So when I came back to India in late 2006, I had friends going, what the hell is wrong with you, you mean you have no investments? Not one? Not even now, when the stock market is booming and people are becoming mega-rich overnight?
My stock answer was, I don’t understand stocks and shares.
And the response invariably was, you don’t need to. Find a good advisor, tell him what you are looking to do and leave it to him to manage things for you. So I did all of that. Slept my way through several discussions, signed a lot of paper and a lot of checques, and began planning my rise to millionaire status, and my retirement, in quick succession.
And then the market tanked.
Two years and a bit later, it had still not reached the levels it was at when I invested in it. So, when I was planning to shift lock, stock and wife to Bangalore, I decided I might as well sell out and keep the money liquid, to fund house-renting and related expenses. Needless to say, the upshot of two years of investing is that I lost a few lakh of my hard-earned money.
And I still don’t understand how any of that happened.
Hopefully, enlightenment will come in carefully calibrated doses, going forward — today, Deepak Shenoy debuts his column on Yahoo.
It’s fascinating how the wizards of the financial world can take something simple and make it utterly confusing and intimidating. Take a simple loan: it used to be “I’ll give you money, you’ll pay me back more money”. Today there are processing fees, pre-closure charges and service taxes. Even the “more money”, traditionally known as “interest”, is now suitably prefixed with “flat-rate”, “monthly-reducing”, “floating rate”. They’ll even loan you money against deposits – the mouth-watering proposal of “Let me lend you your own money and charge you interest”. And finally, what you pay back is now an “Equated Monthly Installment”, a complicated mix of interest and principal, which has the magical effect that even after you make diligent payments for 10 years, you still owe the bank the same amount.
Exactly. That is precisely why I continue to live in a rented apartment, resisting all temptation to buy a swish place of my own.
There is a “huh” factor in everything financial. Shying away from it is ineffective, because our lives are intertwined with money more than ever before. We might have earlier trusted the industry to take care of our money; it no longer seems that’s a given. That just means we have to figure things for ourselves. Like a jigsaw puzzle, once you get the key pieces in place, it’s a lot more understandable.
Ah, okay. So I’ll wait for those missing pieces to surface in Deepak’s subsequent columns. And start investing again. And dream of being a millionaire in my own swish apartment.
Or maybe not.