Consistent Investing Can Build Wealth

Queries

Ritesh Gupta, email

I recently started my first job, and after expenses on rent, food, and online purchases, I have very little money left. Can I start investing with a limited income?

At the start of your career, habits matter more than the amount that you plan to invest. Even a small systematic investment plan (SIP) helps in building financial discipline.

Also, curb random online shopping that could lead to binge shopping habits later.

To start with, build a small emergency fund and start with one modest SIP. To avoid falling into a debt trap, use a credit card only for expenses that can be repaid on time. It is advisable to pay the full outstanding balance every month instead of carrying forward any dues. Also, never use one credit card to repay another. Responsible borrowing and timely repayments are essential for building a strong credit score.

People do not build wealth because they invested large amounts at a young age, but because they remained consistent as their income increased.

Col. Sanjeev Govila (retd), CFP, CEO, Hum Fauji Initiatives

Ria Kumar, email

I have never taken a loan or used a credit card and as such, I do not have any credit history. How can I build a good credit score?

Most financial institutions check an applicant’s credit score before approving a loan or credit facility. But for individuals with no credit history, lenders typically assess repayment capacity based on income, savings patterns, salary slips, income tax returns (ITRs), and bank statements.

One of the best ways to build a credit score is to get a credit card and use it for regular purchases. But make sure to pay the outstanding in full on time. You may also buy a gadget on equated monthly instalment (EMI) and build a credit profile.

Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution

Tarunya Singh, email

My daughter is currently studying in Class 10 and is interested in pursuing engineering abroad. How much should I plan to budget for her education, including tuition fees and living expenses? What are the finance options available for overseas studies? Are there any scholarships, grants, or government schemes specifically available for girl students to help fund higher education abroad?

Planning for a four-year engineering degree abroad calls for a realistic, country-specific budget. Inclusive of tuition and living costs, parents should plan for roughly Rs 1.5–2.5 crore for the US, Rs 80 lakh–1.2 crore for the UK, Canada, or Australia (the UK’s three-year degree structure keeps totals lower), and Rs 40–60 lakh for Germany or other European destinations where most public universities charge no tuition fees for international students, but a semester contribution of €150–350.

Education loans are the most accessible route. SBI’s Global Ed-Vantage offers up to Rs 1.5 crore (and up to Rs 3 crore where the project cost warrants it and adequate collateral is pledged), with collateral-free loans up to Rs 50 lakh for select premier institutions and a 0.50 per cent interest concession for female students. Non-banking financial companies, such as HDFC Credila, Avanse, InCred, and Prodigy Finance, offer competitive alternatives, and interest paid is tax-deductible under Section 80E for eight years.

There are also several scholarships, such as Inlaks Shivdasani, KC Mahindra, and JN Tata Endowment in India, AAUW International Fellowships, Schlumberger Faculty for the Future, Society of Women Engineers awards, and university-specific Women in STEM grants that you could look at once your daughter is in Class 11.

Dirghayu Kaushik, Co-Founder & CEO, Ambitio