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.


Brightly Wearable Tech Tells You When You Need a Bathroom

Though it’s not a fun thing to discuss, incontinence is a fairly common issue for people above a certain age. For now, most people who experience it have to deal with adult diapers or opt for surgery.

But very soon, technology might be able to provide a better way for people to deal with incontinence. Lir Scientific is the company behind Brightly, a new wearable tech device that can tell people when they have to use the bathroom.

The Brightly wearable tech device works by using biosensors that can tell when a person’s bladder has expanded. It then sends an alert to the user’s smartphone to let them know it might be time to find a nearby bathroom.

CEO of Lir Scientific Jean Rintoul told Wired:

“The idea is to give people back some dignity and independence.”

There’s clearly a market for such a product.

According to the CDC, more than half of adults over 65 have to deal with incontinence. And an alert system such as this one, if it works like it aims to, could be more hygienic and cost effective over the long run. It could also help people avoid some potentially embarrassing situations.

But it is not what you would consider a trendy wearable. With all of the buzz surrounding smartwatches and other types of wearable tech, the Brightly wearable tech device is unlikely to get that same type of attention from the Silicon Valley elite.

What it is likely to do, however, is cater to a very specific group with a very specific need. It’s a group that is usually willing to spend some money, especially on an item with such a practical purpose. And that could very well be the reason the company is able to find long-term success in the market. Rintoul said to Wired:

“For some types of startups, it does seem like their goal is a race to the bottom of tiny innovations. We’re trying to take a broader perspective with our technology, especially by targeting an older population. After all, we all are getting older.”

Image: Lir Scientific/YouTube


ISIS Tells Supporters to Quit Messaging Apps for Fear of US Bombs

ISIS Tells Supporters to Quit Messaging Apps for Fear of US Bombs
ISIS has told its members to stop using internet-based communication apps like WhatsApp and Telegram on smartphones, suspecting they are being used by the US-led coalition to track and kill its commanders.

Until recently, the hardline group used such apps to chat with members and supporters outside its main areas of control in Syria, Iraq and Libya – including, say French officials, the assailants who staged attacks across Paris a year ago, killing at least 130 people.

A US-led military coalition has been bombing ISIS positions since 2014, when the group proclaimed a caliphate in Syria and Iraq. Twenty commanders of the group were killed this year, including spokesman Abu Muhammad Al-Adnani.

“If you get onto the programs like WhatsApp and Telegram or others from Mosul, and get in touch with a person being tracked, the crusaders will start thinking about you … assessing your importance and identifying the locations of the (ISIS) centres by following you,” said an article in the group’s weekly newspaper, Al-Naba, published online.

The new instructions came as the group tries to fight off a US-backed offensive on Mosul, its last major stronghold in Iraq, by far the biggest city it controls.
ISIS members already avoid communicating directly with each other on Twitter, which they used 2-3 years ago to spread their ideology and attract new followers.

The group has used Telegram, a messaging service, but its account has become a lot less active. While Telegram offers private messaging, its main use to Islamic militants has been as a distribution tool to share propaganda with backers to repost on Twitter for the wider world.

Pro-IS sites on Telegram frequently remind readers that Telegram is for sharing messages only among supporters, and “not a media platform for (preaching) to all Muslims and the West”, in other words for recruiting sympathisers to join their cause.

(Also see: Telegram Responds to Report of Massive Hack)

Dozens more alternative messaging apps exist, offering various degrees of anonymity and security, but the phones required to use them are seen as increasingly risky possessions.
Al-Naba called on the militants to shut down their mobile phones before entering any of the group’s bases to avoid exposing them to air strikes by the US-led coalition.

“Switch off your phone after you finish your communication and beware of the greatest disobedience of all – switching it on when your are in one of the offices,” it said. “As long as it has power, the phone is spying on you.”

In Mosul, ISIS is cracking down on communication with the outside world to prevent residents from helping the forces advancing on the city, executing people for using mobile phones. Earlier this year, it confiscated satellite dishes to prevent people from seeing the progress made by the Iraqi army.

ISIS has executed 42 people from local tribes, caught with SIM cards, Iraqi intelligence officers said last month. This could not be independently confirmed.

(Also see: Curbs on Extremist Online Content Threatens Free Speech, Say Tech Firms)

WhatsApp bars ISIS supporters for a litany of violations of its terms of service. But identifying violators in private conversations is difficult since the Facebook-owned company implemented strict end-to-end encryption earlier this year.

Telegram, which has a long history of anti-censorship battles with governments around the world, says its policy is to block terrorist channels open to the public, and other illegal public content. Private communications between individuals are not blocked on the service, as these conversations are also encrypted.

Despite the company’s ban, this week pro-ISIS Telegram channels claimed responsibility for a knife attack at Ohio State University and detailed ISIS fighters’ plans in the Philippines to expand into southeast Asia.

© Thomson Reuters 2016

Tags: Islamic State, Messaging Apps, WhatsApp, Telegram, Social, Apps, Cyber Terrorism


Google Shopping Insights Tells You What Customers Want – Now

google shopping insights

Inventory is and has always been a tricky problem for small business owners. Having too much of an item in stock that doesn’t sell is a rookie mistake, as is running out of popular products. However, a new tool called Google Shopping Insights might be just what small business owners need.

Shopping Insights estimates trends and popularity by breaking down search data by products, cities, and devices, and illustrates it in heat maps. This gives retailers the power to know which products to order more or less of, protecting them from losing money and alienating customers.

Given that eCommerce garners so much attention online and elsewhere, it would be easy to just assume that most sales today take place over the Internet, but that isn’t necessarily true.

Jonathan Alferness, VP product management for Google Shopping, explained in an article, “While 87 percent of shopping research happens online, 92 percent of goods are still sold in retail stores. By better understanding user’s shopping intent online, retailers can make more informed local merchandising and marketing decisions for their stores.”

Additionally, marketers can also use the data provided by Google Shopping Insights to target Adwords. If, for example, you know that hoverboards are infinitely “hotter” in Las Vegas than in Atlanta, based on what consumers are Googling, why would you waste resources targeting Atlanta?

Google Shopping Insights – still in beta and only available for the U.S. market at the moment – works best when tracking major trends. The tool currently includes data of 5,000 of the most popular product searches on Google Shopping made between April 2014 and September 2015, and these would, of course, include Star Wars and Minions costumes, at least according to Alferness’s report.

While 5,000 products cover most of the holiday shopping lists, Google Shopping Insights isn’t particularly helpful to retailers of products that are considered relatively niche, but still in demand.

Alferness however, promises that the tool will have fresh updates, new data, stories and insights in the coming months. “It’s all part of our long-term commitment to help retailers succeed with deeper insights about users’ intent and context.”

Image: Google