For a big percentage of Indians’ who go abroad to Canada for studies or work, the primary aim will be to earn a big chunk of money. However, no matter how much you earn, without a proper plan to save it, you will always be poor at the end of the day. This article will show you an easiest way to save your money by Investing GIC of Indian Students.
Many Indians go to Canada as students by taking an Educational Loan from any Indian Bank. Most of the banks provide loans which will be a big chunk in size. If the students who took the loan for their 1 year or 2 year studies, then they will get an additional year before they have to start paying back the loan instalments. Even until then, the interest rates will pile up.
Investing GIC of Indian Students and Part-time earnings brilliantly
Is it good for a student with a big amount of loan to just pay up until it finishes and have nothing else with them?
Normally, an educational loan will have a tenure ranging from 10-15 years. But if you take that much duration of time, you will end up paying a lot more than the loan amount as interest to the bank. It is beneficial for the bank, but as a students who has struggles for years, it is not for you.
Now let us check how can you brilliantly execute this process with easily paying off the loan at an earlier period at the same time saving and having a large amount of money with you at the end.
Note: It is essential to note that, many expenses like adding an additional course, certificate program, getting licensed for any trade or driving, applying for PGWP, booking tickets back to home for visiting family will be extra costs you will have to manage along with the daily expenses for food and grocery, dresses, basic utilities and occasional miscellaneous activities. You just have to be careful enough to manage them wisely as most of them at certain stages of your Canadian life might be inevitable and you will have to spend. We are taking the remaining money with you and whatever you earn extra as a source to pay off the loan and at the end maximising the leftover money as your savings.
Tip 1: Managing your GIC amount
It is essential for every student to have a GIC amount either via a GIC account or a Student deposit program to get your initial VISA approved. Since the current approved minimum amount for this purpose is approximately 20000 CAD or roughly 12 lakhs. If you include the tax you paid for this, the total amount will be approximately 13.5 Lakhs.
Remember these values:
- Total money you have in Canada via GIC: 12 Lakhs
- Total money you spend including tax: 13.5 Lakhs.
- The extra money you have to earn back: 1.5 Lakhs.
Let’s assume an average student’s expense for a month in Canada.
- Housing Rent: 500 CAD
- Groceries and Food: 200 CAD
- Bus fare / travel expense: 150 CAD
- Utilities: 100 CAD
- Miscellaneous: 100 CAD
- Extra expenses: 100 CAD
It is roughly 1150 CAD and let’s round it off to 1200 CAD. For CIBC bank holders, the roughly estimated GIC Release amount every month is around 1300+ CAD. This in turn gives you a 100 CAD extra kept.
So, from GIC you saved 100 CAD per month.
Consider that you expect to get all your money as GIC instalments, you will get roughly 15 instalments. (For the purpose of easiness, I am ignoring the fact that the initial instalment and the final instalment will be larger. We just assume each normal instalment for a month).
In 15 months, you saved 15×100 CAD which is roughly 1500 CAD.
I have added 100 CAD for miscellaneous and extra expenses every month, which all together for 15 months adds up to 3000 CAD. This is where your initial expenses for buying mattresses, winter clothes, movie tickets, partying costs, celebrations altogether comes in. I just kept a fixed amount for each month so that we can evenly divide it for the comfort of calculations. Sometimes, for a few months you wont be spending that 100+100 at all, instead in a single month you might spend an extra 500 CAD.
Read: Best Cards for Indian immigrants in Canada: Forex, Travel, Debit and Credit
Tip 2: Managing your part time job
Consider you are a two year course students and you will roughly have 16-18 months of classes including vacation.
Let us assume that you didn’t find any job at all for the first six months due to the job crisis. Where the remaining 10 months (I am taking the lower range of 16 instead of 18 months) you will have a part time job. For now, let’s assume that you were working part time itself during the Semester break as well as during the Winter break where you can work 40 hours a week instead of the regular 24 hour a week. We are doing this to balance of other difficulties that might come and take the most minimal count into our calculations.
So, we have 10 months to work 24 hours a week. Lets assume you only found jobs good enough to get 15 hours of work per week for the whole 10 month duration. In 10 months, there is approximately 40 weeks.
- Number of Months: 10 months
- Number of weeks in it: 40 weeks
- Number of hours per week: 15 hours
- Hourly pay: 12 CAD (taking the minimum)
- 40 weeks total hours: 40×15= 600 hours.
- Total earnings: 600 hours x 12 CAD = 7200 CAD.
And that’s the money you will have with you at the end of your course. (we assumed that you take GIC for your expenses and save all the money from part-time job. Some student’s struggle hard to meet their expenses using the part time earned money and will keep the GIC amount safely unused. Well, that is good. The more you save and the more you reduce your expense, the more you will have at the end. But never reduce expenses for your basic needs and live in poverty. Be proud to live the way you love)
So, at the end, you will have 7200 CAD as balance of your part-time job earnings.
Tip 3: Investing GIC of Indian Students
It is impossible to get all this money together to invest due to the periodic nature of part time earnings as well as GIC amount. So, we invest periodically in proper channels without taking any risks.
Where to invest our money earned from Canada in India?
The obvious answer is the best one. Share Market is the best option for Investing GIC of Indian Students.
“Share market? No! way! I am not going to spend my money on some stock gambling!” That will be the first thought to comes into your mind or if you ask about it to someone who doesn’t know anything about stock markets.
