When you talk to people who are say 22-30 years of age, you are normally prepared for all kinds of reactions, right?
Well one 27 year old girl had this brilliant conversation with me, and I am reproducing it more or less verbatim:
G: Subra Sir I need to invest Rs. 80,000 for my 80 C – tax provision where should I invest?
Me: ELSS – will give you a choice of 2-3 fund houses, take a pick, it does not matter.
G: Why not a bank fixed deposit, that also gives me the same tax benefit, or life insurance…..etc.
Me: In the long term…equity….etc. etc.
G: Sir why are you saying equities make money for EVERYBODY in the long run?
Me: Because it is true that in the long run (read 5 to 200 years as per your convenience and conviction and trust) one tends to make money. See Colgate, Gillette, Siemens, HUL, ITC, ….
G: You mean..ALWAYS, ALL SHARES?
Me: NO. Some good shares, but long term, most of the time.
G: How many shares have made money for share holders, and given a REAL return (nominal return minus inflation)?
Me: About 100 shares over the past 50 years out of 20,000 shares ever listed. (oops this girl was hurting!!)
G: How many PEOPLE have earned ENOUGH from equity markets to make a difference in their lives?
Me: About 100,000 out of about 2 crore investors (Sebi figure) or 1 crore investors (my estimate)
G: So about 5% of the companies and about 0.5% of the investors? Come on sir gimme a break. I cannot see how a mutual fund manager will pick ONLY those shares for such a small population, I am better off paying the tax.
Me: Hey kid you got me thinking…
G: I live in Malad and I have only heard of people losing money in Harshad scam, Ketan scam, trading….NOT HEARD ANY SINGLE Investment success story. I have ONLY heard of people making TONS OF MONEY IN real estate and gold.
G: I am planning to buy a house in Vasind for Rs. 19Lakhs. I have Rs. 5 lakhs of my money in a bank fd, will borrow Rs. 14 lakhs and pay an EMI of Rs. 14,000 for the next 20 years. I am sure I will get a tax break, appreciation,….What say sir?
Me: Some of my readers may react to you darling. God bless you.
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