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How To Pay For A Foreign Degree?


wealthymattersIf you are aiming for a foreign degree,you are probably facing some financial challenges. A rapidly depreciating rupee is the first challenge. The second one is from the Reserve Bank of India a few days ago. In its bid to arrest the free-falling rupee, the banking regulator has brought down the amount of dollars one can take out of the country from $2,00,000 to $75,000 in a financial year. Education loans and remittances related to overseas studies are a part of the $75,000 limit.But the silver lining is that if someone wants to remit a higher amount, they can do so with prior permission of the central bank This offers a ray of hope for those who have the wherewithal, but for others the only way out is to prune expenses and redraw the strategy to fund education.

Almost 60-70% of students who go abroad will not find it difficult to adhere to this limit. However, in case of several programmes, particularly the MBA courses, the course fee itself will exceed the $75,000 limit. That means the RBI move could have an impact on some management programmes immediately.

Indian students are usually quite thrifty while studying abroad. In the US, for a post-graduation course, the annual fee is typically in the range of $25,000-40,000, on an average. Living expenses could be around $15,000 a year, depending on the lifestyle. If your total expenses — including course fee and living expenses — in a financial year exceed $75,000, you will have to make some adjustments to your plan. That includes compromising on the university or institution you have always aspired for. You could look for cheaper educational destinations. For instance, Australia, Germany, Singapore, and Canada are some of the countries that one can consider to pursue studies. The reasons are varied like low tuition fees or low living expenses and even work permits, which make these countries appealing.  Read more of this post

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5 Financial Homilies To Reconsider


wealthymatters.comFinancial advice always needs to be nuanced.What is good for one person in a certain situation many not be so good for another in a different situation. Unfortunately people are always looking for simple advice and rules of thumb.If we over-generalize on generally sane financial advice we can come to a sorry pass.

Here are some common homilies that need some reconsideration:

1. A house is always a good investment:A house is a tangible investment that you could potentially live in.You could rent it out and make some money.Maybe it will help you save tax.Maybe you could invest in one to save for retirement.Generally saving for a house to live in is good in that it gets a family to start saving.But at the time of buying a house it’s important to remember that you are buying a house and not a home.So do not go sentimental and over pay.Buying a house requires a deal of legwork and hard-headed thinking.Overpay and you will have to worry about the fluctuation in market prices.Try to buy an encumbrance-free house at a discount.It adds a greater measure of safety to your investment.Buy when the markets are down to safeguard yourself.Next how you pay for the house makes a big difference.Try to put down a large payment to save on the total interest you will pay.Shop around for a good loan if you need one.Read the fine print.Check if there is a penalty on prepayment.Lower rates matter.Also check if the interest is calculated on a declining balance.Check for hidden costs starting from the processing fee,the lawyer’s fee and structural engineer’s fee and insurance.When you consider the EMI you want to pay, don’t be too optimistic.Pay increments and bonuses might not come on time.Remember that over longer periods something is bound to go wrong.It’s the way of life.Also if you pay too much of your income into house payments you will not have any money left over to diversify into other assets and derisk your investments. Read more of this post

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