Many clients, students, readers and friends call back saying “This xyz person is offering me 36% returns on life insurance policies” is it possible?” Sometimes they send me a mail…and the company could be anything from A to Z…

My answer has been “The fact that you are asking me shows you do not believe it”. After all you do not call me every day for every thing, do you? – is my jibe!

I once told a client “here is a mutual fund where you will get 40% (CAGR) return, SURELY, in 36 years time”. He was a little stunned and perhaps a little amused. So I told him a story.

Once a poor man was sentenced to death, unjustly, by King Akbar. He came running to Birbal for help.

Birbal told him, please tell the king, “I can make your favorite white horse fly in 2 years time”. The poor chap did not know what to say, but trusting Birbal he went off to tell the client as instructed by Birbal.

Birbal’s wife who was standing nearby asked Birbal “How will you save this poor man…will the horse fly?”

Birbal’s reply was stunning.

He said “Look I have asked for 2 years time. In this period there a few things that can happen:

1. This man can die of natural causes

2. King Akbar may die, and this guy may get a pardon!

3. The horse may die or

4. The damn horse may fly!!

So similarly when I was telling the client that he will achieve 40% returns in 36 years time, the following things can happen:

1. The client may die during this period.

2. I will surely be DEAD by that time

3. The client may forget

4. The fund may actually perform!!!

So when clients ask you for indicative returns, promise them indicative returns over 40-50 years…but do not promise returns for 1-2 years!!


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  1. I am sure a lot of us have read this story elsewhere but from the investment and returns perspective it is simply too good an analogy. Hats off Subra!!

    My decision to meet you at least once before I die is all the more strong now!!

  2. Duniya gumti hai…gumane wala chahiye………Superb.
    Some oversight correction needed-like 2years, 3 years and client in place of king.

  3. This beautiful story is applicable in some form in many many .. many cases in life, all politicians promises before election, all govt promises and reassurances,eg cash which minister announces for victims after major rail accident, many sales promises , this real estate will double surely after 4 years sir, this interest is floating rate in theory but it wont change sir (banker), this 10K belt will reduce obesity in 3 months, Original story, i havent heard anywhere else.

  4. Believe it or not.. but many ppl buy shares.. MF..ULIP plan based on past performance.. and hope that same would continue in future..

    When a person buy a flat..he checks its last projects.. isnt it?

  5. Excellent idea. I’ve been ridiculed many times for suggesting return expectations of 12 – 15% from equities. Now I know 🙂

  6. ULIP was one the biggest “legal fraud” of last decade by insurance industry. Many of my friends in IT felt for it with the exciting “ONLY 3 year premium” feature and dump their lacs. In today’s days everyone is asking me “shall I surrender now, what do u think ?”, the value of fund after 5 years is far far away from what they invested originally.

    I asked them to read subramoney to get right knowledge and decide on your own(and not clear-cut answers though)

  7. Krishna Kishor Kammaje

    Hilarious.. could not control laughing…
    I always saw these ULIP agents as parasites waiting to latch on your back…

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