FINANCIAL EDUCATION FOR CHILDREN

PROJECT YISI
YOUNG INVESTOR, SMART INVESTOR
LEARNING MATERIAL
MODULE – 1b:
BUDGETING, EARNING, SAVING,
INVESTMENTS, INFLATION DYNAMICS,
RANGE OF INVESTMENT INSTRUMENTS &
CHARACTERISTICS
Knowledge Partner

OSAT KNOWLEDGE PVT. LTD

Academic Year: 2025-26

 BUDGETING, EARNING, SAVINGS, AND INVESTMENTS,
INFLATION DYNAMICS, AND RANGE OF INVESTMENT
INSTRUMENTS, CHARACTERISTICS

Do you think only we, humans, save for the

future? Not exactly, the small squirrels too
save for their future. Yes, squirrels save for
the harsh winter before the season sets in.
During winters, squirrels do not get adequate
food to eat, and the severe weather does not
allow them to step out in search of food. So,
the smart squirrels start saving nuts and other
food items well in advance. These tiny animals
successfully manage the winter season “Saving is all about
without any problems because of their accumulating for the future.”
shrewd thinking to be prepared before a
Smart, isn’t it? We, humans, too,
problem occurs.
are no different. Though we do
not exactly save for the winter or summer or the rainy seasons, but save for our future
needs. When did our culture of savings begin? Our practice of saving for the future
started from the time we were on this earth. We all live for tomorrow more than we
live for today, which is the truth of life. Human beings are worried about the unknown
tomorrow, which can be good, better, bad, or ugly. We study hard today because we
have to get better jobs in the future, we have to get better jobs because we have to
earn a good income, we have to earn a good income because we can buy all we want
and enjoy all the comforts and luxuries that life can offer.

In the real sense, our parents teach us the path of saving for the future (our
parents were taught by their parents!). The first innovative idea of saving was
the good old Piggy Bank; dropping money into the stomach of a pig-looking
box. A child is encouraged to drop coins and even notes into the box, which
eventually leads to the accumulation of a somewhat large amount. When the
box was full, the box was opened, which, perhaps, the best unboxing
experience ever. Looking at the pile of money, the glow in the child’s face
would have been worth a million dollars to the parents. The child is very
happy too; the outcome encourages the child to continue saving with another
piggy bank. The money accumulated would have been used for some
purchases, which was another happy childhood experience.
Savings represent the unspent earnings of an individual. Saving is usually an outcome
of earnings. Earnings minus expenditure lead to savings. Does just saving make sense?
No, saving is just unspent money after expenses, but savings must be converted into
investments.

Example of Saving: Every month, Aditi, 13 years old, gets Rs.500 as

pocket money from her parents. Some months, she spends only Rs.400,
which means the balance Rs.100 becomes savings for her. Now, what can
Aditi do with the savings she has managed? Should she just keep the
money with her (store it in her study table drawer) or should she spend
that money too?

Aditi wanted to buy some electrical kit for her science project that cost
about Rs.1500. Her father had made it clear that she had to manage her
expenses within the pocket money being given; anything more she
wanted, she had to ask with justification. Aditi did not want to ask for the
full money required. She knew her father would frown at her, and she
might even get scolded. Aditi decided to save more from her pocket
money over the next four months and ask her father only for the
difference amount.

In this quest, Aditi began to spend less of her pocket money and started
saving more. In the next three months, she was able to save Rs.750. She
then decided to ask her father only for the difference amount. She
explained to her dad how she saved and accumulated half the required
amount and was asking only for the difference. Aditi’s father was happy
and proud of her. He gave Rs.750 and also encouraged her, saying if she
continues to understand the power of saving, she could continue to get
support from him to buy more learning kits. Aditi was very happy.

The above illustration can be a simple process of saving. The purpose of saving was
clear, and the method to save was clear too.
 Why do we save?

All humans experience various events throughout their lives at different future dates.
Every event takes place at different time horizons of the future. Events such as
buying/building a house, buying a car, marriage, family functions, children's
upbringing and education expenses, retirement, vacations, and so on are typical life
events that unfold in families from the shortest to the longest time.

To manage all life events, money is required, which leads to “financial readiness.” To
meet all these events successfully, the first step would be to start saving. The money
saved will lead to a decision to invest in various asset classes or investment
instruments. Factoring in inflation to calculate the future costs is a critical aspect
because if inflation is ignored, the calculations will go haywire.

To save, one must earn, and to earn, one should have a job (business or a profession,
too). For anyone to get a job or employment, two requirements are essential:
qualifications and skills. Through education qualification can be procured, and through
experience, skills can be acquired. The sequence of saving and investment is
Qualification – Skill – Employment – Earning – Spending – Saving – Investing.

The first exercise a family does before saving is budgeting.

Summary of Savings

▪ Income minus Expenses = Savings

▪ Saving is to set aside a portion of income
▪ Saving is “deferred” consumption
▪ Savings is the money needed for “tomorrow” or for the
“future”
▪ Only savings is not good, money saved must be invested

Budgeting

Budgeting is an integral part of every family. An account of inflow v/s outflow or

income v/s expenses is budgeting. The expenses depend on the income capability
of every family. Usually, families plan their expenses based on their income, and it is
also true that families may not have control over their income, but they can have
control over their expenses. In reality, most families tend to spend more than their
income, leading to availing loans or depending on various types of credit. What do
families spend on? The typical family expenses are these:
T YPICAL FAMILY MANDATORY COMMITMENTS ( SHORT-TERM TO LONG-TERM EVENTS)

▪ BUYING/INVESTING IN A HOUSE (SELF-DWELLING)

▪ BUYING A CAR/ TWO-WHEELER
▪ FAMILY VACATIONS
▪ PAYING INSURANCE PREMIUMS
▪ INVESTING FOR THE FUTURE IN VARIOUS INVESTMENT OPTIONS
▪ CHILDREN 'S EDUCATION EXPENSES (INCLUDING HIGHER EDUCATION COSTS )
▪ CHILDREN 'S MARRIAGE EXPENSES
▪ RETIREMENT CORPUS
▪ CLEARING LOANS
▪ UNPLANNED EVENTS (HOUSE RENOVATION , FAMILY FUNCTIONS , MEDICAL
EMERGENCIES ETC .)

