No this story is not about greed. There was a farmer who had a hen that laid golden eggs. The farmer was a bit of a miser. He looked at the hen and thought – all the expense is because of the front side – and all the income is because of the back side.

He decided to cut the head – to save the expenses!

When it comes to philosophy or spiritual thoughts too – many people say ‘I am spiritual, not religious’ – sounds like a joke, really. I know ‘bhakts’ of Shankaracharya (of Kanchi) who would go there in grand silks (he was always against silkworms being destroyed), seeking his blessings for a wedding, and then asking for dowry. Selective acceptance of a guru’s advise is I think absolutely stupid.

This happens to many financial advisers too. Clients use half the advise and then make a mess of the what the adviser has told them. When I say do not take unit linked insurance. I am ALSO SCREAMING ‘take the cheapest term insurance that you can buy for your age, for a period you want, for an amount that is suitable for you’. If you just say ‘Subra says do not take insurance’ – bad luck to your nominee.

Sometimes it is easy to interpret what the adviser has told them. Sometimes it is not. I keep screaming that real estate is not a good investment over a long period of time (say 30 years). However it is true IF AND ONLY IF you keep the money in a good well performing equity portfolio (direct or mutual fund). If the money is lying in a bank fixed deposit – yuck you would have been far, far better off with buying the house.

There are tons of such examples. It is necessary to understand the advise in full. Remember I too have ULIPs – but I bought it when it was cheap, and I did reverse engineering to find out how the cost will hit me over long periods of time. However I am still planning to surrender it, because of fund manager issues….:-)


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  1. This blog is really good Subra sir ! It is so true. Accepting half part of advice is more dangerous than not accepting the advice.

  2. Subra sir,
    When you said real estate investment is not good in earlier posts, I understood it as ” compared to fixed deposit”. With real estate prices so high, do you still think that real estate would give returns of 9% CAGR for next 5 years? Now FD is giving 9% CAGR. Even tax free bonds are coming close to 8% CAGR.
    Also, when you say rental yield is just 2%, you are pushing the reader to think towards FD which gives yield around 8%.

    I strongly think that real estates have become too costly even in tier 2 cities. It would require a lot of depreciation of rupee for real estate prices to just stay the same.

  3. You too have ULIP?!! Surprised. Would love to meet the person who sold you that! or was it bought by you?

    But when was ULIP cheap? Surprised again!

  4. 2004. Premium Rs. 100,000, Sum assured Rs. 20,00,000. 30% allocation charges. Top up Rs. 300,000 – allocation 99%.

    Asset managememnt charges: 0.8% – breakeven with a mf in 3 years. In my case 2 years because of the aggro top up.

    even today u cannot find a better product, but I may be surrendering it….

  5. ULIPS r most missold products!
    plz any person with sound mind DO NOT BUY ULIPS!
    stay away from them!
    they hv high commissions 30-40%even more, highest guarantee NAVs r worst products, stay away!

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