by Sathvik Nagraj | Feb 15, 2023 | Investment
Personal finance is one of the most essential skills any money-making individual should possess. Financial literacy concerning personal finance is a necessity as it provides you with the right skills to manage your money efficiently. Hence, one must be knowledgeable in brief about the components of personal finance.
A lot of people nowadays find themselves in debt traps and are guilty of buying things that they don’t necessarily require. Managing one’s money helps in not only combating this but also in organizing your finances according to your priorities.
Personal finance is the process of managing one’s money to achieve financial security and stability. It involves making a budget, saving money, investing, financial protection, tax planning and retirement planning.
In this blog post, we will discuss each of these components in detail and explain how they can help you achieve your financial goals.
Also check out our article on the importance of personal finance management here.
The Components of Financial Planning
Financial planning is divided into 5 major sectors. The sectors or components of personal finance are:
SAVING
Saving money is the first step and one of the main components of personal finance. It involves setting aside a portion of your income for future use. Saving money can help you build an emergency fund, pay for unexpected expenses, and achieve your financial goals.
One way to save money is to create a budget, and stick to it! A budget is a plan for how you will spend your money each month. It can help you identify areas where you can cut back on spending and allocate more money towards saving.
INVESTING
Investing is the next step in personal finance. It involves using your money to purchase assets that have the potential to grow in value over time. Investing can help you build wealth and achieve your financial goals.
Investing can occur at any point in your life, from your 20s to your 60s.
There are many different types of investments, such as stocks, bonds, mutual funds, and real estate. It is important to do your research and understand the risks and potential rewards of different types of investments before putting your money in.
FINANCIAL PROTECTION
Financial protection is another important component of personal finance. It involves protecting yourself and your assets from financial loss.
This can include buying insurance, creating a will, and making sure you have enough money saved to cover unexpected expenses.
Insurance can protect you from financial loss due to accidents, illnesses, and other unforeseen events. A will can help ensure that your assets are distributed according to your wishes after you pass away.
TAX PLANNING
Tax planning is another important aspect of personal finance. It involves understanding and minimising your tax liability. This can include taking advantage of tax deductions, credits, and other tax-saving strategies.
Tax planning can help you save money and achieve your financial goals.
RETIREMENT PLANNING
Retirement planning is the final component of personal finance. It involves planning for your financial future after you stop working.
This can include saving for retirement, creating a retirement plan, and investing in retirement accounts such as 401(k)s, provident funds and other retirement plans. Retirement planning can help ensure that you have enough money saved to live comfortably during your golden years.
CONCLUSION
In conclusion, personal finance is the process of managing one’s money to achieve financial security and stability. The components of personal finance include making a budget, saving money, investing, financial protection, tax planning and retirement planning.
By understanding and implementing these components of personal finance, you can achieve your financial goals and live a more financially secure life.
It is important to start planning your finances as early as possible to maximise the benefits. It’s also important to revisit your plans regularly and make adjustments as your life circumstances change.
by Sathvik Nagraj | Feb 15, 2023 | Investment
“Freedom” is a very expensive word.
You have probably crossed your teenage and you want your freedom. You don’t want to be shadowed by your parents or your job or any other unnecessary commitments that you might have. Eventually, you realise you cannot live like this all your life. Therefore, decide to invest in your 20s both for the long term as well as the short term.
But, you don’t have a strategy yet.
Fear not! Because this blog is going to elucidate on the different ways that you can start saving and investing at a young age.
Investing in your 20s is an important step towards securing your financial future. It’s never too early to start thinking about how to best use your money to achieve your long-term goals. In India, there are a variety of different ways to invest and save money in your 20s. Here are a few tips to help you get started.
Also check out our article on investing at a young age here.
How to Save Money and Invest in your 20s?
Let us go through the steps involved in saving and investing money in your 20s:
Start with a budget
One of the most important steps in saving money is to create a budget.
A budget is a financial plan that outlines an individual or organisation’s expected income and expenses over a specific period.
Creating a budget will help you understand where your money is going. It will give you a brief idea as to where you can cut back to save more.
Invest in Public Provident Fund (PPF)
Public Provident Fund (PPF) is a long-term savings scheme in India. It provides tax benefits and a fixed rate of interest to the account holder.
It makes an attractive option for young investors to grow their savings and optimise their personal finances.
Invest in Equity-Linked Savings Scheme (ELSS)
ELSS stands for Equity Linked Saving Scheme, which is a type of mutual fund in India that offers tax benefits and invests primarily in equity securities.
It has a lock-in period of 3 years. This makes it an ideal option for young investors looking to invest in the stock market.
Invest in digital gold in your 20s!
Digital gold is a new and growing trend in the world of investing. It allows individuals to purchase and own gold in a digital format.
Investing in digital gold allows for easy and convenient access to gold as an asset class without the need for physical storage or delivery.
One popular platform for buying and holding digital gold is the JAR app, which is a mobile app that allows users to buy, sell, and hold digital gold.
