financial decisions. Keeping things simple yet effective is probably one of the most important financial lessons you can learn from your parents.

How to follow this lesson: The Appreciate app is designed to offer you a simple, easy, and transparent way to invest smartly and build a diversified portfolio. There are no subscription fees, hidden charges or additional costs. There aren’t any minimum investment amount requirements either. So you can get investing right away and in a seamless manner.

Going over these lessons, you may have a lot to discuss with your parents. So pick up the phone and give them a call. Also, make sure to sign up on Appreciate to get all the support you need to act on these crucial financial lessons.

The author, Shlok Srivastav, is Cofounder at Appreciate. The views expressed are personal

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Ladies… it’s time to talk money! Check out these investment tips

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Shubhangi Tiwari, a young advocate from Delhi who lost her father to the brutal second wave of the pandemic. The chaos around her compounded by the responsibility of managing the family’s finances.

Shubhangi isn’t the only one, there are scores of women who suddenly find themselves widowed or orphaned or without the protection of the primary bread earner. Some unable to pay school fees, others burdened by debt, struggling to gain a foothold in the unchartered territory of ‘money matters’.

Also Read: How to start regular investments with mutual funds and e-wallets

Madhura DasGupta Sinha, Founder and CEO of Aspire for Her, an NGO that assists women just like Shubhangi secure a financially fulfilling future and Rahul Pagiddipati, Co-CEO of India’s largest bitcoin exchange, ZebPay, which has taken a very unique initiative to involve their women employees in the company’s decision-making process shared their views.

“We would like to say that don’t start getting completely overwhelmed, start somewhere which is a burning need. Pick up the burning issue in your life and start from there, do not get overwhelmed,” Madhura said.

Also Read: From PPF to NPS to GILTS: 6 investment alternatives to cope up with low interest on FDs

“Find a great financial advisor who you can trust completely and who will demystify all these various elements of finance as they affect your life. Look at both the long-term and the short-term for yourself and for your family. Three, ensure that you don’t have to be financially dependent on anyone,” she advised.

Pagiddipati doesn’t think all women are risk-averse.

Also Read: How financial literacy can enable you to manage your money efficiently

“I think they like diversification. In many ways, diversification is better. So, if you decide to make an investment, if you can diversify your ideas, in many ways in the long run it will help. Crypto is a high-risk asset class, it is very volatile because of that currently now about 80-90 percent of investors in crypto are men but the great thing is every single day, more and more women join the ecosystem,” he said.

“Women, by nature, decides to hold for the long-term and in many ways if you trade less and if you think about it in the long run, that will be better. Sometimes taking a risk is a bad thing,” he added.

For the full interview, watch the accompanying video.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Money Matters: What does restructuring a loan mean?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

In a major relief to corporate and retail borrowers, the Reserve Bank of India has allowed lenders to go for a one-time restructuring of loans that are facing stress owing to the COVID-19 crisis. So what does restructuring a loan mean?

Latha Venkatesh explains on ‘Money Matters’.

To watch other videos in this series, click the Money Matters tab below.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Money Matters: What is GDP and how is it calculated?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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We are going to hear a lot of noise about the gross domestic product (GDP). So how is the GDP put together? How are crops, cattle, commodities, consumer goods, communication, coaching classes and all of the others are put into one number?

This is done by experts from the National Statistical Organisation (NSO), formerly known as the Central Statistical Organisation (CSO). So here’s a ‘GDP Masterclass’ with CNBC-TV18’s Latha Venkatesh on ‘Money Matters’.

To watch other videos in this series, click the Money Matters tab below.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Money Matters: Is M3 too high in India?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

All central banks create money but lately, there has been a worry that central banks are creating too much money including the Reserve Bank of India (RBI). The term used for all the money in the system is ‘M3’.

So how much money should the RBI create in a year? Is M3 too high in India? Is it time to worry about it?

CNBC-TV18’s Latha Venkatesh decodes it on ‘Money Matters’.

To watch other videos in this series, click the Money Matters tab below.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Money Matters: Why aren’t banks lending?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

For the past many months, banks have been parking about Rs 6 lakh crore to Rs 7 lakh crore on a daily basis with the Reserve Bank of India (RBI) for an overnight period for just 3.35 percent. This has drawn a lot of criticism, with experts questioning banks as to why they aren’t lending loans instead of parking money for such a low interest rate?

CNBC-TV18’s Latha Venkatesh explains what the reality is on ‘Money Matters’.

