BUY IT AS AND WHEN HE/SHE DECIDESTO ON AN EMI AT SAY 15% ANNUALRATE OF INTEREST.

The monthly outgo would be nearlyRs 1,100 for a year, translating to atotal outgo of almost Rs 13,000

OPTION 1:

DELAYED SPENDING, ATTIMES, IS SPENDING WISELY

NEXT EDITION: In our next edition we will discuss about long term financial planning forfinancial independence.

STEPS TODOWNLOADAND SCAN A QRCODE

Download QR codeapp on your phone

Run app and scanthe QR code

Your smartphonewill read the code &navigate to thedestination

Scan this QR code tocalculate your tax

liability and how muchyou need to invest

to save tax.

Have questions onMutual Funds?

Scan this QR code tosend them to us.

Scan this QR code for a quick guide to

saving and investingfor youngsters

Small changes to consumption habits could lead to smart savings

PERSONAL TAXES AND INVESTMENTS

— This article has been exclusively created for UTI SWATANTRA

The lifestyle thatmillennials lead, attimes prompt the older

generation to think that theformer are inclined moretowards consuming and lesstowards saving and investing.To some extent this is true.

Millennials could, however,use some smart tools whichcould allow them to enjoy thesame lifestyle, buy the sameconsumables but with a delay.And if they agree to tow thatpath, in the process savesome money in the short run.

And inculcate a habit ofdiscipline in saving andinvesting.

Here's one example how amillennial, aspiring to buy asmartphone for Rs 12,000,could opt for one of the twooptions.

ILLU

STRA

TION

S:SA

CHIN

VAR

ADKA

R This couldtranslate to amonthly saving of Rs1,000

Invest this Rs1,000 in a liquidscheme of a mutualfund house

Say the fundgenerates an annualreturn of 6.5%

After a year, total

corpus would be alittle over Rs 12,400

This leads to asavings of nearly Rs1,000 compared tobuying thesmartphone on EMIs

There's anadditional savings ofRs 400 as the liquidscheme corpus grewto Rs 12,400

OPTION 2:

CAN ONE PLAN POST-RETIREMENTPENSION THROUGHTHE MUTUAL FUNDROUTE?

A BONUS:Such a strategy

could inculcate ahabit of discipline in

spending, savingand investing from a

young age.

TO LET GO OFF SOME SMALL CONSUMABLES, SAYSACRIFICE A COFFEE EACH WEEK AND A MOVIE A MONTH

YES, THAT'S POSSIBLE.Mutual funds are allowedto offer pension planswhich are also notified bythe government as taxsaving instruments.However, only a limitednumber of fund housesoffer this product.

Usually these schemesare categorised ashybrid funds with about40% in equities and thebalance in debtinstruments.Investments in theseschemes qualify for taxsavings under section80c of the income taxact under the annuallimit of Rs 1.5 lakh.

CASE STUDY

Mehul K Bheda replies,

Your query doesn'tinclude any infor-mation about the

budget and time horizonrequired to achieve yourgoals of buying a houseand marriage. For anygoal, especially if it's a fi-nancial goal, time andvalue should always beattached to it.

Buying a house re-quires a huge capital,and if you have minimumfive years in hand thenyou should save money

for down payment andother initial expenses likestamp duty and registra-tion fees by investing 30-40% of your monthly sur-plus in hybrid equity-ori-ented mutual fundschemes via SIP mode.

For short-term goalslike marriage, I suggestyou start allocating 50%of your surplus money indebt category of mutualfund schemes like ultrashort-term or short-termfunds where your capitalwill be at low risk.

I also advise you tostart investing 10-20% ofyour surplus money in di-versified equity mutualfund schemes for long-term goals like retire-ment or wealth creation.Saving at an early stagein life will make a hugedifference to your longterm financial goal.

Currently, you are in-

vesting Rs 1.5 lakh in PPFfor saving tax. Considerallocating 50% of thisamount in ELSS Schemes(Equity Linked SavingsScheme) which offer dualbenefits of saving taxalong with wealth cre-ation. As we all know, eq-uity is a volatile assetclass, but it has the po-tential to grow your mon-ey multi-fold over a longperiod of time.

To safeguard yourgoals, I would also rec-ommend that you consid-er a health insuranceplan (Mediclaim) as a fi-nancial security againstany unforeseen health is-sues which may erodeyour savings.

—The author is a certifiedfinancial planner

This article has beenexclusively created for

UTI SWATANTRA

'TIME AND VALUE SHOULDALWAYS BE ATTACHED TOA FINANCIAL GOAL'I am a 28-year-old advertising professional. My monthly income is Rs 1.2 lakh whileexpenses go up to Rs 35,000. I wish to invest for my marriage and to buy a new house.How do I go about it? I currently have no investments, except an annual transfer of Rs1.5 lakh in PPF.

— Dhrishti Shah

Nikhil Jitendra Anandpara

The GenNext and a cupof coffee: a combina-

tion that is most commontoday and a topic morelikely to get the conversa-tion rolling as against the

terms "opportunity cost"and "compounding". Butthese terms are muchmore important to dis-cuss, maybe over a cup ofcoffee!

For the youth today, lifecan be termed as one bigparty and a vicious cycle.The cycle of earning andspending begins with along list of EMIs but nospace for SIPs. The ideathat your job and your paycheck are constant is fool-ish but to think that youryouth is constant is the ulti-mate error!

Discipline and self-regu-lation are the cornerstonesof a successful investmentplan. Putting your money towork for you may not makeyou look cool to othersaround you, but it definitelymakes you smarter thanthe others around you.

The solution is: auto-mate your savings! Save inoptions that do not alloweasy withdrawals. Give amandate for an SIP thatwill automatically flowinto your mutual fund andnot in your next smart-phone EMI.

Youth has the advantageof time on its side; thetime that can be used tobuild wealth by maximis-ing the power of com-pound interest. With com-pounding, even a smallamount today can reap bigrewards at retirement.Compounding essentiallyadds to your earnings byreinvesting your interest.

— The author is an independent financial advisor

This article has beenexclusively created for

UTI SWATANTRA

'SMALL CONTRIBUTION ON A REGULARBASIS CAN CREATE A BIG CORPUS'

GURU SPEAK

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UTI Retirement Benefit Pension Fund is an open ended retirement solution oriented scheme having a lock-in of 5 years or fill retirement age(whichever is earlier). UTI Long Term Equity Fund is an open ended equity linked saving scheme with a statutory lock-in of 3 years and tax benefit.As per prevailing tax laws. `Inception date 26" December 1994. "2 .3 Million investors = Over 2.2 Million investors of UTI Retirement BenefitPension Fund and over 1.6 Lakh investors of UTI Long Term Equity Fund (Tax Saving), as on 31" December, 2018 . $On investment of T1,50,000per annum for the highest tax bracket of 30% U/S 80C of the Income Tax Act , 1961 . -UTI Smart Plans is only a communication approachapp lied to various tax saving funds from UTI Mutual Fund and is not the name of a Scheme/Plan of UTI Mutual Fund.

UTI Long Term Equity Fund UTI Retirement Benefit Scan the QR code to know more(Tax Saving) Pension FundThis product is suitable for investors This product is suitable for investorswho are seeking: * who are seeking: *• Long term capital growth • long term capital appreciation 3• Investment in equity instruments of • investment in equity instruments

companies that are believed to have (maximum 40%) and debt/ money ..ba°b. r°°deoie rprinoeol 'IT -A u err°m?growth potential market instruments "b° °""°d"°'°'Y '9" r ry F° ,d r sw "ai _,f e°",io" F,"d

' Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.