Thursday, October 06, 2005

Mutual funds for a dummy

I think my friend was right when he called me a fool... in fact he called me a damn fool. He was giving me a lecture on the need for investing my hard-earned money.

He patiently went on explaining all the possible options. Stocks, Mutual Funds, Pension Plans, Insurance Policies...

Pension and Insurance stuff were discarded out right as even he admitted my argument that an investment for say 20 years is something not worth trying at all. He wrote on a scratch pad the amount I will have to pay per year, the quarter term and mid term returns and the final amount that I would get. For our sample 1 lakh rupee invested, we got a profit of around 1.5 times that, but for a period of 20 years. Since my facial expressions suggested that I was not too interested in earning a profit of say 10000 Rs per year, that too after taking all the pain of finding the money to do all this investment stuff.

Then he went straight to Mutual Funds. He asked me if I knew what Mutual Funds were.... Cant really blame him. After seeing my reactions to the pension plans, he should have started asking whether I was familiar with a concept called ‘banking’ where I can put my money for safekeeping. He went on explaining all the advantages. He went from site to site. Terms like risk, dividend, profit, shares etc floated in the air.

At last he started doing the computation. “Ok...Suppose you invest 10000 or say 5000 per month...wait wait.. tell me how much you save every month..”

I said “like... saving means... at the end of the month, my account balance comes to around 1000 Rs. :_)

“Whaaaaat” was his reaction.

After a slight pause “Do you send money home?”


“Do you invest anywhere else?”


“Then what do you do???”

“I mean... I... like... party on weekends....trips... buy some cloths.... food....dunno how... at the end of the month, it comes to that magical figure of 999”

He took 3 minutes before he offered this “You are gone man, you are completely gone”. Then he continued, “Ok. So lets say you save 1000 Rs per month.”

I interrupted “Wait..wait... its not 1000 Rs every month. Its like rotational. Next month, this 1000 gets used up and a 1000 from next month gets saved”

He didn’t respond for the next 2 minutes. Then came this arrow.

“How many affairs do you have?”

“None sir... you know... a steady relationship is a pain in the unmentionable parts. So... nice to have more girl friends and no affairs at all”

“You... you are really mad... you are foolish. I know you have opted for a lesser paying company because you thought it would catapult you into I don’t-know-what. And you are telling me that you don’t have a steady girl friend. You don’t do any investing. All you have is Rs 1000 at the end of every month. You are a fool. A damn fool”

“Thank you sir :_D


CCC said...

Positioning of the blog is clear. But the target market??

Geo said...

with brothers like you, who need enemies... :_(

silverine said...

Metinks you should go in for Mutual Funds considering you find steady girlfriends a pain.

Mutual Funds are like having short term affairs with several girl friends who you find attractive according to their current assets! LOL

p.s: Now my fee details will be sent by mail for this brilliant piece of 'investment advice" ;)


AF said...

Think about it and make a ggod decision about how u wouls like to save ur money...and when u think u have saved enufff....just gimme ur bank account number.....hahaha!

>|' ; '| said...

are savings that important as ur advisor says...

kickassso said...

you find attractive according to their current assets!
nahh! they have advisors do do that part!
if only stocks were girlfriends and there were open positions for advisers!

hope and love said...

hey..!! u r too young to think abt such boring issues..!!
u r smart.. having lots of GFs is much better than having a steady lover..
thats part of ur charm..!!

Geo said...

@silverine: :_D But the sad part is you don’t have a say in where your money goes, as it’s the Investment Director of the Fund who decides fund allocation. I prefer to have a more ‘active’ role, u know :_D

@AF: I can give u my account number even now. You can deposit money from any ICICI branch :_)

@-Poison-: I too am/used to be as innocent as you are. But times are changing... ;_(

@kickassso: you got my point even before I stated it. I know some guys who treat stocks as their girl friends... who literally burn money on them...

@Doc: Thanks doc... your comments always cheer me up. :_D but the only problem is you pull my legs a lot... :_(

AF said...

Haha ! very funny!.
U r an ENGINEER!!(remember self boasting!)…and asking a poor lil doc to depostit in ur acct….Kya huwa ENGINEER??!!kaha gayi boasting??!!! Hehehe!!

venus said...

there are two schools of thoughts, one believes in living today, and one, lives little bit less today, and saves some for tomorrow. What is wiser, you are the judge! freedom can be spoiling sometimes, there is no one to watch us, to tell us where we can be wrong. Not all of your friends would tell you what this guy has told you. Luck you that you have some one worrying for you. My dad always tells me, don't be greedy, and don't be miser either. Happy Mutual funding!

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