Consider SIP investment
SIP or Systematic Investment Plan is a method of investing in mutual funds. It is an easy and convenient way of investing a small amount of money every month in a mutual fund
This way you can invest in mutual funds without worrying about timing the market.
Invest in Real estate in your 20s!
Real estate investments can be a great way to build wealth over time.
The best benefit of investing in real estate is the potential for long-term passive income through rental income or capital gains from property appreciation.
While investing in real estate is a long-term commitment. It can be a good option for those who have a stable income and can afford to make regular payments.
Start an emergency fund
An emergency fund is a sum of money set aside to cover unexpected expenses or financial emergencies, such as job loss or medical bills.
The best benefit of having an emergency fund is that it provides a financial safety net and helps prevent the need to rely on high-interest debt or deplete long-term investments during times of financial hardship.
It’s important to have an emergency fund in case of any unforeseen circumstances. This fund should be easily accessible and should be enough to cover at least six months of living expenses.
Takeaways!
In conclusion, there are a variety of different ways to invest and save money in your 20s in India. It is important to start with a budget and then invest in a mix of options such as PPF, ELSS, and digital gold. SIPs, Real estate, emergency funds and other platforms like JAR app can be used to invest in your 20s.
It is important to consult with a financial advisor to understand the tax implications and the suitability of these options.
Some may help you with your financial journey and some may not.
Always remember to play the long-term game and never to opt for short-term benefits which include high risks.
by Sathvik Nagraj | Feb 15, 2023 | Culture & Money
“Sone ki Chidiya” (Translates to golden bird) is a phrase most of us have heard in our childhood, be it a song or a movie. But what is even more peculiar is sighting a Sone ki Chidiya. Yes, it is possible. Go to any reputed jewellery store in the country and you will find it there. Of course, it cannot fly but what does soar is the demand for gold in India. So, the question arises, What is the amount of gold In India?
Gold has been a popular form of investment and a store of wealth for people in India for centuries. Gold has been a popular form of investment and a store of wealth for people in India for centuries. Various factors act as a catalyst for the amount of gold in India.
In this blog post, we will explore the extent to which people in India buy gold and how much they typically purchase.
How much Gold does India have?!
The World Gold Council estimates that India is the fourth-largest consumer and recycler of gold in the world, behind only The United States of America.
According to the council, the demand for gold in India was approximately 618 tonnes in 2020.
In India, the state of Karnataka is the highest contributor for the amount of gold in India. Karnataka is also known as the “Land of Gold”. Kolar gold fields in Kolar are the largest gold mine in the country.
To get some perspective, check out how the value of a gold ring is calculated in India here.
How much Gold do Indians own?
- When it comes to the amount of gold people in buy in India, the World Gold Council estimates that the average Indian household holds around 23 grams of gold per capita which approximates 25000 tonnes of gold per household.
- Indian household gold reserves are found to be one of the highest in the world. The total gold reserves in India are more than $ 1 trillion in value. $22Bn worth of gold was discovered in the Padmanabhaswamy temple in Kerala. And this is just one temple out of many. This is significantly higher than the global average of around 2 grams per capita.
- The World Gold Council estimates that India is the fourth-largest consumer of gold in the world, with an estimated demand of 618 tonnes in 2020. But here is the twist, this amount is the gold reserves available with the government and does not account for any gold which belongs to a common household in the country.
- Additionally, the average Indian household holds around 23 grams of gold per capita, which is significantly higher than the global average.
- It’s important to note that gold demand in India is not limited to the wealthy; it’s a popular investment option for people of all income levels.
The Reasons for High Demand for Gold in India
Various reasons make up for the ever-rising demand for the amount of gold in India.
Cultural significance
- One of the main drivers of gold demand in India is cultural significance. For many people in India, gold is more than just an investment; it’s also a symbol of wealth and status.
- Gold is traditionally given as a gift for special occasions such as weddings and festivals and passed down through generations, as a form of inheritance.
- This cultural significance can make gold a more appealing investment option, as it may hold more sentimental value than other investments.
Hedge against inflation
- Another factor that drives demand for the amount of gold in India is the desire to hedge against inflation.
- Gold has the ability to hold its value during times of economic uncertainty and volatility, making it a popular choice for those looking to protect their wealth.
Store of value
- Gold has been used as a store of value for centuries due to its unique properties.
- It is a rare and precious metal that is universally recognized and valued. Its value has remained relatively stable over time, making it a reliable store of wealth.
- Gold is also durable, meaning it does not corrode or deteriorate, and is easy to transport and store. It is not subject to inflation, making it a valuable hedge against economic uncertainty.
Lack of Alternative Investment options
- The lack of alternative investment options is also a significant factor driving the demand forgold in India.
- For many people, particularly those in rural areas, gold is the only viable investment option.
- Additionally, traditional savings options such as fixed deposits and bonds may not provide sufficient returns to keep up with inflation.
How does India Meet its Demand for Gold?
- India meets its demand for gold through imports, as the country does not have a significant mining industry.
