We had a client, let’s call him Mr Malhotra. So, Mr Malhotra had been constantly looking for new investment avenues or maybe they were chasing Mr Malhotra. He felt that he must always be on his toes, otherwise good opportunities would run away. He kept an eye on new real estate projects, NFOs, IPOs, ULIP Plans, PMS, equity debentures…..He didn’t want to miss out on any. He had invested in a few startups as well. His logic was to diversify his portfolio as much as possible. Also, he wanted to increase his possibilities of finding winners by investing in so many avenues.
Sadly, his portfolio was too scattered and was all over the place. He had invented a big mess around himself. His quest to find new avenues made him a favourite client for the banks and real estate agents who kept approaching him with their new offerings, telling beautiful stories of projected returns and getting him to sign on dotted lines. Alas! his cupboard as well as his mind was full of investment papers which kept him busy on most of his weekends. Many of his policies lapsed, real estate projects failed, NFOs underperformed and his peace of mind shattered.
It’s more important to say no to the onslaught of financial products than to say yes. The marketing and sales have been getting so aggressive that you really need immense awareness to say no. Most of the time, your bank offers you something, shows the imaginary return of that product and gets you to invest in that. Many even play with investors’ ego and claim that this is the exclusive offer for high end customers like you and available for only a limited period. Many clients simply feel that if the extra money is there in the account, let this be invested. Moreover, if the bank is offering something, it ought to be good.
What they don’t realise is that you may not only be committing your money in some unsuitable investments, the maze of investments and their details will constantly frustrate you and you will always wonder what to do with those investments.
Therefore, it is always worth doing your little homework before making any investments. Understanding a few basics of investments will save you from poor investments, mental agony, and paper mess which would continuously exasperate you. One of the best ways of saving yourself against this onslaught of financial product is having your personalised financial plan. This will make your investments disciplined and link them with your defined financial goals. If you maintain this discipline, then, it will be difficult for the bank personnel to penetrate your solid defence and will not be easy for them to bluff you. You will continue to get the pitch after pitch and they will continue to claim to give you sky, but maintaining the basic discipline will be your best protection against getting your money robbed and your peace of mind being ruined.
Someone rightly said, discipline equals freedom.
Manoj Pandey
CFP
