It is amazing to see a person paranoid about risk in one field does not worry at all about risks in other aspects. Just narrating risks…

  • one person handling IT security for a bank has entered into 2 really bad RE deals stuck without OC
  • one doctor who smokes 20 cigarettes a day
  • one very smart CA handling a group of 22 professionals, well paid drives his car after having 3 drinks
  • one academic who can write a 200 page on risk, has sat on government committees has ONLY bank fixed deposits
  • one young professional with a great career potential is stuck in a bad company and MAKES NO ATTEMPT to change jobs
  • young bankers keeping their money in bank fixed deposits! not even deferring taxes in debt fund, and missing equity wholly
  • one 58 year old has almost nothing as saving (save a spare house in a metro) CEO of a big group company

I could go on and on but that is not the point. The point is if the risk is so obvious why does the person not see it himself / herself? For me in all these cases they distort facts to such an extent that it looks believable. I keep wondering what the mother of a hardened criminal has to say about her son! I am sure she says “he is innocent” It becomes very difficult for the wife to accept that SHE knew that her husband drove after having 3 drinks.

So she rationalizes saying “oh we have been married for a long time…and he ALWAYS drives safely if he has had 3 drinks” . I do think this is NONSENSE, but there is nothing one can do as an elder. While attending such parties you keep fighting your urge to do what is right and what is popular. You do not want to be a spoilsport….etc.etc….HOWEVER I keep wondering whether saying “See I told you..” is of any solace to anybody. In fact it sounds more hurtful. So what can one do? take away the car keys and put the couple in a taxi? Read the Riot Act? Offer to drive them home? Call their parents? Call their boss? Call the police?

I keep wondering. The easy thing for me to do is to just not attend such parties PRETENDING that nothing will happen. Worse is the great Indian Pride of ‘I always do this and have never been caught”. I would be happy if they are caught. It helps to know that they are alive, safe and in jail. Much better than getting up in the morning to a newspaper report about another statistic on drunk driving. Wake up kids, parents spend sleepless nights worrying about you. I guess once you become a parent you MIGHT become more careful…on the other hand you may not.

There were 5 peons/security guard / driver /clerk….who had NO ABILITY to save even Rs. 500 a month. There was a risk that they would end up with no money at retirement. One of them I met in 2008. The others in 2009. All of them started a Rs. 500 SIP – with an IMPLICIT guarantee from me saying “you are investing Rs. 6000*5 = Rs. 30,000, I will underwrite Rs. 33,000”. So in 2014 if it was say Rs. 30,000 I would have had to give them Rs. 3ooo each. So the max risk that I was running was about 3k*5, a risk that I could easily afford. One of them is doing a 3500 sip now, one of them needed Rs. 10k for an emergency at home (he was so apologetic, I said you understand that my guarantee is reduced, he said of course)….

NONE OF THEM came to me with a lesser figure than what I had promised…so here was a case of risk transfer which I could handle.All of them are now enthusiastically pulling auto drivers (one of them beside being a security guard was a part time auto driver), peons, security guards…with their own version of guarantees…hey at least one risk that I could actively participate and help.

I seriously do not know why a mutual fund cannot START a downside protection fund for such people…and sell at the bottom of the pyramid?





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  1. Recently I witnessed one more example of risking extreme by a person who is in senior management level. He spent 25 lacs for classical indian dance program given by his daugther as solo performance just for 2-3 hours on the performance day.

  2. Sir, in the case of the drunk driver, please do not hesitate to put him in a cab without worrying about niceties. Because an accident is not a low probability risk. 🙁

    And his actions will not only affect his life but other innocents too.

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