A Typical Family Monthly Mandatory Expenses

Cable / DTH Charges ₹ 0.00
Children education costs ₹ 0.00
Regular children-related expenses ₹ 0.00
Clothing ₹ 0.00
Cooking Gas Charges ₹ 0.00
Electricity Bill ₹ 0.00
Fuel Charges (for commuting) ₹ 0.00
Flat Maintenance (for those staying in flats) ₹ 0.00
General Medicine (common illnesses only) ₹ 0.00
Grocery & other mandatory household purchases ₹ 0.00
Health Insurance Annual Premium ₹ 0.00
Internet/Broadband/telephone Charges ₹ 0.00
Laundry ₹ 0.00
Milk ₹ 0.00
Newspaper/magazines ₹ 0.00
Personal grooming (haircut, beauty parlour) ₹ 0.00
Salary – housemaid ₹ 0.00
Vehicle Maintenance (annual servicing, insurance, wear & tear) ₹ 0.00
Water Bill ₹ 0.00
Unplanned expenses ₹ 0.00
Total Mandatory Household Expenses ₹ 0.00
 Lifestyle Expenses
Dining & Drinking Expenses at Restaurants/Clubs ₹ 0.00
Donation/Charity ₹ 0.00
Entertainment- Movies in theatres / OTT Subscription ₹ 0.00
Family / Friends/ Visits / Gifts during functions ₹ 0.00
Average Holiday Expenses (Short Trips, Leisure, Pilgrimages) ₹ 0.00
Shopping Expense - (Perfumes, Watches, Designer Clothing etc.) ₹ 0.00
Miscellaneous Expenses ₹ 0.00
Total Lifestyle Expenses ₹ 0.00

Apart from these expenses, families pay loan installments (EMI or equated monthly
installments on housing loans, vehicle loans, and other loans); families also account for
these costs in their monthly expenses.

Besides these huge lists of expenses, families need money to invest, such as life
insurance policies, bank and post office deposits, stocks, mutual funds, gold, and so
on. Hence, the budget of a family can be a complicated affair. When expenses go
beyond income, using credit through borrowings and swiping credit cards starts.

Budgeting and Inflation

The common people’s villain is “inflation.” Inflation is not easy to control or manage.
Despite efforts from the government and the Reserve Bank of India, controlling and
bringing inflation to moderate levels is a Herculean task. The prices of every item have
increased over the last 50 years at an average of 12% year on year; here is the proof:

Avg.
Items Year 1970s Present Day
Inflation
Rs.3 lakh –
Two-bedroom house Rs.1 crore+ 17%
Rs.4 lakh
Degree Yearly Fee Rs.100 Rs.1.00 – Rs.3 lakh 17%
MBA Fee NA Rs.8 lakh Avg. 15%
Gold (1 gram) Rs.18 Rs.10000 15%
Haircut 15 paisa Rs.150 to Rs.200 17%
Milk (1 litre) 10 paisa Rs.55 15%
2-bedroom house rent Rs.50 About Rs.25000 15%
Engg/MBA Fee Rs.5000 Rs.15 – Rs.25 lakh 15%
One cup coffee 10 paisa Rs.30 – Rs.40 15%
Egg (1 piece) 5 paisa Rs.10 11%
Bathing Soap 50 paisa Rs.50 10%
Masala Dosa 50 paisa Rs.75 10%
 Maternity (childbirth) Rs.500 Rs.50000 10%
Movie Ticket Rs.2 Rs.200 10%
Tur Dal Rs.2 Rs.190 10%
Rice Rs.1 Rs.60 9%
Tender Coconut 50 paisa Rs.60 11%
Newspaper 10 paisa Rs.5 8%
Refined Cooking Oil Rs.3 Rs.150 8%
Shirt/Frock Rs.10 Rs.500 8%
Sugar (1 kilo) Rs.1 Rs.40 8%
Petrol (1 litre) Rs.4 Rs.100 7%
Rupee v/s Dollar Rs.7.50 Rs.85 5%
Average Increase in Annual Inflation 12%
The data above offers a comprehensive understanding of how prices of daily needs
have gone up significantly. The increase in the cost is not uniform across items, which
can be another cause of concern. In this context, choosing instruments that have
proved to have the ability to beat inflation becomes critical.

Caution – Differentiate Needs v/s Wants

We all have dreams, and we would like our dreams to come true. For many dreams to
be realized, we have to work hard and wait for the dreams to fructify. From normal
dreams of achieving our dreams have become aspirational. How do we understand
this phenomenon of need v/s want?

Items (Needs) Tick Items (Wants) Tick

HP/Dell/Lenovo Laptop Apple iMac
Switzerland (holiday for
Ooty (holiday for two)
two)
Bajaj Pulsar Royal Enfield
Maruti Alto Car Kia Seltos
Normal House Studio Apartment
Three-Star Hotel (for Five-Star Hotel (for
holiday) holiday)
Domestic Vacation Foreign Vacation
Titan Watch Fossil/Tommy Hilfiger
Local Kirana Store (to shop Supermarket (to shop for
for household items) household items)
Indian higher education Foreign higher education
Normal market shopping Mall shopping
If you tick the items on the right-hand side, then you are prioritizing wants against
needs. Check out the cost difference between needs and wants; the decision-making
becomes easier:

Items Avg. Cost Items Avg. Cost

HP/Dell/Lenovo Laptop ₹ 60,000 Apple iMac ₹ 1.50 lakh
Switzerland (holiday for
Ooty (holiday for two) ₹ 10,000 ₹ 3.00 lakh
two)
Bajaj Pulsar ₹ 75,000 Royal Enfield ₹ 2.50 lakh

Maruti Alto Car ₹ 6 lakh Kia Seltos ₹ 16 lakh

₹ 1.50
Two-bedroom flat ₹ 75 lakhs Studio Apartment
crore
Three Star Hotel (cost per Five-Star Hotel (cost per
₹ 4,000 ₹ 8,000
night) night)
Domestic Vacation (for Foreign Vacation (for
₹ 50,000 ₹ 2,50,000
two) two)
Titan Watch ₹ 4,000 Fossil/Tommy Hilfiger ₹ 10,000
Local Kirana Store (to
Supermarket (to shop
shop for household ₹ 10,000 ₹ 15,000
for household items)
items)
Foreign higher
Indian higher education ₹ 15 lakh ₹ 60 lakh
education
Normal market shopping ₹ 10,000 Mall shopping ₹ 20,000

Does it mean that one should not buy expensive items? Not really. It is all about
affordability. Every person’s or family’s income capabilities are different, but the
dreams and aspirations can be the same. For example, even a middle-class family
would like to go on a foreign vacation, buy a Royal Enfield bike, send their child to a
foreign college for higher education, or shop at a supermarket rather than at the local
kirana store. “Stretching the finances beyond affordability leads to being poor
investors because expenses get prioritized over savings.”

