Pig Butchering Scam

In recent times, the percentage of online fraud has increased. Therefore, it becomes crucial to understand the Pig Butchering Scam. From the idea of fattening a pig before slaughter the name of this scam has come. Hence, scammers convince people to invest more money in cryptocurrency. They try to act like it is a genuine chance for people. While such scams are spread throughout the world, these can result in big financial losses for victims. Once people invest their money, scammers will disappear after collecting it. Let's dig into the article to learn more about Pig-butchering Scam.

What is a Pig-butchering Scam?

A pig butchering scam is an investment fraud where scammers ask people to invest their money in profitable ventures. Usually, they give promises to provide high investment returns within a few months or a short period. They use fake images along with investment portfolios that are false. With the help of these, scammers try to convince victims to prove that their scheme is legal. As soon as victims believe this and invest a huge amount of money, after taking the money, scammers will disappear. As a victim, you were incapable of recovering your invested money.

This term comes from the idea that victims are fattened up with the promise of huge returns before "slaughtering" them for their money.

In this scam, a random person starts a normal conversation. Scammers could get a number of victims from a mutual friend. Sometimes, they act like they are unsure if they have the correct number. In this way, scammers try to engage the targeted person in conversation. In order to lure people, they use pictures of attractive women. In this way, scammers try to showcase their desire for romance to create trust so that they can set up a connection.

How the Pig-butchering Scam Works:

Like other investment frauds, this type of scan follows some steps using which scammers manipulate and deceive victims. They talk with victims about getting huge returns on their investments within a short period. Now, let's see how the pig butchering scam works.

• Gaining a Victim’s Trust:

Scammers first try to act like seasoned investors or experienced professionals. Their aim is to gain the victim's trust. Scammers use online forums or social media platforms through which they keep themselves engaged with potential victims. Thus, they create trust in the people to achieve financial success. Besides, they add a layer of companionship to this scam. In this way, they are able to exploit victims' need for companionship for financial success.

• Pitching the Investment:

As soon as scammers are able to gain the trust of people, they promise a great opportunity to get successful returns and reliable investments. It includes stocks, cryptocurrencies, or other financial instruments. While they use persuasive language, sometimes they ask people and try to convince them by saying that they need to invest money very urgently.

• Collecting Money:

Once scammers succeed in persuading the victim, they will collect the invested money of those people. In order to make tracking harder for victims and other people, scammers often use cryptocurrencies or digital payment platforms.

• Disappearing Completely:

When scammers have got the target amount from the victims, they will disappear. Therefore, people do not find them when they try to withdraw their money. Scammers generate new identities or delete the online existence. Therefore, it becomes challenging for victims to recover the amount they have invested.

Every step takes the victims into the web of lies of the scammers. Victims cannot identify the scam as they are emotionally invested also. So, they also could not be able to remove themselves from the situation.

How was the Pig Butchering Scam Carried Out?

• In this scan, the “host" attempts to make contact with people via social media, dating apps, or deceptive messages.
• After finding the target, called the “pig," the host tries to set up a friendship with the people so that they can encourage victims to explore cryptocurrency trading.
• The host uses a fraudulent trading application to deceive the victim so that they believe they could gain profits from fabricated trades.
• The more the trust of the victim grows, the host tries to persuade them to invest more money. This idea is called “fattening the pig" before the reveal of the scam.
• As soon as victims try to withdraw their money, substantial fees are imposed by the fake platform. Because of the nature of blockchain transactions, it is quite impossible to retrieve lost funds.

Warning Signs of Pig Butchering Scams:

These are some warning signs of these scams:

• You get “wrong number” texts
• Someone asks you to download a "special" crypto trading
• A match starts “love bombing” you on a dating platform
• A friend asks you to invest money in exchange for a crypto
• An online friend suddenly starts talking about crypto
• Investment sites give tiers with at least investment amounts
• The scammer begins trading with you
• In order to gain trust, scammers use emotional manipulation
• You get a quick and small return on your initial investment

Emerging Tactics— Group Chats And Social Engineering:

Nowadays, the emergence of modern tactics becomes more apparent because pig butchering scammers are adapting as well as refining their ideas continuously. They engaged victims earlier via one-on-one chat messaging. But currently, scammers are seen using group chats, which let them, cast a broader net. Also, in this way, scammers are capable of identifying potential victims with greater efficiency.

Creating Authenticity through Group Chat Interactions:

Scammers are often found sharing photos within the group chat as proof of their regular activities. It helps them to increase their credibility. Images highlighting their alleged earnings are also shared with the members of the group. They want to prove their success from their investments. Thus, they are capable of creating an illusion that everything happening in the group chat is real. So, it becomes challenging for potential victims to guess whether the investment is legal or not. It preys on the psychological phenomenon called social proof. Hence, people trust others' actions and follow them also when they see other people getting success in the group.

The Group Chat Strategy:

Scammers add many people to the groups centred around investment discussions. Thus, they can get the attention of the targets.  When the remaining people take an interest in investment, scammers make those people prime candidates for the scam. If someone leaves the group, they might know about the scam or are not taking any interest in investing. It prevents those people from being persuaded by the strategies of the scammers.

In the group, there are several people with different roles. Scammers have generated fake profiles of the chat group members in order to make this group more authentic. In this way, scammers can especially focus on those people who are likely to be more susceptible to their fraudulent schemes. Besides, it creates a situation where social validation is promoted. The reason is that potential victims watch others in the group discussing investment and not calling it out as a scam.

Suspect a Scammer is Luring You in— What To Do?

• Break Off All Contact With The Scammer:

If you are the victim, you need to instantly stop every communication you have made previously across apps, social media, text and email. Ensure that you are not saying goodbye or sending any explanation. You definitely do not want to arouse their suspicions.

• Block And Report Their Account:

In order to add credibility to such a type of scheme, scammers often use many digital "friends" of the host. Ensure that you are reporting each profile that is involved in the scam.

• Change All Your Passwords And Login Credentials:

Suppose you have shared your account number or access codes for cryptocurrency accounts or online platforms. In that case, you have to generate new passwords which are not simple to hack.

• File A Complaint With The FBI’s Internet Crime Complaint Center (IC3):

It lets you add particular details. Also, you can add supporting documents such as screenshots of email, text, and WhatsApp conversations.

• File A Police Report:

You should give all details of the fraud to inform the law enforcement office in your local area. Also you are able to ask them in order to contact the crypto exchange.

• Monitor Your Online And Financial Accounts For Signs Of Fraud:

In order to spot any unknown transaction, you must look into all the credit reports, bank accounts, and credit card statements.

How To Protect Yourself From Pig Butchering Scams:

These are a few things you need to do to stay safe:

• You must not provide your private information to those you have met online only. Ensure that you are not giving your bank credentials or Social Security number (SSN).

• If you haven't seen the person in real life or do not know them personally, you should not send cryptocurrency or money.

• You should not add yourself to any investment site. Besides, you should not download an app because of someone whom you have met online. Remember that this app may deceive you despite seeming real. Scammers may control the app to impress you by saying that you are gaining profits.

• Nothing is like "guaranteed returns." So, you should not believe any site or someone who promises you to give returns. Or don't trust any site that requests you to invest minimum amounts.

• If you are unaware of the working process of crypto currency properly, you should not invest. Hence, it is better to take guidance from a person so that you can use the platform.

• You need to be aware of the popular scams that are related to any app, exchange, or investment platform before being involved.

The Bottom Line:

The most effective thing you should now do is to remain proactive about your digital security. In addition, it is essential to be updated on the latest scams. Also, you need to monitor your credit. When many people get to know about these scams, scammers will succeed less.

Frequently Asked Questions

1. What is the pig-fattening romance scam?

In this type of scam, scammers flirt with victims to gain their trust.

2. What is pig butchering in AML?

Social engineering tactics are used by fraudsters in order to trick people in a way that they invest most of their money before knowing that the investment is a fraud.

3. How do you protect yourself from pig butchering?

These are the tips you should follow to protect yourself:

• You must not send money to someone you have met online only.
• Ensure that you are not talking about your investment or financial position to anyone.

