Personal Financial Knowledge

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Personal financial knowledge has become an important aspect of an individual’s life. It involves having an understanding of one’s financial situation and making informed decisions about matters of money.

A major aspect of personal financial knowledge is budgeting. This involves planning how to spend money and sticking to that plan. A budget helps to prioritize the spending and avoid overspending.

The second important aspect of personal financial knowledge is saving. It involves putting  aside some money for future use, maybe for emergencies, retirement, or other long-term goals. This provides a sense of security and helps to achieve financial goals.

Personal Financial Knowledge Personal Financial Knowledge

Investing is the third key component of personal financial knowledge. It means putting money into investments such as stocks, bonds, or real estate with the goal of earning a return on investment. Understanding investing can be complex, but it is important to grow wealth over time.

And finally, having knowledge of credit and debit is crucial for personal financial success. This includes understanding how credit scores work, managing credit card debt, and avoiding high-interest loans.

In addition to the above mentioned aspects, personal financial knowledge also includes understanding taxes and insurance. Tax planning is crucial as it helps to minimize tax liability and maximize refunds. Insurance knowledge helps to protect assets and safeguard financial future against unforeseen events.

Personal Financial Knowledge Personal Financial Knowledge

Moreover, personal financial knowledge also involves understanding one’s financial goals and risk tolerance. This helps individuals to make informed investment decisions that align with their objectives and risk appetite.

Overall, developing personal financial knowledge is a process that requires education and practice. By taking the time 

to learn about budgeting, saving, investing, and credit, individuals can make informed decisions and achieve their financial goals.

It is important to note that personal financial knowledge is not just limited to individuals who earn a high income. It is equally important for individuals with low or moderate income to have a good understanding of personal finance. In fact, having personal financial knowledge can help individuals with limited income to make the most of their resources and achieve their financial goals.


Reading Time: 3 minutesEducation means studying to obtain a more profound knowledge and understanding of various subjects to be applied to daily life. Education is not limited to just learning from books but can also be obtained through practical experiences outside of the classroom.

The top reason why education is essential is that it provides stability, provides financial security, needed for equality, confidence, a great sense of thinking, and much more.

Offline mode of education has been our traditional form of teaching, but the COVID-19 pandemic has transformed the education landscape. This blog will explore the advantages and disadvantages of online and offline education.

Online Education has become increasingly popular in recent years. It has transformed the traditional learning method into a transformative and innovative approach to learning; The process includes various advantages and drawbacks. Let us discuss the beneficial vital points of the online education system.

  • Flexible learning: People can learn in their own space and schedule. Also, allow students to interact with teachers and mentors anywhere and anytime.
  • With access to a broader range of courses, a particular student can learn and explore different fields of education. Students can pursue various studies from all over the world.
  • Online education can be more affordable than offline education, as the transportation cost, room and board, and other fees are not required for the knowledge.
  • Improved access to education makes education accessible to students who might otherwise be unable to attend offline classes due to physical disabilities, location, or other barriers.
  • Online education offers a range of benefits and advantages, but due to the era of harming technology.

Online mode of education also has certain drawbacks.

  • Limited social interaction: It lacks face-to-face interaction. These things can lead to feelings of isolation and loneliness.
  • Technical difficulties such as slow internet connection and outages can interrupt the learning process and affect the quality of education.
  • The factor of self-discipline is most important when learning comes to online. Learners must be self-motivated and disciplined to keep up with the coursework.

OFFLINE V/S ONLINE EDUCATION Personal Financial Knowledge

Whereas the traditional learning method can provide a more immersive and engaging education.

  • Networking opportunities with peers and professionals in the field can lead to valuable connections and job opportunities.
  • The opportunity of using campus resources, students have a wide range of resources, such as libraries, laboratories, and other facilities.
  • Discipline factor, offline education requires students to attend classes and adhere to a fixed schedule, which can help to develop discipline and management skills.
  • In offline education, students get personalized instructions according to the needs and abilities of an individual.

Indeed, it is a common saying that a diligent student can study anywhere, and this is a testament to the power of self-discipline and focus.

The choice between offline and online education ultimately depends on individual needs and preferences. Each mode of education has its advantages and disadvantages. The most effective approach may involve a combination of offline and online learning to maximize the benefits of each method.