In simple terms, one must build financial muscle by saving/investing and then aspire
to buy items that today seem unaffordable. Families fall into the trap of debt or save
very little because their expenses go beyond their capabilities. Buying low-priced items
is not inferior, and nothing is insulting about it. Do you know what is more insulting
and problematic? Buying or spending beyond one’s capabilities is the worst
financial decision for a family. Taking loans or depending on credit to spend
beyond capabilities are the biggest enemies of common people.
 Understanding the dynamics of inflation

We all know what inflation means: that rising prices lead to inflation. What are the
factors that lead to inflation? Let us understand the dynamics of inflation step by step:

Demand and Supply: Every product or service produced or created needs a buyer or
a consumer. When vegetables are grown, the producer needs buyers; when a school
is opened, the institution needs students to enrol; when an automobile company
manufactures cars, the company needs buyers; when a bank is opened, it needs
customers who can deposit money and avail loans, when a tender coconut seller sets
up his shop, he needs consumers to buy them. The examples can be infinite.

The world would have been simpler if the supply met with the demand in equal
quantity; for example, if a farmer had grown 100 kilos of tomatoes, the demand to buy
is exactly 100 kilos, there would have been no confusion or conflict. But it does not
happen exactly that way. Many times, either the available quantity is less and the
buyers are more, or there is more quantity and fewer buyers, which leads to demand
and supply mismatches.

Such mismatches happen for many reasons: due to excessive rain (natural calamity), or
a strike by the truck drivers, the tomato supply shrank, leading to lower availability,
which led to demand exceeding supply. Naturally, the prices of tomatoes increase,
which can be one of the reasons for inflation.

In another circumstance (the opposite of demand), there were good rains which led to
abundant production of tomatoes, leading to oversupply, supply exceeding the
demand, which led to the prices to fall.

Similarly, for every product or service, for some reason or the other, demand and
supply mismatches lead to price disruptions.

Further, when people panic about the non-availability of items/goods, they rush to buy
and store them, leading to a rise in prices. A war-like situation, strikes, lockdowns (that
we witnessed during Covid-19), bandhs, etc., push the prices north, leading to inflation.

Demand and supply are among the most common causes of inflation.

Oil dynamics: India is a crude oil import-dependent country; 80% of the crude oil
requirement in the country is imported. Since there are only a few countries in the
world that supply oil, geopolitical factors lead to price fluctuations, and oil prices are
controlled by a few countries and oil extracting companies that disrupt prices.

Any increase in the international oil prices affects countries like India that must import,
no matter the price. Here, the demand for oil leads to a surge in prices, and the oil
refining companies in India invariably increase the petrol/diesel prices (the price rise is
passed on to the end consumers like you and me).

When the petrol/diesel prices are increased, the transportation cost increases
(transportation and logistics are the lifeline of an economy; it is impossible to imagine
a country without transportation since almost every item/good needs transportation
from Point A to Point B). This increase in the cost of transportation leads to a rise in
prices (including vegetables, fruits, flowers, pulses, and so on).

Unfortunately, when the crude oil prices decrease, the benefit is not transferred to the
consumers since these are economic decisions made by the government.

Hence, in India, another key factor for rising inflation is the fluctuating crude oil prices.

Increase in wages: Ms. Nandita Nadig is working as a teacher at a school; her salary
is Rs.40000/month. She joined a year ago. Upon completion of one year, she expected
an increase in her salary by at least 10% compared to the salary she was paid over the
past year. Why does Nandita want an increase in her salary?

We all want to lead a life of growth; we need an improvement in our lives, and such
growth or improvement is measured by our lifestyle or the comfort that we can afford.
And the measurement of growth comes from money. If our incomes do not increase,
we do not grow, and if we are not growing, we are not happy or satisfied with our lives.
Growing inflation (rise in prices) needs a rise in income, without which living becomes
unaffordable.

When an employer increases the salary or the compensation of their employee, the
same is passed on to the customers of their company. For example, the increase in the
salary of the teacher (Ms. Nandita) is passed on as an increase in the annual fee (that
is why usually the fees go up by at least about 10% annually across institutions).

Aspirational Living: As economies grow, people’s income grows, and when income
grows, people start leading an aspirational life. People resort to excessive buying
habits, which leads to inflation. India is witnessing a surge in dual income, both
husband and wife working and earning, which has increased income capabilities, which
further has led to high consumerism. High consumerism is another key factor that
stokes inflation.

Commodities-based Turbulences: Every country depends on imports and exports

due to deficits and surpluses. Gold, for instance, is a high-demand commodity across
the world (India is the largest retail consumer of gold with over 24000 tonnes of
household gold), which leads to price disruptions. Many commodities and pulses are
imported due to deficit situations, and the prices demanded by countries with surplus
must be paid. A war-like situation also leads to price disruptions.
Government Policies: Prices may rise due to certain government policies. An increase
in the supply of money within the economic system (which the government wants
because the government wants growth), leads to inflation. Excess money supply means
there is more money in the hands of people, which encourages higher spending,
leading to demand exceeding supply, leading to an increase in prices.

Summary of Learning: Inflation is a battle that common people can never win. Many
reasons lead to a surge in prices across goods and services, which largely remains
uncontrollable despite sincere efforts by the government and the regulator (the RBI).
The only way to overcome inflation is, people must inculcate better spending habits
(refrain from excessive buying habits; be aware of needs v/s wants) and choose such
investment instruments that can beat or overcome inflation.

Savings v/s Investments

Are savings and investments the same? No, they are different from each other. These
are the characteristics of savings:

▪ Savings lead to safety but yield no returns

▪ Money in hand, money in a piggy bank, money in the almirah, and
money in the wallet are all just savings; they are not yielding any
returns
▪ Savings lead to stagnation of value
▪ Stagnation leads to value erosion
▪ If money is not invested, the value of money gets lost

Then, the question is how to manage the money saved. The answer is to start investing.
So, what is investment?

A simple analogy is: Why do we put seeds into a mud pot? The seed is the investment
being made because we expect the seed to grow into a plant, or a tree, and offer
fruits/flowers/vegetables in the future.
Investing is not about having money in our hands/almirah/wallet, it is just savings,
once the money in hand is invested/deployed, the growth starts.

