About Tim N. Goodin

http://left-bank.org

Posts by Tim N. Goodin :

Tikanga-based banking services needed to tackle inequalities

NOTICE: After celebrating Matariki, the highlight of renewal and regeneration in the Maori calendar, now is a good time to think about how to solve a major problem that is preventing us as a nation from achieving true growth and real well-being.

These are the lingering inequalities in our financial system for members of marginalized communities, especially Maori.

Giving everyone fair and equal access to the financial services they need is not only the right thing to do, it is the key to reducing the pressures of housing availability and affordability, intergenerational poverty and the lack of skilled workers. This makes sense both from an economic standpoint and from a tikanga standpoint.

Our current system is simply not configured to make this possible. A new approach is long overdue.

RNZ

The Bottom Line: The most recent figures show that the Maori homeownership rate was 31% compared to 52% for the total population.

READ MORE:
* Karleen Everitt appointed Senior Head of Maori Strategy at ANZ Bank
* Maori landowners work together to create large agricultural enterprises and economic rangatiratanga
* The Reserve Bank’s difficult relationship with the Maori economy

The Reserve Bank and the leaders of the private banking system recognize shortcomings in the current financial system that make it nearly impossible for Maori to have equal access to finance, let alone fair outcomes.

The Reserve Bank released a discussion paper titled Maori financial services institutions and arrangements in March 2021 which highlighted these disparities, such as standard risk frameworks of banks not allowing lending on community-owned land.

This means that in the majority of cases, Maori land has not been developed or improved in a way that creates wealth or other benefits such as housing for landlords and the wider iwi.

Renata Blair of BNZ recently spoke about her own experience of being turned down by big banks to develop two new houses on Maori land despite a good salary and very low risk.

The Reserve Bank and the leaders of the private banking system recognize shortcomings in the current financial system that make it almost impossible for Maori to have equal access to finance.

Robert Kitchin / Tips

The Reserve Bank and the leaders of the private banking system recognize shortcomings in the current financial system that make it almost impossible for Maori to have equal access to finance.

A new model of shared prosperity

This shows a fundamental disconnect between the traditional financial sector and Maori stocks.

Standard models of economic investment are profit-driven only, driven by supply and demand, while the Maori approach is more focused on long-term generational benefits, well-being, and equitable outcomes.

As Rangimarie Price, director of The Connective, said in a recent discussion for The Edmund Hillary Fellowship: “The model currently in use says we have to make money. And then, with what we have left after making money, we will do good. From a tikanga perspective, tikanga is all about purpose and well-being, not profit.

With a growing Maori population, New Zealand’s economic prosperity depends on the ability to bridge this gap, to find new ways of working that do not rely on traditional banking structures.

The disparities that are occurring are currently seen as the problem of the marginalized, but if we come together to find a solution, all of society will benefit.

Consider the fact that the average Maori age is 24. Come to think of it, the success of this 24-year-old will determine what our retreats will look like. It is therefore in all of our interests to help this young person have a solid financial future.

To quote the President of the Productivity Commission, Ganesh Nana: “We must recognize the value of what we have here and develop our own model, our own intellectual property and… kaitiakitanga [guardianship], manaakitanga [support and respect], integrate them into our business models.

Ganesh Nana, Chairman of the New Zealand Productivity Commission.

Provided

Ganesh Nana, Chairman of the New Zealand Productivity Commission.

So what would this new model look like?

The only way forward is to work with Maori and other marginalized communities to create shared prosperity, placing community at the center of decision-making.

There is no one-size-fits-all solution, but a top-down structural approach to finance and a bottom-up method that works with individuals to build financial literacy and decision-making skills is needed.

Work from top to bottom and bottom to top

Two organizations I’m involved with illustrate every part of this equation. PowerFinance is a fintech that works alongside iwi to secure alternative financing streams for housing and other major projects at lower interest rates and more sustainable terms.

Since traditional banking structures cannot provide this kind of flexibility, there is a huge opportunity – and a need – for such innovation.

