Organizing Student Finances With Abhinov Balagoni

Abhinov Balagoni is the CEO and founder of PaxCredit, a business that creates global financial products for international students all around the world. In this AMA, Abhinov shares his insights on student loans, steps toward financial stability for recently graduated, the birth and growth of his company, and university applications.

This Slogging thread by Mónica Freitas, Abhinov, Sara Pinto, Jack Boreham, Salome Muriel, Verushka Buonaffina, Limarc Ambalina, Daniel Guzman, Valentina Zabala and Alex occurred in slogging's official #amas channel, and has been edited for readability.

Mónica FreitasDec 15, 2021, 3:00 PM

In today's AMA, we're joined by Abhinov, CEO and founder of https://www.paxcredit.com/, a business that moves money across borders as seamlessly as moving money within borders. 
“Credit systems should be built around the customer’s life and not the other way around.” - Balagoni states. 
PaxCredit creates global financial products for international students all around the world. 

Please feel free to ask him anything on:

Mónica FreitasDec 15, 2021, 3:02 PM

Hi Abhinov! Thank you for joining us! I hoped we could start with your experience with student loans and the financial environment. What made you want to get involved in this in the first place?

AbhinovDec 15, 2021, 3:06 PM

Back in 2015, while I was moving from India to Singapore for my education, I had to explore financing and international payments options. I realized that the cross-border financial products available for international students were not optimal in terms of pricing, and experience.

Specifically, I noticed that FX rates and markup across banks vary significantly and that there could be an additional cost of about $1000 on university program fees.

This personal experience shaped the thesis for Pax Credit to build a seamless, transparent and cost-effective financial app for international students.

Sara PintoDec 15, 2021, 3:09 PM

Hey Abhinov, glad to have you here! What tips do you have for international students concerning their personal finance?

Mónica FreitasDec 15, 2021, 3:12 PM

Abhinov, that was always a common issue that international students have found. And it used to be incredibly hard to find a suitable solution that didn't leave us in debt.
So, you encountered this problem in your own journey as a student. What was the process that made you start your own company? How hard was it to get started?

AbhinovDec 15, 2021, 3:13 PM

Sara Pinto, as an international student, most of the time you are on a budget.

A few personal finance tips I think would help international students are:
1. Opt for virtual mobile network operators as they are competitively priced compared to traditional mobile networks with similar coverage
2. Get a monthly pass of the local subway to reduce commute costs
3. Use the school email address to sign up for digital services such as Spotify, Amazon Prime, etc.
4. Sign up with a digital banking service such as Pax Credit :) to save on account fees and to get better interest rates

AbhinovDec 15, 2021, 3:23 PM

Mónica Freitas, I was exploring an entrepreneurial career while I was doing my master's. So, when I came across this problem, I was excited about starting up.

However, I realized that I had difficulty navigating the regulatory environment, lacked credibility to partner with major financial institutions and financial resources to build a great product experience.

So, I reached out to multiple companies already offering international money service and secured a partnership with a digital payments company to get started. We piggybacked on their tech platform, financial institutional partners to get our MVP product to the market.

Mónica FreitasDec 15, 2021, 3:33 PM

Abhinov, great tips! Do you still maintain your partnerships nowadays? Have you been able to conquer PaxCredit space on the financial map?

AbhinovDec 15, 2021, 3:37 PM

We are now building our own global payment network with different partners across markets. I believe that getting into Techstars, put Pax Credit on the map, Mónica Freitas.

Mónica FreitasDec 15, 2021, 3:37 PM

Abhinov, I'd love to have your insights on financial planning. Last year, I've graduated my master's, and having spent six months abroad, I ended up using a lot of my savings. How should I start planning my savings, knowing that I want to have a financial cushion for old age but still have enough to pay the bills at the end of the month and maybe a little on the side to enjoy life?

Sara PintoDec 15, 2021, 3:41 PM

Thank you, Abhinov! I'm a student myself, and I think it's safe to say that we don't pay much attention to bureaucracies. How is the process to get started with Pax Credit?

AbhinovDec 15, 2021, 3:45 PM

Mónica Freitas, ah, right! The never-ending dilemma for recent graduates.

The initial step is to identify the portion of your monthly income that you want to set aside for savings/investments. Maybe 10% or 20%, depending on your stage of life.

