As a kid I remember getting irritated whenever the old people would get together. Now they’ll start talking about how expensive everything is, I used to mutter. Back in those days, kids couldn’t utter aloud all the insidious little comments that were swimming around in their heads when adults were around. “Arrey, on a salary of twenty rupees you could run the house and then have something left over? That shawl mamijee wears, no? That cost a full five rupees. Now toh, you can’t buy it for five thousand only.” Everybody shakes their heads. “Tch tch. Zamana hi kharab hai (these are bad times).” As a kid I remember buying sweets for 5 paise and bus tickets cost 25 paise (and I’m on my way to irritating the life out of kids in the family). My daughter has never seen coins below one rupee. Her daughter will probably say the same for fifty bucks. The fall in purchasing power is the reason that we worry about meeting our expenses when we retire.
No, this is not about what this column expects the new government to do for financial sector reform. It is assuming that these are going to be fast-tracked, and along with new products and services, consumers of financial products will bear the burden of too much choice. In his book The Paradox Of Choice, sociology professor Barry Schwartz links excessive choice to consumer misery. He shows how too many similar-looking options actually cause consumers to freeze and prefer status quo to taking any proactive decision. While in the US the number of mutual fund schemes outnumber listed stocks, India is getting there with at least 1,500 funds and investment-linked insurance plans. This number is set to balloon in the next five years as more firms line up at the Indian doorway to get a piece of the vast Indian financial products market.
I’ve learnt to treat questions that include soliciting stock tips and my prediction for the stock market as feeble male attempts to include me in their conversations at social dos. I’d actually much rather talk about dogs, kids and trade hummus recipes. Anyhow, the one question I do take seriously is one which goes like this: I have been investing, but how do I know I am doing enough? How much should I be saving, is there a magic number that I need to hit?