Business Email Compromise (BEC) Scams

As long as email addresses exist, we will get to see email scams. Usually, security vendors & organizations are working to protect against the common phishing scam types. But cyber attackers always remain one step ahead, adapting their tactics to get around the established security controls. Let's learn about the Business Email Compromise, the short form of which is BEC.

 What Is Business Email Compromise (BEC)?

Business email compromise refers to a kind of cyber attack where emails are used by scammers to trick people into sharing confidential information or sending money. Hence, the cybercriminals act as a trusted figure. After that, they ask for a fake bill to be paid or some information that they can use in another scam. These scams are increasing continuously because of the increased remote work. According to the reports, about 20,000 BEC complaints were made to the FBI last year.

 How Does a Typical BEC Attack Work?

In the Business Email Compromise (BEC) Scams, an attacker can be seen acting like someone whom the receipt believes — mainly a vendor, boss or colleague. You should know that these attacks are hard to detect as they never use malware or malicious URLs, which can be analyzed with standard cyber defenses. These attacks depend on impersonation & other social engineering techniques for tricking people into interacting on the behalf of the attacker.

 The use of social engineering, along with the targeted nature, is responsible for making the manual investigation & remediation of the attacks difficult & time-consuming. These scams use different impersonation techniques like domain spoofing & lookalike domains. As domain misuse is a complex issue, the attacks are effective. It is difficult to stop domain spoofing, but more challenges can be faced when you try to anticipate each potential lookalike domain. You should know that these attacks do not require any tradecraft or any advanced tool for execution. Hence, we have given the process through which a typical BEC attack runs:

 Phase 1) Research & Identify Targets:

These attacks are mainly focused on the employees or executives authorized for making payments on behalf of the companies. Cybercriminals perform reconnaissance continuously over days or weeks. Generally, the BEC targets are CEOs, lawyers, & accounts payable personnel.

 Phase 2) Set Up the Attack:

While mass phishing emails follow a "spray and pray" approach, these BEC attacks come across as legitimate. Scammers perform different activities like spoofing email addresses or creating lookalike domains, impersonating reliable vendors, etc., to prepare for the attack.

 Phase 3) Execute the Attack:

The BEC attack may occur in an email or an entire thread based on the thoroughness of the adversary. Often, the communication uses urgency, persuasion, and authority to get a victim's trust. The perpetrator can offer wire instructions to the victim to make payment to a fraudulent account easier.

 Phase 4) Disperse Payments:

As soon as attackers get the money, they collect it quickly and disseminate it across many accounts. Thus, they can decrease traceability & retrieval chances. For cybersecurity incidents, rapid response times are very important. If any organization can't detect a successful BEC attack quickly, it's unlikely that the money is going to be recovered.

 Common Types of Business Email Compromise (BEC) Scams:

Five types of BEC attacks are there:

 CEO Fraud: Cybercriminals act as the company's CEO or executive and they send an email to a person or employee who works within the finance department. The email asks the individual to transfer money to an account that the attacker controls.

 Account Compromise: In this case, attackers hack an employee's email account to request payments to vendors. After that, they use the account to send payments to fake Bank accounts that they own.

 False Invoice Scheme: This tactic is used to attack foreign suppliers. Scammers act as the suppliers and request foreign suppliers to transfer money to the fake accounts.

 Attorney Impersonation:

It happens if a cybercriminal impersonates a lawyer or legal representative. In these kinds of attacks, mainly lower-level employees are targeted.

 Data Theft: HR employees are attacked in this case with the intention of getting sensitive information about someone who works within the organization, like CEOs and executives. After that, data is possible to be leveraged for future attacks like CEO Fraud.

 Common BEC Attack Techniques:

Five common attack techniques are as follows:

 Exploiting Trusted Relationships:

In order to exploit an existing trusted relationship, cybercriminals make a concerted effort. Exploitation might take multiple forms, like a vendor who requests invoice payments, an executive who requests iTunes gift cards, and many more.

 Replicating Common Workflows:

Countless number of business workflows are executed every day by a company and its employees. While multiple workflows depend on automation, many workflows are conducted over email. These workflows are replicated by the BEC attacks to fulfill their targets before victims get any idea.

 Suspicious Attachments:

These are linked to malware in email attacks. However, attachments which are used in these attacks can forego malware in exchange for fake invoices.

 Socially Engineered Content & Subject Lines:

BEC emails depend on subject lines that want to induce quick action. These are a few terms used in subject lines:

• Request
• Overdue
• Hello FirstName
• Payments
• Immediate Action

Leverage Free Software:

In order to lend these scams, hackers use the software that is available for free. It assists emails in sneaking past security technologies that can block bad domains. For instance, SendGrid is used for making spoofed email addresses, whereas Google Sites are used to stand up phishing pages. Attackers use Google Forms & Docs to extract sensitive data from victims. Hosting fake invoices along with 0-day phishing links is possible by attackers in Google Drive and Box.

Things to know:

• You must be aware of every information you share online or on social media. When you share your pet name, the school you attended, identity like profile links of your family members, and your birthday online, a scammer gets all the information they require to guess the password.

• Ensure that you are not clicking on anything in a text message or an unsolicited email that wants you to update or verify your account details. Hence, you need to find the phone number of the company yourself instead of believing and using the phone number given by the scammer. After finding the number yourself, you should call the company to ask whether the request you have received is legitimate or not.

• You must examine the URL, email address, and spelling used in any correspondence. Scammers trick you with little differences because they intend to gain your trust.

• You have to be careful about what you download. There is no need to open an email attachment from those whom you do not know.

• Try to set up two-factor authentication or multi-factor authentication on such accounts that permit it and never disable this.

• You should verify the payment & purchase requests, or you can call the person to ensure that it is legitimate.

Protect Against BEC Attacks— How to do it:

You should know that a successful BEC attack is very costly and can damage an organization. But defeating these attacks is possible by taking some easy email security precautions, such as:-

Anti-Phishing Protections:

You should know that BEC email is a kind of phishing. Therefore, you have to deploy anti-phishing solutions to protect against them. This solution must be able to identify red flags of BEC emails, such as reply-to addresses that are not similar to the sender addresses. Also, it should be able to use machine learning to identify the email language to indicate an attack.

Employee Education:

These attacks generally target employees of a company. So, employees need to be trained properly so that they can learn how to detect a BEC attack and respond to it. Thus, it is possible to minimize the threat of this kind of phishing.

 Separation of Duties:

The attacks aim to trick employees so that they get involved in high-risk activities such as sharing sensitive information or sending money without verifying the request. Try to implement policies for these actions that need independent verification from a second employee. In this way, it is possible to reduce the risk of these attacks.

Labelling External Emails:

These attacks  want to impersonate internal email addresses with the help of domain spoofing or lookalike domains. You can try to configure email programs with the intention of labelling emails (that comes from the outside of the company) to defeat the tactic.

Conclusion:

Impostor emails are created for the purpose of impersonating a person whom your users trust and trick them into sending personal information or money to the cyber criminals.

Frequently Asked Questions

• What are the different types of BEC?

Usually, there are two types of buckets under which the attacks fall: spear-phishing & social engineering attacks.

• What is the most common type of BEC?

An invoice or urgent payment required scam is the most common type of BEC attack.

• What is the biggest BEC attack?

The biggest Business Email Compromise (BEC) Scams to date is "Facebook & Google: $121m BEC scam".

 

Money Mule Scam

Scammers basically try to use you for stealing money. So, it is essential that you are not helping them. If you do so, you will be called a money mule.

Money Mule Scam can happen in different ways. It can be related to online dating, work-at-home jobs, or prizes. Scammers sometimes pay people by check. After that, scammers ask them to send some of this to another person. They want people to use gift cards or wire transfers. Obviously, they will not tell you that the money is stolen. They will lie about the reason for sending it. Remember that it is only a scam, not a relationship, job, or prize.

What is a money mule?

A money mule indicates a person who is responsible for receiving and moving money that is coming from victims. While a few money mules know that they are assisting in criminal activity, a few money mules don't know that their activities are helping fraudsters. Suppose, a person whom you don't know sends you money. Then he or she asks you to forward or transfer the money. Then you are fueling the fraud and serving as a money mule.

