How are Population Growth and Economic Development related

The relationship between population growth and economic development has been a recurrent theme in economic analysis for a very very long time.

As far as I consider, the answer to it depends on the context, type of economy and standard of living of the average population. While economic development can mean a lot of different things, like it can just refer to the economic growth in terms of monetary value as a whole or principally economic development can be said to be the continued, progressive, and active efforts of the public and private sectors of a country that promote the standard of living and economic health of the country. 

The effect of population growth on the economy can be positive or negative depending on various factors and circumstances. While, on the one hand, a large population has the potential to be great for economic development, as the more people you have, the more work is done, and the more work is done, the more value (or, in other words, money) is created. Based on the history of all the developed economies, we see that human capital is a major component of growth. This can be basically deduced from the fact that resources required for economic growth are driven by the availability of human capital. Other positive affects of population growth are economies of scale, the possibility of increasing the market for the goods produced in the country and the new outlook, attitudes, ideologies, creativity they bring compared to the older population. But population growth may also have adverse effect on a nation’s growth as many resources has to be spent on the rising population and it would create pressure on the limited resources the country has and diverts the resources to maintain the capital than increasing the stock of capital per worker.

There are generally 3 schools of thought and views:

a) Opposing the positive impacts on economic development

b) Supporting the negative effects on economic development

c) Believe that there is no correlation between economic development & population growth

What are your thoughts: Is population growth good or bad for economic development?

Real Estate: Investment and Wealth Creation

Traditionally, most investors have trusted the stock market as an avenue to pool in their hard-earned money. While stocks are a well-known investment option, not everyone knows that buying real estate is also considered an investment. Under the right circumstances, real estate can be an alternative to stocks, offering lower risk, yielding better returns, and providing greater diversification. Investing in real estate or stocks is a personal choice that depends on your financial situation, risk tolerance, goals, and investment style.

Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit. It includes data driven solutions like Data Collection, RE Monitoring, Performance and Benchmarks, Fundraising, Investor Reporting, and much more.

Real estate assets are typically very expensive in comparison to the other widely available investment options. Unlike stock and bond investors, real estate owners can use leverage to buy a property by paying a portion of the total cost up front, then paying off the balance, plus interest, over time. Investments in real estate deliver returns in two ways - capital appreciation and rentals. Investing in commercial real estate is not as difficult as it may appear. This is because commercial properties have certain standards that the owner or builder must observe when constructing a business.

For retail investors, the key considerations for investing into commercial assets should be thorough assessment of their risk appetite, investment horizon and the purpose of investment (rental return, long-term investment and diversification). In addition, location of the project, micro market performance, project quality, lease covenants (rent, escalation, lock-in period, etc.) and bench-marking should be part of the due diligence process. Also, one should see whether the micro market is preferred by a diverse occupier mix or a specific industry. This is particularly useful if the investment is in an upcoming commercial project with no pre-leasing activity. At the end of the day, it is a trade-off between risk and return.

Options available to participate in commercial real estate can be shops, offices, land parcels and real estate investment trust (REITs). Commercial properties yield 8-10% in major Indian commercial markets depending on factors such as location, demand-supply dynamics, quality of asset and maintenance. Currently, the commercial market is on an upswing with strong demand momentum and leased options are at a premium. The commercial property market is forecast to remain robust with ~35 Mn sq.ft of average absorption in the next couple of years. If you have an appetite for commercial real estate and are looking for long-term investment, this is the sector for you.

If you have been considering the real estate industry, there is no need for you to hold back any longer. This is an industry that you can be successful in if you are motivated. No need for years of education, or even a great deal of money to get you started. With minimal education and money, you can get started in the real estate industry and be on your way to making money. Why not get started today and join the best industry that there is!

Senior Citizen Saving Scheme (SCSS)

One of the safest investment for senior citizens, with the interest being paid out quarterly. Since it is backed by the central government, the returns are assured, but it comes with a lock-in period of 5 years. You can invest up to Rs 15 lakh and rely on quarterly interest pay-outs for liquidity needs. SCSS also offers tax deductions under section 80C. The SCSS interest rate is amongst the best on offer amongst debt instruments.