Professor Ananth Narayan has explained this concept in detail on www.cnbctv18.com. Read here:

VIEW: Easy to call banks lazy, but one needs to ask why aren’t they lending

How the Indian banking system works and money is created – An explainer

To watch other videos in this series, click the Money Matters tab below.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Money Matters: Your Lordships, please let RBI decide in our interest

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The Supreme Court is currently hearing an all-important case on loan moratorium, where the petitioner, who availed a moratorium on his home loan, is arguing that he should not be charged interest on the delayed interest installments. The case has become famous as the “interest on interest” case. This note argues that charging interest on someone who delays interest payment is normal banking and deviation from this can greatly harm depositors and indeed the financial system.

1. First, let us assume banks announce that anyone who wants can stop EMI payments for six months and pay it after say two years or five years. Now wouldn’t every borrower take advantage of this? If a borrower is paying an EMI of say RS 10,000 a month, and claims moratorium for six months, it would make sense for him to invest that 60,000 in an FD at another bank or put it in a debt mutual fund. In two years the Rs 60,000 will earn him a neat Rs 8000, even at a nominal 7 percent return. He can keep that gain for himself and pay his Rs 60,000 to the bank after two years. Every borrower, including the largest of companies would want to grab this opportunity. And if every borrower says he won’t pay interest for six months, how will the bank pay interest to the depositors. That’s why banks charge extra interest if you avail the moratorium.

2. We can also look at this delayed interest as the time value of money. Let us assume a person X has borrowed Rs 1 lakh from Y in March, promising to repay him at the rate of Rs 10,000 every month from April through the next 10 months. Now assume, because of COVID-29 he can’t pay from April to September. So if X wants to pay this entire Rs 60,000 five years later, is it fair for X to just pay 60,000 to Y? It is unfair because, five years on, Rs 60,000 won’t purchase the same amount of goods and services as it does now. Inflation at the rate of 5 percent a year will mean this kitty will purchase about 30 percent less than what it buys today. That’s why, Y will charge X an interest for the delay. This is exactly what banks are charging — an interest for the delay.

3. A third confusion in this case is in understanding what a bank is. A bank is not manufacturing profits out thin air. A bank is an intermediary which takes money from the saver (a little bit from the shareholder) and lends to a borrower. So if governments or courts interfere and force the bank to forego interest from a borrower, banks will end up paying the depositor that much less. How fair is that?

4. The court is hearing only the borrower. It is not hearing the case of the depositor, partly because depositors are usually less well-off and less savvy people. The typical borrower is a well-placed individual who has met all his basic needs and can afford to pay an EMI for a car or a house. The borrower may even be the proprietor of a large company who can afford to pay a lawyer all the way up to the Supreme Court. The typical depositor usually includes poorer people, who don’t know they are getting a lower rate of interest because the bank has to forego interest from a borrower, worse the depositor also may have lost his job due to COVID and may be depending on the interest paid on his savings to get by. Why is the COVID-19 pain of the borrower more important than the pain of a COVID-hit depositor? Worse, the typical depositor may be our aged grandparents who are living on the interest that their savings are earning. They too are probably hit by unexpected health bills. Is it fair to snatch a bit of their earnings to give relief to a borrower?

5. There also appears to be a misunderstanding of which or whose money can be used for a public purpose like giving relief during a calamity. Governments collect taxes to help needy citizens. What the saver puts in a bank are his tax-paid savings. Those are his private earnings and only he has a right to the interest it earns. The interest on his savings cannot be used for so-called humanitarian purposes like helping a COVID-hit company.

Short point, charging interest on delayed payment of interest or principal is the bedrock of banking. Any relief in terms of time or amounts should not be taken only after looking at principles of equity for both sides – savers and borrowers as also the financial stability of the banking system. The expert, best placed to decide this, is the banking regulator — Reserve Bank of India. They are in court in the interest of the depositor and in the interest of the financial stability of the economy. They are also the experts on the logic of interest rates. Their lordships must please heed their view in the interest of the country.

To watch other videos in this series, click the Money Matters tab below.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Money Matters: What ‘restructuring a loan’ means

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

In a major relief to corporate and retail borrowers, the Reserve Bank of India has allowed lenders to go for one-time restructuring of loans that are facing stress owing to the COVID-19 crisis. The move is aimed at mitigating risks to financial stability. The restructuring is allowed under the framework issued on June 7, 2019.

“With the intent to facilitate revival of real sector activities and mitigate the impact on the ultimate borrowers, it has been decided to provide a window…to enable the lenders to implement a resolution plan in respect of eligible corporate exposures without change in ownership, and personal loans, while classifying such exposures as standard, subject to specified conditions,” RBI said in its statement.

For corporate loans, the RBI has proposed setting up of an expert panel headed by veteran banker K V Kamath to give recommendations on various parameters to be considered for each resolution plan.

CNBC-TV18’s Latha Venkatesh explains what ‘restructuring a loan’ means.

To watch other videos in this series, click the Money Matters tab below.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow