Mint Money tells you when it makes sense to take an education loan, how it can benefit you and how much it can cost

Keeping your accumulated savings invested and taking an education loan instead can benefit you. Photo: Alamy

Keeping your accumulated savings invested and taking an education loan instead can benefit you. Photo: Alamy

Any big-ticket spending requires you to either have the required funds in place or a financing option. When dealing with long-term financial goals, such as higher education of children, you have the advantage of planning much in advance. Here’s how you can go about the planning.

Start early

A lot of parents have an inclination to send their children abroad for higher education, at least at the post-graduate level, said Suresh Sadagopan, a certified financial planner and founder of Ladder 7 Financial Advisories. “In that case, the planning needs to start really early. They would need a horizon of at least 10-15 years. When we talk of international education at post-graduate level today, most likely it is not going to happen below ₹40 lakh,” he said.

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How do you work towards saving that amount? Prakash Praharaj, founder, Max Secure Financial Planners, said that the future cost of a particular course needs to be calculated taking into account at least 10% annual inflation. “Then calculate the current assets and investments accumulated for these goals. Then the remaining gap for the aimed amount is to be filled through monthly SIPs over the years,” he said.

Starting an SIP of ₹5,000-7,000 in an equity fund for 15 years and increasing it by 10-20% each year could help. However, Sadagopan said, given the fact that there are so many ongoing expenses these days, including other loans, it becomes difficult for parents to put aside a huge amount for the child’s post-graduation alone.

Consider taking loan

Even if you have been working on creating a higher education corpus, you need to consider taking an education loan. At present, the total expenses for higher education abroad could be in the range of ₹1 crore per child, Sadagopan said.

“A realistic thing that parents need to realise is that the child’s higher education is not their only goal. Retirement is also an important goal and they need to be aware of the fact that you can get a loan for all other requirements but not for retirement,” he said.

Own funds versus loan

But if someone has already accumulated the required amount, why should another repayment burden be taken on? The answer lies in two things, Praharaj said. “A cost benefit analysis suggests that taking an education loan and keeping the accumulated amount invested works in your favour. Moreover, it also helps in developing a sense of responsibility in the student. The realisation that a repayment has to be done by them keeps them focussed,” he said.

The math of keeping your accumulated savings invested and taking an education loan instead suggests that taking a loan results in significant benefits. For instance, if ₹1 crore is kept invested and an education loan for the same amount is taken, at the end of nine years, including the repayment holiday on the education loan, the net benefit could be around ₹87 lakh (see graph).

This includes the tax saved on repayment of loan. Borrowers of education loans can claim deduction on the interest paid, though not on the principal amount. Also, unlike in home loans, there is no limit to the amount that can be claimed as deduction.

Sadagopan said it is better that the parents keep the money with themselves and let the child take the loan. “In future if the child is struggling to find a job and pay back, you can step in to help at that point,” he said.

[“Source-livemint”]

Xiaomi Mi Crowdfunding Launched in India: Here’s How it Works

Xiaomi Mi Crowdfunding Launched in India: Here's How it Works

HIGHLIGHTS

  • Xiaomi brings crowdfunding platform to India
  • It will sell “innovation-driven” products using consumer’s support
  • Offer currently available on two products

Xiaomi on Wednesday launched a new programme in India called ‘Mi Crowdfunding.’ With the new feature, users will be able to help the Chinese manufacturer in deciding which products it should release in India. Xiaomi will keep posting a curated list of “innovation-driven” products that it will sell only when a certain number of people are interested. If a particular product fails to meet the criteria in a set timeline, the product will not be shipped and the customers will get their money back. The crowdfunding platform has been launched as part of the Xiaomi Mi Fan Festival, which will run from April 5 to April 6.

As of now, Xiaomi has put up two products that it is planning to bring in India, on its dedicated webpage. The first product is the Mi Selfie Stick Tripod, which the company has priced at Rs. 1,099. It is a selfie stick and tripod combined into one unit and comes with a Bluetooth shutter remote. It is equipped with Bluetooth 3.0, meaning it will support smartphones running Android 4.3 and higher, and iOS 5.0 and higher.

xiaomi tripod Mi Selfie Stick Tripod

Xiaomi Mi Selfie Stick Tripod

The Mi Selfie Stick Tripod is able to rotate 360 degrees and comes with an adjustable grip to “accommodate the largest smartphones like Mi Max 2.” The product comes in only one Black colour variant, measures 45×49.5x190mm, and weighs 155 grams. Xiaomi promises that it will be shipped within 10 days of successful completion of the project.

