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Why Indians Lack Financial Literacy | with English Subtitles | Master Mind Maddy - YouTube
Channel: Master Mind Maddy
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For starting a business, India
is a huge market in the world.
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The main reason behind that is
India's population.
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The total population is
nearly around 130 crores.
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Due to that, the consumption
rate of India is high.
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Only for that main reason several multinational
companies step into India.
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But for such a huge population in crores
even the MNC alone cannot cater.
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So only there are a lot of
Small and Medium Enterprises.
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In India alone, there are nearly 50
million Small and Medium Enterprises.
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In those small and medium Enterprises,
approximately 11 crore people are working.
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This is the sector in India
where the most people work.
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Every year thousands of Small and Medium
Enterprises are being started in India.
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In that nearly 90% of Businesses,
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run into loss, become a loss
and eventually shut down.
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The prime reason for the closure is
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Financial mismanagements happen in
Small and Medium Enterprises.
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As people are not aware of how to
manage and handle money in business
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so that business
turns into a loss.
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The knowledge on how to handle
money effectively,
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Defined and termed as Financial Literacy,
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Majority people in our country
do not have this knowledge.
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The main reason for many people to fall
below the poverty line is
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They don't have financial literacy.
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This lack of financial literacy,
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is acting as a big hurdle in the
growth phase of Indian Econmoy.
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What is financial literacy?
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Why is it very low among
the people of India?
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How can it be rectified?
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These are the things which we will be
discussing in this video.
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I am sure this video
will be very useful to you.
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So, please do not
skip and watch it in full.
[79]
Please like the video and start watching
[81]
So youtube may recommend this video
to more people.
[83]
If you are a first-time viewer
of Master Mind Channel.
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Please subscribe
and press the bell icon.
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Welcome back to Master Mind
Its me...Maddy.
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India is just now beginning to become an
Investor country, which is a very good thing
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Many of us do not have a significant
knowledge about investment.
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So what we do, We just
ask for tips from our friends.
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If any of our friends say,
"Buy this share", we buy.
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If the friends invest in Cryptocurrency,
We also invest in Cryptocurrency.
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We just watch others
and do similar things like that.
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We are making an
investment just like shopping
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Without a proper strategy
we buy and keep a lot of things
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and start thinking about how to manage them.
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ET Money has arrived with a solution to this problem.
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A Membership plan ET Money Genius has
been launched by them
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Through this membership, you'll get Personalized
investment plans as per your needs.
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To give a simple illustration,
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If you are about to build a house
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You will not start to build immediately
without a proper course of a plan
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Before starting, you will reach out to an
architect and say your requirements
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and receive a plan from him accordingly
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and we will rigidly follow that plan
and build according to that plan.
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Then only the house will be well built
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ET money genius is like the architect
for your investment life.
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They will create and give investment plans
that will be suitable for you.
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Just like the house is fulfilling
our needs
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and protecting us from the sun and the
rain
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ET money genius also in a similar fashion
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Regardless of the market situation,
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It will help you achieve your financial
goals within your planned time frame.
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In the investment plan in your portfolio,
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There will be 4 asset classes
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Indian equities, international equities,
debt and gold.
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All houses are built only using
bricks and cement.
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But still, All houses look unique,
don't they?
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In the same way, ET Money genius
also using these four asset classes
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uniquely, as per your requirements
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customize mutual funds and stock
portfolio.
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Not only that,
it functions like a GPS,
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Guides every step of your investment
journey.
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ET money genius will be watching
the markets 24 x 7
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Not only that, but they
will also send monthly alerts
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Those alerts, in your portfolio
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will say the required changes according
to the current market situation
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You can make all those
changes in just one tap.
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Compared to the regular markets,
ET Money Genius takes a very low risk,
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and helps to give you better returns.
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The last 15 years regular markets,
when being compared
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Against the portfolio created using
the growth strategy of ET Money Genius
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ET Money Genius has given 18.23%
annual average returns.
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This is 1.4 times more than
the regular markets.
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These returns have been achieved with
a 41% lower risk than regular markets.
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So anyone who is interested in
ET Money Genius membership
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Kindly check the
link in the description.
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The literacy rate of the
whole of India's population is 75%.
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But the financial literacy rate of India
is only 24%.
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Meaning, only the 24% of
Indian population have knowledge regarding
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How to save money, How to invest
the saved money and multiply
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And other money management issues.
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Road side shops can be seen
all over India.
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There are lot of people selling
fruits and vegetables on the platform.
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In order to buy the goods required
for their business, all these people
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operate only by taking loans from
somebody.
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The people who give them loans, do not
give them loans at a low rate of interest.
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They lend money only
at a high rate of interest.
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Nearly 42% of people in India, receive
loan from informal lenders
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At a high rate of interest till date.
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For example, just assume one person
who is selling vegetables on the road
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He will not be having the sufficient funds
to purchase the goods for his daily sales
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So, what he will be doing is
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he will take a loan from
someone who is giving for interest
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Let us assume, he is taking a loan
of Rs 500/-
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The loan lender will be giving him
only Rs 400/-
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He will withhold the interest
he needs to receive in advance.
