What are the most shocking financial behavior that I have seen in my 3 decades of watching people’s financial behavior?

Here is a list….

– Dying without a nominee or a will: recently a guy aged about 58 died without a nominee in his office Provident fund, housing society, bank account, locker, mutual funds…this dead joker takes the cake. Completely.

-Keeping Rs. 2 million in the savings bank account…- not by a rich man but by a person with a CTC of about 1.5 million!! Keeping money in the savings account, liquid account, etc. should be as a part of the strategy, not accident.

-Buying financial products from the bank: well this fulfills the requirement of the bank, and rarely your own financial needs

-Buying different types of unit linked plans for your insurance and pension needs

– thinking of insurance as an investment

-living a complicated life – wife, ex wife, children from 2 wives,….and still not bothering to write a will.

– holding properties with children when spouse is alive!

– not communicating financial needs and explaining value to children or spouse

– pretending as if you understand financial products just because the sales person is too attractive and you did not want to look like a fool

-using anecdotal examples and think you have become a consultant / adviser

– pretending to understand compounding but interrupting it while you invest

OMG I could write a book!! lemme stop!

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  1. Yes Will and Nomination is important. Sometimes I am amazed that banks / securities when we ask them to cross verify the nomination ( for some reason the nomination keeps disappearing after 2 years .. not sure why – although the bank mentioned it is related to KYC ! ) they give me looks – like why should I worry so much about nomination at this age ?

    What does age matter after all ? Disaster can happen at any time.

    Will is another thing altogether !! Difficult to convince family to make it.

  2. I am explaining many times to my father reg will and its importance. He also got very much affeced as his father did not write a will. But still he is not interested and not writing it..very difficult.

  3. I think you missed one. No investment at all. That is the bigger mistake than using ULIP for insurance or mixing insurance and investment.

  4. Hi Subra, There is another thing that happens in Banks
    1. They pay you interest (I checked for savings account, should be same for deposits etc) based on closing balance. will not consider the Accursed interest when daily interest is calculated
    2. But if you take a loan, they take the outstanding amount + Accrued interest and then calculate the daily interest that one has to pay back
    Banks are really smart, otherwise why they do not follow the same approach for interest calculation! I dont think, unless RBI comes back and say, this is how bank should do it, they will change.

    I came to know that in Canada, Banks credit interest daily on one’s checking account and that makes it more correct.

    people should really re-consider if they keep large amount in savings bank account.

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