Steps to download and scan a QR code: 1) Download QR code app on your phone. 2) Run app and scan the QR code. 3) Your smartphone reads the code & navigates to the destination. Scan this QR code to calculate the amount you need to invest to achieve all the milestones you have set for yourself. Scan this QR code to know why financial planning is a must before you begin to invest. Ever thought of how much money you should have when you retire? Scan this QR code to find out. WHAT NEXT? You need greater immunity during rainy days to fight infections. Financial storms can affect your financial health. To build immunity against immunities, let’s look at some immunity booster tips. For more details, follow us on Twitter @utimutualfund; Email queries or suggestions: [email protected] Please mention ‘Swatantra in TT’ in subject line. For more such financial advice, head to our website: http://www.utiswatantra.com *This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information An emergency fund is essentially an amount of money that you keep aside for emergencies. It is a fund that you can access at the hour of crisis or for unexpected and unplanned scenarios, and not for meeting your routine expenses. So, you must design it specifically to meet unexpected financial shortfalls that may apply to you. An emergency fund should be liquid. This is the most critical feature that you should keep in mind when you are choosing where to park your emergency fund. You should be able to withdraw the money when you need it. At the same time, you should ensure that you do not get penalized in the form of an exit load or pre-withdrawal penalty fee. Long-term emergency fund is where you save for large- scale emergencies. HERE’S WHAT THE EXPERT SAID A reader asked us: How can I save for a rainy day through mutual funds? EXPERTSPEAK Subhasish Kar IFA What is compounding. How does it help to increase returns? Compounding is simply the interest earned on interest. This earning on the interest leads to substantial growth in investments and savings. So, even a smaller initial investment amount can fetch you higher wealth accumulation provided you have a longer investment horizon of say 5 years or more. The key aspect of compounding is that it generates earnings on the previous earnings along with the base capital. The point is to build a large base which keeps on adding to the previous earnings. If you have Rs. 1 lakh invested as an initial investment which is compounded at 10% per annum for the following 15 years, you will have a base of Rs. 4,17,725. This is how compounding creates a cycle of earnings that keep growing. GURUSPEAK Sankar Nag IFA Preparing for the monsoon involves fixing your rain gear, storing essentials and carrying out leakage repairs. Personal finance is no different. Here’s a personal finance boot camp to equip you with financial security during rainy days. STARTING WELL AHEAD OF THE SEASONS When do you start preparing for the rains? A week before the rains? A month; or 6 months? The earlier you start, more time you will have to do leakage repairs. Similarly, it’s better to buy an air conditioner or a cooler before the summer begins. In finance, early investing can give you an edge over the weather. For example, starting retirement planning early can help you leave your 9 to 5 job way before your retirement age. Also, you need to start emergency planning as soon as you start earning, and not when an emergency arrives. DIVERSIFICATION HELPS You use an umbrella during rains. You also use it during summers. Sometimes, you prefer diversifying and use a raincoat or a bag cover along with an umbrella to manage risk. In finance, you can use Hybrid Funds to manage your risk and returns. Here, you can get high returns during market peaks and stability during market plunges. ADAPTING IS THE KEY Can you control the rains; the summer heat; the cool winter winds? Adapting to the weather is the best strategy. The better you adapt, stronger will be your immunity. In finance, you cannot control financial emergencies, but you can adapt to them. Having a strong emergency corpus can help you adapt and build immunity against financial storms. DIFFERENT GEARS FOR DIFFERENT SEASONS You need protective gear for every season. For winters, it’s warm clothes; for summers, it’s sunscreen; and for rains, it’s the umbrella or a raincoat. Why do you need these gears? You need them to adapt to the season. In finance, you need different investments for different financial seasons. For example, an emergency corpus through Liquid Funds can help you during emergencies. Similarly, for long-term goals, you can invest in Equity- based Mutual Funds; for short-term goals, Debt- based Funds. You got to prepare for the rainy day. Financial emergencies like job loss and medical emergencies can wipe out savings in no time. ADAPTING TO THE WEATHER IS KEY TO SURVIVING *This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information Here are a few pro tips and benefits associated with emergency planning: Pro tip 1: Know your Finances Being aware of your financial behaviour can help in better financial planning. For example, recording your expenses can help you segregate your expenses into compulsory expenses and variable spends. Benefits: While planning for emergencies, you need to be aware of your unavoidable expenses like rent, food, utility bills, medical expenses, and child’s education. Pro tip 2: Seek Financial Advice After you are aware of your financial behaviour, you can seek financial advice on emergency planning. Just having a Liquid Fund might not serve the purpose. The size of your emergency corpus should be determined based on your financial profile. Benefits: A financial