Investing need not be linked only to money. Investment has many dimensions and
inferences. As a child, you have already started to invest in yourself through education.
When you are about 4 years old, you start going to school, which will end when you
complete your post-graduation when you are about 24 years old; twenty years of
investment to acquire education and competency. Isn’t this an investment? Yes, it is.
You are investing in yourself, which is a very important investment.

“Investing is deploying money towards activities that are expected to

generate positive returns over time in the future.”

A farmer invests in his land; a sportsperson invests in his or her sporting skills; a
businessman invests in his business; a spiritual person invests in spirituality; a
bodybuilder invests in his physique, and so on. There can be innumerable such
examples of investments. And, what is to be noted is that the process is long and takes
time to achieve success. Hence, investing is to achieve success over a longer period,
whether it is with money or otherwise. Even to become a doctor, an engineer, an IAP
or IPS officer, and so on, one must invest in time, dedication, and focus. Hence,
investment as a term has more dimensions than savings as a term.

While savings have limited scope, the scope of investment is wide. Since people have
several goals to achieve, offering them a wide range of investment choices too is
imperative. They are given the choice to choose from the available options. For
example, we travel from one place to another. Let us say you want to travel from
Bengaluru to Mumbai; how can you reach your destination? You can walk, go by
bicycle, auto, car, bus, train, and/or by air. So many options, isn’t it? It is for the traveller
to choose the option that suits his or her requirements.
 Why is investing better than savings?

Saving is like having the seeds with you and not sowing them into the soil. What
happens if you just have the seeds with you and do not sow them? The seed is wasted
because if it is not sown, there is no value for the seed. The moment we sow the seed/s,
the process of growth starts because we start expecting the seed would turn into a
plant and eventually start offering flowers/fruits.

Similarly, having money in our hands, wallet, or the almirah does not give power for
the money to grow. We must “invest” the money in instruments that allow or empower
the money to grow; that is the difference between savings and investments. Another
reason for choosing to invest over saving is to give the power to the money to beat
the threats of inflation. How to understand the threat of inflation? Let us understand
this from a few examples:

Example – 1: Last year same day, Meghana stored Rs.100 in an almirah and decided
to save this amount for the future. A year later, today, she took Rs.100 from the
almirah and went to the shop nearby and wanted to buy something she wanted.
The shopkeeper said the price of that item was Rs.105; she was surprised and told
the shopkeeper that the price last year was Rs.100 and why it was now Rs.105. The
shopkeeper said that the price has gone up and you have to pay Rs.105; the price
increase is due to inflation.

Meghana had Rs.100, but she needed Rs.105, which means her money did not have
the opportunity to grow and offer her the all-important “purchasing power.” She
did not give the ability for her money to grow because she decided to save rather
than invest. She had the money but could not buy what she wanted.

Example - 2: Last year same day, Rashmi decided to do something different than
what Meghana did; she decided to invest Rs.100 in an instrument that offered her
5% annual returns. A year later, today, Rashmi withdrew Rs.105 (Rs.100 + Rs.5
growth) and went to the shop nearby and wanted to buy something she wanted.
As she walked towards the shop, someone tapped on her shoulder; she turned and
saw that the taxman was standing and reminded her that she had to pay taxes on
the income of Rs.5 earned on her investment. Rashmi thanked the taxman for
reminding her and paid a 10% tax on Rs.5; after taxes, she had Rs.104.50 with her.
She went to the shop to buy the item she wanted, but the shopkeeper said she had
to pay Rs.105, which Rashmi did not have. She had to add more money to be able
to make the purchase. In the case of Rashmi, even though she had invested, her
money could not get the purchasing power to buy what she wanted. What
happened here? She had not chosen the right instrument to invest.
Example – 3: Last year same day, Anusha did it differently from what Meghana
and Rashmi did. She decided to invest Rs.100 in an instrument that could offer her
10% annual returns. A year later, today, Anusha withdrew Rs.110 (Rs.100 + Rs.10)
and went to the shop nearby. She, too, was met by the taxman, who reminded her
that she had to pay a tax of 10% on her income. Anusha paid Rs.1 tax on Rs.10
happily and went to the shop with Rs.109. The item she wanted to buy was Rs.105,
which she paid for, took the item, and also had an excess of Rs.4 with her.

(Note: Tax rates mentioned in the above examples are indicative; there are different
slabs for different earning ranges)

Anusha had chosen wisely, which gave purchasing power to her money; even after
paying the taxes, she still had surplus money with her to buy what she wanted.

The learnings from these three examples are that investing is more important than
saving, and choosing the right instrument is equally important to give purchasing
power. Everyone must know about all the investment instruments that are
available and also understand the characteristics of each of the instruments.
Prudent choices of instruments are critical for successful investment outcomes.

Options to Invest

The government (the economic and financial system) has made available a range of
investment options to every citizen of the country. The following are the investment
options made available to choose from:

Bank Fixed Deposit Bank Recurring Deposit

Post Office Savings Instruments Government Bonds

Corporate Bonds Corporate-issued Debentures

Gold (Precious Metal) Real Estate

Life Insurance
 Stocks Mutual Funds

The root of savings and investing starts with Earning and Spending. The usual practice
across individuals and families is to spend first and save or invest next. What did
Mr. Warren Buffett say?

Mr. Warren Buffett, known as the world’s most successful investor, professed that one
should sacrifice expenses to be able to save and invest. Because if we start spending,
then there would be nothing left to save or invest, hence, the prudence is in saving
first and then spending. This is easier said than done in reality. What would you do?
Spend first or save first?

Introduction to Investment Instruments

A wide range of instruments is made available for all types of investors.

Investment Instrument - 1:

1. COMMERCIAL BANKS
INDICATIVE INDICATIVE INDICATIVE
TYPE OF INSTRUMENT
MATURITIES RISK RETURNS
Fixed Deposits 7 days to 10 years Very low risk Low (returns
(deposits are may not be
Recurring Deposits 6 months to 10 years
insured up to able to beat
Tax Saving Deposits 5 years locked-in Rs.5.00 lakh) inflation)
Note: Commercial Banks include Public Sector Banks, Private Banks, Foreign Banks,
Regional Rural Banks, and Small Finance Banks. The interest rates offered could be
different at different banks. Banks are free to offer their own interest rates on deposits.

