Not very long ago people believed you finished your education, got a good job and relaxed. This is no longer true. Welcome to the next 20-30-50 years:
1. Taxes in all forms will GO UP: Frankly there is no attempt by any government anywhere in the world to become more efficient – this will force taxes to go up.
2. More institutions will fail us: If you were a 50 year old American you should be worried about your Social Security benefits dying much much before you die. You will surely outlive your Social Security.
3. If you are a 25 year old Indian working in a PSU organisation or even in the Government your pension is likely to be self managed. If you are scared of equities, think again. Inflation will chew your investments. Learn financial management, record keeping, investing in equities, asset allocation, re-balancing, etc.
4. Holy cow institutions like Life Insurance Corporation, Unit Trust of India, State Bank of India will SURELY give you NEGATIVE REAL RETURNS on your ‘investments’ – because these are not investments, they are savings instruments.
5. If you are in the government service, be ready for big parts of your organisation being privatised. For e.g. the railways may outsource the canteen, banks may outsource credit rating, banks may outsource payroll management – things which look unbelievable now.
6. National Pension Scheme will not take off in the current mode. Not sure when it will take off. Fund managers may have the mandate to invest in index funds, but the performance gap between 2 schemes will be so high, that there will be panic.
7. The return on bond funds will be negative when interest rates are dropping!
8. NPS does not realise that people are not as scared about fees as they are scared of poor management! esp when it comes to money management!
9. The regulator normally speaks the language of the biggest player…so do not have too much expectations from that side!
10. Whatever is happening in financial services is also happening in the medical field…so be careful there too!
Be careful the government, big psu companies, ….will …
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