How to Avoid Financial Disaster in Investing

If there is one word that can save you from financial ruins then that word is ‘NO’.
 
Financial product salesman who pitch financial products to save for child’s education or your retirement, buy family’s health insurance Or have a credit card that allows you to purchase at will and offers reward points when you splurge?
 
Market the financial product well and the gullible retail customers will fall for it and would continue to buy it. After all, who does not want to save for retirement or Child’s education etc? If you have teeth, you do need toothpaste, right? So, if you have a child, you certainly need a child plan. If you have a family, you must have medical insurance. You also need a retirement plan. The result: you end up buying costly child Ulips, confusing medical policies, and inflexible pension plans.
 
 
Salesman pushes you to diversify across stocks, gold, property, bonds, bank fixed deposits, post office savings, PPF and a host of other instruments. 
 
Trust me, all this is a sure shot recipe for financial worries. 
 
This is not to say these products do not offer value, some of them do. Trouble is that most of these products involve complex investment strategies. These strategies are difficult to understand and a retail investor does not even try to understand what is the mechanism behind all of it. 
 
However, one word can safeguard your finances against such perils, protect your money and make you rich. It is simply, ‘no’. Nahi. Naa. Nako. Vendam. This two-letter locution will act as a shield against financial planners, wealth managers, money quacks, banks, insurance companies, mutual funds and portfolio advisers who are trying to sell you something or the other.
 
‘No’ is a powerful word. Use it ruthlessly. Say ‘no’ to the relative who wants to sell you an endowment insurance policy. Turn down the bank executive who is pushing a pension plan. Refuse the offer of a free add-on card from the credit card company. Don’t agree to buy the child plan that costs a bomb. Just keep your financial life as simple as possible. 
 
At the end of the day, you’ll realize that you can’t let someone else take control of your finances. There is no one better than you to manage your money than you. It may seem daunting at first to do it all by yourself but it not that difficult as it is made out to be. When you trust the advice of your broker, wealth manager, Insurance agent you should always keep in mind that there is a conflict of interest. They earn not by giving advice but by selling these products. They mostly pitch product which offers them the maximum commission. So, the only way to avoid this is to take control yourself. 
 
Keep learning, take out half an hour or so to sharpen your financial knowledge and soon enough you will learn the tricks of the trade to keep you ahead of the game.


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