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Easy Money

Onboard a streetcar named desire, people with some extra money want a quick road to riches
By Narayan Krishnamurthy | February 18, 2017

The mindset of some people who are getting their share or more money seems to be living with the easy come, easy go mindset. So, instead of money that would have been better invested or even saved goes into buying that flashy new car or the new electronic gizmo, even as they very much have good cars and Smartphones. I am not against occasional indulgence, it is not sinful, but there’s nothing to be lost and much to be gained in investing small sums of money, even if they seem very meaningless.

Experts reckon, any surplus money should be ideally invested for future financial needs. The lesson I have learnt over the years: on the road to wealth, there is no more sustainable method than disciplined investing over a long period. It’s perhaps not quite as dramatic as winning the state lottery, but it’s far more secure. Remember, it’s okay to be on board that streetcar named desire, so long as you stick to a stately pace. I could see the disappointment in a room full of teachers I was speaking to about the need to take control of their finances, with some wakeup call on them not having done enough, when they could have. 

Get rich theory

Although everyone is riding the road to riches, the pace varies, which is why many a times people look at what others are doing and forget that, it may just not be the same for them. So, I heard a few murmur about the fabulous scheme they had heard of, which was going to be their get rich key. But, as soon as I mentioned SocialTrade, the face went one of cheer to one of disbelief. I could not fathom how these learned people can make such a cardinal error in putting their hard earned money into the hands of cheat funds.

For a long time, people have been duped by signing up for one scam investment or the other, which are way outside the purview of any financial regulator – RBI, IRDAI, SEBI or the PFRDA. The lure of mindboggling returns always get them to blindly commit, when they would be asking 100 different questions at the time of buying a five thousand rupee cookware, not a single question is asked from those promising them 1000 per cent returns at times. I recollect a friend’s father who put in about Rs 13,000 about 15 years ago in a plantation scheme which promised him Rs 20 lakh at the end of a decade. He had to be extremely gullible or cerebrally challenged to think that anyone could deliver such returns.

Then there are go buy the guidance of friends, who on probing are recent acquaintances at best. The lure – if my friend could get rich quick, so can I. I would suggest everyone look up the SEBI investor education video and seek out Mr. Kumar to understand how he made his riches. There isalso the possibility that yourfriend was lucky or very good at stock market investing to make a killing.Learn from his experience or at least,don’t chase his model, as it may not work out for you or you will join the growing tribe of people who’ve lost their money by investing in what they did not understand. 

 

Probe deeply

The beauty of small savings and investing in small sums is that it makes investing affordable. You put little money aside into savings, which could also be put into investments. Then, get into identifying financial instruments which would suit your risk appetite and then deploy the funds into it. So, before getting into stock markets, ask yourself if you will be fine if your investment lost 70 per value within a week. If you can stomach such a wild swing, enter the equity markets, or best stay away from it. 

In my experience, every such get-rich quick dream reflects the triumph of hope over experience. Believe me, when I say that there’s no fast elevator to fortune. True, your neighbour may have made a pile on Infosys in double-quick time, but only because he bought in at the right time and at the right price. It’s futile to try and do the same when the scrip has peaked or the market is overheated. And if you’re one of those persons who invested a your savings on the advice of Mr. Kumar whom nobody really knows, you should accept that money does not grow on trees. 

 

nk@outlookindia.com

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