Are You a 'Lost Investor'?

Published on / By M. Pattabiraman Twitter: @pattufreefincal / 27 Comments

Published: October 20, 2014 at 9:39 am

Last Updated on September 6, 2019

When I posted a checklist for DIY investors: What it takes to do your own financial planning, Ashal Jauhari had the following to say. I would like to think he gave vent to his frustrations (about time too!):

“Dear Pattu Sir, I’m in DIY mode. Please tell me the BEST Term plan and the BEST Health Plan to purchase. Please suggest should I invest in HDFC Top 200 or not. How about keeping money in FDs under wife’s name? I want to crorepati in next 20Y………………..”

I don’t think, even after this open invitation from you (the above post) many ‘ll try to look into the deeper meaning of your post.

Thanks

Ashal

This is the sad reality of wannabe DIY investors. They either want the best solution or want ratification from a group of ‘experts’ for free.

Call it free lunch* and they are bound to get insulted.

  • free now. The ‘expert’ will not be held responsible for post-dated repercussions.

1) If a financial planner or IFA says DIY investing is time-consuming, it is quite understandable. You don’t expect barbers to admit that people can cut their own hair. It is sad to see that even neutrals in the financial services believe this nonsense.

Until a term life insurance, health insurance, goal planning and alignment of investments are in place, DIY investing will take no more than 2 hours a week.

Lost investors  are those who take longer because they are busy seeking tertiary opinions.

Once the basics are in place, there is literally nothing to be done unless you are a direct equity investor. For the mutual fund investor, an annual review in the initial stages (would take about an hour) and a quarterly review after several years is all that one needs.

If that is time consuming, then I am lost for words … parliamentary ones that is.

Note: these are exaggerated figures. I take much less time than this. I get extremely irritated when people tell me that I am able to manage my finances on my own because I have time. Wrong!

I am able to write a blog, because I manage to make the time. DIY investing takes so little time that I don’t event account for it. It is part of normal routine like eating and sleeping.

2) DIY investing requires neither intelligence nor analytical skills
All it requires is a maturity to focus on personal needs – one at a time.  Sure, DIY investors pick up a bit of jargon and a bit of math down the line. This is incidental and not a requirement.

Lost investors are those who over-analyze a problem 

Example: ‘Where do I invest my emergency fund?’!

3) DIY investors need not, rather should not, be personal finance enthusiasts.

This is utter nonsenses and often the root of all evil. All a DIY investor need to do is to take one step at a time. Identify one action item and work on it.

See more about this: Personal Finance Essential for Young Earners.

You don’t need to read books like inedible investor, rich step-mother, poor step-mother. You don’t need to read newspapers, TV, blogs, join forums etc. etc.

All this activity will only distract you from your goal: taking meaningful action

Lost investors are those who do not recognise the importance between knowledge and information.

4) I completely agree when someone from financial services says, most investors need hand-holding. These are the investors who get confused about product selection (among other things).

Thanks to the friendly neighbourhood insurance agent and the banks relationship manager, investors are wary of seeking professional help.
Therefore, unfortunately for the IFA or financial planner, the investor needs hand-holding to seek professional help – they don’t know which hand to hold and when!

I can definitely afford to say that ‘I don’t trust anyone with my money’ provided I can trust myself with my money.

Lost investors are those who neither trust themselves nor professionals to get the job done.

Do share if you found this useful
Use our Robo-advisory Excel Template for a start-to-finish financial plan! Now with a new demo video! ⇐ More than 700 investors and advisors use this!
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 2600 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! ⇐ More than 600 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   
My new book for kids: “Chinchu gets a superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both boy and girl version covers of Chinchu gets a superpower.
Most investor problems can be traced to a lack of informed decision making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, if we had to groom one ability in our children that is key not only to money management and investing but for any aspect of life, what would it be? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parent’s plan for it and teach him several key ideas of decision making and money management is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Did you know? We have more than 1000+ videos on YouTube to explore! Join our YouTube Community!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners .every month.
About the Author Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored three print books, You can be rich too with goal-based investing (CNBC TV18), Gamechanger, Chinchu Gets a Superpower! and seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations based on money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association, IIST Alumni Association. For speaking engagements, write to pattu [at] freefincal [dot] com
About freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions, seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)
Free android apps