- However, the Indian government has implemented various measures to encourage the use of domestically mined gold and reduce dependence on imports.
- These measures include increasing import duties on gold and promoting the use of gold monetization schemes.
Takeaways!
In conclusion, gold is a popular form of investment and store of wealth for people in India.
The demand for gold in India is operated by a variety of factors which include its cultural significance, its protection from inflation, and the lack of other investment options.
As the gold market is constantly changing it is always wise to keep an eye on the market and consult with a financial advisor before making any investment decisions.
by Sathvik Nagraj | Feb 14, 2023 | Culture & Money
Have you ever wondered why mangalsutra is important and the reason behind an average Indian married woman wearing that astonishingly beautiful piece of gold jewellery around her neck?
We have seen the pandit/priest who demands that exquisite piece of treasure around the neck of a woman while chanting holy hymns and mantras. Most of us know that it is something that symbolises marriage.
In this blog, we will explore the reasons why the Mangalsutra is considered important for Indian Weddings.
Also check out our article on the factors involved in calculating the value of a gold ring in India here.
The Significance of the Mangalsutra!
Here are key points why the holy thread is considered important in Indian Weddings and have such high value and significance for marriages in India
Symbol of Marriage
The mangalsutra is a symbol of the bond between husband and wife. It signifies the commitment, love, and trust shared between the two partners.
It is believed that the mangalsutra protects the marriage and brings happiness and prosperity to the couple.
Spiritual Significance:
It is also considered to have spiritual significance. It is believed to have the power to ward off evil and negative energy.
The black beads in the mangalsutra are said to absorb negative energy, protecting the couple from any harm.
Cultural Significance:
The mangalsutra has been an integral part of Indian culture for centuries. It is seen as a symbol of a woman’s identity as a married woman.
It is worn as a sign of respect for the husband and his family.
Rituals and Traditions:
The mangalsutra is an essential part of Hindu wedding rituals.
During the wedding ceremony, the groom ties the mangalsutra around the bride’s neck, signifying their union.
It is also an important part of many other rituals and customs, including Karva Chauth and other festivals.
Legacy:
This holy thread is often passed down through generations as a family heirloom.
It is seen as a symbol of the family’s heritage and history, carrying with it the memories and traditions of previous generations.
The Components of a Mangalsutra
The mangalsutra, although it seems simple, there is a lot of thought that goes into designing one.
- A mangalsutra usually has black beads along with gold in it. The importance of the black beads in mangalsutra is that it signifies a bond between Lord Shiva and goddess Parvati. Both are considered to be some of the most powerful deities in the Hindu religion. The black beads symbolise Lord Shiva and the gold in the mangalsutra symbolises goddess Parvati. The sacred thread lies incomplete without these two elements in it.
- The use of gold in the mangalsutra is thought to bring good fortune to the marriage and the couple. The gold used in it is also believed to have spiritual powers, and it is believed to protect the couple from evil spirits and negative energy. Gold is also a symbol of immortality, and it is believed that the mangalsutra will bring eternal love and happiness to the couple.
- Furthermore, gold is considered to be a very pure and auspicious metal. It is believed that the mangalsutra, being made of gold, will bring purity, auspiciousness and good luck to the married couple.
- The beads in the mangalsutra denote the different forms of energies like air, water, Earth and Fire and are said to protect the couple from the evil energies of the world.
While the mangalsutra continues to hold significant cultural and religious importance in India, its design and style have evolved over time to meet changing fashion trends. Modern designs incorporate diamonds, other gemstones, and different materials, while still retaining the traditional significance of the same.
Why is Gold used in Mangalsutra?
In addition to its cultural and religious significance, gold is also a practical choice forthe Mangalsutra. Apart from religious beliefs, gold does have a lot of benefits otherwise.
- Gold is a very durable metal, and it is resistant to tarnishing and corrosion. This means that the Mangalsutra will last for a long time and will continue to look beautiful and new even after many years of wear.
- It’s also a flexible metal and can be shaped and moulded into various designs, which makes it possible for the it to be made in various styles and designs. It can be simple and elegant, or it can be more elaborate and ornate, depending on the couple’s preference.
- In addition to the above-mentioned reasons, gold is also an investment. Because gold prices tend to rise over time, it is a good investment option for couples. They can sell their Mangalsutra in the future if they need money.
Conclusion
In conclusion, the Mangalsutra is one of the most important and sacred symbol of marriage in Indian culture. It is typically made out of gold. Gold is considered a symbol of wealth, prosperity, and good luck, and it is also believed to have spiritual powers.
The structure and components of this holy thread has a wide place in religious history and signals the sacred bond between Lord Shiva and Goddess Parvati.
Beyond the mangalsutra’s religious importance, it is made out of gold as it is a practical choice considering its durability, resistance to tarnishing and corrosion, and its ability to be shaped and moulded into various designs. Furthermore, it is a good investment option.
We hope this article helped you dive deeper into the intricacies of the sacred holy thread and understand its significance in Indian Weddings.
