6 Important Rules for Retirees…and other Investors
There are some basic rules for investors and more importantly for Retirees:
1. What you do not understand, is not worth knowing: If a financial planner tells you ‘Sir, you do not understand this, I will explain it to you’ – please be IMPOLITE and ask him to …….. (unprintable!). NOBODY (repeat NOBODY) is interested in ‘teaching’ you. Normally it is in the interest of the oil skin salesman that you understand LESS, rarely more. Unless of course he is a professor. If he is a professor, he is not really interested in teaching you, so he will not attempt.
2. Be careful of what your broker can do for you: First of all have less expectation from your broker. Then meet him. Then lower your expectations to the right level. He is interested in getting you to fill some forms, buy some shares, mutual funds, unit linked pension plans, etc. YOU and YOU alone are interested in knowing what is good for you. Take inputs from your broker, use your OWN brain and then decide. If he pushes you for time, ask him to take a chill pill.
3. ANYBODY who has a secret way of earning more is telling you a LIE. A pure blatant lie. There are no secrets that people go around giving free to all and sundry. Sadly some such people go around the world -and they have a fantastic affinity to recent retirees sitting on Rs. 85 lakhs and wondering what to do with that money. Be damn careful.
4. Oil skin salesmen today have many qualifications, be careful. Once upon a time you could trust your banker – but like I said that was once upon a time! So in the alphabet soup of qualifications they pick up a few alphabets and threaten you with their lingo. See point 1. What you do not understand is NOT WORTH KNOWING especially once you have retired.
5. Do not be overconfident (It cannot happen to me syndrome): Remember that is what everybody thinks, till it actually happens. Be careful. Ask your kids, friends, neighbors,….but decide on your own.
6. THE MOST IMPORTANT one: know whom to trust. Not your brother, brother -in-law,…..boss, exboss, banker….remember finding the right person is not easy, but it is a MUST – and you should have 3-4 people with whom you can discuss. Choose such a person carefully.
Risks are worth taking, only if you understand them.
If you are sitting in a group where investment advice is being given FREE and you do not know who is paying the bill, boss it is you. You are sucker who is being had 🙂
SAM
Subra,
Happy 2012. Nice article. I wish I had read this in my late twenties or early thirties – I would have been richer – literally! 🙂
Ashish
Nice Article Sir.
No free lunch as they say. And indeed the trust is hard to find.
krish
One more advise is yielding to ego ticking. Most of the oil skin sales men use this as last resort. It could be praise, insult or hardly any effect syndrome. Some of them showcased as miniscule in the bigger portfolio.
anon
that last line was fantastic.
An enriching and solid 2012 wished to you, Subrabhai.
dr kishan
Subra sir
I can think of only one thing about this article. The Punch line of Bloomberg TV: “BLUNT AND SHARP”.
Happy new year to you.
Since if the year is happy for you, you shall continue enlightening us and thus our year shall be happy too
kishan
shiva
LOL good one. No (3) – wish poor Madoff retiree investors had paid attention to this.
Vijayashankar
If someone gets a surplus, the investment horizon changes!
For eg., if you would get 2 lakhs in your hand – that may not be used for a year until next big ticket investment comes (unless you dont have big loans), how would you think you would invest?
Safe bet – debt funds?
I bet, the financial planner would suggest the Mutual funds route, to make some moolah!
subra
btw Vijayshankar who said ‘Safe bet-debt funds?’ – is this always true or only at the top end of the interest rate cycle?
Knowledge is the only protection
abhishek
loved the last line…
great post !