Jagoinvestor
February 3, 2009
Your investment must be the way you want your life to be – Simple and Easy.
Keep it Simple Please
Lot of people thinks that if they choose complex investment products then they can generate a good return. But then key to successful investment is make it as simple and easy as you want your life to be.
There are many products available in markets , Some are extremely easy to understand and strongest. While others are complex and on an average not very easy to understand by common public.
In Life, simple things works best. We all want our lives to be simple and easy, We don’t want lots of complications. In the same way we should use simple products while choosing our investments. Simple things works in the best manner.
There is a tendency of creating complex products because general public feels, that because they are complex and not easy to understand, they must be working very differently and in a smart way. This is far from truth.
Easy to understand products like Term Plans, PPF and Mutual funds works brilliantly. You don’t need ULIPS or product like Jeevan Astha and Endowment plans with lots of stupid clauses.
What happens when u choose simple products?
Your life is easy, you can understand them better, track them better and change it in a much better way.
Imagine a person A with ULIP or Endowment policy for Insurance needs and B with Term Insurance.
What are the benefits B enjoys?
– He understands every things about his products the reason being there is very less to understand. (If you die, your family gets money, if you don’t, you get nothing).
– He can choose to stop his stop his policy any time he wants (if he does not feel the requirement)
– He can change it to some other policy later in life if he wants.
There are many things like this, where as in ULIPS and Endowment policies , people are stuck with no mercy if they cant pay premiums some 2-3 yrs in a row. There are too many clauses and different types of sum assured, and things like those.
What is the Learning?
Take easy to understand and simple products which look Plain Vanilla, Complex products have nothing extra than complexity. Just make sure you understand easy products well and how to use them well. Your investing life would look much like your investments. Keep them Simple.
KISS –> Keep It Simple Stupid.. Agree with you that we should keep things simple n easy..
Thanks for this very informative post. This is a nice blog and will be looking forward to read more from you.
wow , This is first negative comment i am receiving and that proves that nothing is constant (like all positive comments i got till now )
Point 1 : No one will change the policy if he/she finds that other policy is not beneficial for him/her , so anyways he/she will not do it .
Point 2 : You said “TODAY IS A MATERIAL WORLD MANY DONT THINK OF LOTS OF MONEY FOR FAMILY, RATHER THEY WOULD LIKE TO ENJOY IT THEMSELVES AT A LATER DATE” .
So there are different kind of people in world , It depends wheather this person loves his family and wants to secure them or want to just enjoy all his money himself . Its totally htat person wish , A person can use a product in many ways . So its a personal choice .
Dear readers , I like to read names of my readers , please add it at the end of the comment .
btw , Dear Anonymous , are you from Guwahati by any chance ? you can mail me at my email id if you dont wish to disclose your name , just in case .
Thanks
Manish
Life insurance is about financial security for family, but you say B can change it to some other policy , BUT THEN HE WILL PAYING HIGHER PREMIUM AS HE HAS GROWN, YOU HAVE FAILED TO MENTION IT. WHEN THE MORTALITY AGE IS GOING UP ALL THE TIME AND WHEN AVERAGE AGE OF LIVING IS AROUND 67, PEOPLE HAVE TO THINK ABOUT FINANCIAL INDEPENDENCE AFTER 60 . ALSO TODAY IS A MATERIAL WORLD MANY DONT THINK OF LOTS OF MONEY FOR FAMILY, RATHER THEY WOULD LIKE TO ENJOY IT THEMSELVES AT A LATER DATE. SO THE NEED TO LOOK AT INSURANCE AS ONE OF THE COMPONENTS AND NOT AS A STAND ALONE.
FOR ALL THE REASONS YOUE ASSESMENT IS WAY BELOW PAR.