Jagoinvestor
August 14, 2014
Allow Wealth coming into your life by breaking your Belief System
Most of the TV channels help in selling products like – Lal Kitab, Suraksha Kavach, Shri Yantra . They do this day and night and according to these advertisements, these products helps people in becoming prosperous. Most of the news channels have at least one show on Palmistry too, which solves people financial problems. Some believe in it and some choose to call it superstition.
Superstition or Beliefs
Here is an old story to learn something from about superstition or beliefs
When the spiritual teacher and his disciples began their evening meditation, the cat who lived in the monastery made such noise, that it distracted them. So the teacher ordered that the cat be tied up during the evening practice. Years later, when the teacher died, the cat continued to be tied up during the meditation session. And when the cat eventually died, another cat was brought to the monastery and tied up.
Centuries later, learned descendants of the spiritual teacher wrote scholarly treatises about the religious significance of tying up a cat for meditation practice. Now how is this related to financial life ? Many such cats are present in your financial life, which you might not even be aware about, you believe in few things as if they are truth without questioning them and thinking about it.
Let’s look at some real life examples
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“Advisor: Sir, gold prices have gone up because of festive season I think you should wait for some time?
Mr. Shah: No no, We buy gold only during Diwali. No matter what gold prices are – we would like to go ahead.
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Real estate agent: Sirji, one very good property is available at a very competitive price. The property is main road touch and it is difficult to get such property at this rate.
Mr. Singh: Oye No no. it’s House number 13. It is an unlucky number we can’t go ahead with this property. Show us some other property.
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Insurance agent: Sir I have a traditional plan, where you get high returns and your money is absolutely safe
Half of india: Yes, my parents taught me the same. I believe in LIC, I know LIC is safe and best investment. I am ready. tell me where to sign?
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Whats your Belief System
Now look at your belief system. Look at what did you hear on TV or read something on blog or magazines, that became part of your belief system. From time to time question your thoughts and beliefs, as questioning will help you grow.
Break your belief system,
Nandish Desai
Manish..well said in this article.
I was having couple of LIC policies which my parents started, now they have also identified the losses incurred and now advising me to never take LIC policies.
Two days before I got a call from one LIC agent ( Now the have surged and looking for business as now 80cc limit is 150000). He is still in that medievel age of policies with their Anands and nigams..I felt like he is not that much excited to explain their new Term insurance policies 🙂
Yea .. that happens ..
AND LAST THING TO ADD
IF ONE WANT TO SAVE MONEY ,WILL SAY STOP CELEBRATING FESTIVALS ,AS STUDY BY EXPENDITURE REFORMS COMMITEE (FINANCE MINISTRY)
SUGGESTED THAT AVERAGE INDIAN LOST THERE MONEY BY 25% OF TOTAL INCOME IN FESTIVALS .
SO MONEY SAVED MONEY EARNED .
STOP WEARING CLOTHES BY BRANDS AS IT COST ARROUND 10-15% OF YOUR EARNING
STOP SPENDING IN MALLS , PIZZA HUTS,DOMINOS,PVR,INOX , THIS ALSO HELPS YOU IN SAVING
SO MONEY SAVED MONEY EARNED , IF ANY ONE FOLLOWS THIS ONE CAN ALSO GROW HIS CORPUS BY MIN 25% A YEAR
BUT ONE QUESTION REMAINS UNANSWERED WHY WE ARE BORN ,JUST TO SAVE OR TO LIVE OUR LIFE. .
How is this related to this article ?
Dear Paresh ,
you know what problem we have , is if we dont undst things we call it superstition and if we know than we honour it .
blog by jago investor is awesome but at times they sound tilted.
say for example ,father ,grand father has taken policy from LIC ,== now tell me at that time which company was offering and what and then you will find only company that was LIC ,
Secondly if father,grand father has taken the policy that means they undst the meaning of insurance and its relevance ,
Now about gold – who takes gold for investment purpose ,i am sure very few and you wont ,and if you or any one want to invest in gold you/he will go for ETFs why for physical gold .if a person purchase gold especially in INDIA its have emotional value and for the reason of bringing something in auspicious days and they have its own importance.AS OF now I havent met anybody who has purchased gold /ornaments on a fixed date and sold it to get appreciation.