How does money mule scam work?

Money mules come from online job sites, dating sites, social networking sites, online classifieds, and Dark Web Forums. Once a criminal recruiter gains your trust or the victim whose money is acquired, they entice you by offering jobs or setting up a fake relationship. Their task is to convince you to open a new bank account or any existing personal account to receive money sent by criminals. After that, criminals send money to the account where the money will be deposited. They give exact details related to the fund transfer. Sometimes they tell you to withdraw money as cash, use it to purchase a gift card, or convert it to virtual currency, such as Bitcoin.

What Are the Consequences?

Money mule scams can affect your financial future, resulting in incarceration. Money mules can charge the following:

• Mail fraud 
• Wire fraud 
• Bank fraud 
• Money laundering 
• Aggravated identity theft

Engaging in these activities can allow criminals to steal your personal information and use these illegally. If someone is caught acting as a money mule, they must repay the acquired money. It can also result in frozen assets, damage to the credit score, etc.

Who is at Risk?

Usually, the target of criminals is students who are searching for work or those who are on dating websites.

What Are the Signs?

These are the signs:

Work-from-Home Job Opportunities:

• You receive an unsolicited email that offers easy money without any effort. 
• Unknown people tell you to open a bank account online in your name. 
• Being an employee, you are said to get the money in your bank account. 
• There is no particular job description for your duties.

Dating & Social Media Sites:-

• Online contacts or someone you never met tells you to receive money & forward the funds to others.

Protect Yourself:-

• Search on the web to check if the job offering company is legal. 
• Never go with any job offer asking you to transfer money from your bank account. Legitimate companies never tell you to do this. 
• Be aware if someone on the internet wants to use your bank account to receive money. 
• Ensure that you don't give your financial details to those people who are unknown (mainly to online strangers).

How to avoid it?

These are some tips that you need to follow to prevent yourself from being a money mule:

• You must not agree to send money to someone whom you don't know or receive it. 
• Never take those jobs offering money easily. 
• Never open a bank account or cryptocurrency account based on another's direction. 
• Despite receiving money first, you should not send money to any online love interest. 
• Never spend money on getting a prize. 
• You must not open any links in emails sent from an untrusted source. 
• Banks don't call people or send SMS to get personal details such as Account Details, Passwords, or OTP. 
• Never share the Net Banking credentials with others.

What to do if you find yourself involved in a money mule scam?

When you transfer money on behalf of others, criminals can get huge advantages, even you can lose money or be put in Jail. If you find yourself involved in a money mule scam, you can do these things following:

• You should not communicate with those asking you to move money or property. 
• Inform your financial institution and ask them to change accounts. 
• You need to report it to local law enforcement and at reportfraud.ftc.gov. 
• International crime networks use money mules to steal money from businesses. That's why people like you must stay alert and notice the warning signs.

Conclusion:

During the COVID pandemic, the online bank scams increased in the United States. So, you need to be informed and protect your personal information. You should not share your bank accounts with online acquaintances.

Frequently Asked Questions:

Q. How does a money mule scam work?

When a money mule transfers acquired money illegally on behalf of others, it is called a money mule scam.

Q. What is a money mule romance scam?

It is a scam where vulnerable adults receive money from unknown people or those who have gained their trust.

Q. Can a money mule go to jail?

If any money mule is caught moving stolen funds, they will be put into jail, even for this crime, they can get a 14 years prison sentence.

Stock Parking

Do you know what stock parking is? It is a practice where a group of people lends their accounts to a person for purchasing and holding the shares. Market manipulators use this tactic to cloak their manipulative works. You will be called "figureheads" if you lend your account to market manipulators.

It is common for banks and companies as these hold custody of their client's assets. But, market manipulators usually abuse this practice to circumvent regulatory requirements or commit illegal acts. Manipulators compensate the figureheads and give them money to control accounts like stock trading and give instructions for voting corporate actions. Let's dig into the article to know about stock parking in detail.

What is Stock Parking?

Stock parking is an illegal practice where people sell their shares to other people by letting them know that the actual owner of the share will purchase them back after a short time. Its target is concealing a stock's real ownership & maintaining the appearance of regulatory compliance.

It occurs when someone buys a share, but it is held by the 3rd party temporarily before being placed in the account of the final client. Brokers can obviate regulatory disclosures of specific positions & transactions because stock parking is not legal.

Stock Parking Explained:

As we have told before, it is an illegal measure where brokers sell shares to a party, and later the party will sell it to the original broker with a profit to the receiving broker. Hence, the target is to decrease the position for disclosure deadlines. Parking stocks are mainly done by brokerages for keeping holdings clean under Securities and Exchange Commission (SEC) guidelines during disclosure periods. Otherwise, they do so to appear as if they fulfilled all the obligations by the settlement date for a specific trade.

A stock broker can park stocks without the knowledge of the employers. Hence, they can shift their shares to the brokerage's internal regulations to conform instead of avoiding an SEC violation. It can sometimes happen that two stockbrokers collude for their profits without knowing about each other's companies with this arrangement. To avoid the disclosure of long-term holdings is one of the intentions of brokers also. In this case, the reason may be that the whole holdings can not withstand federal scrutiny when all long-term holdings are retained by them. Otherwise, the reason is that the brokerage firms are holding penalties for aged stocks.

Common Illegal Acts:

We have given here some common illegal acts which are related to stock parking.

Market Rigging:

Market manipulators usually buy stocks & sell them with figurehead accounts, just like the "ping pong" game. They also give instructions to the figureheads with different brokers when or what stocks they have to buy and sell. After that, they dump the stock at an expensive rate.

Vote Planting:

The market manipulators can arrange for the figureheads to vote in a shareholder meeting so that they can secure approval for corporate actions like rights problems with high subscription ratio and price discount.

Circumventing Regulatory Requirements:

They conceal their original shareholding with the help of this practice to evade specific regulatory requirements. For instance, they may need to make a general offer to purchase shares that are left in a company by holding shares of 30% or more.

Cornering Of Placing Shares In GEM Listing Activities:

Several placement-only GEM listings viewed placing agents for allocating a small share to many retail investors to fulfil the minimum number of shareholders. This move is called as cornering of shares. As a result, shareholding is concentrated highly in the arms of market manipulators.

They can use the figurehead accounts to manipulate share rates upon listing. As a result, they experience a price surge of 10 times or more for luring retail investors into taking up these stocks.

Trading practice via figurehead accounts undermines the market's transparency. It can cover up the company's "true" shareholding distribution to prevent investors from getting a complete picture for making informed decisions. But those in the dark are capable of making erroneous investment decisions. Recently, a few small-cap stocks were available to have several shareholders. But they were highly concentrated among some shareholders.

Parking vs. Kiting:

The term "Parking" mainly refers to a form of share kiting. Hence, brokerage firms intend to cover undeclared short positions, the stock of which wasn't given by the settlement date. Instead of performing a buy-in transaction, firms are colluding with one another. In this case, these delay the settlement procedure and, later, inflate several shares for trade in the secondary market.

It also represents the market's collusion and artificial manipulation. In this case, you should know that when it comes to talk about the SEC regulations, the punishment severity to collude the park shares basically relies upon the infraction severity, the shares traded numbers, taxable income's unregistered amount, and the conspiracy scale. There are a few tiny violations that incur more than a small fine. In 1989, bigger cases were prosecuted more severely where Paul Bilzerian, a corporate raider, was convicted on nine counts of tax fraud connected with this scheme. Therefore, he was prisoned for four years and fined $1.5 million.

The Bottom Line:

It is a digital wallet for all the Web3 requirements. Remember that it is easy to access a wealth of DeFi platforms from crypto to NFTs and beyond. You should know that OKX is a leading digital asset financial service provider. With the help of this, it is possible to access world-class security, as you continue trading & storing assets. Besides, it is possible to connect existing wallets and win up to $10,000 once you deposit over $50 via a crypto purchase or top-up within 30 days of registration. In this article, we have covered all the details regarding stock parking. If you still have any queries, do ask us via comments.