China Plus One Strategy

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What is China Plus one strategy?

The COVID-19 pandemic ravaged the whole world and disrupted the entire global supply chain. It prompted companies to invest in other countries around the world to not depend on China wholly. This strategy is called China plus one strategy

How did China manage to attract initial foreign investment?

In the early 1980s, there was a spike in labor and manufacturing costs in western
countries. This made Western companies shift their manufacturing base from their
native countries to China, where cheap labor, low production cost, and enormous
domestic consumer markets for the companies to invest.

Significant reasons why companies are looking for alternatives to


           A) The political ideology that China follows.
           B) The spike in labor cost.
           C) Geopolitical conflicts with neighboring countries.
On the other hand, the consumer market in India is already established and ready with cheap and skilled labor. Promoting employment of the youth will be highly beneficial for the country’s economy and attract foreign companies to the country.

How can India appeal to foreign investors?

Tariffs: Decrease import taxes on raw materials and machinery. The tax levied on raw material imports is about 40.8% and 29.8% after GST on machinery, making foreign companies think about their options upon investing in India.
China Plus One Strategy Personal Financial Knowledge

Infrastructure: make transportation and infrastructure better and invest in special economic zones to attract labor for the factories.

      A) The road connectivity in the country poses a significant problem as the quality of             roads is below average in some parts of the country, which causes a delay in                   transportation and increases the cost of maintenance of the vehicle.

      B) The airports and seaports are still not capable of handling a large consignment.

      C) A faulty logistical approach also poses a problem that leads to companies                         reconsidering their options.

      D) Invest in making good schools and hospitals around these economic zones to                  ensure the quality education of children of labor.

Address the power problem: Govt has to focus on giving power at a subsidized rate and invest in renewable energy sources to remove dependence on fossil fuels.

       A) Invest in modernizing power transmission to long distances. Most of the power                lines are still not underground, which poses a problem during natural calamities.

       B) The government has to ensure that the power is supplied to each part of the                      country so that the factories in remote areas can function smoothly.


China Plus One Strategy Personal Financial Knowledge

Try to promote the growth of small-scale industries and establish a communication channel between these small-scale industries and the MNCs and promote collaboration between them.

Promising stores of natural resources.: Ensure a proper supply of water and metals and minerals to these regions.

Try to make the policies & transactions transparent and make the system less corrupt. Also, there should be a reduction in government red tape, and the role of bureaucracy in making industries should be reduced.
Strongly investing and introducing new technologies and communication channels in manufacturing and transportation. The government has to aggressively support and promote skill development to ensure jobs for the country’s youth.
Resolve political ideologies and avoid clashes to ensure peace in the areas and attract the interest of foreign companies.
         A) The Center has to cooperate with the state governments to reduce the clash between the center and the state.
         B) Ensure stability with proper policing in the area to prevent antisocial elements from wreaking havoc and preventing rioting.

Marketing Strategy behind Rs.999 tags & 10% extra quantity

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You must have seen products being priced as Rs.999 rather than Rs.1000, though there is just a difference of Rs.1, the former one is preferred more and has been a successful marketing strategy. Let’s find what’s behind this strategy.

What goes through the mind while making a purchase of a product which uses this strategy?

a) First round to the closest rounded values and judge the quality of the product.

b) Second to quantitatively assume the incentive of getting a product of higher quality at a lower price.

Psychologically the incentive felt while pricing 999 instead of 1000 is much

higher than that of pricing 998 instead of 999, so in a way we can say that the value of ₹1 is different in different situations.


There is one more strategy that has been in the trend since a long time, i.e., offering a 10 or 20% extra quantity for a similar price as before.


This strategy works on rational person only if he/she has a reference to compare with. For e.g., if you go to the store and see two products A and B having the same price but different quantities.



Marketing Strategy behind Rs.999 tags & 10% extra quantity Personal Financial Knowledge

Psychological analysis is a clever marketing strategy adopted all over the world. 

Is 999 smaller than 1000? Obviously yes.


But it looks much smaller to the subconscious mind. 1000 is a 4digit number and 999 is a 3digit number, so subconsciously our mind decides that 999 or 899 or 799 is a similar group but 999 and 1100 aren’t. Thus, a smaller number of digits in price tag gives impression of cheaper product.