               

At the juncture of retirement, the most important thing that a senior citizen or retiree is looking for is the safety of capital, followed by substantial returns, liquidity and tax saving.At present, there is no other financial product that can fulfill these requirements other than SCSS. With a lock-in period of only 5 years, and you have the best financial investment product suitable for senior citizens.

SCSS has been specifically designed keeping senior citizens in mind, as it is in simple terms, a deposit scheme with guaranteed returns and minimal risk. The investor can conveniently use this scheme to generate a regular income flow. SCSS, in true sense can bridge the shortfall between the pension and regular expenses of a senior citizen.

Old age and retirement bring a lot of uncertainties and doubts in the minds of people and lack of financial awareness is one of them. Senior citizens are always wary of putting their money in financial products out of fear of losing their capital. SCSS with its sovereign guarantee of capital protection can be an ideal investment vehicle at this stage of life.

2nd Innings Financial Liberty

               

Consider this: You have always been smart, financially aware, meticulously planned your future and the silver days. You are confident taking inflation into consideration, the corpus you have built or are building would be more than sufficient to take care of your post-retirement days -- the most basic and standard fallacy in most of our lives. What is paramount is not the accumulation but smarter investment, diversification and planning the maturity timelines, to ensure they are able to take care of your expenses too, while they grow and assure you and your beneficiaries dividends in future.

There are a plethora of saving schemes for senior citizens. But, with time not on their side, senior citizens look for investment avenues that carry minimal risk.Here are a few financial instruments that you ought to have in your portfolio to achieve this goal.

• Senior Citizen Saving Scheme (SCSS):One of the safest for senior citizens, with the interest being paid out quarterly (liquidity), backed by central government debt funds (risk), and only a 5-year lock-in (tenure)
• Pradhan Mantri Vaya Vandana Yojana (PMVVY): A government-backed scheme, it comes with no credit risk and a longer tenure of ten years. The scheme was to end on March 31, 2020, but the central government decided to extend until March 31, 2023 due to its popularity amongst retirees
• Life Insurance Annuities: Unlike PMVVY and SCSS, annuities offer guaranteed returns over a much longer term of 30-40 years, covering your entire retirement phase.
• G-Secs: Being a sovereign security, it is highly secure, and provide average stable returns. With longer tenures, and an option to exit, if the need arises, these are very lucrative instruments, guaranteeing semi-annualised payouts

Alternative Investments: Is it a Safe Bet?

While traditional investment avenues such as MFs, stocks, PPFs and the like, have been around and have been the preferred choice among investors and financial enthusiasts, there are other investment avenues available which are not known to many but might generate better returns than traditional investments. There investments are called as alternative investments in which risk tolerant investors can invest.

Alternative Investments are the non-traditional investment options and hence do not invest in traditional investment assets like equities, bonds, cash and bank deposits. Investments in alternative investments include private equity, private debt, hedge funds, vintages and collectibles like wine, art, paintings or cars. There’s still ambiguity whether to consider real estate as an alternative investment or not, but of late commercial real estate has got the interest of financial advisors, industry experts and investors' interest globally.

The beauty of any financial product or solution, whether it is the "tried, tested, recommended and suggested" (by the previous generations) PPF, Life Insurance (by LIC) et all, is that all of them come with a pinch of salt and pepper (pros and cons). While comparatively lower liquidity, absence of a clear benchmark to decide fair value, thus also leading to a lack of clear direction in valuation of a commodity (as part of the investment), the most worrisome factor is that historically the segment has been tarnished with  a few shams and scams (but look at it what has not, Stock Market scams, residential real estate, MF closing down). Remember High Risk High Gain, so while the risk of a downside is high, so are the benefits of an upside. Alternative investments come with the satisfaction and benefits of diversified portfolio, shield against the volatility associated with unit-linked investments and as stated much higher assured returns.

As oft-stated in advertisements "MF are subject to market risks", similarly in case of alternative investments, personal financial acumen and knowledge or having a financial advisor with a sharp aptitude and knowledge is paramount to secure your investments and gain from the upsides through 3Ps - Purpose, Patience, Perseverance