Laziness is costing you money, and it is benefiting the BFSI participants, so they are loving you for that. Let us say you have a reasonably high net-worth and you have Rs. 1 million in the savings bank account. And your father, mother, wife, son and daughter too have another 2.5 million Rs. in the savings bank account.

You are told about LIQUID FUNDS. You are explained the advantages, but you are resistant.

Why? Well you think you need liquidity. Well, well. You have never had to raise money in all the 50 years of your life. Your son never will. Your dad never had to. You have a great job, your wife is a senior GM in a bank, you have credit cards – so really cash is never going to be an issue. It is just that you like the default mode.

The BFSI honours you by giving laziness a nice name: Inertia. Not good enough? Status Quo Bias.

Wow. Sounds good right? AKA default mode. What we do with our smart phones, TV, etc. This is the convenient mode. We do not want to put in too much effort. So what if it will give us more income? or help us defer our taxes? or the difference in the income between savings account and MF return can fund your vacation? You would rather go on a cheaper vacation – again default settings. Just move your but. Go from savings bank to liquid fund. Go from fixed deposits to Income funds, equity funds, balanced funds…as per your level of risk tolerance, see the impact.

We see this status quo bias even when we choose modes of transport. Today at least in Mumbai it is cheaper to use an Ola or an Uber instead of using our own cars. Do we do it?

It is cheaper to rent a house instead of buying one. Do we do it?

No. This is of course a combination of 2 biases – one of course it is status quo bias and the other one is the Status bias or Social bias. Since everybody buys a house, we should buy a house….ditto for car.

This obviously comes from our times as a hunter gatherer. When you were in a big group – one of them spotted a brown animal moving towards you from the guy said run…so EVERYONE ran. Made sense. After all if it were a lion you were saved. If it was a deer, well you were sorry. From this must have been the origin of the phrase “better safe than sorry” – and our loss aversion bias.

We need to see our behavior and see how our bias is impacting us….and act accordingly.


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  1. lakshminarasimman

    nowadays it is very difficult to make a change because of number of irritating calls to customer care or talking to 100 so called relationship managers to cancel your cable or close 1 account

  2. Short and and to the point as always, Subra.

    I wondered if you had recently seen the television ad for the indian trading league, with Kapil Dev as brand ambassador.

    I think it really sends a wrong message and wondered if you could do a small write up on the same in your own inimitable style 🙂

  3. Well, w.r.t buying vs renting a house, I wonder if all decisions can be made based on money. I personally as a tenant, switched three houses in the course of three years not able to bear the wrath of owners – increasing rent, brokers unnecessarily interferring, sudden inspections by the owner etc. Sure, math says renting will turn out to be cheaper, but hell, I am at peace in my own house without any nonsense and am happily willing to pay the price for it. My point is that it is not always a status bias

  4. Agree with you w.r.t car – those days are gone where getting a taxi is such a difficult thing even in main cities…with ola and uber, it is more easy to get on to a taxi rather than taking the car from the basement. 🙂

  5. Can you suggest some equity funds to invest my money for retire.ent
    Its important for me to get this info please consider this I can save up to 40,000 RPS a month

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