Post that, set up a high-interest savings account that would cover your living expenses for 6-9 months.

Next, an easier way to get started is to invest in ETFs or Index funds. Once you have gained confidence in your decision-making skills, pick stocks of the companies that make your favorite products.

Allocating a portion of your savings to blue-chip crypto projects such as BTC and ETH is a good investment opportunity today.

Mónica FreitasDec 15, 2021, 3:52 PM

Abhinov, can you tell us to which countries you're expanding? Have you considered partnering with universities? A few university colleagues studied abroad, and they'd usually open an account and go for banking options recommended by their university.

Jack BorehamDec 15, 2021, 3:54 PM

Abhinov, great to have you with us! What do you think about crypto? How will you embed blockchain and crypto into your platform? It won't be central banked controlled, so how does that work? Do you charge any fees for money transfers? Companies like Pay Pal charge a fair bit?

AbhinovDec 15, 2021, 3:56 PM

Sara Pinto, we have a simple process for our users to get started.

Currently, we have a web app, and you can register with your email, verify your identity and send money abroad — all within 90 seconds.

Mónica FreitasDec 15, 2021, 3:56 PM

Abhinov, I'm taking notes! Most of us don't even know where to start. Investing in crypto and stocks always seemed exciting but still a foreign concept. We're afraid to lose the money we can't see or touch. So what's your best advice for investing? Where should we get our data to know if we're making smart decisions?

AbhinovDec 15, 2021, 3:59 PM

Mónica Freitas, our new web app will go live for users in the US and Canada this month. They would be able to send money abroad to about 30+ countries.

Regarding university partnerships, we are currently working on that front.

Yes, students will be able to set up a bank account pre-arrival with Pax Credit next year.

https://slogging.slack.com/archives/C01D94MM0VB/p1639583533299400?thread_ts=1639580406.296400&cid=C01D94MM0VB

AbhinovDec 15, 2021, 4:07 PM

Jack Boreham, I believe stable coin projects bridge the traditional finance and digital finance worlds.

We are exploring a few stable coin projects for our cross-border payments use case, but would extend that to our upcoming savings account and lending products next year.

Regarding pricing, we have a small markup on the FX rate, but no transfer fee for bank account transfers beyond a certain limit. We want to incentivize our users to transfer large amounts.

AbhinovDec 15, 2021, 4:20 PM

Mónica Freitas, joining a few online communities, say 'personal finance' Subreddit on Reddit or following a few credible accounts on Twitter could be a great starting point for financial planning.

As you spend time reading the posts, you will get exposure to different thinking processes and, gradually, you can identify the parts that you are comfortable with and build upon that.

For purchasing Crypto and stocks, most of the digital platforms are good places to start.

Salome MurielDec 15, 2021, 5:36 PM

Hi Abhinov! I am going to study in Canada starting next year. Knowing that Toronto is a really expensive city to live in, what tips would you give me on how to save money while studying abroad?

AbhinovDec 15, 2021, 6:01 PM

Salome Muriel, in addition to the ones listed below, I would suggest looking up local deal websites such as Groupon for casual hangouts, to manage your budget.

As an international student, most of the time you are on a budget.A few personal finance tips I think would help international students are:
1. Opt for virtual mobile network operators as they are competitively priced compared to traditional mobile networks with similar coverage
2. Get a monthly pass of the local subway to reduce commute costs
3. Use school email address to sign up for digital services such as Spotify, Amazon Prime etc.
4. Sign up with a digital banking service such as Pax Credit :) to save on account fees and to get better interest rates

Verushka BuonaffinaDec 15, 2021, 10:08 PM

Hey Abhinov, this is great information you are sharing. Who are the most indicated people to put on a reference list? my niece is applying for a scholarship at a university in Boston

Limarc AmbalinaDec 16, 2021, 5:25 AM

Hi Abhinov, thanks a lot for joining us!

Limarc AmbalinaDec 16, 2021, 5:26 AM

What do you think about the current state of post-secondary education? Many people feel it is overpriced, undervalued these days, and not very useful in terms of learning practical skills you’ll use in business. Do you think the university system is “broken”?

AbhinovDec 16, 2021, 5:29 AM

Verushka Buonaffina, often, people list the most credible person they can get a reference from. However, a great recommendation from a referee with a strong working relationship is a much better indicator for the scholarship committee.

