A special programme designed for parents and their children
An introduction to safe financial products is necessary for today’s youth. With this in mind, Moneylife Foundation organised its flagship programme “How to be Safe & Smart for the Youth” for parents and their young children. The programme was supported by Lila K Jagtiani Foundation.
Sucheta Dalal, managing editor of Moneylife and founder trustee of Moneylife Foundation, took the first session where she explained how to be safe with one’s money. Ms Dalal advised that we should keep our financial life simple. As the first step, she advised the attendees to avoid unregulated financial products. She also discussed the ‘eight security features’ of Indian currency notes.
In her presentation, she made the audience aware of various scams, especially the electronic kind, in which people lose large chunks of their savings. Ms Dalal asked the audience to share their stories about ‘Phishing’ and ‘Vishing’ where scamsters make the gullible public part with financial details and rob them.
Among the most widespread scams are ‘pyramid schemes’, also known as ‘chain money schemes’ or ‘multi-level marketing schemes’ (MLMs) which easily dupe people. Millions have lost money, she pointed out in schemes such as QNET, Pearls, City Limouzine, Japan Life, etc. One of the main sources of financial advice is relationship managers (RMs) of banks. Ms Dalal reminded the audience that the main objective of RMs is to achieve their sales targets and not to enhance our wealth.
Mr Yogesh Sapkale, deputy editor of Moneylife made a brief presentation on safe passwords. He highlighted that 50% of users have the same password for all the sites. And, worse still, almost 90% of them don’t change their password periodically. He explained the process of creating strong passwords: use more than 13 characters in a combination of words, digits and special characters. Online banking, emails and social media presence should be protected by strong passwords. For sites, which do not affect you personally or financially, one can use simpler passwords, advised Mr Sapkale.
Simple Steps for Investing Smartly
In his session, Debashis Basu, editor of Moneylife and founder trustee of Moneylife Foundation, urged the audience to find ways to save at least 25% of their income. He explained the benefits of regular saving by showing how money compounds dramatically over the long term, even though in the initial periods it hardly seems to grow. Saving money regularly is the only first step. If the savings are kept in bank deposits, they won’t grow much, especially if one is in the higher tax bracket. Money has to be invested in higher-return products. How does one go about it?
The list of financial products available today is endless. It’s difficult to decide which financial product is better than the other. Which product will suit your needs? It requires dedicated effort, plenty of time and a keen interest to know all aspects of financial products, he said. Fortunately, if one sticks to a combination of fixed-income products and equity funds, the job will be done. He suggested that youngsters, who are new to investing, should start investing in the ratio of 40:60 (bank FDs: equity mutual funds). Hold your mutual fund investments for 10-15 years and you won’t regret it, he said.