Anecdote: The day the microphone voiced its protest!

Assume that I am speaking about ‘how to plan for retirement’ in a seminar (what were the organizers thinking!  Asking a nut job like me to talk!)

Let us say that more than half my audience consists of people (duh!) in their early 30s to mid 50s.

I go on and on about the factors one needs to worry about while planning for retirement and then suddenly say,

All that I have said is relevant only if your children will not take care of you’.

 ‘If your children are loving and do take of all your expenses in retirement, then none of what I said about retirement planning is relevant to you’.

If you were in the audience, how would you react?

The anecdote concerns a seminar on retirement by Mr. Debashis Basu, founder, editor and publisher of Moneylife magazine.

It is a good and informative seminar. One that everyone should see. No doubt about that.

Unfortunately, his microphone did not like what he said or rather what he was going to say, 20 minutes into the talk!

Watch: Retirement savings seminar: Be prepared for the unknowns

The video is about 54 minutes long. So if you like, you could go straight to the part when the microphone voiced its protest

I agree with the microphone.  Do you?

Moneylife and Freefincal

Regular readers would readily agree that I am not a big fan of the way Moneylife magazine reports news.  I have regularly referenced their articles in poor light.

1. Well, not all of my Moneylife-mentions are in poor light.  In the hope that you will not called me biased, let me start with a positive mention.

We must salute the courage of Ms. Sucheta Dalal who exposed the Harshad Mehta Scam to the world.  Her work has had an extraordinary impact on Indian stock markets. You see this for yourself here:

Understanding the Nature of Stock Market Returns

Here is an article that refers to Mr. Debashis Basu's book, Face ValueCreation and Destruction of Shareholder Value in India

 Myth Buster

The rest of the mentions, I am afraid are not as endearing.

 

2. Moneylife first caught my attention when I read their article on surrendering insurance policies. So I wrote this (hopefully more balanced) article to accompany the

Insurance Policy Surrender Value & Paid-up Value Calculator

 

3. While working on mutual fund investment mode (SIP, VIP, lumpsum etc.) comparison calculator, I noticed they had written a related article and claimed that theirs was the ‘first comprehensive and unbiased research on SIPs’. They claimed that SIPs are not as successful as they are made out to be, but failed to take into account investment durations greater than 10 years.

I hope the conclusions accompanying this Comprehensive Mutual Fund Investment Mode Comparator are a bit more balanced (that word again!).

 

4. When bonds crashed in July, Moneylife had a field day claiming how debt funds are not suitable for the average investors, completely (or conveniently) forgetting that every portfolio (esp. those for long-term goals) would benefit (in more ways than one) with debt funds in them.

So in response I asked: Is This Financial Literacy?

This post divided readers. Many agreed with me, and a few strongly disagreed! I was told to do research to counter Moneylife’s conclusions.

Well, what stinks, stinks. I see no need to research it.

 

5. Their article titled, Five Reasons not to Buy Debt Funds was amusingly based on  

the ‘average returns of debt schemes that have a corpus above Rs100 crore’

Amusing because, it is like making conclusions after averaging apples and potatoes.

More details can be found here: Debt Mutual Funds vs. Fixed Deposits: Volatility Simulator

Hopefully investors and planners could use this simulator make more sensible conclusions with regard to the safety of debt mutual funds.

 !!!!!

 In case if you are wondering what the fuss is all about, please consider this:

I am pushing 40. My son is pushing 4! I love my son and he loves me.   Therefore, I will assume that he would love me and take care of me when I retire.  So I will forget about my retirement plan, transfer all my assets to him, assume that I have parented a good son, and place my trust on the traditional values so unique to India.

How wise would that be?

 If you are a Moneylife fan, feel free to criticise me.  I promise to publish your comment unedited!

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26 thoughts on “Anecdote: The day the microphone voiced its protest!

  1. Justgrowmymoney

    Many an individual dream has been shattered in believing children would take care in old age. Even if they do what is the guarantee children will make enough money or have a lucrative career. If it is only about taking care of basic needs then food, clothing and medicines alone will be people's expenses on retirement (shelter is assumed to be acquired in working life) which an individual can still easily plan for in working years!

    Reply
    1. pattu

      Hi, Yes are very right. The 'individual dream' sometimes refer to children also! Yes it quite stupid to even think children will/should take care of us ... even if they want too!

      Reply
  2. Justgrowmymoney

    Many an individual dream has been shattered in believing children would take care in old age. Even if they do what is the guarantee children will make enough money or have a lucrative career. If it is only about taking care of basic needs then food, clothing and medicines alone will be people's expenses on retirement (shelter is assumed to be acquired in working life) which an individual can still easily plan for in working years!

    Reply
    1. pattu

      Hi, Yes are very right. The 'individual dream' sometimes refer to children also! Yes it quite stupid to even think children will/should take care of us ... even if they want too!

      Reply
  3. ashalanshu

    Dear Pattu, apart from the basic financial support, parents do need emotional support also in their sunset years. The financial part can be taken care off by each individual for her/himself (creating adequate retirement corpus) but emotional part can not be replaced by anyone.

    Personally I'm comfortable to have my financial freedom in my sunset years. I do not want to be dependent on someone. be it my children or some one else.

    Thanks

    Ashal

    Reply
    1. pattu

      Hi Ashal, Yes you are absolutely right. In India emotions have many layers. Many parents believe that their children should take care of them (physically and emotionally if not monetarily) BECAUSE they did it to their parents and BECAUSE they have showered love on their children. This is nonsense.

      The trouble today is, even if children want to take care of their parents, they work in another city or country. It is simply impractical to just quit and come.