AbhinovDec 16, 2021, 5:42 AM

Limarc Ambalina, I'm of the opinion that the university system works but works only for a few universities.

Barring a few licensed professions, for the vast majority of programs, I believe the primary role of universities is to assign credibility in the job market and to give you a strong peer network. This holds true only in the case of a few good universities.

Daniel GuzmanDec 16, 2021, 1:12 PM

Hey Abhinov, do you have any recommendations about how to get a job abroad? Any tips, or suggestions about it?

AbhinovDec 16, 2021, 6:04 PM

Daniel Guzman, you would require visa sponsorship and that could limit the jobs you could apply for. But, with a targeted approach, you could broaden your job search.

For instance, if you are interested in technology companies and startups, then you could try to target job websites such as AngelList with a visa sponsorship as well as remote filters. Similarly, you could try searching on LinkedIn for job openings. Additionally, reach out to relevant team members of target companies on LinkedIn/Twitter and see if their team is hiring. Often, the new roles created will be filled within their network even before they are listed on job portals.

An effective tip to stand out from the crowd is to reach to the hiring team member via email/LinkedIn/Twitter post submitting your job application. Good luck!

Valentina ZabalaDec 16, 2021, 6:49 PM

Hi Abhinov, I just graduated from college and I have some savings that I would like to invest. What could I consider as a good investment opportunity?

AlexDec 16, 2021, 6:54 PM

Hi Abhinov, I am going to study abroad and I am a little worried about my parents' economy, how can I help them so that their expenses on my study are lower?

AbhinovDec 16, 2021, 8:09 PM

Valentina Zabala, I'm assuming that you are just getting started with investing. So, would suggest ETFs tracking the NASDAQ 100 Index and S&P 500 Index. As you gain more understanding of the financial markets, you can start investing directly in company stocks.

Additional notes on financial planning here

Joining a few online communities, say 'personal finance' Subreddit on Reddit or following a few credible accounts on Twitter could be a great starting point for financial planning.

As you spend time reading the posts, you will get exposure to different thinking processes and, gradually, you can identify the parts that you are comfortable with and build upon that.

For purchasing Crypto and stocks, most of the digital platforms are good places to start.

Mónica FreitasDec 16, 2021, 8:13 PM

Abhinov, that's awesome! What would you say is the main challenge when it comes to making PaxCredit known to the general public?

AbhinovDec 16, 2021, 8:15 PM

Alex, in the major education destination countries such as the US, UK, Australia, and Canada, as an international student you can get teaching/research assistant roles. Even for your education, there are multiple loan providers with no collateral requirement.

Effectively, you can take a bet on yourself and build your career without having to burden your parents financially.

AbhinovDec 16, 2021, 8:24 PM

Mónica Freitas, in general, personal finance understanding is low and that is lower in the case of the younger population, the target audience of Pax Credit. So, only a small portion of our users actively look for financial products to support their education expenses. 
 
However, we noticed that international payment solutions are something our target users search for extensively and that is a regularly used product. 

Another interesting observation is that our target users are part of close-knit groups and the products that delight them tend to be widely shared among those groups.
 
Our goal is to reach those initial sets of users and champion them to spread the word about Pax Credit in their respective communities.

Mónica FreitasDec 16, 2021, 8:46 PM

Abhinov, that's a great strategy! I think when it comes to finances we tend to be more careful about which company we trust. When we find a good one, we'll share it with everyone.

Mónica FreitasDec 16, 2021, 8:47 PM

Abhinov, what's something you've learned throughout your student and entrepreneur experiences that you wish you'd known sooner?

AbhinovDec 17, 2021, 11:06 AM

Mónica Freitas, as a student, I realized that your peer group affects the college experience most. As an entrepreneur, it is the same peer group that affects your quality of work.

However, an additional layer of gaining trust comes into play at work that I took for granted as a student.

Mónica FreitasDec 17, 2021, 3:04 PM

Great advice! Abhinov That's a wrap on this AMA. Any closing thoughts, anything you want to promote? Thank you for joining us! It was an absolute pleasure to have you!!

AbhinovDec 17, 2021, 3:10 PM

This was a fun experience. Enjoyed the AMA session.
 
Do follow Pax Credit on Instagram for interesting personal finance tips and memes :)