Busting the Myth Series

Life insurance is one of the highly misunderstood products in the Indian financial industry. While some people buy insurance for all the wrong reasons, some do not believe in the concept at all considering it a waste of money. It is like saying I do not believe in the concept of gravity! Let us bust some bizarre myths & some common misconceptions about life insurance. Do not require life insurance as I am going to live longer:This may appear strange but there are few instances where people think they do not require life insurance because they have a very healthy […]

Although our current peak income tax rates are at a very reasonable 30% level, it would surprise a few to know that in the 70s they were at a ridiculous 90% plus. I think our attitude to income tax is a legacy of those times. The majority of us would invest our money anywhere without understanding the merits of investment, if we were told that the investment would save tax. A case in point. A few years back there was a tax saving option under a sec called 80ccc. This could be availed only by investing in Pension schemes. A […]

This is a sample of an oft repeated conversation at any Financial Advisors office: Client: I am planning to buy a house. Advisor: Another one? Client: Yes. Advisor: Why? Client: For “investment”. Advisor: How will you fund it? Client: That’s why I have come. I want to sell some stocks and Mutual Funds I am holding. I want your advice on which ones to sell. For the balance amount I will take a loan. Advisor: (wondering to himself) Aren’t Stocks and Mutual Funds investments” The problem lies in the client assumption that Real Estate is the only asset, which will […]

Busting the Myth Series Myth no. 1 – Gold is the jewel among my investments Hindus believe in the sade teen (3 & 1/2) muhurat basically 4 days when it is considered especially auspicious to buy gold. Then we have Diwali, marriages and a host of other festivals, which keep the jewelers busy. So Kharidne walon ko kharidne ka bahana chahiye. It may be either in the form of coins or rings or in the form of jewelry. Does this buying really constitute investment? When we think of an investment portfolio we generally think in terms of buying at an […]