Businesses that recognize that shared ownership does not automatically add risk to a loan and are ready to innovate with technologies such as blockchain that ensure loans are safe and responsible for both financiers and the bank. iwi, could transform financial services and outcomes for marginalized people.

The essential ingredients required are a willingness to partner with iwi to co-design solutions and look beyond the immediate investment opportunity. This is an approach that is not limited to one project to be funded, but to the overall needs of the iwi, so that the funding is approached holistically so as to achieve greater benefits and more durable.

Meanwhile, the nonprofit Māori Women’s Development (MWD) supports Maori Wahine entrepreneurs who do not have access to funding from traditional financial institutions.

Our work recognizes that improved financial literacy and improved decision-making skills are essential to ensure long-term business success and financial prosperity.

That is why, in addition to providing grants of up to $ 50,000, 80 percent of MWD’s work is focused on pastoral care, where the women themselves make decisions and solutions are sought with our counselors.

Having both the right funding structures in place to provide funding and the mindset that financial transactions cannot be treated in isolation are essential if we are to create truly equitable results for Maori.

The need for restorative financing

The last piece of the puzzle the current system lacks relates to this mindset – recognizing that every financial transaction supports a bigger goal, which isn’t always profit.

We need to put more emphasis on restorative finance, or finance that “seeks to remedy the systemic injustices that extract and penalize communities of color, the poor and the working class by making investments that generate community wealth, produce governance structures that benefit the whole and strengthen community power.

Kataly Foundation CEO Nwamaka Agbo said of investors: “People want to see perfect success before they take the leap.

“It’s my job to remind them that this is not an academic study and to challenge them to ask themselves if there is any part of their investment that they could use to explore and experience. with a community or an individual. “

While MWD is still the only option for Maori businesswomen, despite its inception over 30 years ago, it is time for our approach to short-term investing and our financial system as a whole to change.

When you put Maori in a house, it is not about the house. The house is a tool for making people healthy, giving them a stable future, allowing them to take root, to plan and to move forward.

If more organizations develop innovative financial models like PowerFinance, or take a restorative approach to investing, we can lay the groundwork for many more homes and a much healthier future for everyone.

– Teresa Tepania-Ashton is the Managing Director of Māori Women’s Development.


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Average student debt of 50 to 61 borrowers

Select’s editorial team works independently to review financial products and write articles that our readers will find useful. We may receive a commission when you click on product links from our affiliate partners.

There are many less 50 to 61 year olds who still have student debt compared to younger age groups, but those with high average balances.

According to the statistics of the US Department of Education Data from the fourth quarter of 2020, borrowers in this age group have an average balance of $ 42,290.32, which is almost as much as the highest average debt level of $ 42,373.23 carried by the bracket. younger than them (35 to 49 years old).

But while these two age groups, 35 to 49 and 50 to 61, have similar average balances, the total number of loan borrowers drops dramatically after age 49. There are only 6.2 million borrowers in the older age group, compared to 14.2 million borrowers in the younger age group.

The numbers illustrate a scenario where borrowers find themselves at different ends of the spectrum. There are those who have fully paid off their student loans before their 50s – signaled by the sharp drop in borrowers – and also those who still have a good chunk of their debt to pay off with all the interest accrued over most of their age. adult – signaled by the high average debt balance.

The data also takes into account borrowing parents who have taken out student loans in their own name to help fund their children’s college education.

Refinance student loans in your 50s

Whether you are paying off your own student loans or managing them parent PLUS loans you purchased for your child, refinancing with a private lender can help you get rid of the debt once and for all.

Since you probably had your loans for years before the age of 50, you may have already refinanced several times. The good news is, you can refinance your student loans as many times as you want. You can take advantage of your age, too: If you’ve built up a history of on-time loan repayments over all these years, you may have a higher credit rating and be in a better position to benefit from a lower interest rate.

Before refinancing: With the current freeze on federal student loan payments and interest, we do not recommend that you consider refinancing Federal or Parent PLUS loans until forbearance ends on September 30, 2021. Federal loan refinancing removes all Unique government protections like deferral and forbearance, income repayment plans, forgiveness programs, and blanket student loan cancellation.