Investment Instrument - 2:

2. POST OFFICE SAVINGS INSTRUMENTS

INDICATIVE INDICATIVE INDICATIVE
TYPE OF INSTRUMENT
MATURITIES RISK RETURNS
Public Provident Fund 15 years
National Savings Certificate 5 years
Kisan Vikas Patra 9 years & 7 months
Recurring Deposit 5 years
Government Better than a
Time Deposit 5 years guaranteed bank deposit
Monthly Income Scheme 5 years
Senior Citizen Savings Scheme 5 years
21 years of the girl
Sukanya Samriddhi Account
child
Note: The rate of interest, maturity, terms of investment, and withdrawals are the same
across all post offices in the country. Premature withdrawal is not permitted in most of
the instruments. Most instruments cannot be purchased online; one must visit the post
office and make investments.

Investment Instrument - 3:

3. CORPORATE FIXED DEPOSITS

ISSUER OF THE INDICATIVE INDICATIVE INDICATIVE
INSTRUMENT MATURITIES RISK RETURNS
Mahindra Finance 1 year to 5 years
Shriram Transport 1 year to 5 years
Finance
Moderate to Better than
PNB Housing Finance 1 year to 5 years
high (issued the bank &
LIC Housing Finance 1 year to 5 years by private post office
ICICI Home Finance 1 year to 5 years institutions) rates
Sundaram Home Finance 1 year to 5 years
Muthoot Finance 1 year to 5 years
Note: The names of the companies mentioned are only a few examples and are used
for illustration purposes. Several other corporates/financial institutions in the market
offer fixed deposit instruments. The rate of interest and maturities would be different
across different corporates. Corporate Deposits must mandatorily obtain Credit Rating
from approved credit rating agencies

Investment Instrument - 4:

4. DEBENTURES (ALSO KNOWN AS NCD or NON-CONVERTIBLE DEBENTURE)

INDICATIVE INDICATIVE INDICATIVE
TYPE OF INSTRUMENT
MATURITIES RISK RETURNS
Muthoot Fincorp 2 years to 8 years
Moderate to
Kosamattam Finance 1 year to 3 years Better than bank,
high (based
Edelweiss Financial post office &
2 years to 5 years on credit
Services company deposits
rating)
Nido Home Finance 3 years to 7 years
Note: Debentures are like deposits but are not deposits. Debentures are offered by
private companies (corporate bodies/financial institutions) to raise capital for their
businesses. The rate of interest and maturities would differ from company to company.
All NCDs should obtain a Credit Rating from an approved credit rating agency. All
debentures must list themselves on stock exchanges to offer liquidity to investors
(investors in NCDs can buy and sell through stock exchanges, similar to buying and
selling stocks)

Investment Instrument - 5:

5. RBI RETAIL DIRECT SCHEME (RDS)

INDICATIVE INDICATIVE INDICATIVE
TYPE OF INSTRUMENT
MATURITIES RISK RETURNS
91 days, 182 days, 364
Treasury Bills (T-Bills)
days
State Development Loans 91 days, 182 days, 364 Government
(SDL) days Low
guaranteed
G-Sec (Dated Government Long-term maturities (2
Securities) years to 40 years)
Note: The Reserve Bank of India has offered an opportunity for individual investors to
invest in government securities (both short-term and long-term instruments).
Investments can be done only online by opening an account on their official website
(https://rbiretaildirect.org.in/#/). Rs.10000 is the minimum investment amount
Investment Instrument – 6:

6. SOVEREIGN GOLD BONDS (SGB)

Indicative Indicative Indicative
TYPE OF INSTRUMENT
Maturity Risk Returns

Investing in Paper Gold in the value

of gold managed by the RBI (min. is 8 years Moderate Moderate
one gram, max. 4 kilos)
Note: In its endeavour to discourage people from buying physical gold, the
government introduced paper gold or non-physical gold. RBI was given the
responsibility to offer gold bonds at the prevailing prices to be invested only online,
with a maturity of 8 years. RBI is to return the money to investors after 8 years based
on the prevailing gold prices at the time of redemption. The investors will also get an
annual interest of 2.50% on their investment. (Currently there is news that SGB is being
discontinued by the government)

Investment Instrument - 7:

7. RBI FLOATING RATE SAVINGS (TAXABLE) BONDS

Indicative Indicative
TYPE OF INSTRUMENT Indicative Returns
Maturity Risk
Better than bank and
Floating Rate Savings Government
7 years almost equivalent to
Bond guaranteed
post office savings rates
Note: Instrument issued by the RBI on behalf of the government; a long-term
investment instrument that offers a slightly higher rate of return compared to a bank
deposit.

Investment Instrument - 8:

8. NATIONAL PENSION SCHEME (NPS)

Indicative Indicative Indicative
TYPE OF INSTRUMENT
Maturities Risk Returns
Market-linked,
Pension Scheme (for salaried 60 years of the Moderate to
double-digit
individuals) investor high
returns
Note: Facilitating the receipt of pension upon retirement for individuals. Designed for
all types of individuals to invest during their earning period and accumulate a post-
retirement corpus. Investors can choose debt, hybrid, and/or equity-oriented
portfolios managed by mutual fund houses
Investment Instrument - 9:

9. EMPLOYEE PROVIDENT FUND (EPF)

Indicative Indicative Indicative
TYPE OF INSTRUMENT
Maturity Risk Returns
Retirement Benefit (deducted Through the Moderate
from the salary of an employee employment (higher than
Low Risk
every month, along with the tenure of bank & post
employer's contribution) individuals office returns)
Note: A renowned saving-cum-investment option offered by the government through
the Employee Provident Fund Organization that enables salaried individuals to create
a retirement corpus. Premature withdrawal allowed.

Investment Instrument - 10:

10. LIFE INSURANCE POLICIES

Indicative Indicative Indicative
TYPE OF INSTRUMENT
Maturities Risk Returns
About 20 - 30
Traditional Life Insurance Plans Low Low
years
Unit Linked Insurance Plans 5 years to 20 Moderate Moderate to
(ULIP) years to high high
Note: Insurance product that has embedded investment component. Policyholders
buy life insurance plans and pay regular premiums based on the maturity and sum
assured chosen at the time of buying the policy. The policyholder gets a lump sum
amount upon maturity or the nominee of the policyholder will get the proceeds (sum
assured plus growth as on date of death) upon the death of the holder during the
policy term. Traditional plans do not have equity market exposure, while ULIPs have
exposure to equity markets.