Next is the Bluetooth Audio Receiver that has been priced at Rs. 999. The device, meant to provide wireless music, comes with a single key function that turns on the earphones, connects to Bluetooth, plays and pauses music, and answer calls as well. It comes with Bluetooth 4.2 to connectivity, and a headphone amplifier chip.

xiaomi bluetooth Xiaomi  Mi Bluetooth Audio Receiver

Xiaomi Mi Bluetooth Audio Receiver

Xiaomi claims that the 97mAh battery onboard can be fully charged within 2 hours and support 4 to 5 hours of playback. The device weighs 10 grams and comes with a 3.5mm audio jack. Users can pair up to two handsets but only one of them can be connected at one time. Notably, the product does not have the volume key function of Apple and Apple certified MFI earphones. It is available in a White colour variant.

To use the Mi Crowdfunding feature, first, you will have to select the product and click on ‘Support now’ to place your order. Following this, you can use any preferred online payment mode and pay within the defined timeline on the payment page. You will be able to come back anytime to check the project progress. Notably, a project is considered successful once the bar reaches 100 percent in the defined timelines. Also, in case you change your mind, you can cancel the order before it ships out.

[“Source-gadgets.ndtv”]

Israeli Firm Says It Can Turn Garbage Into Bio-Based Plastic

Israeli Firm Says It Can Turn Garbage Into Bio-Based Plastic

Hawks, vultures and storks circle overhead as Christopher Sveen points at the heap of refuse rotting in the desert heat. “This is the mine of the future,” he beams.

Sveen is chief sustainability officer at UBQ, an Israeli company that has patented a process to convert household trash, diverting waste from landfills into reusable bio-based plastic.

After five years of development, the company is bringing its operations online, with hopes of revolutionising waste management and being a driver to make landfills obsolete. It remains to be seen, however, if the technology really works and is commercially viable.

UBQ operates a pilot plant and research facility on the edge of southern Israel’s Negev Desert, where it has developed its production line.

“We take something that is not only not useful, but that creates a lot of damage to our planet, and we’re able to turn it into the things we use every day,” said Albert Douer, UBQ’s executive chairman. He said UBQ’s material can be used as a substitute for conventional petrochemical plastics and wood, reducing oil consumption and deforestation.

UBQ has raised $30 million (roughly Rs. 195 crores) from private investors, including Douer, who is also chief executive of Ajover Darnel Group, an international plastics conglomerate.

Leading experts and scientists serve on its advisory board, including Nobel Prize chemist Roger Kornberg, Hebrew University biochemist Oded Shoseyov, author and entrepreneur John Elkington and Connie Hedegaard, a former European Commissioner for Climate Action.

The small plant can process one ton of municipal waste per hour, a relatively small amount that would not meet the needs of even a midsize city. But UBQ says that given the modularity, it can be quickly expanded.

On a recent day, UBQ Chief Executive Tato Bigio stood alongside bales of sorted trash hauled in from a local landfill.

He said recyclable items like glass, metals and minerals are extracted and sent for further recycling, while the remaining garbage – “banana peels, the chicken bones and the hamburger, the dirty plastics, the dirty cartons, the dirty papers” – is dried and milled into a powder.

The steely gray powder then enters a reaction chamber, where it is broken down and reconstituted as a bio-based plastic-like composite material. UBQ says its closely-guarded patented process produces no greenhouse gas emissions or residual waste byproducts, and uses little energy and no water.

According to the United Nations Environment Program, 5 percent of global greenhouse gas emissions are produced by decomposing organic material in landfills. Roughly half is methane, which over two decades is 86 times as potent for global warming as carbon dioxide, according to the UN Intergovernmental Panel on Climate Change.

For every ton of material produced, UBQ says it prevents between three and 30 tons of CO2 from being created by keeping waste out of landfills and decomposing.

UBQ says its material can be used as an additive to conventional plastics. It says 10-15 percent is enough to make a plastic carbon-neutral by offsetting the generation of methane and carbon dioxide in landfills. It can be moulded into bricks, beams, planters, cans, and construction materials. Unlike most plastics, UBQ says its material doesn’t degrade when it’s recycled.

The company says converting waste into marketable products is profitable, and likely to succeed in the long run without government subsidies.

“What we do is we try to position ourselves at the end of the value chain, or at the end of the waste management hierarchy,” Sveen said. “So rather than that waste going to a landfill or being incinerated, that’s kind of our waste feedstock.”