We too can’t force you to do it or convince you that’s the best method since there are risks involved. But if the stock prices have to crash and you to loose money, the entire Indian economy has to fall down. At that stage having a lot of money with you in hand or bank account will also be useless.
Let’s see some facts about before proceeding to the ways and techniques.
- Average minimum income generated through stocks: 15%
- Average maximum income generated through stocks: 36,596.43% (yeah, we didn’t put the decimal by mistake)
- Expected average income through stocks if kept in holdings: 30%
- Maximum income through bank FDs: 8%
- Maximum income through government bonds: 6-7% (Most safest way to invest).
It is all up to you to choose whether to start investing in Indian stock markets. Markets like USA’s Nasdaq is also a good option, but it requires more money since it’s trading in US Dollars. However, India being the 5th most powerful economy in the world, it is safe to invest especially when you can use the low valued Rupee with respect to USD or YUAN. In fact, Canada is less stable economy if compared with India with world’s 9th position in economic stability.
Due to the vastness of the topic, it is impossible for me to explain everything about the stocks in one small article. I will try to give hints and tips in future.
Now, let’s look on how to buy stocks and which is the best trading brokerage partner.
I am personally using PayTM money and Motilal Oswal apps to manage my stocks. PayTM Money being the first and most familiar one fore while Motilal Oswal is the new but insightful app with good suggestions.
There are several other good apps and companies to be considered as potential brokers. But, I can’t just suggest them without using them. Hence, let me share the links to download the app and sign up below.
- Sign up for Motilal Oswal Demat account.
- Sign up for PayTM Money Demat account.
Demat account is an account similar to your bank account. In your bank account you put you money, make transactions to other, receive from other. Similarly, in a demat account you put your shares, buy new shares, sell your shares. So, a demat account is just a bank account but for keeping your shares.
Here is the analogy:
Bank savings account: To manage your liquid cash/cash/currency
Bank locker: To manage your gold/documents/valuables
Demat account: To manage your shares bought from share market.
Other popular stock brokers where you can open a demat account are:
- Upstox: Open Upstox Demat account
- Angel One: Open Angel One demat account
- Share Market (by PhonePe): Open Sharemarket demat account
- 5paisa: Open 5paisa demat account
- Groww : Open Groww Demat account
There are several other stock broker apps too. but the above mentioned 7 are the most popular, widely used and most trust-able.
How to Pay back the loan by Investing GIC of Indian Students
Now let’s come to our final target. We did all this for two main reasons. To get rid of the educational loan we already have taken from india as soon as possible and to have a good chunk of earnings with us.
- Sign up for a demat account as soon as possible
- Start choosing most popular and stable companies and invest in them.
- only choose delivery method to get holding of shares. Never choose F&O or Intraday.
Intraday is simply the buying and selling the stocks on the same day. You will have to assess the market and buy shares at lower prices and sell it on the same day. you cannot keep those shares with you. If you didn’t sell, the broker will automatically sell it at the marketing closing time rate. SO, do this if you know the trading mechanism of stocks with proper analysis.
F&O is the area where big losses occurs. It has the potential to make your super rich but at the same time it can take away everything. We don’t recommend you to even go near it unless you have become a pro-trader with years of experience and knowledge. This is the section in stock market which make millionaires end up with nothing and huge debts.
So, you should only buy shares at best prices, to keep it in your holding. This means, you own certain number of shares of a company. The share price will fluctuate and go down or up. But over time, eventually it will only go up in long term – which is roughly a period between 3 months to 12 months.
The magical Brilliants steps
Open the demat account, look for good futuristic companies with a future of minimum 10 years ahead. For example, companies working and investing in the areas of Electric Vehicles, Electric parts, Farming Technology, Pharmaceuticals, Renewable energy, Public Sector Companies are much more good to invest in.
Find stocks with shares valued between Rs 50 to Rs 150. Buy them when ever you get a hold of extra cash. Make it a habit. Buy 100 shares this week. Buy 300 next week. Buy 50 this weekend. Buy another 500 next week. Do this periodically and eventually you will have a handful of shares of a company.
If you are not sure of which company and which sector, go for the basket investments. Basket investments are offered by certain trading companies where they altogether combine multiple companies. So, even if one of the company’s individual share price comes down, the other will hold them together so that your risk will be low.
Higher the risks you take Higher the chances of gain as well as loss. So, make sure you know what risks you can handle by calculating the loss and then invest. It is best to read newspapers and online news portals that regularly update finance news and stock market news to have proper insights.
Why focus on Investing GIC of Indian Students?
Investing GIC of Indian Students is the easiest way you can manage money once you get a good part-time job. It will be sufficient enough to manage all the expenses using the money earned through job.
We are not saying that you should wait until you get a job or you should only use the money from GIC, but balance the money in GIC by adding or subtracting your part-time earnings.
Once you do this periodically, at the end of your course, which is roughly 15 months, you would have already invested a big sum of money in shares. For most of them, they will already have provided you with good profits. Sell them when you believe they might not increase further and invest more in new shares at lower prices. Do this in a organised and cyclic order so that you will be investing from time to time and taking the gains to feed off to your needs.
By this method, you can interestingly find a large pool of extra cash with you, which you can use to feed the interests of your loan and within short span of time fore-close that loan.
Do the same process and you will find yourself financially independent of any jobs or professional crisis. All you need is a mobile phone or computer to earn money by trading with companies rather than doing the actual businesses.
Do this: If you are interested in getting onboard, then we can give out free stock tips and share suggestions via a whats app channel. If you like that, please do comment. If sufficient people asks for it, we will make one.