Financial Planning: Micro and Macro

The word financial planning has now received a lot of attention. Thus whether it is a brokerage company or a credit card issuing bank everybody uses this word. It will not be surprising to see cell phone operators calling and offering ‘FP” services on the phone soon 🙂

FP is all encompassing and it is easy to do parts of it well and completely miss the big picture. There are people who keep track of their expenses to the last paisa but can completely miss the fact that the money is lying for long times in their savings bank account (not as a strategy but due to laziness or fear of investing).

There are people who will do everything to save money but keep it in LIC policies which give a return less than bank fixed deposits. Their cost cutting, penny pinching not withstanding their lack of knowledge (irrational fear) keeps them away from creating wealth.

Normally it is the cost of financial illiteracy which stands between most people and wealth creation. However when you tell them it costs Rs. 10,000 for a one day seminar on wealth creation…they baulk. However they will keep Rs. 300,000 in a savings bank account for 2 years and lose about 100,000 in opportunity. Even worse they will give Rs. 100000 to a guy who promises to make it Rs. 500,000 in 3 years time…and keep waiting. Sad I wish I could quantify the cost of financial literacy.

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2 Responses to “Financial Planning: Micro and Macro”

  1. Very true Subra.

    Thanks for the thoughts.

  2. Nice thoughts

    Most of the people have started using the word “financial planning” , but still they confuse it with “investment Planning” .. It will/has to change .


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