Is Financial Planning Expensive?

Nowadays, financial planning has become a very important factor when you want to achieve any financial goal. No matter whether it is a short-term or long-term goal, financial planning enables people to meet their financial goals by planning. It does so by taking savings and allowing them to invest in several financial instruments. You should know that investors don't have enough resources that will allow them to get deep financial knowledge so that the securities can be analyzed. Besides, they don't have enough time to analyze securities. 

So, what you can do is consult a financial advisor. The advisors generally charge fees for their advisory services. Therefore, it is essential to have a deep knowledge regarding financial advisor fees. Now, dig into the article to know whether financial planning is expensive or not.

Who is a Financial Advisor?

Financial advisors are those specialists who usually offer financial advice to investors so that they can achieve their goals in life. Hence, they need to conduct financial preparation, a process that allows the people to achieve the target via proper financial management.

They can have different types of goals like purchasing a home, investing money for child education, estate or retirement planning. The major role of an advisor is to make customers feel relaxed and give them some confidence. The advisors must keep up with the current events of business. Besides, they need to offer the customers impartial advice.

What Is The Cost of a Financial Advisor?

The service type you want, the portfolio size, and the compensation structure are the factors that need to be considered while determining the cost of a financial advisor. However, you will not find any standard cost that is applicable to financial advisors. A few advisors charge depending on the credentials and certifications. For instance, a financial coach can charge less than a CFP or certified financial planner.

Try to find such an advisor who can fulfil your requirements, such as making a suitable financial plan at a budget-friendly price range. But it never indicates that you need to choose the cheapest advisor. However, if you want, you can go with ones who charge higher fees and can provide an in-depth and detailed look at your finances.

You should ask the advisor about their fee structure, how to give their payments, what is included in their price range, before settling on an advisor.

How Are Financial Advisors Paid?

You should know that all advisors aren't paid in the same way. However, the payment structures depend on a few factors, including flat fees, commissions, or percentage of assets.

Fee-only:

This type of advisor can earn money when you give them payment for their services, and the fees may be hourly or flat. However, they can take the charges as a percentage of assets they are managing for you. But there are advantages when you work with this kind of advisor, i.e., the advisors are fiduciaries. In this case, you should know that a financial advisor who is working under fiduciary duty is needed by law for putting the best interest of the clients above their own. When you hire advisors, they may recommend some financial plans and products. Advisors should recommend such plans to the clients that suit their clients best instead of pushing them by those plans which can allow the advisors to earn them a commission.

Commissions:

There are some advisors working on commission. They earn money through sales commissions from third parties. But there are a few advisors who advertise themselves that they are "free" advisors. It indicates that they are not charging any money for their advice. But the money is earned actually through the commission.

Therefore, if you are going with a commission-based financial advisor, it's vital to proceed with cautions. Remember that these kinds of advisors are not fiduciary like the fee-only type. These advisors are salespeople with whom you should consult mainly for insurance brokerages & investment. They will not recommend their clients the best product as per the customers' needs.

But you should know that all commission-based financial advisors are not reliable. A few products are sold under a commission model, like life insurance. So, you must remember that they aren't held to the same care level as fee-only financial advisors.

Percentage of Assets:

Advisors can also charge their payments based on a percentage of the assets which they are managing. The average percentage is around 1% per year. For Robo-advisors, the charge is near about 0.25% to 0.5%. You will get more benefits if you have a large amount of assets as they need to pay less percentage rates compared to those who have a small amount of assets.

Should You Use a Robo-advisor?

These automated software platforms help to simplify investing. You can get these services at a much lower cost than in-person advisors. If you are going to use the robo-advisor due to the reasonable fees, you need to remember these have caveats.

These programs help to manage the money. But these software programs will not tailor a financial plan that is specific to the requirements of the clients. If someone is going to use this platform, he Or she will be asked several questions such as the present state of the finances, overall risk tolerance of the client, their financial goal, and so on. Based on the answer of the questions, the platform will give a pre-made portfolio.

There are a few robo-advisors that give an option that allows the users to add personalized financial services. But it charges extra fees for that.

How to Find a Financial Advisor:

When you start working with a financial advisor, it may happen that you have no idea from where you should start your search. Several professional financial planning associations give free databases. Here, we are going to mention a few professional financial planning association names. Let's check it.

• NAPFA (National Association of Personal Financial Advisors) 
• Garrett Planning Network 
• XY Planning Network ACP (Alliance of Comprehensive Planners)
• Ensure that you understand the services, the fees, and the costs charged by the financial advisor, before you settle on a particular advisor.

The bottom line:

Sometimes, you may find that hiring a financial advisor is an unnecessary expense. But you should remember that they can save money in the long run. Therefore, when you hire a financial advisor, before you sign, ensure that the advisors have transparent fees. You should generally go with such an advisor whose fee is less compared to the amount of money they save for you. You can verify any financial advisor via the government website before you sign documents or hand over the money. Is Financial Planning Expensive? What Is the Average Cost of a Financial Advisor? Is this question bothering you? Then you should know that In the year 2021, as per the Research of an Advisory HQ News Corp, the average fee of a financial advisor was 1.02% of AUM annually for a $1 million account.

What is Cybersecurity Insurance?

Cybersecurity is one of the modern emerging industries. Companies that buy this insurance are known as early adopters. You should know that the policies of Cybersecurity change from one month to the next, given the dynamic and fluctuating nature of the associated cyber-risks. However, the underwriters of these policies limited data so that the risk models can be formulated and policy coverages, premiums and rates can be determined.

What is cybersecurity insurance?

Cybersecurity insurance is a contract that one entity can buy to decrease the financial risks of an online business.

Why is cyber insurance important?

Always remember that losing electronic data or compromising any data can affect a business badly, such as loss of customers & revenue may occur. Cyber liability coverage plays a crucial role in keeping businesses protected against cyber event risks. It can also help to reduce cyber attacks and incidents. How does cyber insurance work?

Suppliers offering business insurance, including E&O insurance, business liability insurance, and commercial property insurance, sell many insurance policies. In most cases, these cybersecurity insurance policies come with first-party coverage which can be applied to losses that a company may suffer due to cyber incidents.

Who needs cyber insurance?

A few businesses make, store and manage electronic data like customer contacts, customer sales, PII, and credit card numbers. Cyber insurance is beneficial for these e-commerce businesses. Moreover, it is advantageous for those businesses that used to store customer details on a website.

What is Cyber Insurance Coverage?

It can offer coverage for these conditions including:-

Identity Theft: 

You can get coverage for the defense cost of any claim that the affected party raises. Moreover, it offers coverage not only for the prosecution cost against 3rd party, but also for the costs of documents' photocopying, etc.

Cyber Stalking: 

It offers coverage for the incurred cost for any criminal case's prosecution against a 3rd party.

Malware Attack: 

This plan can offer restoration costs if malware attacks your computer. Besides, it gives the defense cost of any claim raised from the affected party.

Phishing: 

It gives coverage of financial loss caused due to phishing acts by third-party.

What does cybersecurity insurance cover?

• Informs customers if any security breach has occurred. 
• Pays legal fees imposed due to privacy violations. 
• Recovers compromised data by hiring computer forensics experts. 
• Restores customer identities. 
• Recovers the stolen data.

What Does Cyber Insurance Not Cover?

These are the following which the insurance doesn't cover.

• Damages that are caused due to negligence to safeguard like credit and debit cards, bank accounts, and the internet connections, details.
  
• It does not cover bodily injury, diseases, death, or damage to substantive items. 
• The insurance doesn't cover any loss caused due to electric disturbance, mechanical failure, breakdown, or media failure.

Benefits of Cybersecurity Insurance:

• It can offer protection against cyber threats & crimes 
• Financial cybersecurity insurance cost coverage 
• Protects big and small companies from a cyber-attack

How can you raise a claim under cyber insurance?