Somebody in the comment section commented about numerology ,vaastu ,and all such concepts as dubious and rejected as crap. I will reiterate that if you dont know things then you wont honour it.Its all science and to undst it you just have to change your view then you will undst ,
Quoting EXAMPLES ,
MAGNETIC BEHAVIOR (POLES)OF EARTH and its impact on body ,
AIR CIRCULATION in environment and its impact on our body
kundli and genetic disease, autosomes and sex chromosomes ,blood disorders and blood incompatability, and many more .
Third and last its mutual fund vs ulips ,
mutual fund charges around 2.25 to 2.75 % where as ulip charges 1.35% as fmc if investment is taken in picture. and a blog BY jago investor itself says that this difference gives a big blow to corpus.
SECONDLY, IF WE CALCULATE OTHER CHARGES OF ULIP VIS A VIS MF
THEN ALSO BY 7 YEAR ONWARDS ULIP BECOMES CHEAP AS COMPARED TO NOTION OF MUTUAL FUND.
THIRDLY ,RETURNS if you will see many mutual fund didnt delivered the return as ulips of all company has delivered .BE specific.
Fourthly what tax exemption you get in ulip you wont find in MFs
last but not the least it comes with a value addition of insurance ,as well as now commission has been capped by IRDA, thus making it more attractive .
A GOOD MF WITH A GOOD AUM HDFC TOP 200 WAS DISCARDED BY JAGO TEAM MUCH BEFORE ,THEY HIGHLIGHTED SOME PARAG MUTUAL FUND AND QUANTUM FUND .
why theyare focussing on new funds not old one coz they seems to be intelligent,and others are just mediocre, why they highlight to take term plans and for rest rely on mutual funds .
IF WE ALL BECOME MATERIALISTIC THEN WE WILL LOOSE OUR VALUES ,FAITH,BELIEFS ,AND FINALLY HUMANITY
SO JAGOOO INVESTOR JAAGOO
Thanks for sharing your views Sandeep
To Nandish Desai,
I have not read this type of illiogical and utter non sense comparisons..
Point 1. U say advisor tells gold price will fall down as price has risen, how the advisor knows that price will come down?, whats the qualification of advisor, on what basis he is saying price will come down?..
Point 2.Real estate agent tell house is located in good location should buy and buyer is focussing on numerology, this is utter non sense, ppl buy the house based on many factors not only numerology…agent is also driven by commission to sell some flats..
Point 3.Prejudice against LIC exposed, why he said my father and grand father invested in LIC because they know that its safe and secure and u will get reasonable return, its not his father and grand father is illliterate and they dont do the calculation, as per those times inflation the return was reasonable, i think this group is totally against LIC, it must be getting commision for selling MF, gold and real estate..
Nandhish post something which is sensible..
Gabriel,
Why did you have to write such a long senseless response when you could have just declared that you dont know a thing and dont want to learn anything either.
To PV, Intelligent PV, i have replied with reasons, if you think its senseless than its ur wish…if you want to argue than argue with reasons, dont make empty comments…
when one says my grand father and father invested in LIC that means they have made reasonable return by investing in LIC policies, if they have made losses they would have spread a negative message and LIC would have wind up…now also as we speak there are ppl both literate and illiterate buying LIC policies…
Gabriel,
It seems you are taking it personally.
Writer has highlighted some factors which affects our buying patterns.
1. I know lots of people buy gold coins and/or ornaments on auspicious days i.e. Pushyanakshatra, Laxmi Pujan time etc. without considering price factor and they wont wait for a week even if you tell them good benefit.
2. People have rejected good properties because of various reasons which are hard to believe like house number which is not favourable, bad VASTU, wrong entrance and misplaced water tank and also waited for good period avoiding bad ones like “Shraddha, Amas etc.
3. LIC……. aaaah LIC is surely one of them. Everybody have LIC in India and I am sure 90% dont even know what their policy gives them, because half of them were forced, duped, coerced by someone who knew someone who knew someone in their family. 50% out of 90% doesnt know that if for example they buy LIC’s x+y (kushal jungal mangal) policy for Rs. 100 and same thing is available with other private players at cheaper rate because you buy “x” policy from ABC company for Rs. 10 and “y” policy from DEF company for Rs. 50 and still you save Rs.40 but because my father had LIC and his father had LIC I should also have it. You know what I mean.
First para you mentioned about superstitious Lal Kitab and other things…which is not related with Investment Idea. How do you compare this advert with investment? How can you compare with LIC with Lal Kitab???
