I have been a big proponent of financial education, but I hope you understand its limitations. Let me explain. Finance has changed over the past 100 years. In fact the changes in the past 10 years could perhaps be greater than the changes in the past 90 years before the last decade.

Now if you were in a class and heard that ‘derivatives’ are hedging instruments – meant to protect against adverse price movement of something that is very important to you – you would have believed it. However the financial service industry has made the derivative instrument into a leverage instrument and a great speculative tool.

If you heard that ‘SIP (systematic investment planning) is a good way invest, you should hear the newer concepts called SIP – ‘Sir we have a SIP – it is a scientific investment planning – we tell you how to build a portfolio on a month to month basis’. Believe it or do not.

If you thought Life insurance is a SAVING product – returns are incidental to the plan – move on! Now life insurance is sold and bought as an investment option, you have half baked guys who will tell you ‘Sir you can switch – and I will tell you when to switch. Welcome to ‘simple life insurance’.

The education industry’s budget is a fraction of the product sales budget….so who will win?  Well your guess is as good as mine.

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