advisor can help you determine the size of your emergency corpus. More are the financial dependents; bigger will be your emergency corpus. Pro tip 3: Invest in Liquid Fund You can invest in Liquid Funds to build a strong emergency corpus. These are fixed income securities with no lock-in and immediate redemption facility. Benefits: Liquid Funds can give you returns over and above inflation. They are low-risk Mutual Funds, which can be redeemed any time during an emergency. Pro tip 4: Review your investments Your emergency needs differ during different stages of your life. For example, your emergency needs are different when you are single, married and after you become a parent. Benefits: Reviewing your emergency planning from time-to-time can help you become financially ‘weatherproof’. HOW TO WEATHER THE STORM IN YOUR FINANCIAL LIFE It’s never too late to adapt to your financial rains; start your Liquid Fund SIP now! SIP can cover you during rainy days, just like your umbrella! To save your savings from inflation Inflation can wipe-out your savings. Do you recollect the time when the prices of groceries spiked? The value of money declines with inflation. Therefore, your savings will be ineffective in fighting inflation. To stay inflation-ready, you need investments that can give returns over and above inflation. To have the same lifestyle during financial emergencies Financial emergencies can impact your daily lifestyle. Successful emergency planning can help you continue with your financial goals and lifestyle. You cannot avoid or stop uncertainties, but you can manage through them and have the same lifestyle. To be financially secure Financial security is a feeling you derive when you are certain about your goals, as well as emergency- ready. One of the essential pre-condition for financial security is managing uncertainties. Therefore, Liquid-Fund SIPs (Systematic Investment Plan) should be an essential component of your portfolio. Financial storms can damage your finances. A strong emergency corpus can help you keep going with your financial goals. Here are the top 3 reasons why saving for a rainy day is essential: Swatantra Kumar Explains: Why to save for a rainy day *This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information In the next edition: Remember, the time your friend took you under his umbrella during the time of need? In the next edition, we will discuss how Mutual Funds can be your all-time financial friend! Mutual Fund investments are subject to market risks, read all scheme related documents carefully. Join us as we discuss the reasons for befriending your investments in our next UTI Swatantra Facebook Live show - 'Best Friends Forever, Financial Problems Whatever'' on Thursday, 1st August 2019, 5 pm onwards.
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Steps to download and scan a QR code: 1) Download QR code app on your phone. 2) Run app and scan the QR code. 3) Your smartphone reads the code & navigates to the destination.
Scan this QR code to calculate the amount you need to invest to achieve all the milestones you have set for yourself.
Scan this QR code to know why fi nancial planning is a must before you begin to invest.
Ever thought of how much money you should have when you retire? Scan this QR code to fi nd out.
WHAT NEXT? You need greater immunity during rainy days to fi ght infections. Financial storms can affect your fi nancial health. To build immunity against immunities, let’s look at some immunity booster tips.
For more details, follow us on Twitter @utimutualfund; Email queries or suggestions: [email protected]
Please mention ‘Swatantra in TT’ in subject line. For more such fi nancial advice, head to our website:
http://www.utiswatantra.com
*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information
An emergency fund is essentially an amount of money that you keep aside for emergencies. It is a fund that you can access at the hour of crisis or for unexpected and unplanned scenarios,
and not for meeting your routine expenses. So, you must design it specifi cally to meet unexpected fi nancial shortfalls that may apply to you. An emergency fund should be liquid. This is the most critical feature that you should keep in mind when you are choosing where to park your emergency fund. You should be able to withdraw the money when you need it. At the same time, you should ensure that you do not get penalized in the form of an exit load or pre-withdrawal penalty fee. Long-term emergency fund is where you save for large-scale emergencies.
HERE’S WHAT THE EXPERT SAID
A reader asked us: How can I save for a rainy day through mutual funds?
EXPERT SPEAK
Subhasish Kar IFA
What is compounding. How does it help to increase returns?
Compounding is simply the interest earned on interest. This earning on the interest leads to substantial growth in investments and savings. So, even a smaller initial investment amount can fetch you higher wealth accumulation provided
you have a longer investment horizon of say 5 years or more. The key aspect of compounding is that it generates earnings on the previous earnings along with the base capital. The point is to build a large base which keeps on adding to the previous earnings. If you have Rs. 1 lakh invested as an initial investment which is compounded at 10% per annum for the following 15 years, you will have a base of Rs. 4,17,725. This is how compounding creates a cycle of earnings that keep growing.
GURU SPEAK
Sankar Nag IFA
Preparing for the monsoon involves
fi xing your rain gear, storing essentials and carrying out leakage repairs. Personal fi nance
is no different.
Here’s a personal fi nance boot camp to equip you with fi nancial security during rainy days.
