Banking Confusion for the Common Man!
It is difficult not to see the advantages of an investment when approached by a good salesman.
Who can deny the need to save for his child’s education and his retirement, or to safeguard his family’s health and build wealth in the long term?
Or have a credit card that allows you to purchase at will and offers reward points when you splurge?
Position the financial product well and the retail customer will fall for the sales pitch. Focus on the need and the customer will buy. After all, if you have teeth, you do need toothpaste, right? So, if you have a child, you certainly need a child plan. If you have a family, you must have medical insurance. You also need a retirement plan. The result: you end up buying costly child Ulips, confusing medical policies and inflexible pension plans.
Then there are hawkers of complex investment strategies. They push you to diversify across stocks, gold, property, bonds, bank fixed deposits, post office savings, PPF and a host of other instruments. Even if you can’t afford a new home, a bigger car or a foreign holiday, they will get you to leverage on future income. So you take a home loan, a car loan and a personal loan for the foreign tour. Of course, you also pick up a few credit cards in the bargain.
Trust me, all this is a sureshot recipe for financial worries. But one word can safeguard your finances against such perils. I am sure you are dying to know the word. Well, it is simply No. Nahi. Naa. Nako. Vendam. This two-letter locution will act as a shield against financial planners, wealth managers, money quacks, banks, insurance companies, mutual funds and portfolio advisors who try to sell you something or the other.
Say No to your relative who wants to sell you an endowment insurance policy. Turn down the bank executive who is pushing a pension plan. Refuse the offer of a free add-on card from the credit card company. Don’t agree to buy the child plan that costs a bomb. Just keep your financial life as simple as possible. One term insurance plan to cover your life, SIPs in 2-3 well chosen diversified equity funds, a gold ETF if required and a simple medical insurance for your family. One credit card as well, not as an ATM but as a convenience to replace cash.
jawahar prasad
A simple and best advice on independence day celebration.
VK
Off late I’ve been bombarded with calls from HDFC and Axis. Every NO is met with huge resistance and they want my explanation. Tragically, the explanations fall on deaf ears! Either they don’t understand or don’t want to understand or simply don’t really give a damn. I feel like I am talking to a stubborn and obsessed 3-year old…
subra
VK send them a link to this article 🙂
Puneet
@VK: You can disconnect the call the moment you hear HDFC or Axis and card.
Carl
I’ve been getting these calls over the past 2 weeks. The caller is always a female with a really good command over the English language. Have complained to the DND register.
Funny situation— Call back reply from DND states “ The caller only wanted an appointment for a senior manager” — This cannot be taken as a sales or promotional call.—DAMN IT —I don’t have an account or card with any of them, What call could it be???
Need to change my wording on the next DND complaint.
Abhijit
Whenever anybody approaches me with ULIP/Endowment plans, I first simply refuse. If they are still aggressive (by explaining me about disadvantages(?) of Mutual funds or stocks in all), I simply offer to play a game to that sales person.
The game is: I will buy this plan but the sales person has to promise me in writing (on stamp paper/notarized whatever that is legally bound) that the outcome of this plan at the maturity should be better than the Equity Mutual Fund SIP that I am suggesting. If the MF wins, he should pay me the difference and vice-versa if there Plan wins.
Till now, nobody accepted this challenge. But the best part is that they never turned up again to bother me 🙂
Pradeep
Very true and apt article. When my son was born I also feel into the ulip trap not even realizing it’s ulip. I wondered why it costs so much when the return is so little. But just by buying that plan I had a false sense of security. But then subra blogs and others opened my eyes and I made that ulip as paid up and left it at that.
Rajiv Ahuja
V.K mentioned HDFC. I can assure you Kotak Mahindra Bank is not far behind. In Mis-selling the insurance products.