Refinancing of private student loans in a context of declared inflation

While interest rates remain low, now is the time to lock in a lower refinance rate on your private student loans before rising inflation pushes rates up, which is expected to happen in end of 2022.

To get a low rate today, you need to choose a refinance lender that offers fixed interest rates. Select private student loan financings analyzed and compared from national banks, credit unions and online lenders to rank your best options. All of the companies on our best deals list offer a variable and fixed refinance interest rate, as well as low refinance rates, flexible loan terms, no up-front refinancing fees or prepayment penalties. and protection against financial hardship. Learn more about our methodology for choosing the best student loan refinancing companies below.

Refinancing with a fixed rate versus a variable rate means that you will pay the same low interest rate for the remaining term of the loan. It’s even better for your portfolio if your salary keeps pace with future inflation, so you earn more and earn less interest. If you opt for a refinanced variable rate loan, its rates are subject to change. When inflation is likely to trigger rate hikes, variable rate student loans will also experience higher interest rates.

Our methodology

To determine which student loan refinancing companies are best for borrowers, Select the analyzed and compared private student loan financing from national banks, credit unions and online lenders. We’ve refined our ranking by only considering those that offer low student loan refinance rates and prequalification tools that don’t hurt your credit.

While the companies we have chosen in this article consistently rank among the most competitive interest rates for refinancing, we also compared each company on the following characteristics:

  • Wide availability: All of the companies on our list refinance both federal and private student loans, and they each offer variable and fixed interest rates.
  • Flexible loan terms: Each company offers a variety of financing options that you can customize based on your monthly budget and how long it takes to pay off your student loan.
  • No creation or registration fees: None of the companies on our list charge borrowers an upfront “set-up fee” for refinancing your loan.
  • No early repayment penalties: The companies on our list do not charge borrowers for prepayment of loans.
  • Simplified application process: We made sure companies offered a fast online application process.
  • Co-signer options: Each company on our list allows a co-signer if the direct borrower does not qualify for refinancing on their own.
  • Automatic payment discounts: All of the companies listed already calculate automatic payment discounts in their advertised rates.
  • Private student loan protections: While you lose the benefits of the federal student loan when you refinance, each company on our list offers some type of protection for borrowers in times of financial difficulty.
  • Loan sizes: The above companies refinance loans in a range of sizes, from $ 5,000 to $ 500,000. Each company advertises their respective loan amounts, and completing a pre-approval process can give you an idea of ​​your interest rate and monthly payment.
  • Credit / eligibility conditions: We took into consideration the minimum credit scores and income levels required if this information was available.
  • Customer service: Each company on our list provides customer service that is available by phone, email, or secure online messaging. We have also opted for lenders who have an online resource center or advice center to help educate you on the student loan refinancing process.

After reviewing the features above, we’ve sorted our recommendations by best for overall refinancing needs, having a co-signer, applying with a fair credit score, refinancing parent loans, and medical school loans.

Note that the rates and fee structures for refinancing private student loans are not guaranteed forever; they are subject to change without notice and they often fluctuate with the Fed rate. Choosing a fixed rate APR when you refinance will ensure that your interest rate and monthly payment will remain consistent throughout the life of the loan.

Your refinance rate depends on your credit rating, income, debt-to-income ratio (DTI), savings, payment history, and overall financial health. To refinance your student loan (s), lenders will conduct a serious credit check and request a full application, which may require proof of income, identity verification, proof of address, etc.

Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.


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Major Korean bank to launch crypto custody services By BTC Peers

Major Korean bank to launch crypto custody services

One of South Korea’s largest financial institutions, Woori Financial Group, will soon begin offering cryptocurrency custody services to its clients through a project known as D-Custody.

The initiative was launched in collaboration with Coinplug, one of the first exchanges in South Korea and a blockchain financial services provider. While Coinplug will become the key shareholder in the ownership agreement, Woori Bank will contribute less.

