Financial Planning

Discount Purchase v/s Actual Requirement

Discount Purchase V/s Actual Requirement

We all get tempted at offers when we see discounts at stores, malls or even online websites and end up purchasing goods, which we may actually don’t require or even use in the near future. Whereas, we most likely will shrug off a genuine seller, who would be pitching for a product (with or without discount), which will actually be beneficial & useful to us.

Why do we behave like this?

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Live in own house via “Home Loan” or Live in a “Rented” house? What should one look at?

rent-vs-buy

This is a scenario which one goes through while relocating to a new place, mainly to metro cities like Mumbai, Delhi & Bangalore. It’s been everyone’s dream to have their own property, but without any guidance in place, making us feel helpless.

One hand you have hordes of brokers who are ready to show you apartments, where you just have to give them an indication on your budget. On the other hand you have banks offering home loans based on your eligibility & make offers look very attractive.

But both these parties will never ever advice what is good & right, give you a cost benefit analysis, how one should look at buying a property or even renting? Broker makes cool 1% on the purchase transaction. Banks has a spread of 3% to 5% on your interest payment & makes handsome money by lending.

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Is advice only the domain of HNI?

financial-planning-HNI

Well for starters, my interaction with customers of all categories, i.e. retail to mass affluent or even budding HNI’s, not just in today’s market scenario, but since last 15 years of my corporate career, is that customers don’t mind paying for advice, as long as same delivers, “what is preached?”
Pop comes out question; why we don’t have players or offerings which takes care of same?
My understanding, it’s all about vision & execution from a leader or from a company, where we have very few risk takers or even innovators. We all follow a herd mentality, not just at a customer level, but even at a company & leader levels. In short, we have very few companies, who would want to try new products or create new demand. I am talking about companies like Apple, Facebook, even our own Tata motors with Nano… all have DNA built on innovation & customer centric working. Whereas most of the other companies, follow the herd mentality.

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New Year Resolution 2015

new-year-resolution-2015

With 2015 few days away, I thought of writing the most debated topic & a crucial benchmark, which always get backseat…. What should come first? Expenses or investments?
Let me start with you… which one will you prefer?

  • Income minus expenses equals investments
  • Or Income minus investments equals expenses

I will not be surprised, if you have selected the 1st option, as most of us including myself (till few years back though) follows the first model, i.e. we take out expenses from our monthly income first & balance is looked at investments later, on what is left.

I started thinking as to why most of us follow this model, even though back of the mind we know it’s wrong.I started comparing societies & countries on how they follow savings & investments. What comes out clearly in the culture & upbringing an individual goes through, where I can draw parallel to the most heated topic of 2014, “women empowerment”.

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