by Mr. P.V.
Subramanyam CA & FINANCIAL TRAINER
It is very powerful
and you should use it ruthlessly to protect your finances.
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/her child's education and 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 not 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.
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| P.V. Subramanyam CA & FINANCIAL TRAINER. |
Of course, you also
pick up a few credit cards in the bargain. Trust me, all this is a sureshot
recipe for financial worries. However, one word can safeguard your finances
against such perils, protect your money and make you rich. 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 advisers
who are trying to sell you something or the other.
`No' is a powerful
word. Use it ruthlessly.
Say `no' to the
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.
Do not 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 nofrills medical
insurance for your family.
Pick one credit card
as well--not as an ATM for easy money, but as a convenience to replace cash.
About the author
Mr. P. V.
Subramanyam, a Chartered Accountant by qualification and a financial trainer by
profession.
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