• The insured must inform the insurer when they come to know about any cyber incident. A few insurers tie up with third-party service cybersecurity insurance providers so that they can raise the claim. 
• Then an investigator is assigned so that the incident can be analysed and then the investigator chalk out a temporary resolution plan. 4-5 hours is the turnaround time. 
• You need to hire a cyber expert for the incident analysis when you find that the incident is severe. But, In-house cyber experts are unable to do this for keeping transparency. 
• Mostly the concerned parties engage in the resolution's discussion. The Insured's 2nd opinion is obtained about potential costing ascertained to resolve the attack. When any affordable option is available, the insurer will take it. However, the action's final plan can be drawn. 
• Information is reported to the claiming team again. Then, the team reviews these to approve the final post.

How can you renew Cyber Insurance?

If you are willing to renew the insurance coverage, you should follow these steps.

• First, you need to go to the insurance website. 
• After that, your task is to fill in the policy number so that you can access the account. 
• After coming to the website page, find the "Renew" button. 
• It is also possible to add any add-ons or remove any if required before renewing the plan. 
• The premium amount will fluctuate based on the add-on's addition or removal. 
• After that, you should hit the "Renew" button. 
• You can pay now using a debit/credit card, UPI, or net banking. 
•  After completing payment, you will get the updated policy documents in your registered email ID from the insurer. Besides, you will get a hard copy from the insurer to your registered address. 
• Ensure that you renew your insurance on time so that your cybersecurity insurance policy won't get canceled.

How can you choose a cybersecurity insurance policy, and how much does cyber insurance cost?

The pricing depends on the annual revenue of the insured entity and industry. If any entity wants to qualify for coverage, it must submit to a security audit by the insurance company. It can give documentation using an approved assessment tool. However, several companies don't want to select this insurance for the uncertain return on investment (ROI).

CISA, or Cybersecurity and Infrastructure Security Agency, helps to encourage businesses so that they can enhance their cyber security for additional coverage at budget-friendly rates. In this case, you should know that this agency operates under DHS or the Department of Homeland Security. If your company is willing to select a policy, it must review policy details to confirm that it comes with all essential protections.

Tips to Enhance Cyber Security:

These are a few tips that you should follow to enhance cyber security.

• You should follow the cyber security measures. 
• Try to allocate the cost of cyber insurance to your organization's budget. 
• You can enhance its expertise.

Conclusion:

Our world has entered into an era of cyber attacks, and there are plenty of viruses, breaches, and other attacking forms. But cybersecurity insurance plays a vital role in keeping your business protected.

Frequently Asked Questions:

Q. What is cyber insurance called?

Cyber insurance is called cyber liability insurance or cybersecurity insurance.

Q. What are the 4 categories of cyber and privacy insurance?

Its primary focus is to keep your company secured from the primary risks through these four insuring agreements:

• Network security and privacy liability. 
• Network business interruption. 
• Media liability. 
• Errors and omission.

Q. Is cybersecurity insurance necessary?

It helps to protect all kinds of data from theft and loss.

Personal Finance Basics - Ultimate Guide

Personal finance is a term that includes various concepts like saving, managing money, investing, etc. Besides, the term covers banking, budgeting, mortgages, investments, insurance, retirement planning, and tax planning. You can say that it comprises the entire industry that can offer people financial services. In addition, it can recommend them about financial and investment chances.

In simple words, it is a personal finance management that a family unit does for saving, spending money, etc., taking different financial risks and future life events. If you want to plan it for yourself, you must consider the suitability to your needs. For example, you should consider banking products like checking, savings accounts, credit cards, and consumer loans. In addition, it is essential to consider companies' shares, bonds, mutual funds, and other investments in private equity along with the insurance, including life insurance, health insurance, & disability insurance. Moreover, you should consider social security advantages, retirement plans, income tax management, etc.

What is Personal Finance?

The Personal finance meaning is how to manage money, save and invest.

Principles of Personal Finance:

Remember that the circumstances have differences based on patterns of income, wealth, and consumption needs. Besides, different countries have different tax and financial laws. In addition, the market condition depends on geographic location. It indicates that advice for you may not be suitable for another person. In this case, you can take the help of a personal finance advisor. They can provide personalized advice in challenging situations. Moreover, if you are a person with high wealth, you should hire someone like him.

But there is an argument between University of Chicago professor Harold Pollack and personal finance writer Helaine Olen. They said that advice in the US can boil down to some easy steps.

• You should pay the credit card balance off each month ultimately. 
• In addition, you should save 20% of your income. 
• Besides, you should make an emergency fund. 
• Try to contribute more to tax-benefitted funds, including 401(k) retirement funds, individual retirement accounts, and 529 education savings plans.

While investing savings:

• Ensure that you must not trade individual securities. 
• Try to avoid high-fee managed funds. 
• Remember that you have to find mutual funds of low cost. 
• Whether you use a financial advisor, you need them to commit to a fiduciary duty to act in your best interest.

Personal Finance Planning Process:

Financial planning is a crucial component of personal finance. It is a dynamic procedure that you must monitor and re-evaluate daily. Usually, it involves five steps.

Assessment: 

If you want to assess your financial situation, you have to compile easy versions of the financial statements like balance sheets and income statements. Using a personal balance sheet will provide you a list containing values of your assets like car, house, clothes, stocks, bank account, and cryptocurrencies. You can list private liabilities like credit card debt, bank loans, and mortgages. Remember that a personal income statement can list your income and expenses.

Goal Setting: 

You should always target many goals, even if it mix short- and long-term goals. For illustration, you may have a long-term goal like retiring at age 65 with a net worth of $1,000,000. On the flip side, a short-term goal is like saving up money for a new laptop or computer to buy in the upcoming month. When you set a goal, it will help you to make financial planning. You should set your goal to meet specific financial requirements.

Plan Creation: 

The plan asks you how you should accomplish your goals. It means you should decrease unnecessary expenses, enhance the employment income, spend money in the stock market, etc.

Execution: 

When you want to execute a plan, ensure that you must need discipline and perseverance. If necessary, you can take help from professionals like accountants, financial planners, investment advisers, and lawyers.

Monitoring and Re-Assessment: 

The plan should be monitored to adjust planning and reassess it. Goals that most adults have include:-

• Pay off credit card/student loan/housing/car loan debt, 
• Spend the money for retirement, 
• Spend the money on child education 
• Pay medical expenses.

Why Do You Need Personal Finance?

People will need it for different reasons, including:-

1. No Formal Education:

Most nations have a formal education across different disciplines. People pursue study to earn a livelihood. What they have learned will be available as an outcome in the form of money. Although we know making money is our primary motive, no formal education still exists at elementary levels like schools or colleges. Students don't learn how to manage money. But it is essential to know the gap in the education system that doesn't let us see how a person should manage their money. That's why we should learn personal finance from an early age to differentiate between needs vs. wants. According to this, you should plan accurately.

2. Shortened Employable Age:

It has been years since people notice the need for change, the jobs which need manual intervention or are mechanical. But these are becoming redundant very quickly.

Many employment chances shift from nations with higher labor costs to countries with lower labor costs. It happens several times when employees who don't have enough skills in the middle management category are replaced by fresh talents. The reason is that the upcoming talents know new modern technologies to fix problems. As a result, they become more useful for companies than the old ones. Besides, the company can also hire them at low prices, and they are also valuable to the company.

Economy health of any nation drives automobiles, chemicals, construction, consumption, and demand. We have seen that if economies stagnate, some industries suffer more than others. It can result in companies that rationalize the workforce. You may lose your job and become unemployed for a considerable time. These are reasons why the legal employable age of 60 is decreasing.

That's why you should begin planning for your retirement and save money for retirement purposes, which is why you need so.

3. Increased Life Expectancy:

Although there are plenty of developments in healthcare, modern people are still living at an older age than their forefathers. Therefore, gradually the average lifespan changes over many years. Therefore, people in developing economies live much more life. While the average life expectancy was 60, it is now 81. Increased life expectancy but with shorter employable age requires personal finance.

4. Rising Medical Expenses:

Medical expenses have been increasing exponentially over the years. For example, expenses of the cost of drugs, hospital admission care and charges, nursing care, specialized care, and geriatric care have increased too much. Several medical expenses don't have insurance policies, including private/individual insurance coverage or federal or national insurance coverage.

