We just don’t get the big picture. The more I talk to people about money, the clearer it is that we compartmentalize our money lives so tightly that we totally fail to see the big picture. Every conversation with whoever I meet now swings around to money. People share their stories, their worries and their fears. They share the power equation within home that money causes. While housewives have always shared stories of the skewed power money equation, working women have equally scary stories. That’s because those who earn more than men have a triple burden—to manage work, home and the male ego. But most often the usual story is the fuzziness about how we think about money and how we simply are not able to see the whole money story.
Why mutual funds? That’s the question personal finance expert Monika Halan, consulting editor of Mint and author of ‘Let’s Talk Money’, answers in this episode of ‘Money with Monika’.Mutual fund investments do come with risks, she says, but it’s a gamble worth making for a diverse, and more lucrative, investment portfolio—be it for a seasoned investor or a beginner taking her first steps in financial planning. See mutual funds as a buffet, Monika Halan says, and invest as per your taste.For more videos from Money With Monika series, click here >>
This is the new inflation target for the Reserve Bank of India (RBI), with a floor of 2% and a ceiling of 6%. Remember that one of the reasons for inflation, or a rise in the prices, is that governments borrow too much to fund expenses.
We fined Wells Fargo a historic $100 million for the illegal practice of secretly opening hundreds of thousands of unauthorised deposit and credit card accounts.”
Log in to the home page of the US watchdog Consumer Financial Protection Bureau (CFPB)http://www.consumerfinance.gov/ , a government agency set up to ensure that consumers of financial products are treated fairly by banks and other lenders, and you see this as the top featured story.
What’s the Wells Fargo story and why is it relevant to us? Wells Fargo is one of the biggest banks in the US, and is known to be an aggressive cross-seller of financial products. Cross-selling is something we’re all familiar with—you have a savings account with a bank and it pushes other products at you: loans, funds, insurance, cards.
Quick, do the math. If it takes you two hours to read one policy brochure and there are 65 brochures, how much time will you spend reading? 130 hours, or a 16 eight-hour days. What, you have a day job and need to work? Skip your TV and workout and spend two hours a day reading them and you need 65 days. By which time there will be another few products in the market and your attempt to be a literate consumer who looks at disclosure statements and reads the policy documents before buying a medical insurance plan will remain undone. If you had other products to buy, such as life insurance, investment plans, home loans, you should pretty much leave everything else and just reach for the brochures.
We don’t do tips. We don’t do ‘best bets’. We don’t tell you ‘winning’ stocks or how to multiply your money overnight. In short, we don’t do bulls and bears or what comes out of them. We don’t insult your intellect by giving you the winning tip this year. Look at the data in the chart below (Each year has a new winner); there is no consistent winner in different asset classes year on year. If gold outperformed equity, debt and cash in 2011, it was the turn of equity to be the winner in 2014. Chasing last year’s winner is a strategy that we don’t follow. Predicting next year’s ‘winner’ is a job we leave to the speculators and traders in the market to worry about.