Financial products and the circle of wealth

Expense Account, Mint

One of the reasons that people find buying financial products tough is that there is no connect between the product and what it will do. A car gets you around the city. A washing machine, well, washes clothes. And a laptop allows me to write this piece.

But what will that mutual fund do for you? Or this insurance policy? Look at the financial products you have in your portfolio and answer this question: What is the role of each of these products in your life? Why did you buy it and what will it do for your financial life? I have been asking this question at my workshops for a while now and the overwhelming lack of an answer and the sheer confusion about financial products and their function in our lives promoted me to design a system that will attempt some answers.

Read more

Wealth managers for rural India, anyone?

Expense Account, Mint

I finally have to beg for food. Straight from the airport to the meeting, the late flight does away with lunch. With a tummy that threatens to growl out of control, I stop Nachiket Mor mid-word—not an easy task, I assure you—to ask if there is some food in the guest house. I’m in Chennai to look at what IFMR Trust—where Mor is chairman of the governing council—is doing that it gets customized financial services to the remotest Indian.

Mor pushes a Nutribar at me and a cup of coffee, and goes right back to his presentation. Soon we are deep into the innards of a software that matches individual profile to a set of financial products. Key in a simple personal accident policy to the financial life cycle of a village daily wager and see the rest of his life’s financial chart move from red to blue, from despair to hope.

Read more

Mindset or luck: what makes people rich?

Expense Account, Mint

A lottery. A rich ancestor. A winning stock. No, I don’t get any of these, so how do I get rich? If you’ve never had this thought then either you need the truth serum or you already work in the non-profit sector (wicked grin!).

The quest for gold is as old as we can remember, but do we know what makes it flow to some people and not to others?

In 2006, CNN Money tried to answer this timeless question by getting a reporter to ring doorbells in the richest areas of cities across the country and ask this question. Besides getting chased by dogs and almost getting flattened by sports utility vehicles, the reporter found three common characteristics in the people he met by knocking on their ebony doors.

Read more

Budget 2009 aims at achieving trident goals

Expense Account, Mint

There is a little bit of a child in all of us. We build expectations about an event and become so attached to these that they become the reality ahead of the event. The final event then has no option but to disappoint. After discounting the huge build-up to the Budget that the media and the market created and looking at the exercise as a vision statement for the next five years, I find that it works very well.

I like it because it is a goal-oriented Budget—not in the way that the market would have liked with specific number-driven targets but more as a vision statement.

Read more

Of exploding toasters and sugared ‘sandesh’

Expense Account, Mint

Who’s to blame if the toaster you bought last week explodes, even as you try to crisp that square of baked flour? Did you, as the customer, make a wrong choice buying a top branded product, or is the producer of the toaster to blame?

Elizabeth Warren, Harvard professor and chair of the Congressional Oversight Panel, the commission overseeing the disbursement of bailout funds, asked the same question of a financial product—Why is it possible to “refinance a home with a mortgage that has the same one-in-five chance of putting your family out on the street…, and the mortgage won’t even carry a disclosure of that fact”?

Read more