In the meantime, the project should go live next week. Commenting on the move, a representative from Woori Bank said:

In overseas markets, digital asset custody has become an established and successful practice among new services offered by banks.

Speaking of crypto custody, several traditional financial institutions have jumped on the crypto bandwagon. For example, in February, America’s oldest bank BNY Mellon (NYSE 🙂 announced that it was launching a new crypto custodial service for Bitcoin and other cryptos.

Although South Korean regulators have sought a way to tax crypto transactions and crack down on illegal transactions, the demand for digital asset custody services in the region has continued to grow. Besides Woori, other Korean banks like KB Kookmin and Nonghyup Bank have also entered the crypto custody space.

Continue reading on BTC Peers

Warning: Fusion media would like to remind you that the data contained in this site is not necessarily real time or accurate. All CFDs (stocks, indices, futures) and Forex prices are not provided by the exchanges but rather by the market makers, and therefore the prices may not be accurate and may differ from the actual market price, which means that the prices are indicative and not suitable for trading purposes. Therefore, Fusion Media assumes no responsibility for any business losses that you may incur as a result of the use of such data.

Fusion media or anyone involved with Fusion Media will accept no responsibility for any loss or damage resulting from reliance on any information, including data, quotes, graphics and buy / sell signals contained in this website. Please be fully informed about the risks and costs associated with trading in the financial markets, it is one of the riskiest forms of investing possible.


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World Bank Provides $ 185 Million to Jamaica for Storm Protection

The World Bank (International Bank for Reconstruction and Development, or IBRD) has priced a catastrophe bond that will provide the government of Jamaica with up to US $ 185 million in financial protection against losses from named storms. during three Atlantic tropical cyclone seasons ending in December 2023.

The government of Jamaica is the first government in the Caribbean region and the first in a small island state to independently sponsor a catastrophe bond, also known as a cat bond. Jamaica was one of sixteen Caribbean Catastrophe Risk Insurance Mechanism countries that benefited from IBRD’s very first bond in 2014.

The bonds were issued under the IBRD’s “capital at risk” note program, which can be used to transfer risks associated with natural disasters and other risks from developing countries to capital markets. Payments to Jamaica will be triggered when a named storm event meets the parametric criteria for location and severity set out in the terms of the bond. The transaction includes an innovative reporting function allowing rapid calculation of payments, in the weeks following a qualified named storm. It is also the first cat bond to use an innovative cat-in-a grid parametric trigger design for tropical cyclone risk.

Jingdong Hua, Vice President and Treasurer of the World Bank, said, “We are delighted to be able to support this transaction and to bring together so many different partners, all committed to building Jamaica’s resilience in the face of tropical cyclones. We especially thank the capital market investors for their support and participation in this important mission.

Carlos Felipe Jaramillo, Vice President for Latin America and the Caribbean, World Bank, said: “The Caribbean region is vulnerable to climate-related events and we know how important it is to protect well-being. of the inhabitants of the region. We are proud to help Jamaica reduce the risks associated with these kinds of events. “

Dr the Hon. Nigel Clarke, Minister of Finance and Civil Service, Government of Jamaica, said: “The Government of Jamaica has strategically prioritized disaster risk financing to mitigate the negative fiscal impact of tropical cyclones and natural disasters, thereby strengthening Jamaica’s economic resilience. We are pleased with the successful placement of this Catastrophe Bond, which adds an indispensable layer of catastrophe risk financing that complements our multi-layered approach. In this transaction, Jamaica benefited from the vast technical resources of the World Bank and the strength of its balance sheet. We are also grateful to our bilateral partners, the governments of the United Kingdom and Germany, through the Global Risk Finance Facility, and to the United States through the United States Agency. for international development who provided financial support to the transaction.

Jamaica is highly exposed to tropical cyclones which pose a significant threat to Jamaica’s macroeconomic outlook. The Government of Jamaica has taken a proactive approach to building financial, physical and social resilience to disasters, and is supported by the World Bank through various financing instruments and technical assistance.