Chetan we are talking about beliefs in the article and so they are mentioned in the article. Some believe strongly in lal kitab and some See insurance as investment. (You get what you believe in)….
It is correct comparison.
Ask any person in India who has just started earning and he will tell you that friend of his maternal uncle, friend of cousin, door ke chacha ke mama sold insurance policy to him and guy has no idea about it.
It is the same belief which TRICKED us to have at least “FEW” LIC policies to “SECURE” our future. I also bought LIC policy within 1st year of my career and I swear I still dont have damn idea about what it secures – my future or agent’s? But it was and still is customary (before it was for all, now it is for some unaware investors) that if you have got regular income than you must have some LICs.
Its good comparison, some of us still tie cat to the tree.
Excellent article and very well articulated. I feel it brings subtle yet significant points and because of simple and common examples used which people can relate to, it definitely strikes a chord …..cant see a better way to understand how our beliefs affect our financial decisions and importance of questioning those beliefs…
Thanks for your appreciation
Dear Nandish,
Good Evening !
I read your articles & didn’t stop myself to give reply.
I have both LIC & Mutual Fund agency & running it by more than five years.
As the internet accessibility is increase the BLOG crowd is increase with their EXPERT comment.
But i think they have their own mind set & try to convince the people as per their OWN ideas.
Insurance & Investment both are totally different financial tool, you people mix up both & make the cocktail.
When you go for Insurance, one should side line the investment purpose because insurance will help your family in any unfortunate condition.
Investment is totally different & have lots of choice to go any of it.
Readers are also smart enough to understand……
Thank you
Hi Pravin
What you are saying is exactly what we are also saying . One should not mix the insurance and investment .
Nice article on traditional belief on investment.
Welcome
Hello Sir,
Very Very nice article. I request all readers of this blog please consider term insurance plans only. Don’t mix insurance & investment, both are different.
This is really good article that slaps the traditional beliefs. Those beliefs should be eradicated when it comes to matter of money. Apart from above examples, buying gold as an Ornament is another belief that affect badly on people unaware about other new investment plans.
Thanks for sharing your views 🙂
My question is not related to finance. I have started a blog . I want to have a comment/reply box like you. I have tried a lot by myself/googling and can not find a solution. Can you please help me out.please
my blog is itoocaninvest.blogspot.in
Hi, Mani
Congratulation to start the blog. I check your Blog right now you are using Blogger platform. If you want good features like jagoinvestor.com, they are using wordpress.com platform. First you must have your own domain like myplanning.in than start blogging on wordpress.com (free and paid)….
For more information mail me at [email protected]
Dear Manish,
While your stories and examples in the article are attractive, perhaps your underlying motive for promoting some category of investments at the cost of LIC is not difficult to be discerned by any serious reader. Perhaps, you should have been more forthright and bold enough to state this fact in clear terms. Anyhow, overall your purpose appears to be well served as the article is eye-catching.
Thanks for your appreciation . I am sure readers are quite smart to understand what we want them to understand 🙂
Manish
I loved this!! Thank you.
Thanks
Very less words, but high on content.. Good article Nandish
The author seems having prejudice about insurance saving in general and LIC in petticular.
I often come across the suggestions of financial advisor that if someone has put some part of his income in LIC then he is being advised ad if he has done a big crime. And he then is advised to keep money into mutual fund.,(possibly becoz mutual funds are offer ring commission not only on fresh deposits but also the retaintion commission to remain invested in the fund.
I think any advisor shall have open mind & broder frame of mind while advising on saving & investment.
Best Regards
C D Singh
[email protected]
I feel there is no question that the blog is pro investor / consumer as also reflected in its name “jago investor” but that dosen’t mean its anti advisor specialy insurance advisor ….it has always given due credit to genuinely good products even in insurance industries e.g Term plans etc… feel there is no prejudice here its just that whatever is in investors interest is brought to light here.
I don’t think the intention is to undermine LIC in particular but the traditional insurance polices in general. Needless to say that in India, the major share holder of traditional policy is LIC, so is the name specified.
Why does then Term Insurance was not promoted by LIC or by its agents?
I am one such victim who has paid 1/3 rd of my earnings as insurance premium in a traditional policy which was recommended by a bloodsucking LIC agent. I have no regret calling them bloodsuckers as what they want is commission otherwise they don’t have any sense to suggest policies and its coverage amount.