If you are from the United States, you will get insurance coverage from employers, private insurers, or the federal government. Senior citizens get Medicare, while people will lower income levels get Medicaid. However, you must observe the extent of the Medicare program with the rising US fiscal deficit and a large proportion of the geriatric population.

But if you are from other developed markets like the EU, most medical care is reimbursed nationally. As a result, the national healthcare budgets started to be tightly controlled. Besides, several new expensive therapies exist which don't belong to the national formularies. It indicates that patients don't get access through government policy. They need to spend money from their pocket to avail these medicines.

Regarding developing nations like India and China, approximately all expenses are out of pocket. It is because no overarching government social security system exists covering medical expenses.

These are a few reasons you should have medical, accidental, critical illness, and life coverage insurance. In addition, the need for personal finance is also immense.

Five Aspects of a Complete Financial:

Savings: Ensure that you must save money as savings to cover sudden financial needs.

Investing: It is essential to grow money to achieve your aspirations.

Financial Protection: It ensures that your family and you can sail through the most challenging times.

Tax Planning: The correct tax planning, like making proper expenditure /investment, helps to reduce taxable revenue. Thus, you can save plenty of money each year.

Retirement Planning: It is vital to ensure you have saved much money for your needs during the twilight years.

Let's discuss what these are in detail.

1) Saving:

You might need a lot of money suddenly. For instance, your car might break down, or you have lost your job. However, you can deal with these emergency events with sufficient savings to cover the need. According to the thumb rule, the fund for the emergency needs has to be three to six months of your expenses.

• You can choose Debt instruments like Liquid Funds to park the money for emergency requirements. 

These are the three reasons: 

 

• These provide better returns than savings accounts though you don't get guaranteed returns. 
• The funds are highly liquid. Therefore, it is possible to withdraw the money after seven days. 
• These have negligible credit and interest risk. That's why the money is safe.

2) Investing:

You might confuse investing with saving or find them similar. Hence, you should ensure that saving means setting money aside. On the other hand, investing money indicates putting money to buy any asset ( stock, bond, mutual funds, etc.) to increase your money's growth.

Regarding investment, mutual funds are a good choice if you do it properly. Remember that you must be conscious while selecting the fund in which you will invest your money. Otherwise, you can find it counterproductive. It is vital to make your investment according to the need of investment and horizon. That's why you should establish a timeframe around it. After that, you should choose a mutual fund suitable for your investment timeframe.

Now, a question arises which fund should you select according to your financial goals?

Short-Term Goals: 

It indicates those goals you have to achieve within three years. You may need to arrange funds to save for a trip or a phone within this timeframe.

• Best investment options: Liquid Funds and Ultra short-term funds are the best investment options.

Mid-Term Goals: 

Have you set a goal that you want to avail yourself of within three to five years? If yes, then we can say it is a mid-term goal. Giving a down payment for a house is an instance of it.

• Best Investment Options: Hybrid Funds, ELSS, Short Term Debt funds like Banking, and PSU Debt Funds are examples of investment options.

Long-Term Goals: 

If you want to set any goal for a minimum of five years, it is referred to as long-term goals. Some long-term goals are retirement, children's education, and kids' marriage.

Best Investment Options: Multi Cap Funds, NPS (only for retirement), and Large Cap Funds are the best investment options.

3) Financial Protection:

We might weave several dreams in life and create investment plans to turn those dreams into reality. But the same can become a liability unless we protect them with a safety net. That safety net is insurance.

Four types of insurance exist, including:

Term Insurance:

This life insurance ensures your family does not have to go through financial hardship if you die early. The term insurance sum is higher than other health insurance products. Whether you calculate it accurately, it is possible to compute the regular expenses of your family. In addition, you can account for a retirement corpus for your partner. Besides, you can cover various liabilities, including home loans and kids' education.

Health Insurance and Critical Illness Insurance:

If you have health insurance, there is no need to pay from your pocket if you or your family member has taken ill. It can cover all costs, including hospitalization, medication, pre, and post-hospitalization expenses, etc. In addition, you can choose vital insurance with your primary health policy. If you diagnose with one of the critical illnesses mentioned in your policy, the insurance company might spend money to assure you the sum assured.

Mortgage Protection Insurance:

It can pay off the mortgage when you die during the mortgage term. Besides, it ensures that the loan or mortgage for a home, car, property, etc., is not becoming a liability for your family if you die early.

Personal Accidental Insurance:

If you encounter an accident and get injured seriously or partially, you will get the money from the insurance company. They help you to cover the expenses for treatment and loss of income. But your family will get the payment if you die during the accident. The payable amount relies on the fatality of the accident.

4) Tax Saving:

People must pay taxes according to tax slabs. If you want to deduct the taxable revenue to a certain extent, you must invest in the correct fund. Seventy exemptions and reduction choices are available via which you can bring down our taxable revenue.

Two famous sections to reduce taxes are as follows:-

Section 80C: It is the largest pool for tax reduction. People can claim to reduce up to Rs 1.5 lakh under the section to create different investments and expenditures. Some well-known tax-saving instruments include EPF, PPF, NSC, NPS, ULIPs, children's tuition fees, life insurance premium, five-year tax saving FD, ELSS, Senior Citizen tax saving instrument, Sukanya Smriddhi Yojana, and home loan principal amount.

Section 80D: You can do a similar thing under Section 80D. Regarding the premium amount, it is possible to spend money on a health insurance policy. Other avenues exist which can decrease your taxable income.

5) Retirement Planning:

You should know that your most vital life stage is retirement. Ensure that it may be miserable or blissful, but it depends on how you plan for it. It will be true if you want to do any financial planning. You need to follow the two-step method hence. The first one is saving for retirement. On the other hand, the second option is creating revenue from the assets during retirement.

The two steps are as follows:-

Step 1) Building A Retirement Corpus:

You must save money for your retirement time. There are mainly two reasons – loss of income and increased life expectancy. Suppose you retire at 60 and live up to 85. Have you planned how you will spend the remaining twenty-five years after retirement while you won't have any stable income?

Considering inflation is another factor meaning the rise in prices of goods and services for daily use. During that time, the expenses will be increased after retirement. Suppose the monthly expenses are Rs 35,000. But it can be Rs 80,000 per month in 20 years. Remember that you must not maintain similar living standards.

Creating a fund big as a retirement corpus is always a lifelong process. Therefore, you should begin saving money quickly for your betterment. EPF, NPS, and Mutual Funds are the investment options for creating a retirement corpus.

Step 2) Generating Income during Retirement:

While it is vital to ensure that you save sufficient money for your retirement while working, it is also essential to channel that corpus after retirement. Try to make the correct investment to ensure that you will have a steady income. Some good investment options include STP withdrawal/transfer from Mutual Funds, life insurance annuity, and rental income.

What Is A Personal Finance Course?

It lets you know how to manage money and other forms of wealth. For instance, it means how spending money affects your accounts, use of your credit cards, the way through which interest rates make or break your portfolio, etc.

How Long Is A Personal Finance Course?

It is a course of six week where you need to learn short videos embedded with exciting learning exercises. This course enables students to practice their learning.

The Bottom Line:

You should control your finances. In addition, you should have the power to make a life choice except worrying about money. If all aspects of an entire financial picture are in one frame, it can confirm that your financial future is ideal.

Frequently Asked Questions:

• Q. What are personal finance examples?

Examples of personal finance including how to budget, balance a checkbook, save for retirement, buy insurance, plan for taxes, and make investments.

• Q. Why is it important?

Managing your money via budgeting, investing, and savings is essential. Long-term planning with potential financial risks is included in this case.

• Q. What is the most essential part of it?

Cash flow management is a vital part of it. The term means how much money is going in and where that money goes.

Sri Lanka Economic Crisis

Sri Lanka economic crisis is for the bad external advice and misguided policies. The nation has faced the issue due to a severe balance of payments (BoP) problem. Besides, the reserves of foreign exchange are depleting rapidly. Nowadays, it has become hard to import vital consumption goods. As a result, the nation can't repay past debts. In the article, we have let you know about the causes of the recent problem and documented the roles of different groups.

