Freefincal Q & A Plus Symptoms of Excess Financial Literacy Syndrome

Published: July 2, 2017 at 2:11 pm

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Each week I try and answer generic questions from readers. Here is this week’s edition along with a list of symptoms of Excess Financial Literacy Syndrome – a worrying condition caused by delayed money management and industry propaganda.

Ramamurthy: Dividends distributed by companies are subject to a Dividend Distribution Tax of around 30%.What about the dividends declared by Fund House on dividends declared by them under Dividend option? Is this also subject to the Dividend Distribution Tax? If so at what rate?

Pattu:  Sir, the dividend distributed by a mutual fund is taxable only if it is not an equity fund. That is, if it predominantly receives interest income then, 28.84%  of the dividend will be deducted as tax at source. This is regardless of the tax slab of the investor and cannot be refunded if the tax payer is from 0%,  5% or 20% slabs. This is why one should be careful before choosing dividend option of debt funds, especially the so-called monthly income plans.

Shrikant: Dear Pattu, I asked this question on various forums/sites/experts but there is no positive reply. My question: Where can I get consolidated data on Co;s issuing frequently bonus shares OR Top 25-50 co;s issuing bonus shares? i know this is very tricky query. I tried & searched bse/nse sites, but could not find useful data. Hope out of your busy schedule, you will be able to reply Thanks shrikant

Pattu: I asked Indraneal Balasubramaniam (who wrote: How to Build a Stock Screener) and he suggested that you will have to analyse the data listed here for your requirement.

Krishna: Hello sir, I’m a follower of your blog and I can say, you’ve helped me and many others to set their priorities question is ,if we update our name in PAN database, how to get the updated name reflected in Mutual Fund account statements or its not needed to update it as PAN number is same

Pattu: You will have to update KYC details. You can download this form from AMCs or CVLIndia.

Raj: Hi Sir, Your website and excel trackers helped me a lot in my investment journey in India which started a year ago. Can you please write an article on investment options available for NRI in US or Canada who wishes to come back to India after a few years?

Pattu:  I would suggest keeping it simple. As long as you are in the US, avoid Indian investments (with the exception of stocks perhaps). And once you come back for good, you can invest as usual. There many articles online that discuss what you need to do with your 401Ks once you become an RI.

Mohit: Just a feedback. Somehow SBI magnum midcap is not being picked up in Screener 1. (all funds with more 10% return). In screen 3 I can see that this fund has provided more 10% return every year. Thanks & Regards Mohit

Pattu: Mohit is referring to this post: Two Simple Ways To Screen For Mutual Funds. The sheet lists SBI Midcap as a small cap fund. This could either be an error on my part or Value Research classified it that way a few months back and now it has changed character. My vote is for the latter. You can change the category and screen again.

Symptoms of Excess Financial Literacy Syndrome

Most 30+ and 40+ earners who try and manage their own money have a regret – they did not start early, made mistakes early – eg. buy products just for saving tax. Due to this once bitten, thrice shy experience and thanks to an efficient industry propaganda in association with the media, there is an increase of what I would like to call excess financial literacy syndrome.

Symptoms include:

1: Equating financial literacy with equity investing and volatility aversion with ignorance. Assuming that anyone who mixes insurance and investing is maxing a mistake.  Read more: Are fixed income investors financially illiterate? This was later turned into an ETWealth Article  Why investing is not only about equity

2: Trying to manage the retirement corpus of parents assuming that they can “do better”. Read more: Should we be managing our parent’s retirement corpus?

3: Wanting “more useful” topics financial literacy to be taught in schools in colleges. Read more: Delay Gratification: the key to financial literacy

4: trying to maximize returns from emergency funds

5: Mistaking “to be informed” with information.


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Prevalence: Fairly common
Prognosis: Typically resolves on its own in many. If unresolved or left untreated can lead to confusion, indecision, loss of time, money, health and mental peace.
Treatment: Alternate hobby, Information diet.


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About the Author M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the author and owner of  He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management.  He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis. He conducts free money management sessions for corporates  and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
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