Investment Instrument - 11:

11. PENSION PLANS

Indicative Indicative Indicative
TYPE OF INSTRUMENT
Maturity Risk Returns
Dedicated Pension Plans
Low to Low to
(through mutual funds & life Over 10 years
moderate moderate
insurance plans)
Note: Another option for individual investors is to choose a dedicated and exclusive
investment option to create a corpus that offers regular pensions upon retirement. The
invested money gets invested in debt and/or equity markets. Pension Plans are mostly
offered by life insurance companies
Investment Instrument - 12:

12. INITIAL PUBLIC OFFERS (IPOs) / PRIMARY MARKET

Indicative Indicative Indicative
TYPE OF INSTRUMENT
Maturities Risk Returns
Subscribing for shares issued by
High to High to very
new companies during their No maturity
very high high
public issues
Note: An opportunity for individual investors to look beyond traditional investment
instruments. Subscribing for shares by applying for Initial Public Offers. An entry point
into equity markets by becoming “shareholders” of a company

Investment Instrument - 13:

13. SECONDARY MARKET (STOCK EXCHANGES)

Indicative Indicative Indicative
TYPE OF INSTRUMENT
Maturities Risk Returns
Buying & selling stocks of listed
High to very High to very
companies through registered No maturity
high high
stockbrokers
Note: Other than acquiring shares through initial public offerings, individuals can
acquire shares through the secondary market with the assistance of stock exchanges
and stockbrokers. The minimum purchase quantity is one share of a company listed
on a stock exchange. The person opening an account with a stockbroker to transact in
stocks must be at least 18 years of age; minors are not permitted to open an account
and transact in stocks.

Investment Instrument 14:

14. MUTUAL FUNDS

TYPE OF MUTUAL Indicative
Indicative Maturities Indicative Risk
FUNDS Returns
Low to Low to moderate
Debt Funds 1 day to 10 years moderate to to moderately
moderately high high
No maturity (ideally 5
High to Very
Hybrid Funds years & above holding High
High
is recommended)
No maturity (ideally 5
Equity Funds years & above holding Very high Very high
is recommended)
Note: Individual investors can invest in mutual funds as an alternative to directly
participating in debt and equity markets. Investors have a choice to choose from
different types of mutual fund categories based on their risk and return profiles

Investment Instrument - 15:

15. REAL ESTATE INVESTMENT TRUSTS (ReIT)

Indicative Indicative Indicative
TYPE OF INSTRUMENT
Maturities Risk Returns
Indirectly investing in commercial
No maturity Moderate Moderate
properties
Note: Indirect investment by individual investors in large commercial properties (malls)
managed by reputed builders and developers. Shares/units can be purchased through
initial public offerings and/or through stock exchanges. These companies’ shares are
traded on the stock exchanges. The rental income earned is distributed as a dividend
(profit sharing) by the real estate management company. An increase in share prices
is possible, offering a moderate return on investment.

Investment Instrument - 16:

INFRASTRUCTURE INVESTMENT TRUSTS (InvITs)

Indicative Indicative Indicative
TYPE OF INSTRUMENT
Maturities Risk Returns

Indirectly investing in
No maturity Moderate Moderate
infrastructure projects
Note: Indirect investment by individual investors in large infrastructure projects such
as road, rail, power etc. undertaken by reputed infrastructure companies. Shares or
units can be purchased through initial public offerings and/or through stock
exchanges. These companies’ shares are traded on the stock exchanges. The profits
made by the companies are shared as dividends to shareholders. An increase in share
prices is possible, offering a moderate return on investment
Summary of all investment instruments as discussed above is summarized below:

Summary of
Indicative
Sl. Investment Remarks Risk Liquidity
Returns
Instruments
Pre-closure
Fixed Deposits
with penalty or
1 Bank Deposits & Recurring Very Low Low
wait till chosen
Deposits
maturity
No pre-
Post Office closure can
A variety of
2 Savings Very Low Low avail a loan on
instruments
Instruments specific
instruments
Only Fixed
Corporate Fixed Deposits; no Moderately Moderately Wait till
3
Deposits Recurring High High maturity
Deposit facility
Tradable; can
Debentures sell
Similar to fixed Moderately Moderately
4 (issued by prematurely
deposits High High
corporate bodies) on stock
exchanges
Tradable; can
Fixed Income
sell
Retail Direct Debt Low to
5 Very Low prematurely
Scheme Instrument moderate
on stock
offered by RBI
exchanges
8 years; can
Sovereign Gold Moderately Moderately
6 Paper Gold trade on stock
Bonds (SGB) High High
exchanges
RBI Floating Rate Long-term Low to No premature
7 Very Low
Bonds savings Moderate withdrawal
Exclusive Only upon
National Pension Moderate Moderate
8 pension turning 60
Scheme (NPS) to High to High
scheme years of age
Can withdraw
Employee For retirement Low to Low to prematurely or
9
Provident Fund corpus Moderate Moderate wait till 60
years of age
Low to Low to
Traditional & Long (wait till
10 Life Insurance Moderate Moderate
ULIPS maturity)
to High to High
 For post-
Low to Moderately Long (wait till
11 Pension Plans retirement
Moderate High maturity)
income
Shares issued Can exit
Initial Public
12 by new Very High Very High through stock
Offers
companies exchanges
Buying &
selling of Can exit
Secondary
13 shares through Very High Very High through stock
Market
stock exchanges
exchanges
Indirect Low to Low to Can exit within
Mutual Funds
investment in Moderate Moderate 1 to 2 days
14 (Debt, Hybrid &
debt & equity to High to to High to (open-ended
Equity Funds)
markets Very High Very High schemes)

Investing in
Can exit
commercial Moderate Moderate
15 REITs through stock
rent-yielding to High to High
exchanges
properties

Investing in Can exit

Moderate Moderate
16 InvITs ongoing infra through stock
to High to High
projects exchanges

Characteristics of Investment Instruments

Every investment instrument has its own characteristics. Similar to sugarcane being
sweet and chilli being spicy, every investment instrument is different. Each instrument
has its utility based on the duration of investing, the age of the investor, and risk and
return expectations.

Importantly, given the changes in the world, the understanding of the instruments too
must change.

From ascertaining the characteristics of instruments based on

Safety, Liquidity, and Returns, we must start ascertaining them
with four new characteristics, such as whether the instrument
supports Wealth Preservation or Wealth Creation, if the
instrument is Emotional, and if the instrument is inflation-
friendly.

