Whenever there is a talk about investment (greed) or insurance (fear) there are a few statements that I hear, and it does not help at all!

Let me elaborate on those statements:

1. You have Colgate? I wish I had bought that share WHEN IT WAS THAT CHEAP! – you can replace Colgate with Hdfc, Coromandel Fertiliser, Gillette, ..does not matter.

But dear me, it WAS NOT CHEAP at any stage (Hdfc perhaps is an exception, I bought it below par in 1980 – Rs. 93 or 97 for a Rs. 100 share) – it was a LOSS MAKING company not a company paying 1000% dividend regularly. Colgate was always at a high p/e share and Bharti (at Rs. 80 on the way up) was not a proven entity, and therefore considered risky!!

2. You told me, and I bought 1000 shares, I wish I had bought 10,000 shares: This is what a very, very successful lawyer told me when I was speaking to him about Tata Power. The year we are talking about is perhaps 2002 – and Tata Power was available for Rs. 100. To me this is funny – you buy as per your greed and hold as per your capacity to hold.

3. This time it is different: This is a joke which I get to hear from the sales side brokers keen to do a deal, and I tell them ‘this time is no different’ . Amazing how often this statement gets punished, but still quoted by the media!

4. I wish I had started earlier: Well compounding is about time – did you not learn this in 7th standard did you not? How could you have forgotten it in standard 8th?

5. It will not happen to me: try talking insurance – life, illness, theft, almost anything. If it will not happen to you, let us part – why are you wasting MY time talking about something that is not going to happen to you. This conversation goes on like HE IS DOING ME A FAVOR by covering his life with HIS wife as a nominee.

6. Term insurance is too expensive in India: Ok sir, I accpet your point what should I DO? I am not IRDA, I do not own a life insurance company (thank God for that), and if the only company that I trust is ‘A’ it does not matter that R has issued a new cheap plan. I do not buy insurance because it is cheap. I buy insurance because when I die my wife will get the cheque.

7. I have never made a loss in equity shares: L O L. no explanation needed

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  1. What is the extent of risk in Term Insurance wrt trust on a company? Isn’t it enough that the company is solvent (hope IRDA will ensure that)? Is it so that some companies wiggle out of paying claims compared to others???

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