The cat bond complements Jamaica’s portfolio of disaster risk financing instruments and builds on the extensive engagement of the World Bank, including the preparation of disaster risk models and analyzes for Jamaica and the Jamaican government adopting a disaster risk financing strategy.

The cat bond transaction received financial support from the United States through the United States Agency for International Development, the United Kingdom-funded World Bank Disaster Protection Program, as well as Global Risk Financing Facility (GRiF). GRiF, implemented by the Global Facility for Disaster Reduction and Recovery (GFDRR) and the World Bank’s Disaster Risk Finance and Insurance Program, is supported by Germany and the United Kingdom to provide grants aimed at strengthening the financial resilience of vulnerable countries by establishing or in pre-established risk financing instruments.

Dr Heike Henn, Director of Climate and Energy, Sustainable Urban Development, Environment, German Federal Ministry for Economic Cooperation and Development, said: “We are happy to have contributed to this milestone. important in building Jamaica’s economic resilience to climate risks. Our support is an integral part of our efforts within the InsuResilience Global Partnership, whose vision is to strengthen the resilience of developing countries and protect the lives and livelihoods of poor and vulnerable people from the impacts of climate risks and climate change. disaster. the Partnership brings together governments, civil society, international organizations, the private sector and academia. Only together can we meet the challenges of climate change.

Asif Ahmad, British High Commissioner to Jamaica, said: “The UK stands in solidarity with countries on the front lines of climate change, especially small island states like Jamaica which are particularly vulnerable. This is why we have used our Presidencies of the G7 and the COP this year to advance the use of innovative finance for resilience. We congratulate Jamaica on this new catastrophe bond, which will ensure that funds are available quickly for a rapid response and recovery from hurricanes. The UK is delighted to have supported this work through the Global Risk Finance Facility, alongside our G7 partners Germany and the US, as well as the World Bank. “

Jason Fraser, Jamaica Representative, United States Agency for International Development, said, “This obligation solidifies the commitment of USAID and the United States Government to support innovative disaster financing mechanisms that provide financial reserves following natural disasters. enable Jamaica to fund its own recovery from natural disasters and reduce recovery costs. This agreement is an important milestone in Jamaica’s long-standing partnership with the United States and our growing engagement with the Caribbean region as neighbor, partner and friend.

Aon Securities and Swiss Re Capital Markets are joint structuring agents and joint bookkeepers for the transaction. AIR Worldwide is the modeler and risk calculation agent.

Paul Schultz, CEO of AON Securities, said: “Aon Securities is delighted to partner with the World Bank to help the Government of Jamaica bring this landmark transaction to the capital markets. We recognize that natural disasters can have a significant impact on the country, and we are delighted to help establish this protection to help Jamaica build a stronger social safety net and a more resilient economy for its citizens. “

Jean-Louis Monnier, Managing Director and Head of Retro & ILS Structuring, Swiss Re Capital Markets, said: “Swiss Re Capital Markets is proud to have partnered with the World Bank and the Government of Jamaica to carry out the the country’s first catastrophe bond issue. on the market. This groundbreaking transaction includes innovative payment mechanisms that allow Jamaica to access disaster relief funds more quickly following a trigger event. As such, she embodies Swiss Re’s mission to make the world more resilient.


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England reopens, but companies lift restrictions more slowly

After 16 long months, the UK government lifted nearly all of its pandemic restrictions across England on Monday, including its advice for working from home.

But with the arrival of the so-called Freedom Day, the country is reporting nearly 50,000 new cases of coronavirus per day in a population of which two-thirds are fully vaccinated. And now a “pingemia, In which hundreds of thousands of people are interviewed by the National Health Service’s track and trace application and ask them to self-isolate because they were in the vicinity of a person who tested positive, causes staff shortages in all industries.

Rather than a stampede of workers returning to their offices, many large companies are approaching the reopening with caution, as the government says there must be “personal and corporate responsibility” for certain measures. At 10 a.m. on Monday, trips on the London Underground were 38% of normal demand, no more than the same time last week, and the vast majority of people still wore masks.