Marketing Strategy behind Rs.999 tags & 10% extra quantity Personal Financial Knowledge

We all often visit showrooms. Let’s imagine we purchase an item worth ₹999.

So, it’s quite genuine that we don’t ask for ₹1 change in the name of our status symbol.

This same ₹1 when collected in bulk, results in increasing black money in our country. It may sound like contribution of ₹1 will be insignificant when we are

talking about the whole country.

But let’s make it clear from an example.

Suppose a company has 250 retail outlets in INDIA. Daily if 100 customers will drop their ₹1 then the company will make ₹ 250*100*30 i.e. ₹7,50,000 per month. Means unknowingly we are adding a good amount to black market.


Marketing Strategy behind Rs.999 tags & 10% extra quantity Personal Financial Knowledge

By pricing the products Rs.999 over Rs.1000 has one major benefit to the business as the new GST rules are different for different price ranges.

 For instance, Garments costing less than Rs. 1000 will attract 5% of GST whereas if the price exceeds Rs.1000 (including 1000) it attracts 12% of GST. Hence directly a margin of 7% is created.

Hence if the price is Rs.999 rather than 1000 the buyer has to pay less amount of GST, and obviously this makes this marketing scheme very efficient, as no one wishes to spend more money on taxes.



Marketing Strategy behind Rs.999 tags & 10% extra quantity Personal Financial Knowledge

As we all know the brain has two zones normally, one for feeling and emotional and another is for analysing and aptitude stuff. Basically this 999 and 1000 concept is just a mind game, we think that 999 is coming in 900 range so it’s cheaper than 1000 but we know that the only difference is 1 RS in this.


So, what is the reason behind this? Why our brain got tricked by this simple marketing strategy?


The main reason is that our brain reads from left to right, the first digit of the price resonates with us the most and it creates an optical illusion of getting something in the lower number series, say when it is written 999, it psychologically gives an effect that we have purchased something in the range of 900 something. But we know very well that this 900-1000 or 99-100 is not varying vastly, the only difference is 1Rs and this difference creates a vast impact on data processing that happens in our brain. And because of these, people don’t bother to pay 1Rs extra to the shopkeeper while buying something because for them at that moment ,1 Rs is nothing in front of 1000 or 900.



(Fun Fact: The numbers ending with 9 are also called “charm numbers” or “magic numbers”) 



Marketing Strategy behind Rs.999 tags & 10% extra quantity Personal Financial Knowledge

Shrinkflation is the process of items shrinking in size or quantity, or even sometimes reformulating or reducing quality, while their prices remain the same or increase.

Most consumers do not generally check the size of a product. Someone who loves potato chips, for instance, may not realize if his or her favourite brand reduces the size of the bag by 5%, yet will almost certainly be able to tell if the price goes up by the same amount.

The combination of shrinkflation and giving extra 10% is an effective marketing strategy. 


E.g., Chips of 10 Rs weigh 25gm. Decreasing its size to 20gm and giving 10% extra is an effective marketing tac-tics. Overall, the product weight decreased to 22gm but nobody observed it as they think it’s giving an extra 10% so weight must be increased.



The Nestle’s flagship product Maggi, a very popular instant noodles in India, the price of a small packet of Maggi was Rs.10, but at some point, of time the price was increased to Rs.12 resulting into decrease in the demand and less sales, as most of the people didn’t like to pay the odd Rs.2 as well, leading the company to reduces its price from 12 to 10 again but by reducing the net weight of the product, resulting into again gaining those lost footfalls.


Although the price remained to 10, but effectively the price of the product was increased as now the weight was reduced by almost 30gms but, then also people didn’t care much about it as compared to the increase in the MRP. And now many products are using the same strategy of maintaining the MRP, but on the cost of quantity and quality as well.


Although, both the above-mentioned marketing strategies are successful and are used widely. But, the effect of reducing from 1000 to 999 is much more than increasing the price from 1000 to 1001, and giving extra 10% quantity, this also comes in accordance with the prospect theory put forward by Daniel Kahneman and Tversky that the effect of a loss of the same magnitude is higher psychologically.

(Daniel Kahneman and Tversky: Nobel 2002 in economics and psychology)

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