If you want, you can find out the roots of the issue of colonialism and the post-war developmental pathway. In this century, the country's fortune in economy has been tied continuously to exporting primary commodities like tea and rubber and garments. With the help of the primary commodity exports, tourism and remittances, it mobilized foreign exchange reserves, and it used these to import essential consumption items like food.

Sri Lanka Economic Crisis reasons:

1. In 2009, the nation emerged from a 26-year long war. People expected that the growth in economy would revive. The country's post-war GDP growth was high for pent-up demand between 2009 and 2012 at 8-9% per annum. 
2. After the global fall in commodity prices, the economy was on a downward spiral. The country experienced a slow down in exports and a rise in imports. After 2013, the average GDP growth rate became halved. 
3. The government of Mahinda Rajapaksa was under a $2.6 billion loan obtained from the IMF or International Monetary Fund in 2009. The budget deficits were very high in the war. 
4. Besides, the major fight of 2008 drained its foreign exchange reserves. In 2009, they obtained the IMF loan in this context, but they did a condition, the budget deficits need to be decreased to 5% of the GDP by 2011. 
5. While there was no increment in growth or exports, and the nation was experiencing the continuing drain of foreign exchange reserves, United National Party (UNP)-led coalition government took another US$1.5 billion loan from IMF. They approached the IMF in 2016 for three years between 2016 and 2019. The condition of IMF was that they have to decrease the fiscal deficit to 3.5% by 2020. There are other conditions included also— the tax policy and tax administration; control of expenditures; the commercialization of public enterprises; flexibility in exchange rates; improvement of competitiveness; and an accessible environment for foreign investment. 

GDP, Debt and Savings Rate:

The GDP growth rate shrank from 5% in 2015 to 2.9% in 2019. Besides, the investment rate was 31.2% in 2015, but it fell in 2019 and came down to 26.8%. In addition, the country faced a change in the savings rate from 28.8% in 2015 to 24.6% in 2019. The Government revenues get reduced to 12.6% of the GDP in 2019 from 14.1% of the GDP in 2016. Moreover, the Gross government debt experienced a rising GDP from 78.5% in 2015 to 86.8% in 2019. According to Jaishankar, India is working extra time to offer swift assistance to the nation.

Incidet of 2019:

In 2019, the country witnessed two major shocks to its economy. First, they faced the Easter bomb blasts of April 2019 in churches in Colombo, and the accident caused the death of 253 people. Tourists didn't prefer to come after the incident in foreign exchange reserves. And the second incident was when a new government replaced the UNP-led government in November 2019. Gotabaya Rajapaksa was the leader of the new government, named as the Sri Lanka Podujana Peramuna (SLPP).

During their campaign, the new government had promised the people to reduce tax rates and offer wide-ranging sops for farmers. It was Gotabaya Rajapaksa who implemented the plan to slash taxes.

The new government decreased the VAT or value-added tax rates from 15% to 8% in December 2019. Besides, it raised the annual threshold for VAT registration from LKR 12 million to LKR 300 million. In addition, they raised the annual income threshold for a waiver from LKR 500,000 to LKR 3,000,000. They also ruled out the nation-building tax, the PAYE tax, and the economic service charges.

Affect of Covid-19:

According to the estimate, a 33.5% decline was there in the registered taxpayers between 2019 and 2020. They witnessed GST/VAT revenue halved between 2019 and 2020. In 2020, the situation became worse for the COVID-19 pandemic. All the rubber, tea, and garments exports faced a tough time. The country spent, on average, about $260 million on fertilizer subsidies per annum.

The Gotabaya government came up to give a solution to stop foreign exchange reserves from draining. The country became a 100% organic farming nation overnight.

Although they withdrew the policy in November 2021 after the farmer protest, it pushed the nation to the brink of a disaster. The Agricultural scientists warned the Gotabaya government about the potential losses from the organic farming policy. They said the government that yields can drop by 25% in paddy, 35% in tea, and 30% in coconut.

Conclusion:

The country's economy grew slower than usual at 1.8 % in the last quarter of the 2021 financial year. According to the data of the government's statistics department, the entire growth of the year was 3.7 percent. The nation's central bank had projected a growth of 5 % for the year.

Frequently Asked Questions:

Why is Sri Lanka in an economic crisis?

When it was 2010, the nation faced a sharp rise in foreign debt. In 2019, it reached 88% of the country's GDP. Besides, the COVID-19 pandemic has increased the crisis. In 2021, the foreign debt rose to 101% of the nation's GDP result of which the country faced an economic crisis. 

What are the reasons for the situation?

The five main reasons for the crisis are as follows:-

• The five broad causes of the situation are: 
• External Economic Attack. 
• External Information Attack. 
• Breakdowns. 
• Psychopathology. 
• Human Resource Factors

Is the nation in financial trouble?

The country is experiencing an unexpected economic problem. The issues of the nation have been increasing for years. Besides, the country is facing annual inflation in double digits. Their rupee has plunged to a record low against the U.S. dollar.

Eight Valuable Personal Finance Tips for Beginners

The amount you earn has to be spent as living expenses exist. The desire to grow wealthy beyond your means also exists. Savings is the weapon to achieve it, and careful planning is most important. Please find below ways of accomplishing this as personal finance tips for beginners.

• Begin Early:

Everything in life is about early starts. Saving money is no exception to this rule. Irrespective of the amount you can save, the habit and attitude to saving are essentially combined with an early start.

A plan of action does not require a big plan, but the early kick-off matters. It may be in trickles first, but the savings compound into a more considerable value with time passing by, and it is the result that matters in the long run. Delays in such matters would never help, and procrastination would result in lesser savings only and is the best personal finance tip for beginners.

• Prioritize Saving before Spending:

As a growing child, your parents must have taught you the value of money. Moreover, they would have inculcated inside you the thought that to spend money which you have with you. Nowadays, credit cards are available to you, which can reverse your policy of saving. The idea to purchase on credit cards is good provided you pay up the purchase amount before a month or the date the bank starts levying interest.

Just imagine you purchased a Television set and you are paying interest every month! The Television becomes a costlier investment, and there would be excess cash outflow.

The cardinal rule is to allocate the savings and reduce that with your income. It's a bad idea to spend first and save whatever is leftover.

• Be Your Own Financial Advisor:

Saving money is only a part of the deal. The other part lies in managing it wisely. There are many ways to lose those savings, as others become aware of your wealth. They may advise you to invest in profitable ventures, but their end-interest is only the commission they earn through it. As a personal finance tip for beginners it is best to do your research and analysis by acquiring knowledge through the internet or direct investigation and then decide.

On the same note, it's advisable to keep more than an eye on your bank accounts. You can trust Banks to a large extent, but even they may charge you arbitrarily. In such cases, if your account is debited, you can approach the bank and have it reversed. Thus, you become the Finance manager of your savings.

• Budgets:

You may not be in the habit of noting down your cash inflows and outflows. You would be shocked to see that your savings are going down at the month-end even though you have been cautious in spending money.

The only solution is to budget your expenses initially and keep checking on them, not exceeding them. All expenses have to be meticulously noted down, and you would soon know the excessive expenses. When precautions are taken, you can achieve your goal of savings.

• Health Insurance:

You cannot be confident that you will stay in good health always. Neither can your family parents. You may feel that an expense like a Health insurance premium would pull your savings down, but you're mistaken. In case of a sudden accident, a visit to the hospital is bound to cost you an enormous amount.

You may have health insurance through your office; never hesitate to take a few insurance policies on your family, including ageing parents. The prevention you would realize is better than cure.

• Saving for Different Purposes:

You may be a salaried person and well equipped to meet all your expenses, resulting in savings. Savings generally protect you with financial health once you retire or slip into old age. But wait! There are other purposes apart from that. You may desire to go on a vacation or perhaps buy a farmhouse etc. This cannot be met with your available savings but create a special fund to meet those planned schedules in the future.