Sir , what do you have to say about the overall article ?
Dear manish, I am a fan of your blog but I am LIC agent working from lastb5 years. Pls once you read our LIC profile 2014 and then you coment on LIC plans and what is LIC. from last 57 years LIC performing well and protecting and securing he people life with their financial goals. Yes I agree we are giving less returns compare to the mutual funds and stocks. But LIC helping to build the nation and serving allmost 40 crore people. We are proud to be an LIC agents. Pls u advertise your products and send a e mails again again to prospects to join your classes and collect cheques but don,t blame or make fun with LIC.
Thanking you
Srinivas.
Bangalore
because without LIC we cannot imagine our country growth. And also it is a backbone of our nation financial growth. Pls understand my mind. Because ur products will not reach common people in the rural are but we are reaching all areas with trust and true service. Uu take icici, hdfc,reliance, sbi or any other insurance company for comparision why only on LIC.
Hahaha.. I have an LIC Jeevan Anand policy sold to me by my maternal uncle when I was clueless about investing. Doing some ballpark calculations, the rate of return I would get will be around 6 % or even less. A PPF/VPF would give better returns! I am stuck with it because exiting would entail huge loss. Basically, there is “No anand in this jeevan” if you are with LIC policies.
20-30 years ago, the deposit interest rates used to be 12-15% in India. LIC could give returns in the range of 8-10%. 10% return on LIC policies combining insurance and investment was considered good and safe back then for long term.
Even when the interest rates crashed, LIC continued with the same insurance policies exactlly similar to the point (tying cat even when Guru died) in the article. In line with the downward interest rates, now LIC conventional policies give returns in the range of 6% or lower.
The sore point here is, being a largest insurance company with complete govt back up, it did not launch term insurance policy for 50 years of its existance and launched only after the private players entered the field and came out with such products.
While we credit that LIC provided livelihood to millions of agents, employees and perhaps vendors for several years, I accuse that it did not act in the best interest of the customer. While everyone in the field of insurance across the world tells that term insurance is best for customers than any other policy, alas, no LIC agent would recommend this product. Time for introspection and deeper review of this article content.
Well Said Krish!!
You expressed everything I wanted to… I am a victim of such LIC policy “Jeevan Anand” I discontinued the policy after paying the premiums for 7 years.
Dear Sir,
Since you are LIC Agent (or agent of any insurance company). I would recommend you to learn financial mathematics and learn deeply how each and every financial product is designed whether it is insurance policy, FD, or Mutual Fund etc.
I am sure your conception about all the Life Insurance Policies will vanish away. I am sure sooner you will stop selling these fraud Endowment or ULIP’s(even if it is Government Organisation) if you are ethical salesman and works for client welfare.
In case you are unethical and thinks about your commission only then you will continue selling these Endowment and ULIP of any insurance company.
I am sorry for using some harsh words!
What do you have to say about the overall article ?
Very truely written and an eye opener for the people who really get caught in the maze of these commercials claiming such things. I don’t understand why people behave in such a way. We have law in place against the promotion of superstition and loot. Why these so called actors and actress don’t understand that people who love them so they should reciprocate their love with making them fool. These actors should be first held responsible for their intentional behaviour to fool people and pocket their money.
I do remember a incident when our renouned wrestler Shushil didn’t excepted the proposal to promote a brand of liquor stating that it is against his ideology and the people of India.
Here comes the difference between a real Hero and a imbecile actor.
Thanks for sharing that Vijay !
Awesome article !
Thanks Sahil
Hi Nandish,
You are absolutely right. These ads have occupied almost 20% of the space on TV. People are believing on these products as well. I do not know why they are even entertained and no banned is imposed by the government on such programs. They are fooling people and a huge population is be fooled by these Sellers. In India, being a spiritual or may be a religious country, people believe in them. I have several known person which buy such products and still suffering in their life.
One should be aware of what they exactly are believing and where they are utilizing the money. If such was the scenario, western and american country would have been way back from us where such beliefs do not even exist. We have to realize that it is a business for them and they are earning successfully from us.
I read all your articles and have realized that you touch very common and important topics which really matters for general public. However from past some time your articles are not coming up frequently. You are doing a great Job and please keep posting such articles which open the eyes of general public (like one about filling petrol at filling stations) and are of Importance.
Regards,
Naveen Rana
Thanks for sharing your views on this Naveen 🙂