“Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the “gotta have it scale” and while NOT an end, plays a major part in helping us achieve our goals. Again, we all work at our job, business and earn the bucks, however, what can shoot you upwards is managing the bucks – making money work for us .
Superficial Knowledge, impulsive investments, burnt fingers
Sadly, most of us DO NOT pay much attention to gaining knowledge of products we invest in. Most of the knowledge is superficial – from advertisements, colleagues, tips from uncles and all one ends up doing is investing impulsively. What happens – “When a person with money meets a person with experience, the person with the experience winds up with the money and the person with the money winds up with the experience”. The only one who ends up making money is the uncle through whom you invested. I was shocked when I recently addressed colleagues at work. Not one approved of the idea of a pure Term Insurance plan. “What!! An insurance policy that will give me nothing!? You must be joking!”
A colleague invested in a policy (through a relative) and later discovered that Rs. 12000.00 first premium was worth only Rs. 4000.00. She discontinued, not having understood the product features... Now her only investments are in bank deposits (mostly savings account)! Another acquaintance invested in a ”Superb” investment scheme (MLM) and ended up losing only Rs. 58000.00 but gaining good experience. Well, who said that knowledge is free!
So, what do I do?
Resolve – to gain in-depth knowledge of some financial products
There is good money to be made in the long term provided one knows what he wants, has studied the products and is willing to invest in what one understands for the long term.
“Too many companies will design products that are complex, harmful, and sold with high-pressure tactics — after which the customer can run from pillar to post to have his problems redressed. Sounds too bleak and cynical? Well, the faster we wake up to this fact, the better for us.”
“Most savers don’t have the time, interest and skill — and get gypped repeatedly. And after that, disgusted, they conclude that bank deposits, “money-back” insurance policies, and annuities are the safest products, if not the smartest, and thus serve their purpose fine.”
Bank deposits and insurance policies which give us a return of 5-6% wont even cover inflation and I will get gyped investing in products I dont understand!
Suggestion:
As a start, I would suggest that every youngster as a start (and others), equip himself/herself comprehensively about:
- Mutual Funds – including all the products available
- Insurance Policies
- Small savings products
- Tax rates, the tax structure
- Basics of the stock market
First, learn to understand where we must not invest!
Regular reading of good financial publications and a financial daily is a great start. Several web portals give details of products and their performance, product details and you can google what you wish to see.
Use social media and search for what you want - excellent stuff available to give you in-depth knowledge of not only products and importantly, where one should not invest.
Follow me on Twitter @invest_mutual
Happy and Profitable Investing!!
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