The table below explains the same clearly:

 Wealth Wealth Emotional Inflation-
Instruments Safety Liquidity Returns
Preservation Creation Asset friendly
Bank
Yes Low Low Yes No Maybe No
Deposits
Post Office
Yes Low Low Yes No Maybe Slightly
Savings
Retail Direct
Yes Low Low Yes No No Slightly
Scheme
Sovereign
Yes Low Moderate No Yes Yes Yes
Gold Bonds
RBI Floating
Yes Low Low Yes No No Slightly
Rate Bonds
Provident
Yes Low Moderate Yes No No Slightly
Fund
Life
Yes Low Low Yes No No No
Insurance
Pension
Yes Low Low Yes No No No
Plans
Corporate
Fixed
Moderate Moderate Moderate Yes No No Slightly
Deposits &
Debentures
National
Moderate
Pension Moderate Low Maybe Yes No Yes
to High
Scheme
ULIPs Moderate Low Moderate Maybe Yes No Maybe
Primary
No Yes High No Yes No Yes
Market (IPO)
Direct
No Yes High No Yes No Yes
Stocks
Mutual
No Yes Moderate Yes No No Slightly
Funds (debt)
Hybrid &
Equity
No Yes High No Yes No Yes
Mutual
Funds
REITs &
No Yes Moderate No Maybe No Maybe
InvITs

The characteristics of each instrument offer a good decision-making choice for every
investor since each investor is different in their understanding of risk and return. It is
important to choose a combination of instruments that offers the ability to beat
inflation. As we can observe from the above list of instruments, only a few of them are
inflation-friendly, and a long list of instruments are not. If we give more importance to
safety, the returns will be low, and also the instrument may not offer purchasing power.

Example – 1: You had at your disposal an amount of Rs.10000 and you

wanted Rs.25000 after 10 years to meet an event. If you chose a fixed deposit
as your choice of instrument to invest because it was safe, after 10 years at
5% rate of interest, your capital can grow to become Rs.16300 (before
accounting for taxes). Your investment will grow, but it will not grow to the
extent that assists you with creating the required corpus.

Example – 2: You had Rs.10000 and chose to invest in an instrument that

offered assured returns of 6% per annum (such as a bank deposit). At the end
of one year, you achieved guaranteed returns, but the returns did not help
you with the purchasing power because the inflation was equal to or above
6%.

Example – 2: Instead of a fixed deposit, you choose gold, which is not exactly
safe but has the tag of being a moderately risky asset. Assuming your
investment grows at 8% to 10% compounded over 10 years, and the value
grows to approx. Rs.25000, but you may not be able to decide to sell or
liquidate gold because gold is an emotional asset. It is not easy for Indian
families to sell gold.

Example – 3: You decide to invest in an equity-oriented instrument that is

not safe and a risky asset. Your investment can grow to approx. Rs.25000 at
10% to 12% annual return in 10 years; you can easily liquidate the investment
and get what you want. Equity as an asset class is not an emotional asset and
has proved to be a reliable asset over a longer period.

Understanding different asset classes

Assets are classified as

▪ Financial Assets (better liquidity)

▪ Fixed Assets (not easy to liquidate)
▪ Precious Metal (emotional; difficult
decision to liquidate)
▪ Depreciating Assets (used as utility
items, not as investments)
What are Financial Assets?

▪ Bank Deposits
▪ Post Office Savings Instruments What are Fixed Assets?
▪ Life Insurance Policies (with
▪ House, flat, or apartment
investment component)
(residential/commercial)
▪ Provident Fund
▪ Real Estate (commercial)
▪ Pension Fund (including the
▪ Vacant site
National Pension Scheme)
▪ Farmland
▪ Stocks
▪ Own factory premises
▪ Mutual Funds
▪ Bonds
▪ Debentures
▪ Corporate Deposits

What are Depreciating Assets?

What is Precious Metal? ▪ Vehicles (car, two-wheeler)

▪ Machinery (office or factory use)
▪ Gold ▪ Electronic items & gadgets
▪ Silver (laptops, mobile handsets)
▪ Platinum ▪ Appliances (television, washing
▪ Diamond machine, refrigerator etc.)
▪ Jewellery ▪ Furniture

Summary

While saving is good, investing is ultimate because investing empowers savings to

grow. Different investment instruments are made available to choose from, but the
onus to choose the right combination of instruments is critical for successful
investment outcomes. One must understand the characteristics of instruments
before choosing them. Having basic knowledge about investment and investment
instruments is the responsibility of common investors, which leads to taking
prudent investment decisions. A family should follow responsible budgeting by
spending responsibly rather than overspending and/or spending through
borrowed money.
 GIST OF THIS MODULE

The above content is a financial education module for children, focusing on the
concepts of budgeting, saving, and investing for future needs.

Importance of Saving for the Future

Saving is a fundamental practice for both humans and animals, exemplified by

squirrels that store food for winter. It is essential for financial readiness and
managing future needs.

• Squirrels save food to prepare for harsh winters, demonstrating the instinct
to save for future needs.
• Humans save for various life events, such as education, housing, and
retirement.
• The concept of saving has been passed down through generations, starting
with simple tools like piggy banks.
• Savings are defined as unspent earnings, calculated as income minus
expenses.
• Savings should be converted into investments to grow wealth over time.

Understanding Budgeting and Expenses

Budgeting is crucial for families to manage their income and expenses effectively.
It helps in planning for mandatory and lifestyle expenses while ensuring financial
stability.

• Budgeting involves tracking income against expenses to maintain financial

health.
• Families often spend more than their income, leading to debt and reliance
on credit.
• Typical family expenses include housing, education, insurance, and lifestyle
choices.
• Mandatory expenses can include education costs, groceries, and utility bills.
• Lifestyle expenses encompass dining, entertainment, and vacations, which
can strain budgets.

The Impact of Inflation on Savings

Inflation is a significant challenge that erodes the purchasing power of savings

over time. Understanding inflation dynamics is essential for effective financial
planning.
 • Inflation averages around 12% annually, affecting the cost of living and
savings; historical data shows significant price increases in essential items
over the past 50 years.
• Factors contributing to inflation include demand-supply mismatches, oil
price fluctuations, and wage increases and importantly geopolitical factors
such as wars.
• Consumers must be aware of inflation to make informed investment
choices that can outpace rising costs.