And so, most employers maintain a voluntary return to the office, requiring masks to be worn away from desks and limiting their office capacity to avoid overcrowding. For example, the bank of england ask staff to come back only once a week from September. But there was an easing of policies on Monday within the central bank – restrictions on the use of elevators have been relaxed and spaces between offices will be removed.

At JPMorgan Chase’s London offices, which typically house 12,000 employees, masks still need to be worn in common areas and meeting rooms, social distancing indicators are still marked around buildings, and capacity remains capped at 50 %. The biggest change on Monday is that employees on any team are allowed to return to their office if they wish, which has increased occupancy slightly by around 30% recently, but is still fine. below its capacity. Over the summer, the bank intends to gradually raise the limit.

In the City of London, the capital’s main financial district, health and safety measures at Goldman Sachs’ 826,000 square foot European headquarters remain the same. This means that workers must wear a mask when they are not seated at their desks and continue to participate in the on-site testing program. Social distancing will reduce the normal capacity of the office. Recently, on average, about 30-40% of the 6,500 bank employees were in the office.

Goldman Sachs is also monitoring vaccination rates from voluntary surveys of its staff, which have shown a “significant upward trajectory” since June, according to an internal memo.

“We will continue to monitor local case rates and public health safety advice, and update our in-office protocols as appropriate,” said the memo, sent by Richard Gnodde, managing director of Goldman Sachs International.

At McKinsey & Company’s London office, masks will only be required in high-traffic areas from Monday, the one-way system around the building will be abandoned, there will be no limits on the number of people who can use a meeting room and the staff won’t have to have their temperature checked when entering the building. But there is still no obligation to return to the office.

Even Prime Minister Boris Johnson will be working from home on Freedom Day, as he too has been asked by the National Health Service to self-isolate for 10 days.


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Mobile money transactions drop drastically

By The Citizen Reporter

Dar es Salaam. Four days after the Electronic and Postal Communications Act (CAP 306) came into force, the Tanzania Association of Mobile Network Operators (Tamnoa) said activity had dropped significantly, calling on the government to change the new fees.
In an effort to increase its revenue by 1.254 trillion shillings to partially fund the 36.68 trillion shillings budget for fiscal year 2021/22, the government last month amended the Electronic and Postal Communications Act ( CAP 306) by imposing a levy on all mobile money transactions, depending on the amount sent and withdrawn.
Calling it “Patrioism Levy,” Finance and Planning Minister Mwigulu Nchemba said it was important that every Tanzanian participate.
“With this tax, we are looking to increase government funds so that we can meet our urgent needs. We have schools that don’t have running water. Besides cholera, there is also the global Covid-19 pandemic which requires hand washing. The money will be paid through mobile money transactions, ”he said in an interview a few days before the new law came into force.

Tamnoa Chairman Hisham Hendi, also CEO of Vodacom Tanzania Plc, said millions of customers have stopped using their services, especially those in rural areas, due to rising costs threatening their businesses.
“Customers complain a lot, especially in rural areas, although we continue to provide the best possible service, recognizing that mobile financial services are an important service to the community. We believe the government will see this and take appropriate action as this tax affects businesses and harms people, ”Hendi said in a joint statement released by Tamnoa.
Despite the loss of business, the telecommunications companies providing financial services, namely Vodacom (Mpesa), Tigo (Tigopesa), Airtel (Airtel Money), Halotel (Halopesa), Zantel (Eazypesa) and the Tanzania Telecommunications Corporation (TTCL Pesa), said the tax reduced competition. in the market and reduces the motivation to invest more.
In a bid to recover, Hendi said the telecommunications companies will continue to engage the government and parliament to voice their concerns which he says will be resolved in the best interests of the nation.
He said they were taking such steps realizing that the situation could worsen in the future as the five days of the first deduction did not go well.
“The revenues have dropped dramatically because consumers are not using our services as they were in the beginning. The situation is not good, ”he said.
On tax equality, the Executive Director of the Tanzania Private Sector Foundation (TPFS), Francis Nanai, said the best tax system is one that involves many people, with taxes being levied at lower rates.
“The idea of ​​introducing a transaction tax was a good thing, but the rates charged are not friendly. TPSF hears complaints from us, but we believe that nothing is impossible. The government should sit down with stakeholders to reconsider these standards and banks should not be left out. This. Because of technology, the phone is also a bank. There are people who borrow or keep savings on their phones, ”Nanai said.
Listening to feedback from mobile financial service providers, customers and agents, the director said research is needed to determine the most appropriate way to implement this tax.