STARTING WELL AHEAD OF
THE SEASONSWhen do you start preparing
for the rains? A week before the rains? A month; or 6 months? The earlier you start, more time you will have to do
leakage repairs. Similarly, it’s better to buy an air conditioner or a cooler before the summer begins. In fi nance, early investing can give you an edge
over the weather. For example, starting retirement planning early can help you leave your 9 to 5 job way before your retirement age. Also,
you need to start emergency planning as soon as you
start earning, and not when an emergency
arrives.
DIVERSIFICATION HELPS
You use an umbrella during rains. You also use it during
summers. Sometimes, you prefer diversifying and use a
raincoat or a bag cover along with an umbrella to manage risk. In fi nance, you can use Hybrid Funds to
manage your risk and returns. Here, you can get high returns during
market peaks and stability during market plunges.
ADAPTING IS THE KEY
Can you control the rains; the summer heat; the cool winter winds? Adapting to the weather is
the best strategy. The better you adapt, stronger will be your immunity.
In fi nance, you cannot control fi nancial emergencies, but you can adapt to them. Having a strong emergency corpus can
help you adapt and build immunity against fi nancial storms.
DIFFERENT GEARS FOR DIFFERENT SEASONS
You need protective gear for every season. For winters, it’s warm clothes; for
summers, it’s sunscreen; and for rains, it’s the umbrella or a raincoat. Why do you need these gears? You need them to adapt to the season.In fi nance, you need different investments for different fi nancial seasons. For example, an
emergency corpus through Liquid Funds can help you during emergencies. Similarly, for long-term goals, you can invest in Equity-
based Mutual Funds; for short-term goals, Debt-
based Funds.
You got to prepare for the rainy day. Financial
emergencies like job loss and medical
emergencies can wipe out savings in no time.
ADAPTING TO THE WEATHER IS KEY TO SURVIVING
*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information
Here are a few pro tips and benefi ts
associated with emergency planning:
Pro tip 1: Know your FinancesBeing aware of your fi nancial behaviour can help in better fi nancial planning. For example, recording your expenses can help you segregate your expenses into compulsory expenses and variable spends. Benefi ts: While planning for emergencies, you need to be aware of your unavoidable expenses like rent, food, utility bills, medical expenses, and child’s education.
Pro tip 2: Seek Financial AdviceAfter you are aware of your fi nancial behaviour, you can seek fi nancial advice on emergency planning. Just having a Liquid Fund might not serve the purpose. The size of your emergency corpus should be determined based on your fi nancial profi le. Benefi ts: A fi nancial advisor can help you determine the size of your emergency corpus. More are the fi nancial dependents; bigger will be your emergency corpus.
Pro tip 3: Invest in Liquid FundYou can invest in Liquid Funds to build a strong emergency corpus. These are fi xed income securities with no lock-in and immediate redemption facility. Benefi ts: Liquid Funds can give you returns over and above infl ation. They are low-risk Mutual Funds, which can be redeemed any time during an emergency.
Pro tip 4: Review your investmentsYour emergency needs differ during different stages of your life. For example, your emergency needs are different when you are single, married and after you become a parent. Benefi ts: Reviewing your emergency planning from time-to-time can help you become fi nancially ‘weatherproof’.
HOW TO WEATHER THE STORM IN YOUR FINANCIAL LIFE
It’s never too late to adapt to your fi nancial rains; start your
Liquid Fund SIP now!
SIP can cover you during rainy days, just
like your umbrella!
To save your savings from infl ationInfl ation can wipe-out your savings. Do you recollect the time when the prices of groceries spiked? The value of money declines with
infl ation. Therefore, your savings will be ineffective in fi ghting infl ation. To stay
infl ation-ready, you need investments that can give returns over and above infl ation.
To have the same lifestyle during fi nancial emergenciesFinancial emergencies can impact your daily lifestyle. Successful emergency planning can help you continue with your fi nancial goals and lifestyle. You cannot avoid or stop uncertainties, but you can manage through them and have the same lifestyle.
To be fi nancially secureFinancial security is a feeling you derive when you are certain about your goals, as well as emergency-
ready. One of the essential pre-condition for
fi nancial security is managing uncertainties. Therefore, Liquid-Fund SIPs (Systematic Investment Plan) should be an essential component of your portfolio.
Financial storms can damage your fi nances. A strong emergency corpus can help you keep going with your fi nancial goals. Here are the top 3 reasons why saving for a rainy day is essential:
Swatantra Kumar Explains: Why to save
for a rainy day
*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information
your goals, as well as emergency-ready. One of the essential
In the next edition: Remember, the time your friend took you under his umbrella during the time of need? In the next edition, we will discuss how Mutual Funds can be your all-time financial friend!
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
Join us as we discuss the reasons for befriending your investments in our next UTI Swatantra Facebook Live show - 'Best Friends Forever, Financial Problems Whatever'' on Thursday, 1st August 2019, 5 pm onwards.
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