Investing made very very simple...

In today’s complex and competitive financial world, a common man struggles to identify the right investment tool to achieve their personal and financial goals. Plethora of deductions like income tax, health insurances, EPF, multiple advice from different people of different backgrounds make it even more confusing for one to even get in to this game. This eventually makes Fixed Deposits (FD) the most favorable destination for investors so that they do not have to deal with the commission-hungry insurance agents, useless bank agents and adamant tax agents.

Frequent news about inflation eating up the profits of FDs leaves an investor thinking what should be done with the existing money as well as the future savings income. Few investors go back to the “different people of different backgrounds” to get new ideas about how should they react and most of them wait and watch their way to economic nosedive. The commission-hungry insurance agents show new unit linked plan and the investor buys in looking at the carrots like life cover, “assured’ income or return, amazing tax saving opportunity, etc. The commission-hungry mutual fund agent does the same and wins their share of commission. Sooner or later, the common man’s all savings income goes in to the hands of equity market (commonly known as share market). The “agent” takes common man to a nasty roller coaster ride where nobody (actually everybody in this world) is a driver!

I have seen many people struggling to fulfill their personal goals due to this rat race. Most of them complaining about one of the agent, bank, market or the government!

If you buy something that you don't need, soon you will have to sell things that you need! -- Mr. Warren BUffet

I generally start discussion with such clients with one simple question -- Do we take only one medicine for all the medical problems?

You get the idea?

The investment world becomes simpler as soon as you understand your needs (like your sickness) and the investment vehicle (like medicine). Most of the times, you know what medicine is going to help you if you have cold and fever.

In the investment world as well, one should first understand personal needs. Here are most common needs to start with.

·         Food and day-to-day needs

·         Home

·         Child’s education

·         Security

·         Well-being of the family in case the income-generating member is no more.

·         Health management

·         Post retirement income

As all the needs are very specific in nature, they are surely going to need that specific investment highly specialized for the same. I call this concept “need-specific investment”. If one start clubbing the investments for more than one need, he/she has higher probability of paying for something that is not going to be useful. How is the deal of free comb with a bath-soap for a bald guy?

I will start expanding needs and need specific investment tools in my next week’s blog. So, keep an eye on my future blogs…

In the meantime, please let me know your needs and the investment tools that you may have used for the same. Also, let me know if you are struggling to find an investment tool for your specific need. I will try my best to address them.