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Financial Literacy Essentials: Smart Choices for a Secure Future

Learn to navigate your budget, investments, and risks wisely through financial literacy. Understand the importance of diversification and the potential pitfalls illustrated by famous financial scams. Discover resources, courses, and initiatives to enhance your financial knowledge.

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Financial Literacy Essentials: Smart Choices for a Secure Future

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  1. Financial Literacy

  2. Definition • SKILL • Smart decision with money in hand. • People knows their way around their BUDGET.

  3. Why study financial literacy? • The state says we need to! • The number of foreclosures and bankruptcies are increasing. • Credit card use has gotten out of control. Video • You have the chance to be smart with your finances!

  4. Concepts • Budget • Emergencies • Debt

  5. What do you need to know before Investing • Compound Interest • Diversification • Risk Vs. Reward • Financial Market

  6. So….. • Start Early • Invest Regularly • Be Patient

  7. Diversification • Don’t put all eggs in one basket

  8. Ways of Diversification • Investment Type • Maturity • Industry • Geography

  9. Risk Vs. Reward

  10. Contd.. • No Risk • High Returns

  11. Financial Markets • A market in which financial assets are purchased or sold

  12. Money Market Instruments

  13. Capital Market Instruments

  14. Think Before you Invest Famous Financial Scams in India • HarshadMehta Case • Fooled many investors • Initiated a scam • Diverted funds about 5000 crores from the Banks to stockbrokers • Ketan Parekh • Bought shares in fictitious names from Allahabad Stock Exchange and Calcutta Stock Exchange • CA and run a family business • Satyam Scam - Company’s Chairman confessed that he manipulated accounts

  15. Contd.. • RoopBhansali Scam - CRB was once a top Investment firm started by CR Bhansali • He collected money from investors by way of mutual funds, FD and debentures • Transfered to another company • Subrata Roy • Sahara India Pariwar Investor • Failed to return 24000 crore plus interests to its investors as directed by Supreme Court • Saradha Chit Fund Scam - West Bengal and Odisha • HSBC case of Suchitra Krishnamurthy, PNB Case, Vijay Mallya -

  16. Financial Literacy across the Globe

  17. State wise Financial Literacy in India

  18. Contd..

  19. Targets for Literacy • Rural • • Urban poor • • Children/ students • • Women • • Senior citizens

  20. Mantras • Don’t Lose money • Insure – To secure your future • Avoid Credit traps • Focus on safe financial products

  21. RBI Initiatives for Financial Literacy • Multilingual RBI website for the Common Person • – In 13 languages; Financial Education page on RBI’s website • • Multi-lingual reading material • – Comics books (Raju and Money Kumar series), • Educational games - Comic books are becoming popular among children and even among grownups • • Awareness programmes • Films, skits, road shows

  22. Contd.. • Participation in exhibitions - stalls on financial education • – Financial Education camps in remote places - Outreach visits – Essay/Quiz competitions; • Visits to RBI by school children • – Financial Counselling & Literacy Centres • – Talks on Radio/Television

  23. Measure your Financial Literacy Level • Questionnaire

  24. Inference • Score Range Inference • 0 to < 5 The financial literacy level of the individual is assumed to be basic • 5 to < 8 The individual has intermediate knowledge of financial instruments • 8 to 10 A score in this range depicts advanced financial knowledge.

  25. Web Portal • Rbi.org.in • Pgportal.gov.in

  26. Few MOOC Courses on Financial Literacy • https://www.coursera.org/courses?query=financial%20literacy • https://blog.edx.org/personal-finance-courses-improve-your-life • https://www.ccfeducation.org/financial-literacy-courses-online/ • https://swayam.gov.in/courses/public • https://www.open2study.com/subjects/financial-literacy-010713

  27. References https://www.rbi.org.in/scripts/SearchResults.aspx?search=financial%20literacy • https://www.sebi.gov.in/media/press-releases/apr-2017/students-can-take-financial-literacy-tests-throughout-the-year-shri-ajay-tyagi_34738.html • https://www.livemint.com/Money/2l9bZsVo7eempRU9yLvPAL/SP-survey-More-than-70-Indians-fare-badly-in-financial-li.html • https://www.moneylife.in/article/hsbc-loots-suchitra-krishnamoorthi-after-big-promises-of-24-percentage-returns/24975.html • https://www.nefe.org/What-We-Provide/Primary-Research/Effect-of-Financial-Literacy-on-Financial-Behavior • https://www.nber.org/papers/w15352.pdf • https://onlinelibrary.wiley.com/doi/pdf/10.1111/ijcs.12408 • https://www.researchgate.net/publication/267641595_A_Literature_Review_On_Financial_Literacy • https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2515891 • https://www.organismocf.it/c/document_library/get_file?uuid=a1138bb4-92b2-43ad-8a36-ffe716c858b2&groupId=10122 • https://www.financialeducatorscouncil.org/financial-literacy-statistics/ • https://www.forbes.com/sites/danipascarella/2018/04/03/4-stats-that-reveal-how-badly-america-is-failing-at-financial-literacy/#529eaabc2bb7 • https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5450829/ • Source- Data Complied from the National Centre for Financial Education Report

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