Through the Looking Glass

Rediff 'Beware of inflation: it eats into your savings,' your financial advisor would have warned you a number of times. What you need to worry about it not just the inflation number that the government publishes every Friday, but the inflation that is relevant to you. The traditional issue One of the biggest differences between the number that the government estimates as inflation and the actual inflation that impacts you is the difference in the basket of goods and services that both take into account. So, for example, your biggest cost items like rent, children's education expenses or health care expenses may not find the same weight in the government numbers as they do in your monthly budget. This concept has been written upon an implemented by financial advisors: they tend to advise you to take a buffer over the normal inflation rate and to account for higher inflation when it comes to goals like education. We will today explore a different concept called ...

The Economic Times For many NRIs, investing in India is more reliable because of tax benefits & better growth opportunities. In our previous article, we looked at some of the issues faced by the professional NRIs when planning their finances. This time let us look at the opportunities available to the NRIs when they move from saving to investing their money. Investment choices available locally We begin going up the risk-reward line and identify invest opportunities for the NRIs in their home country. We focus primarily on US. Checking/saving accounts: Due to inertia (checking account is opened as a salary account) or lack of financial advice, money typically lies in checking accounts here earning as low 0.25%. Savings accounts cost a fee or come with a minimum deposit requirement and can earn slightly greater 5% in the USA currently. These accounts are good for short-term liquidity and emergency needs. 401(k) contributions: Similar to our EPF contributions, 401(k) con...