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• Right attitude Buying life insurance policies to save tax or investing in risky stocks to make quick money is not right approach to deal with finances
culture in India. Pubs are jam-packed on in the locker, and some would invest all their budget.
weekends where people would spend a the money in the stock market. Very few A fancy car, a fancy house, a fancy
bomb on drinks. By the end of the month, people understand the right way of di- watch, a fancy vacation are bad invest-
they are left with no money. A journal- versifying the investments. ments decided by whims. People want
ist friend told that often he had to bor- Gold worth lakhs is kept in lockers fancy stuff and willing to pay a premium
row money from his maid at the end of only to be used once or twice a year. This irrespective of the value it generates.
money. That speaks volumes for financial is resulting in the money getting blocked Then there are people who lack patience
mismanagement when it comes to per- and hence not getting any returns on and want investment to double in a few
sonal finance. it. Traditionally, people have been risk- months. Such people fall into the trap
averse would just keep the cash at home. laid by unscrupulous agents to lure them.
No medical insurance By investing in fixed deposits in a bank The RBI has been warning people to nev-
People are losing out the lifetime sav- they would earn more and their funds er invest in plans that offer huge returns.
ings just because they did not take medi- would be safe too. Many people lose their lifetime of savings
cal insurance. One accident can shatter because they don’t have the patience to
all financial dreams. Better be insured. Considering frugal as cheap understand the investment option and
Healthcare cost is rising and it is impos- A lot of people confuse economic spend- would blindly trust anyone with their
sible to manage it without insurance. ing by being cheap. An economic spend- investment.
Then there are people who are paying er does not compromise with quality but
the minimum amount due on credit does his research well enough to buy Not discussing the money matters in
card payment? If yes, they are trapped the product or service at the lowest rate. the family
in credit card mystery. On the other side, Having a car is not an asset because it Discussions related to money are con-
very few people really enjoy benefits like consumes fuel and has a maintenance sidered as a taboo in Indian families.
free lounge access, buy one get one mov- cost. Its price will only depreciate in Nobody really discusses money mat-
ie ticket, etc. the future. Car is a necessity but people ters. Unfortunately, a lot of people are
Everyone has come across the formu- spend a lot of money and even take the dependent upon others with their hard-
la of compounding but very few people loan to buy a luxury car over and above earned money. This is the reason we have
really understand its power. This is the a lot of self-proclaimed experts giving
reason people do not start saving early stock market tips.
and hence lose out on the power of com- An economic spender People blindly invest their money in
pounding. Albert Einstein said that pow- penny stocks, day trading, futures, and
er of compounding is the eighth wonder does not compromise options. They eventually lose all their
of the world. with quality but does his hard-earned money. The root cause is
greed. As a result, many people rather
Becoming a victim of lifestyle inflation research well enough than learning new stuff and growing the
Moving from 2bhk to 3bhk just because to buy the product or skillset, end up wasting time on social
you have got a good hike, upgrading your media, YouTube and other social plat-
car because you have got some bonus service at the lowest forms. People should remember that
are some of the examples of lifestyle in- rate. People want fancy best advice on matters including finan-
flation destroying financial lives. Some cial comes from the family than people
people would invest all their money in stuff irrespective of the with vested interests.
real estate, some would invest all the
money in gold, some would just keep it value they generate letters@tehelka.com

tehelka / 15 november 2019 28 www.tehelka.com