It is best to deposit these extra savings in an account with a high yield so that money value is not eroded due to inflation. Even a deposit for a short time in deposit schemes like ' CD' (certificate of deposit) is a good idea.

• Be a Knowledgeable Taxpayer:

If you are a salaried person, you ought to know the tax bracket you would fit into. Tax is deducted at source when you work in a reputable organization and your ' Take- home ' is lesser to that extent.

There are many sites on the internet which has tax calculators. All you have to do is punch in your salary, and the tax calculator would let you know your net salary.

• Debit cards Vs Credit Cards:

Debit cards are helpful as you need not carry the money in your bank account. You can only spend within that limit or balance in the secure account.

Credit cards allow you to buy anything or spend money that is not yours. If you can meet that commitment without rolling it over, your savings will not be affected. If you cannot pay that, it will attract a very high rate of interest which will erode your savings. Moreover, if you do not meet the bare minimum charge notified to you by the bank, it would attract late/delayed fees. The tip is to spend when you can meet it within the deadline.

Conclusion:

Financial awareness wins the day and not how high you earn. Tax structures keep changing every year, and money value keep depreciating year after year. It's best practice to know which account to open in the bank or elsewhere to mitigate inflation. If you follow this entire personal finance tip for beginners you will continue to live comfortably after retirement.

Personal Finance Management Key Aspects

Personal Finance Management is all about managing expenses monthly or daily and saving a reasonable amount for the future. Every single person should do this management for healthy and quality living. To effectively organize your money for future needs, consider some of the significant components of your finances.

In this personal finance blog post, we are going to discuss five significant vital aspects of personal finance. So, read the post till the end to draw a better picture of your finances. 

 Components of Personal Finance

These are the five key components of personal finance:

• Insurance for emergency 
• Tax Planning 
• Expense Management 
• Savings are essential 
• Investment

Let's dig in deeper and study these major aspects thoroughly:

#1 Insurance for Emergency

One can do financial protection via insurance to get over hard times. But people don't appreciate this option. Many people don't believe in health insurance or basic insurance. Insurance is an essential element to sail you and your family from difficult times or events. These are the insurances which we all need, these are:

• Term Insurance 
• Property Insurance 
• Health Insurance 
• Personal Accidental Insurance etc.

#2 Tax Planning

Tax planning is another factor that needs to be considered, as some take it for granted. With the right approach, we can minimize our taxes. Pay attention to how much you are spending, over expenses, etc. To grow your money, you can put money in tax-advantaged investment accounts and reduce your unnecessary expenses. One can easily reduce taxable income via tax deductions and exceptions. The most popular sections related to it are Section 80C and Section 80D.

#3 Expense Management

We should track our expenses, whether day-to-day expenses or unforeseen ones. One can fix and keep aside some amount for these unexpected expenses. You can even create funds for vacation, travel, etc. By keeping a track record of all your expenses, you can maintain a decent balance in life. 

 #4 Savings are Essential

Saving is the left money after allocating money for our monthly or essential expenses. It is well said that no matter how small your income is, one must save some portion from it. Make it a habit, and it will benefit you in hard times or for long-term investments. Do savings, and in this way, you can build a safe and secure future.

#5 Investing

Many people think investing and saving are similar, but that's not correct. Saving and investing are different components. Investing is like getting money, i.e., stock, mutual funds, etc., to make your money increase. Investing is generating money from money. One of the best investing options is mutual funds. And some other options are fixed deposits, real estate, stocks, etc.

Final Verdict

To build a safe and robust future, all these aspects are must to consider. With these, one can draw a perfect picture of a financial future. Do personal finance now to make better plans and decisions for the future. A correct balance between expense, income, saving, and investment is necessary to optimize a person's financial management.

Credit Card Balance Transfer- Money Market Blog

When someone transfers a massive amount of payment from one credit card to another, then we call it a credit card balance transfer. In this case, a new credit card is necessary. It is because the bank will credit the amount to this new card account. People who want to transfer money at a low-interest rate can use this mode. They can get many advantages like some exciting rewards, cashback offers, and so on by using this method.

What do you mean by credit card balance transfer?

It implements a money transfer procedure from a credit card to another credit card of a different bank. The entire process doesn't consume so much time. However, you can't transfer money also if both the credit cards are of similar banks. It is an essential thing that you should remember.

You can see multiple credit card associations enticing money transfer fees to mislead customers. However, if you are a cardholder, you can get many promotional offers. The companies offer their customers a specific time about 6-18 months when they won't take any interest charge.

Benefits of Balance Transfer

Reduced Financial Strain – The interest rate of transfer money in the credit card balance transfer is significantly lower. The finance charge of credit cards is around 3.5% every month. But for the balance transfer, the interest rate becomes 1.8% per month. A few card providers are there who offer 0% interest rates. It is the most exciting offer that you can get.

Stabilize Credit Score – If the interest rate charged to you is significantly lower, then it becomes easier for you to make payments. As a result, you can maintain the credit card score also. Besides, you can pay the balance in proper time.

Interest-Free Period – You can get an interest-free period from the credit card providers. Therefore, it becomes beneficial for credit cardholders.

Other Benefits – Besides, the cardholders can get introductory offers from credit card providers. The offers they provide, such as interest-free periods, low-interest rates, and so on are exciting. It is the most attractive benefit that they offer to the cardholders.

Fees & Interest Rates on Credit Card Balance Transfer

Processing Fee - In the case of balance transfer money, you need to pay an extra fee. The range of these processing fees is between 1% and 3%. Apart from this, a few banks are also there who charge a flat fee. Interest Rate – Usually, the interest rate for a balance transfer is 0.75%. However, the interest rate of credit card balance transfer may be 0% also for a limited period.

Who can apply for Balance Transfer?

The credit card balance transfer is advantageous for people who want to transfer money at a low-interest rate. So, they must take assistance from balance transfer credit card. Using it, they don't need to give additional interest rates or processing charges.

But you need to remember that it is suitable when you can pay the entire money within a few months. If you see that it may take a year or more than that, then you must go for a personal loan.

How to apply for the Credit Card Balance Transfer?

Do you know how to transfer money with a credit card? A new credit card comes with a 0% interest on balance transfer. You need to check whether the interest rate is automatic or it relies on a credit score.

You can apply for it through Netbanking, contacting customer care, through SMS, etc. But for this, you should be a credit cardholder.

If you need a new credit card for money transfer, then you need to check a few things. Verify whether you fit with the eligibility criteria set by the specific bank or not. Here, you can know the necessary details related to it from a particular bank. Proof of identity, address, income source- are some essential documents. You may need these documents while applying for the credit card balance transfer.

Conclusion:

Credit card balance transfer is a method that helps you to send money easily with a low amount of interest rate. It doesn't change your credit card rating or credit score.

Frequently Asked Questions:

Q. What is a Zero Balance Card?

Zero balance card implements a credit card by which one credit cardholder can pay any balance owed in full. In this case, the cardholder doesn't need to add any extra charges.

Q. Should you use the secured credit card for your credit?

A secured credit card can act as collateral. This type of credit card is mainly used for a cash deposit.

Q. How can you get money by a balance transfer from the bank?

NEFT, cheques or demand draft are the processes that a bank uses for a balance transfer.

Q. How long does the balance transfer request take time?

At first, you need to check the card, whether it is new or not. If the credit card is not new, then it may consume up to one week. But if you have a new credit card, the balance transfer request may take up to one month.

Q. Which of these is beneficial– a balance transfer or a personal loan?

First, thou should think about whether you will be able to pay the amount within a few months or not. If you cannot pay the balance at the right time, then a personal loan is the best choice for you. Otherwise, if you can pay the amount within a few months, then you must choose credit card balance transfer. You should choose the personal loan instead of a balance transfer. You can do this if you see that the time may require one year or more than that to pay off the money.

Q. What to do if you have applied for a balance transfer on your credit card but haven't got any notification?

If you have faced such issues, then you need to contact customer care.

Q. Can a credit cardholder transfer money from one credit card to another of the similar bank?

No. One cannot transfer any money to a credit card account of the same bank. The credit card account must be of a different bank.