Inculcate the values of financial planning in your children from a young age. That’s the best gift you can give them on Children’s Day
Teaching a child the importance of healthy finances is not just a gift to them but also a means to empower them to have a bright future. While schools are now adding concepts like finance, savings and taxes to their curriculum, it’s still on a basic, informal level. Therefore, it’s important for parents to take the lead in this matter. So, how should you inculcate the value of financial planning in children.
Start them young
Children start showing strong traces of their understanding and potential at a young age. A three-year-old, just starting to learn her numbers and counting, can easily understand the concept of money. Start with a handful of coins and ask her to count them. Explain to her that 5 counts with the number 1 on it can buy her a small packet of biscuits and 10 coins with the number 2 on it can buy her a sheet of stickers. Make it even more fun by gifting her a piggy bank and tell her that all the money she puts in there belongs to her and that she can use some of it the next time you’re out at the supermarket or in the mall.
The Value of Money
There’s no point in having money if you don’t know the value of it. Explain to your child that money has to be earned and doesn’t just come along for free. Help your child earn some money the hard way. One fun and exciting way to do this is to get them to do simple, extra chores at home in return for pocket money. Get them to participate in a festive spring cleaning and reward them for it. Then sit down with them and count their earnings. Once you’re finished with the exercise, ask them what they would like to do with the profits. Would they like to save it? Spend it? Donate it? Encourage them to save the earnings to buy something they have been coveting
Lead by example
Children always emulate their parents. It is thus important to lead by example and exhibit habits and behaviour’s that you would like your child to pick up too. One way to do this is to take a walk through a market and point out things that you need – food, clothes, household supplies – and things you want – expensive mobile phone, state-of-the-art television and designer handbags. Tell them that you’re happy with what you already have, and chances are, they will pick up on this behaviour and learn to be happy with what they have too.
Learning the value of money and the importance of financial planning early in life will stand children in good stead later in their life.
Disclaimer: Investment in securities market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.
Gold Investing Made PainlessInstruments like ETFs, E-Gold and Sovereign Gold Bonds enable you to invest in gold in demat form The investment portfolio, of majority of Indian households, comprise of some gold. It is considered auspicious to purchase gold during festivals like Dhanteras. However, holding gold in physical form is not without its drawbacks. Some of them include the risk of theft, purity of the metal, making charges if you’re buying jewellery, and lack of liquidity. However, if you still think that gold is a good investment bet, you can still put your money in the metal -- without actually holding it in physical form. Your options include gold exchange-traded funds or ETFs, e-gold, and sovereign gold bonds. Let’s look at each of them: Gold ETFs: Gold ETFs are like open-ended mutual funds that invest in gold. When you buy units in a gold ETF, the funds are invested in gold bullion. These funds are open-ended and traded on the stock exchange. All you need to do to invest is go to your online trading account and buy them. Similarly, you can also sell them. Therefore, you enjoy the benefits of high liquidity, accurate pricing of the metal, plus safety. You can also buy them in quantities of your choosing -- even as little as a gram. There is, of course, a small charge involved in ETFs, called an expense ratio. It’s usually around 1% -- not a very high price to pay for safety, liquidity and transparency. Apart from this, you will also have to pay brokerage charges. E-Gold (Electronic Gold): This instrument is similar to ETFs and was introduced by National Spot Exchange in 2010. This enables you to buy gold in dematerialised form, just like shares and mutual funds. What’s more, you can buy the gold in small quantities. If you so choose, you can convert the dematerialised units into physical gold. Unlike ETFs, E-Gold does not involve a recurring management fee, but only a one-time charge. Sovereign Gold Bonds (SGBs): Another option for gold investing is SGBs issued by the Reserve Bank of India (RBI). These are available for a tenor of eight years in denominations of 1 gram, with a maximum limit of four kg for individuals. You can opt for early redemption after five years. On redemption, you will be paid in cash based on the average price of gold of 999 purity of the previous three business days. The bonds are available at branches of banks and selected post offices. The best part about these bonds is that they are tradable on stock exchanges, thus ensuring a high level of liquidity.Open AccountInvest Now Disclaimer: IndiaNivesh Securities Limited (CIN No.: U67120MH2006PLC158634) I SEBI Reg. No.: INZ000010132 (exchange membership no. BSE: 3130, NSE: 12566, MSEI: 51500) I Research Analyst: INH000000511 I CDSL: IN-DP-CDSL-392-2007 I NSDL: IN-DPNDSL-297-2008 I AMFI: ARN58314. Regd. Office: 601/602, “Sukh Sagar” N.S. Patkar marg, Girgaum Chowpatty, Mumbai - 400 007. Tel: 91 022 66188800. Corporate office: Lodha Supremus, 17th Floor, Senapati Bapat Marg, Lower Parel, Mumbai - 400013. Tel: 91 22 6240 6240 l Fax: 91 22 6240 6241. Disclaimer: We are only distributors of Mutual Funds, IPO, Corporate Deposits & Fixed Income Products & PMS is not offered for commodity segment. “Investment in market / Mutual Funds are subject to market risks, read all the related documents carefully before investing.”
Want to save upto ₹ 46,800 in tax this year? Here’s how Who doesn’t like to save tax? And if you can save tax and earn equity-like returns at the same time wouldn’t that be great? That’s where ELSS or equity-linked savings schemes come in. With ELSS, you can save up to ₹ 46,800 a year in tax if you are in the highest tax bracket. What’s an ELSS? An ELSS is just another equity mutual fund with two key differences. Like any other equity mutual fund, an ELSS invests a large portion of its portfolio in equity. But: 1. An ELSS comes with a lock-in period of three years 2. And, more important, it offers tax deductions on investments of up to ₹ 1.5 lakh under 80c of the Income Tax Act. That’s why ELSS is also called a tax-saving fund. How can you save tax with ELSS? To encourage investments, Section 80c of the Income Tax Act allows tax-payers to claim deductions for investments of up to ₹ 1.5 lakh in a wide range of instruments, including fixed deposits, PPF, postal savings and ELSS. You can invest the amount in one or more of the instruments. For example, you can choose to put the entire ₹ 1.5 lakh in ELSS or you can spread it over across different assets. The amount you invest under section 80c is reduced from your total taxable income. For example, if your taxable income is ₹ 6,50,000, and you invest ₹ 1.5 lakh in ELSS, then you need to pay tax only on ₹ 5,00,000. If you are in the highest tax slab of 30%, your savings add up to ₹ 46,800 in a year. Features of ELSS You can invest in ELSS either through a systematic investment plan (SIP) or lump sum. Take note, however, that each SIP investment in ELSS will have a three-year lock-in ELSS comes with two options – dividend and growth. Returns from both are taxed differently. Dividend income from investments in equity schemes are tax-free in the hands of investors, but the mutual fund house pays a 10% equity dividend distribution tax, which reduces your returns The returns from an ELSS are treated as long-term capital gains since you have held it for over a year. LTCG of up to ₹ 1 lakh are tax-free, and gains of over ₹ 1 lakh are taxed at 10% This makes ELSS a good choice because it combines equity-like returns with excellent tax-efficiency. What’s more, among the 80c options, ELSS comes with the lowest lock-in period (for example, tax-saving FDs have a 5-year lock in, NSC has a 6-year lock-in and PPF matures after 15 years) To claim tax benefits, you must invest the entire amount in the financial year. So, if you would like to save tax with ELSS for FY18-19, you must make your investment by March 31, 2019 Happy investing!
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