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For a sum of Rs 500, if Rs 100 is interest
then the interest rate is nearly 20%
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The vegetable seller will receive
that Rs 400
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and buy the vegetables and star selling.
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He will be selling from morning till night
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He has sold all the goods purchased
for Rs 400 for a sale value of Rs 800
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Now he has to return the
loan received in the morning.
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He has aleady paid the interest.
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The received loan amount Rs 500,
He will go and return by night.
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He will have the
balance Rs 300 in hand.
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He and his family must manage that day
only with that 300 Rs.
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The following day, again he will go to him
and ask Rs 500 as loan and do his business
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This will keep on repeating
like an endless cycle
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There is a way for the vegetable seller
to rid himself from this loan trap
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It is enough if he saves Rs 10
from the Rs 300 which he brings home daily
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If it is Rs 10 per day, he will be having
Rs 500 in his hand by the 50th day
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He will have the needed investment
for that day to do the business.
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So there is no necessity for
him to receive a loan at interest.
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But, he is not aware that
by using such a technique
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He will be able to create his own
investment.
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No one has said
these things to him.
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So he is continually getting trapped
in the loan net.
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if you know any such people,
Please share this video with them.
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This being one side, a research data
reveals the other side.
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In Indian Banks as of now, there is a total
of Rs 18,830 crores of unclaimed assets
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This sum of money is locked in accounts
which are not having any transactions
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The reason for this can be
the death of account holders,
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or there were no nominees
to claim that amount
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So only the funds are still lying
in the bank
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On one side, there is a set of people
who don't know how to save money.
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On another side there is a huge sum
of Rs 18,000 crores without any usage
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All Indians are either saving the money
or spending the money.
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Many are not aware of
how to handle that money.
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If you investigate the reason for this you
will know that
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It is because of the education system
in our schools
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They are teaching simple interest,
compound interest
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teaching trigonometry, teaching calculus
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But any school does not teach on how
to manage money.
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For a piece of financial advice,
many of us reach only our friends.
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The irony is most people don't
have friends with financial knowledge.
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it is because no one has
taught us about financial literacy.
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If financial literacy is included in
school syllabus in early stages
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A basic awareness will
be starting from that age.
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Today, most students complete their higher
education only by applying for a loan.
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After they start working, it will take few
years at least for them to repay the loan.
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In those times, to manage the expenses
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due to lack of knowledge,
they get credit cards.
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As they are not aware of how to use
Credit Cards to their own advantage
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They get caught in a debt circle.
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if all these things had been taught
to them in the school itself
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They would have known,
what are the Do's and Don'ts.
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We are not using trigonometry or
integral calculus on a daily basis.
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But we manage money on a daily basis.
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But none of the schools teach us about it.
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If you are financially literate, You
will plan your investment smartly.
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In case any tragedy happens to
you in future also,
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Still, you would have taken term insurance
to support your family.
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You would have taken medical insurance
for everyone in your family.
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Those of you, who have done these
Please comment below.
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The financial literacy rate of
Tamil Nadu is 22%.
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The financial literacy rate of
Gujarat is 83%.
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The comical thing about this is the
literacy rate of Gujarat is only 68%
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So this means that, even those who don't
know to read and write,
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know how to manage money.
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Another notable point is
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There are nearly 1 Crore people in Gujarat
who is investing in the stock market?
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But not even half the number of people
do from Tamil Nadu.
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In stock markets, you can hear about
an amusing phrase.
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Among the investors in the
Indian stock market 90% are from Gujarat
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And the balance 10% are Gujaratis who are
outside Gujarat.
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Gujaratis know how to multiply
the money they have saved.
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We should also become like them.
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Already I have made a video
about Seven Investment rules.
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I will be repeating it which
I have said in that video.
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The earlier you start your investment
journey, the better it is.
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Then only there will be a compounding
effect and your money will multiply.
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Also, Do not invest everything
in one place.
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Diversify it and invest them in different
categories.
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Classify your goals as
short term and long term.
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Plan your investment
according to that.
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To manage your personal finance
and to be a financially literate
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I would recommend a book:
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"Financial affairs of the common man"
by Anil Lamba
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This book explains in very simple English.
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The author has written according
to the Indian environment.
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There are lot of personal finance books.
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But most of them are written on the
basis of the American environment.
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But this book is
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Written in a way making
the understanding easy for the Indians
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in the indian scenario.
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I have not come across any Tamil
books in the subject of personal finance.
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In case I see, I will post them
in my Instagram, and you can follow
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This book is available in online itself.
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Book Fair is also taking place.
it is possible to be there also.
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Please read the book and comment
"How it was?"
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If we are financially literate, it is not
only good for us, but also for the country
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I believe this video
would have been useful.
[602]
Please like the video. Subscribe to
Master Mind channel. Press the bell icon.
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I will meet you again in an interesting
video. Until then ... it's bye from Maddy.
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