      Reply
  4. ashalanshu

    Dear Pattu, apart from the basic financial support, parents do need emotional support also in their sunset years. The financial part can be taken care off by each individual for her/himself (creating adequate retirement corpus) but emotional part can not be replaced by anyone.

    Personally I'm comfortable to have my financial freedom in my sunset years. I do not want to be dependent on someone. be it my children or some one else.

    Thanks

    Ashal

    Reply
    1. pattu

      Hi Ashal, Yes you are absolutely right. In India emotions have many layers. Many parents believe that their children should take care of them (physically and emotionally if not monetarily) BECAUSE they did it to their parents and BECAUSE they have showered love on their children. This is nonsense.

      The trouble today is, even if children want to take care of their parents, they work in another city or country. It is simply impractical to just quit and come.

      Reply
  5. bharat shah

    'How wise would that be?'
    i am asking if your wealth/assets would be transferred after death of you and your spouse, whether sky would fall.

    Reply
  6. bharat shah

    'How wise would that be?'
    i am asking if your wealth/assets would be transferred after death of you and your spouse, whether sky would fall.

    Reply
  7. pattu

    Not clear about what you mean to say. I have absolutely no problem if my child gets my wealth after me and my spouse die! In fact I will try and make sure he does.

    Reply
  8. pattu

    Not clear about what you mean to say. I have absolutely no problem if my child gets my wealth after me and my spouse die! In fact I will try and make sure he does.

    Reply
  9. bharat shah

    i just endorsed your views! even if you have lot of wealth, till you and your wife live, there should not be parting. same way , not depending financially on kids in retirement days. there is no question whether they love you or not, but who knows their financial condition at that time.

    Reply
  10. bharat shah

    i just endorsed your views! even if you have lot of wealth, till you and your wife live, there should not be parting. same way , not depending financially on kids in retirement days. there is no question whether they love you or not, but who knows their financial condition at that time.

    Reply
  11. prakash

    We have enough analysis through excel on corpus, withdrawal rate etc.How do we handle the emotional aspect?As far as children are concerned,let us assume the worst case scenario and get ready for it.Why not acquire a space in giving back the society?I find very very few planners have delved into it.Can u come out with ideas?

    Reply
    1. pattu

      Sir, Thank you for your response. Could you be a little more specific wrt emotional aspects? Trouble is, due to my training everything about personal finance is grounded in mathematics, including the behavioural, emotional and commonsensical aspects! So I would like things spelt out a little more.

      I will more than honoured if could consider writing on these aspects yourself as a guest post. Even if you expand your comment it would make a considerable difference.

      Reply
  12. prakash

    We have enough analysis through excel on corpus, withdrawal rate etc.How do we handle the emotional aspect?As far as children are concerned,let us assume the worst case scenario and get ready for it.Why not acquire a space in giving back the society?I find very very few planners have delved into it.Can u come out with ideas?

    Reply
    1. pattu

      Sir, Thank you for your response. Could you be a little more specific wrt emotional aspects? Trouble is, due to my training everything about personal finance is grounded in mathematics, including the behavioural, emotional and commonsensical aspects! So I would like things spelt out a little more.

      I will more than honoured if could consider writing on these aspects yourself as a guest post. Even if you expand your comment it would make a considerable difference.

      Reply
  13. Financial News (@TopFinNews)

    Making a mountain out of a molehill?

    It was probably just a tongue-in-cheek remark going by the quoted text.. and the title of the seminar- "Be prepared for the unknowns"

    Many would like to be financially independent in their retirement, however, life's circumstances can make you bitter or better,..

    But why would anyone transfer all their assets to their children? Not planning for retirement is one thing and transferring all your assets is another... I doubt that was mentioned in the seminar.. You give a totally different impression to what was said..

    It's clearly evident that you are not a fan of Moneylife... Hence, the reason to poke holes in what they say...

    Reply
    1. pattu

      Was expecting this comment from you much earlier!
      The seminar would have been an excellent one, had he not made that stupid remark.
      If you watch the video (preferably the whole one), you might understand what I meant. I stand by what I wrote. Of course I am no fan of Moneylife. I have better things to do than to be fans of a bunch of scandalmongers.

      Yes I took great delight in poking holes at them (past tense as I have realised that they are not worth my time). I would like to think all of my pokes are reasonable ones.

      I know you disagree. I have given your earlier comments enough thought, but do not find them convincing enough to change my stand.

      They have all the means to make a huge difference in the financial literacy space but are causing more harm than good because of their attitude. Journalistic training to blame?

      Reply
  14. Financial News (@TopFinNews)

    Making a mountain out of a molehill?

    It was probably just a tongue-in-cheek remark going by the quoted text.. and the title of the seminar- "Be prepared for the unknowns"

    Many would like to be financially independent in their retirement, however, life's circumstances can make you bitter or better,..

    But why would anyone transfer all their assets to their children? Not planning for retirement is one thing and transferring all your assets is another... I doubt that was mentioned in the seminar.. You give a totally different impression to what was said..

    It's clearly evident that you are not a fan of Moneylife... Hence, the reason to poke holes in what they say...

    Reply
    1. pattu

      Was expecting this comment from you much earlier!
      The seminar would have been an excellent one, had he not made that stupid remark.
      If you watch the video (preferably the whole one), you might understand what I meant. I stand by what I wrote. Of course I am no fan of Moneylife. I have better things to do than to be fans of a bunch of scandalmongers.

      Yes I took great delight in poking holes at them (past tense as I have realised that they are not worth my time). I would like to think all of my pokes are reasonable ones.

      I know you disagree. I have given your earlier comments enough thought, but do not find them convincing enough to change my stand.

      They have all the means to make a huge difference in the financial literacy space but are causing more harm than good because of their attitude. Journalistic training to blame?

      Reply

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