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School, a place, where students are taught every subject like maths, physics, chemistry, geography, history, English and more, knowledge from these subjects helps them to get a good job and earn their needs and livelihoods. Students are also taught about the moral value and life skills, in short, if we say, complete all-round development of a student is done in school.

The lessons learned from these subjects were good for earning a livelihood but, these lessons failed when the matter of finance and financial planning was picked up.

Many investors wish, if they would have learned the six most important investing and financial lessons, at school, then today, they would not have only good earning skills but also good investing and financial planning skills also. These lessons would have given a significant advantage in their life and would have helped them avoid several mistakes.

Well, let us what are these six investing and finance lessons must be learned at school:

Lesson number 1: Inflation is here to stay

Inflation is always there in the market, your expenses keep growing, in both cases, when your needs grow and lifestyle changes or even when your lifestyle doesn’t change. In India, there have been days that witnessed increased inflation of 8%, currently, the inflation rate in our country is around 4-5%, and if we estimate as per the current inflation rate, then it can be assumed that the annual expense of an individual can go up more than 50% in a decade from now. Look at the table below, it illustrates how the inflation rate increases your expense over time.

Lesson Number 2: Saving vs Investing

We have always been taught to save money for future needs, and it is essential for every individual to keep aside a part of his income. Some people, do invest this part of their income in traditional assets like Fixed Deposits, Savings bank account, or in some kind of insurance policy, but one thing that they lack from their investment is, inflation-beating return, so basically parking your saved money in an asset is not a lesson, rather parking your money in an asset that gives inflation-beating return is a lesson that should be learned.

Lesson Number 3: Investing is a patience game

Investing is just like a game, where the investor as a player, in some matches scores out of their best, whereas in some matches they score below their average, but here the investor as a player, maintains his patience and performance, and do not outburst when he performs low, finally he wins the game. So basically, Investing is a game of patience, and it takes time to build your wealth, and in the meantime, sometimes it performs best, and sometimes worst, what an investor needs to learn is to keep calm, and stay invested for long-term, they will receive a good return.

Lesson Number 4: Participate in the growth of the nation

Well, to every citizen of a country, it is requested to them to be a part of the growth of their nation, for this they are required to invest in the top-grade companies and benefit from the growth of these companies. The top-grade companies always show their growth in line with the GDP (Gross Domestic Product) and are always working towards beating inflation on a wide margin.

Lesson Number 5: Mutual Funds are here to stay

Well, as per a survey it has been observed that in India, only a fraction of the wealth of individuals is saved through mutual funds, whereas in other developed countries, people invest a significant part of their savings in mutual funds. So basically, people in India should learn about the features of mutual funds and start investing in as it is a low-cost way to participate in the growth of the top tier companies in India. This will ultimately lead to the growth of our country, India.

Lesson Number 6: Plan your taxes well

Not only saving money and investing it in the right asset is necessary, but also along with that people need to plan their taxes. Every individual is liable to pay taxes according to their income slab, but the people need to learn that their investments in mutual funds can save their taxes. One thing every investor needs to mark is, as their wealth grows, it is taxed only when there is an incidence of capital gains. However long-term capital gains are taxed at lower rates. So basically, when you plan your investment in mutual funds, do look for schemes or plans that are tax-efficient or tax saving. If you plan your investments well, you can significantly reduce overall taxes and delay the incidence of tax.  

So basically, these are the lessons that should be taught I the school along with other subjects like maths, history physics, chemistry or more. If these lessons would get to be taught in schools for every student, we can predict that our children can be better off tomorrow than we are today.

You can contact us at Shri Ashutosh Securities Pvt Ltd., for any assistance, we are here to help you in any way possible.

Happy Investing!

(Mutual Fund investments are subject to market risk Illustrations are for example only, there is no guarantee of returns. Past performance is not an indicator/guarantee to future returns).