Distinguishing Between Savings and Investments

Savings and investments serve different purposes in financial planning, with

investments being essential for wealth growth. Understanding the differences can
lead to better financial decisions.

• Savings provide safety but yield no returns, leading to stagnation and value
erosion.
• Investments involve deploying money to generate positive returns over
time.
• Investing is likened to planting seeds that grow into fruitful plants, while
savings are merely holding onto money.
• Choosing the right investment instruments is crucial to maintaining
purchasing power against inflation.

Available Investment Options for Individuals

A variety of investment options are available to individuals, each with unique

characteristics and potential returns. Understanding these options is vital for
effective financial planning.

• Common investment options include bank fixed deposits, recurring

deposits, and post office savings.
• Other options include corporate bonds, government bonds, gold, real
estate, and life insurance.
• Stocks and mutual funds offer opportunities for higher returns but come
with varying levels of risk.
• Individuals should assess their financial goals and risk tolerance when
selecting investment instruments.

The Sequence of Financial Readiness

Achieving financial readiness involves a sequence of steps that lead to earning,

saving, and investing. Prioritizing savings over spending is essential for building
wealth.
 • The sequence includes qualifications, skills, employment, earning, spending,
saving, and investing.
• Warren Buffett emphasizes the importance of saving first before spending
to ensure financial growth.
• Families should focus on building financial muscle through disciplined
saving and investing practices.
• Avoiding debt and prioritizing needs over wants can lead to better financial
outcomes.

Investment Instruments Overview

A diverse range of investment instruments is available for various types of

investors, each with unique characteristics, risks, and returns. Understanding
these instruments is crucial for making informed investment decisions.

Commercial Banks and Their Offerings

Commercial banks provide various deposit options with low risk and low returns.

• Fixed Deposits: Maturities range from 7 days to 10 years; very low risk with
returns that may not beat inflation.
• Recurring Deposits: Available for 6 months to 10 years.
• Tax Saving Deposits: 5-year lock-in period; deposits insured up to Rs. 5 lakh.

Post Office Savings Instruments

Post office savings instruments offer government-backed options with

guaranteed returns.

• Public Provident Fund: 15-year maturity; government guaranteed; better

returns than bank deposits.
• National Savings Certificate: 5-year maturity.
• Kisan Vikas Patra: 9 years & 7 months maturity.
• Most instruments do not allow premature withdrawal.

Corporate Fixed Deposits

Corporate fixed deposits provide moderate to high returns but come with higher
risk.

• Offered by private institutions like Mahindra Finance and Shriram Transport

Finance.
• Maturities range from 1 to 5 years; interest rates are generally better than
banks and post offices.
Debentures and Their Characteristics

Debentures, or non-convertible debentures (NCDs), are issued by private

companies to raise capital.

• Maturities range from 1 to 8 years; moderate to high risk based on credit

rating.
• Better returns than bank and post office deposits; tradable on stock
exchanges.

RBI Retail Direct Scheme

The RBI Retail Direct Scheme allows individual investors to invest in government
securities online.

• Treasury Bills: Maturities of 91, 182, and 364 days; government guaranteed.
• Minimum investment amount is Rs. 10,000.

Sovereign Gold Bonds

Sovereign Gold Bonds offer a way to invest in gold without physical ownership.

• Maturity period of 8 years; moderate risk with moderate returns.

• Investors receive annual interest of 2.5% and redemption based on
prevailing gold prices.

RBI Floating Rate Savings Bonds

These bonds provide a government-backed investment option with a floating

interest rate.

• Maturity of 7 years; low risk with returns better than bank deposits.
• No premature withdrawal allowed.

National Pension Scheme (NPS)

The NPS is a pension scheme designed for salaried individuals to accumulate a

retirement corpus.

• Investment period until 60 years of age; moderate to high risk with market-
linked returns.
• Offers a choice of debt, hybrid, and equity portfolios.
Employee Provident Fund (EPF)

The EPF is a retirement benefit scheme for salaried employees.

• Contributions are deducted monthly; low risk with moderate returns.

• Allows for premature withdrawal under certain conditions.

Life Insurance Policies

Life insurance policies combine insurance with investment components.

• Traditional plans have low returns, while Unit Linked Insurance Plans
(ULIPs) offer moderate to high returns.
• Maturities range from 5 to 30 years.

Pension Plans for Retirement

Dedicated pension plans help individuals create a retirement corpus.

• Investment duration is typically over 10 years; low to moderate risk with

moderate returns.
• Funds are invested in debt and/or equity markets.

Initial Public Offers (IPOs)

IPOs provide an opportunity to invest in newly issued shares of companies.

• No maturity period; high to very high risk with potential for high returns.
• Investors can exit through stock exchanges.

Secondary Market for Stocks

The secondary market allows buying and selling of stocks through registered
stockbrokers.

• No maturity period; high to very high risk with potential for high returns.
• Investors can easily liquidate their investments.

Mutual Funds Overview

Mutual funds offer a way to invest in diversified portfolios of stocks and bonds.

• Debt funds have maturities from 1 day to 10 years; low to moderate risk.
• Equity funds have no maturity; very high risk with potential for very high
returns.
Real Estate Investment Trusts (ReITs)

ReITs allow indirect investment in commercial properties.

• No maturity period; moderate risk with moderate returns.

• Shares can be purchased through IPOs or stock exchanges.

Infrastructure Investment Trusts (InvITs)

InvITs provide indirect investment in infrastructure projects.

• No maturity period; moderate risk with moderate returns.

• Shares can be traded on stock exchanges.

Characteristics of Investment Instruments

Investment instruments can be evaluated based on safety, liquidity, returns, and

other factors.

• Safety: Varies from very low (bank deposits) to high (equity).

• Liquidity: Ranges from low (fixed deposits) to high (stocks).
• Returns: Vary significantly, with equities offering the highest potential.

Asset Classifications

Assets are classified into financial assets, fixed assets, precious metals, and
depreciating assets.

• Financial Assets: Include bank deposits, stocks, and mutual funds.

• Fixed Assets: Include real estate and machinery.
• Precious Metals: Include gold and silver.
• Depreciating Assets: Include vehicles and electronic items.

Importance of Investing

Investing is essential for growing savings and achieving financial goals.

• Understanding different investment instruments is crucial for making

informed decisions.
• A balanced approach to investing can help beat inflation and preserve
wealth.