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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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Laddering


wealthymatters.comNormally,for fixed income instruments , the interest rates corresponding to longer terms are higher than those for shorter terms.However,locking in money for longer periods is not always an option.One way of ensuring a greater degree of liquidity while taking advantage of the higher rates offered for the longer tenures is laddering.

If you want to create a 5 year ladder you could buy a 1year, 2year, 3year,4year and 5year instrument .Then after the first year,renew the matured 1 year instrument for a term of 5 years.Then the following year do the same with the matured 2year instrument.Continue the process.

Laddering ensures that at least some of the higher interest rates are locked in and that the average rate is higher than the rates at the lowest point in the interest rate cycle.

If you are drawing an income from your fixed income instruments say to pay or part pay you a pension,your EMIs,a tution fee or get some passive income,laddering smoothes out the variations.

Laddering is possible with bonds,NCDs,FDs,CDs etc.

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