Long ago a relative of mine came up to me and asked ‘how can this company pay 22% p.a. interest’? and I burst out laughing saying “only fools and idiots will invest in these schemes”.
He turned red. He had invested in this scheme. Not much by today’s standards, but in 1982, it was a big fortune, and a big percentage of his net worth. Of course he lost the money. His children supported him.
His wife was livid with him for not asking me BEFORE investing.
I find that many classmates, friends, relatives are loath asking for advice BEFORE investing. They are secretive with the people they know and trust some unknown fund manager or relationship manager.
One interesting case is a friend and his father. They will not even open a new savings bank account unless they show it to me. Only once did they keep a Rs. 5L bank fd – to get a locker – when they did not ask me. Even here the old man played it smart by refusing a unit linked plan with a regular premium of Rs. 4L. He offered 5L ka FD. In retrospect it looks good because he has another 3 years to go and he is getting 11.75% as interest.
I am still seeing people lose money in bank and corporate fixed deposits. BANK??? AND how can somebody lose money in a bank fixed deposit? Simply because these people carry bank VISITING cards, but invest in some unknown nbfc! Never happened to you? Lucky you! I know one single woman with a slightly challenged son who was made to invest in an under construction plot, a PMS, and ULIP. Her Rs. 7 crores was reduced to Rs. 1.5 crores in about 5 years time. SHE HAD ACCESS TO MY ADVICE and choose to trust the RM of a bank…and then the RM of an NBFC. Remember the friend and his father from the previous para? they are this woman’s neighbor, yes, in Mumbai.
I find that many friends and relatives will not want me to know how much they invest – what if I told all the others? What if I felt jealous (maybe?)..or whatever reasons. Suddenly one day in one wedding somebody will ask ‘how is this’..and nowadays I do not say “only Mad dogs and Idiots invest in them”. As I grew older I realized that he/she must have invested in that.
Like 4 friends, 2 relatives, 2 colleagues of friends who asked me “How can an exchange default”? and I asked “why would a company call itself ‘National Spot Exchange’ – just to confuse you about ‘Nse’ and what the @#$%^&** were the regulators doing giving them permission? Well, I do not have an answer, so I will not ask such an embarrassing…..
Source:
DharniGroup.com