Personal Finance Blogs: 5 Amusing Observations

Most personal finance bloggers talk about their mission to spread financial literacy and yet ...

1. Tax-saving  Every year in Jan. and Feb. there is invariably an article on 'how to save tax this financial year' and none for the rest of the year. Tax-planning should be integrated with goal-planning. A prudent investor starts his/her planning in April based on the union budget. Very few blogs stress this. Why? Is it because no one will be interested in a  'how to save tax this financial year' in April?

2. LIC Polices Around the same time each year LIC introduces a new policy or two. Immediately all the bloggers jump on the review band wagon. Search for 'Jeevan S**am review' to see what I mean! In the movie 'As good as it gets' Jack Nicholson's character says, " I am drowning here and you are describing the water!" I get reminded of this line each time I see such a review. All most all bloggers will agree that one should not mix insurance and investments just as one should not drink and drive (most reviews would thankfully end with this line after reproducing most of the information found in the insurers website). What is bad is bad! So what is the point of review after review? The following article template should suffice.

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"Review of LIC Jeevan ****** "

Stay Away!

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3. "Best Mutual Funds to invest in 2***" Every year there is an article like this. Compare this with a similar one written by the blogger last year and the year before, most of the funds will be the same. Many bloggers who write such articles are finance professionals.  Eventually all most mutual fund investors will realize that  the 'best fund' does not exist and that fund ratings are a myth. An article on "How to choose a mutual fund?" re-published every six months will educate investors more than such a 'best of' list.  Don't expect a finance pro who is offering MF investment services to write such articles. You will not find a 'how to fish' manual in a fish market. Such articles cater to the free-lunch mentality: 'Suggest me good funds to invest in'.' Which is the best life/health insurance policy' etc. If you think such articles promote financial literacy, think again.

4. Tax-free bonds. At least the LIC policy reviews had a statutory warning at the very end of the article. Reviews on tax-free bonds are even worse. Most of these articles are a mere reproduction of brochure information. Somebody please tell these bloggers that a review of a financial product is an assessment of who should invest and when, besides the usual yadda yadda. This is completely missing in almost all such 'reviews'. Somebody please tell them because I tried and failed: one leading blogger thought I was attacking his integrity. Another gave me such an unprofessional (he was a pro) reply that I choose not to reproduce it here. What is worse is that a peddler of these bonds writes 'review' after 'review' in a leading blog. Don't expect financial literacy from those!

5. MF-Direct option. Did you notice that there are surprisingly few articles on this! Why? A leading blogger would have been the first to review such an option (and he knows, or should I say knew, how to write proper reviews)  before he started financial advisory services. The problem lies in linkups (with who or what? Take a guess!). Fact is most financial planners in India are fee-based planners. That is they offer MF services and get commissions  in addition to client fees. Do you expect them to tell their clients, "choose the direct option, you just pay me advisory fee". Expect them to say something like: "Yes the direct option will fetch more returns over the long term. However if you cannot choose MFs yourself then it is best that you stick to the regular option". Easy to guess what that means. Recently a well-known planner recently wrote an article in NetworkFP to stress exactly this to their clients! A major portion of financial planning is investment advisory. The other part is the math and the calculations which you can get free from here :).

The point is the financial gyan offered by a blog is limited by bloggers agenda (hidden or otherwise). Let us not confuse information with knowledge - Caveat emptor.

 

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18 thoughts on “Personal Finance Blogs: 5 Amusing Observations

  1. loancalcs

    Pattu Sir,
    Well said. There is a huge lack of quality information available to common man, when it comes to personal finance.
    It is a fact that many people search Google with queries like "Best Mutual Fund", "Review of LIC Policy......." and "Review of Tax Free Bonds...". Similarly lot of people search Google for options to Tax Saving in the month of Feb. and Mar. This might be forcing the financial bloggers to write articles on these topics. After all they are getting the traffic from Google through these search queries.
    The articles on topics like "MF-Direct Option" would be a great information for common person, but it may not get the desired traffic from Google. The reason being that people are actually not aware about it and so, may not be searching it.
    Most of the bloggers are actually more concerned about driving traffic to their blogs and not about actual quality information passed to the common man. So, they are dishing out, what actually the people are searching...and not what actually is best for them to know.
    My POW.

    Thanks,
    Silki

    Reply
  2. Anurag

    Hello Sir,

    What would you advise for the ppl who would like to make financial planning as their profession and to blog on financial topics....

    Reply
    1. pattu

      Hi Anurag,

      For individual financial advisory enterprise is the key ingredient. A blog can used to attract customers. Only thing is the writing has to be simple but the information extensive!

      Reply
  3. pawan

    Dear Ashal! Where are you and why u are not writing / review any article about investment yaar!
    Give regardes to ur family and friends.
    Thanks.
    Pawan

    Reply
  4. Ashal jauhari

    Dear Pawan, if youwere asking for my current residence, I'm out of India. Regarding writing/review, I'm already doing the same day in & day out in http://www.jagoinvestor.com/forum as well as in my facebook group - asanideasforwealth.

    You may catch me at any of the 2 locations. 🙂

    Reply
  5. Basavaraj Tonagatti

    Pattu-Wonderful observations. But thought to clear my points in detail. Because I too run financial blog http://www.basunivesh.com.
    1) Tax Saving-Yes it is correctly said that tax saving must start with beginning of FY. I wrote one post about the mistake which few tax savers do. Even I too of the opinion that our investment should match with our financial goals+tax saving in mind. Otherwise we may end up in trouble of cash flow.

    2) LIC Policies-I love to write about LIC products and news related to LIC. Reason is, whatever we may say and repeat the same line of "never mix insurance with investment", you notice from my product reviews or any other related posts of my blogs then you find lot of comments eager to invest in such products. So I think staying away from writing about LIC is a worst than writing about it and slowly bringing the awareness will actually makes sense. We all know that lot of mis-selling is from insurance agent and LIC being number one player in India, staying away from writing those related to LIC actually dangerous than the writing repeatedly and pressing for the financial awareness. I found few of the top bloggers shy away even to use the name of LIC, but in my view hammering repeatedly will actually bring results than staying away.

    3) Best mutual funds to invest-I completely agree with view you expressed. Even I staunchly appose few media reports about profit and loss whenever market raise or fall suddenly.

    4) Tax Free Bonds-Your comment on my blog about tax free bonds analysis is my response to this point.

    5) MF Direct-Well few of them wrote about this with pointing more on disadvantages of going directly. In my view it is premature to compare the performance and write on this unless we have data of atleast around 6 months to 1 yrs. So I totally stayed away from this point.

    Overall your observations are eye opener to all bloggers who they themself claim to be on top of the world without understand the need of the client or visitors.

    Reply
    1. pattu

      Hi Basavaraj,

      Thanks for your detailed comment. What I have pointed out constitute generic observations pertaining more to blogger attitude/behaviour. To each his own and if you are passionate about writing something then I am sure people will benefit from it. I see your point about LIC polices and fully agree with you reg. people focusing on disadvantages of investing directly in MFS.

      Thanks for writing.

      Reply

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