The wonder plastic isn’t without its sceptics, however. Duane Priddy, chief executive of the Plastic Expert Group, said UBQ’s claims were “too good to be true” and likened it to alchemy.

“Chemists have been trying to convert lead to gold for centuries, without success,” Priddy, a former principal scientist at Dow Chemical, said in an email to The Associated Press. “Likewise, chemists have been trying to convert garbage to plastic for several decades.”

UBQ said it is confident its technology will prove the sceptics wrong. “We understand that’s people’s perceptions. We hope to convince them in a professional and scientific manner,” Sveen said.

Even if its technology is ultimately successful, UBQ faces questions about its long-term viability. Building additional plants could be expensive and time-consuming. It also needs to prove there is a market for its plastic products. The company said it is negotiating deals with major customers, but declined to identify them or say when the contracts would go into effect.

The UN Environment Program has made solid waste disposal a central issue to combatting pollution worldwide. Landfills contaminate air, water and soil, and take up limited land and resources. A December 2017 report by the international body devoted five of its 50 anti-pollution measures to reducing and processing solid waste.

“Every year, an estimated 11.2 billion tons of solid waste are collected worldwide,” the organisation says. “The solution, in the first place, is the minimisation of waste. Where waste cannot be avoided, recovery of materials and energy from waste as well as remanufacturing and recycling waste into usable products should be the second option.”

Israel lags behind other developed countries in waste disposal. The country of roughly 8 million people generated 5.3 million metric tons of garbage in 2016, according to the Environment Ministry. Over 80 percent of that trash ended up in increasingly crowded landfills. A third of Israel’s landfill garbage is food scraps, which decompose and produce greenhouse gases like methane and carbon dioxide.

To UBQ, that means a nearly limitless supply of raw material.

“The fact is that the majority of waste goes to a landfill or is leaked into our natural environments because there simply aren’t holistic and economically viable technologies out there,” said Sveen.

[“Source-gadgets.ndtv”]

Siemens Partners With Amazon as It Ramps Up Industrial Software Platform

Siemens Partners With Amazon as It Ramps Up Industrial Software Platform

Siemens is partnering with Amazon as it accelerates the rollout of its MindSphere industrial software platform, the core of its bid to dominate the market in digital factory automation.

The German group’s next version of MindSphere, to be launched in January, will run on Amazon Web Services (AWS) – the most popular cloud system with industrial software developers.

“Many customers appreciate it very much,” Siemens Chief Technology Officer Roland Busch told reporters and analysts at a company presentation in Munich on Friday. “You have to really scale up in order to justify your money.”

So far, MindSphere has run on the SAP cloud, and from April it will also run on Microsoft’s Azure.

MindSphere gathers data from devices, analyses the information and uses it to help customers optimise processes. Attracting a critical mass of developers to work on the platform is crucial to improving the quality of software applications.

MindSphere is one of a number of so-called Internet-of-Things platforms being developed by industrial companies racing to help their manufacturing customers improve productivity, where growth has been slowing in developed countries.

The technology was thrown into sharp focus in August by Emerson Electric’s failed $29 billion (roughly Rs. 1,85,767 crores) bid to buy Rockwell Automation.

The area is still in its infancy, with companies pursuing different strategies, although Siemens is generally considered to be leading the pack, helped by more than $5 billion (roughly Rs. 32,030 crores) of acquisitions in the past two years and by arch-rival General Electric’s partial retreat as it narrows focus.

Siemens said it was targeting 1.25 million connected devices and systems by the end of its fiscal year in September, up from 1 million currently, as it expands its offering – previously focused on autos and aerospace – to cover all sectors.

It is increasing research and development spending to over EUR 5.6 billion ($6.6 billion) this fiscal year from 5.2 billion last year, the lion’s share of which will go to its Digital Factory division.

Siemens says it made EUR 5.2 billion in digital revenues in the year to September. It has 23,000 in-house software developers, rivalling some of the world’s biggest pure-play software companies.

General Electric is reducing investment in its Predix industrial software platform by about $400 million (roughly Rs. 2,562 crores) this coming year to $1.2 billion (roughly Rs. 7,687 crores), and focusing solely on its own installed base of customers for the rollout.

Under new Chief Executive John Flannery, GE as a whole is narrowing its focus and shedding businesses with around $20 billion (roughly Rs. 1,28,121 crores) in revenue.

GE aims to double Predix revenues to $1 billion (roughly Rs. 6,406 crores) in 2018.

[“Source-gadgets.ndtv”]