What service providers are saying
In a more or less similar vein, mobile money agents are already claiming customers blame them for the high fees, with some saying they’ve been cheated.
In a recent interview with The Citizen, a Tabata-based agent in the city, Mr. Toni James, said some clients accused him of scamming him by deducting excessively huge sums in cash-out transactions.
“Activity is already down. Today (yesterday) people are not using mobile money transactions as they normally do in the recent past, ”he lamented.
Ms. Rahel Farahani said: “My business is a home bakery. I rely on network customers because I have no business premises. These deductions are going to seriously hurt my business – and I am considering moving away from home. “
Ms Farahani also claimed that the government’s decision on the new charges will harm people, including women and young self-employed workers.


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Family finances: Manjras should repay his personal loan using the FD bank

Samir and Kajal Manjra live with their children, aged 11 and 6, in their own home in Ahmedabad. While Samir is employed, Kajal is self-employed and the two report a combined income of Rs 1.05 lakh per month. Their portfolio includes real estate worth Rs 1.45 crore (two properties, one of which is independent), equity worth Rs 12.2 lakh in the form of mutual funds and ‘Ulips, a debt worth Rs 11.37 lakh in the form of PPF, EPF and fixed deposit, and Rs 55,000 in cash.

They also have a personal loan of Rs 3.05 lakh for which they pay an NDE of Rs 36,006. Their goals include building an emergency corpus, saving for their children’s education and marriage, and their own retirement.

Financial planner Pankaaj Maalde suggests they start by building up an emergency corpus of Rs 3.06 lakh, equivalent to six months of spending, allocating money and part of the fixed deposit. This must be invested in a liquid fund. Maalde also suggests that they pay off their expensive personal loan with the remaining fixed deposit amount.

Wallet

Cash flow

Pg11-2

Then they want to save Rs 43 lakh for the education of their older child in eight years. For this, they can allocate Ulips and start a SIP of Rs 5,000 in diversified equity funds. For higher education in 11 years, they will need Rs 52.5 lakh and can allocate mutual funds for the same.

They will also have to start a SIP of Rs 12,000 in diversified equity funds. For the education of the second child, they will need Rs 56 lakh and Rs 69 lakh in 12 and 15 years, respectively. For these objectives, they will have to start SIPs of 17,500 and 14,000 in diversified equity funds. For child marriages in 14 and 21 years old, they will need Rs 82.7 lakh and Rs 1.08 crore, and will need to start SIPs of Rs 16,500 and Rs 12,500 in equity funds. In the absence of surpluses, however, they will have to invest in them after an increase in their income.

How to invest for goals

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For retirement in 22 years, the couple will need Rs 3.4 crore and will be able to allocate their PPF and EPF corpus, as well as a property. They should also continue to pay Rs 5,000 per month to the NPS to achieve the goal.

For life insurance they have two Ulips worth Rs 15 lakh and two term plans of Rs 1.05 crore. They should continue with these and buy a Rs 30 lakh futures plan for Kajal for Rs 333 per month. For health, they have Rs 4 lakh insurance from Samir’s employer, a Rs 5 lakh family floating plan and a complementary plan of Rs 10 lakh. Maalde suggests that they continue with these. They should, however, choose a Rs 25 lakh accident disability plan for Samir, which will cost him Rs 333 in monthly premium.

Insurance portfolio

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Financial Plan by Pankaaj Maalde Certified Financial Planner

Write to us for expert advice

Are you looking for a professional to analyze your investment portfolio? Write to us at [email protected] with “Family Finances” as the subject. Our experts will study your portfolio and give you objective advice on where and how much you need to invest to achieve your goals.


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