financial independence: the best gift for your...

*This content was created exclusively for UTI Swatantra. Visit http://www.utiswatantra.com for more information

Nomination facility is offered for the transfer of mutual

fund units in case of the unfortunate demise of the unit holder. Nomination is the process of appointing a person to take care of your assets in the event of the unit holder's death. An investor can appoint a nominee for his mutual fund scheme, or for the demat account in case he holds mutual funds in his demat account. When a nomination is registered, it facilitates easy transfer of funds to the nominee(s) in the event of demise of the investor. In the absence of a nominee, the heir claimant will have to produce a host of documents, such as a will, legal-heir certifi cate and a no-objection certifi cate from other legal heirs etc, to get the units transferred in his/her name.

Can my child be a nominee for my Mutual Fund investments?

GURU SPEAK

Shyamal NandiIFA

The cost of educating our children is rising consistently. One relief is the tax benefi t provided for spending on children’s education. The Income Tax Act provides a direct deduction on account of fees paid for the education of dependent children. The act also provides for deduction on account of interest on loans taken for higher education of children. The deduction on payments made towards tuition fee can be claimed up to ` 1,50,000, together with deduction in respect of insurance, provident fund and pension. But, there are certain conditions to get this. It can only be claimed in respect of two dependent children and for fees to an educational institution within India and, for tuition fee only. Payment as donation or development fee to an educational institution does not qualify.

HERE’S WHAT THE EXPERT SAID

EXPERT SPEAK

Vikash Kumar BaidIFA, Trust Capital

A reader asked us: Can I get any tax deductions if I spend on my child’s

education?

FINANCIAL INDEPENDENCE: THE BEST GIFT FOR YOUR CHILDAs a parent, you want to see your children grow up to be fi nancially independent individuals. You are probably working round the clock to ensure that they get good education. You are saving for their future too. But, not many schools teach children about money that early. You may want to take the initiative now.Here are ways you could make a start:

Be the wind beneath their wings● While you are teaching

fi nancial independence to your child, you need to instil confi dence in them that you are doing your bit to secure their fi nancial future.

● Education is costly. Show your children that you are prepared by investing regularly to help them pursue higher education in their chosen fi eld.

● Introduce them to the schemes and explain the way they work for them. For example, Children’s Fund – a solution-oriented Mutual Fund matures after 5 years or after your child attains the age of maturity, whichever is earlier. Such long-term investments help you meet long-term goals.

● Set an example by showing your portfolio and explain how different investments meet different goals at various life stages.

The need to invest● When your children enter

their teenage years and have a fair understanding of money, teach them that the money lying idle in a savings account will lose its purchasing power, thanks to infl ation.

● Introduce the concept of investing and setting goals at this stage.

● Systematic Investment Plans (SIP) are the best, to begin with for young children as they can begin investing in their future with only ` 500.

● Encourage them to tie this SIP to a particular

goal like the celebration of a milestone birthday.

Empowering your child● When your kids are solving

basic math problems at school, introduce them to the concept of a savings account. Use the opportunity to introduce the concept of interest rate.

● Leading banks have special accounts where your children can have their own debit card, that gives them a sense of ownership and responsibility.

Begin with the saving habit● It’s never too early to

inculcate the habit of savings in your kids. The good old piggy bank can be your trusted aide.

● Even before they know how to count money, encourage your kids to put the money they receive as gifts into their piggy banks.

Swatantra Kumar Explains: Herd Mentality


Herd mentality refers to an investor habit where the decision to buy or sell is clouded by the behaviour of others around him.

Thus, if everybody is investing in a particular stock or sector, there is a strong tendency for a bunch of investors to do the same.

This is without taking merits of investment into consideration.

Swatantra Kumar Explains: Herd Mentality

Do’s and Don’ts of investing to avoid the herd mentality

DO invest in what you understand

Do read up before investing

DO NOT try to time the

marketDO invest

according to your fi nancial

goals

DO NOT let emotions get the better

of you

DO NOT invest on the

basis of a “hot” tip

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

In the next edition: Volatility is part and parcel of the investing world. In the next edition, we will understand risk and volatility. Furthermore, we will look at some tips for staying calm during volatile times.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

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 know to immunise your

child's future.

Have questions on Mutual Funds? Scan this QR code

to send them to us.

Scan this QR code to register for an event

happening in your city.

WHAT NEXT? Simple tips to make your child fi nancially independent

FIVE TIPS TO HELP YOUR CHILD BECOME FINANCIALLY SMARTFinancial independence begins with fi nancial discipline that you can inculcate in your child from an early age. Here are some simple tips

you can use to make your child fi nancially smart.

1 Play games that encourage financial thinking

What better way of imparting money lessons to your kid than through games. Good old board games like monopoly and variations of the same for younger kids stimulate fi nancial thinking in children. What’s more, you get to spend quality time with them!

3 Use the pocket money to impart money-making lessons

Are your kids constantly haggling for more pocket money? Show them how they can “earn” that extra moolah by completing chores around the house or running small errands for you.

5Patience pays in the long runFinally, ingrain the habit of investing regularly over the

long run through SIPs, no matter what. While your child’s education and the wedding may be your long-term fi nancial goals, their view may be entirely different, like saving up for the coveted DSLR camera or a fancy gadget when they complete their primary education. Just as you are investing small amounts patiently for years together to secure their future, encourage them to continue with their SIPs.

2 Use apps to teach the basics of financial discipline

Not all exposure to technology is bad! If you fi nd your kids using smart devices deftly, introduce them to simple fi nancial apps that can teach them the basics

of budgeting and tracking expenses that can help them build good fi nancial habits.

4Allow room for failuresEven after your efforts to make your

children fi nancially independent, you may see them falter at times or do things wrong like overspending or indulging. Instead of reprimanding and punishing

them at such times, use the opportunity to tell them about money management.


It is never too early to invest – Let them start today!

EVEN YOUR CHILD CAN

HAVE AN SIP INVESTMENT!

For more on fi nancial independence for children, tune into UTI Swatantra Facebook Live on 14th November, 2018 from 5:00 pm onwards and catch the live show on 'Let your children and their SIPs grow together'.

financial independence: the best gift for your...

Documents