Many people like the words like wealth creation, equity, SIP, etc. It does not mean that they understand the whole process is not so difficult. NEITHER is it so easy.

Let us see some important things that they miss:

1. Breaking/ Stopping a SIP: one of the kids in the office went to the mutual fund office to see his statement of ELSS. The girl at the counter said ‘you can withdraw Rs. 43,940’ as these units are more than 3 years old. HE had no need for that money, but because he could withdraw, he did.

2. Continuing the same example ..he also stopped the SIP. Why? No particular reason, just stopped. This was an ELSS…and this year he will end up paying more tax. Such stupidity is not uncommon.

3. Not having an emergency fund / not having adequate medical insurance: ‘Sir my mother had an accident….so the money was withdrawn..and the SIP stopped. Accurate but amazingly stupid excuse. Have heard it many times.

4. My bank RM asked me to take a life insurance policy. So I removed money from my mutual fund and ‘invested’ in a ULIP.

5. The amount of money you save is the gap between your ego and your income. Ego can include anything done to show off – buying show off assets, doing show off charity, …and eat into your saving / investment.

6. One very important wealth creation tool is ‘not caring’ what others think about you. Not very easy especially when you are young and more vulnerable to peer pressure.

7. Looking for fun in investing. Some of the best returns that I have got are in dull nbfc, fertilizers, toothpaste, mortgage, …- none of these industries have any glamour or thrill.

8. Markets can go up far longer than you have patience, and can come down even faster than YOU want. None of us know what will happen in 2015 (or any future year), so rest assured you are in good company. Stick to your SIPs, do not watch TV.


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  1. Subra: Very well said and patience is a virtue. Investing and Wealth Creation is very boring as require discipline & waiting for good amount of time. Thought of sharing what I read

    “There is something in people; you might even call it a little bit of a gambling instinct… I tell people investing should be dull. It shouldn’t be exciting.
    Investing should be more like watching paint dry or watching grass grow.
    If you want excitement, take $800 and go to Las Vegas.” Paul Samuelson

  2. Regarding point 4, though ULIPs may be bad products, I guess returns would be better than savings bank. I observe that some people are more religious about this ‘forced’ savings as opposed to PPF or mutual funds where its entirely up to you to maintain the investment over long periods of time. Of course, you’ll not be creating wealth but would be better off as compared to spending the money on frivolous things.

  3. Too much information spoils the discipline and focus.
    Some say PPF
    Some say Index
    some say Real Estate
    Some say Direct Equity
    Some say gold
    ….with Statistical figures to prove their points….Financial Planners should be like doctors; There should be more success stories than mistakes…Based on available information, doctors success rates are higher and we tend to digest negatives.

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