Personal Finance

Put checks in place to curb overconfidence

Personal Finance, Press / By /

The ability to deceive potential mates provided an initial evolutionary advantage to our ancestors. Then the advantage shifted to those who could detect the tell tale signs of lying leading to an arm race between detection and deception. Self deception evolved to mask deception better, hiding the truth from oneself to hide it better from others. Impact of Self deception (or over confidence) is not limited to mating partners however and it impacts all walks of life including personal finance. Harsh’s article in Business Standard today.

Central agency needed to curb mis selling menace

Banking, Investments, Personal Finance, Press / By /

Whilst newage investors require protection from unregulated finfluencers there is an urgent need for a centralised investor grievance redressal agency that will provide protection for older investors to whom financial products are mis-sold and their grievances fall through the regulatory gaps. First mooted by the Financial Sector Legislative Reforms Commission ( FSLRC) the expert committee appointed by the Supreme Court (in the Hindenburg report matter) has reiterated the recommendation. Harsh’s article in the Business Standard.

Investor education can´t be left to finfluencers

Financial, Personal Finance, Press, RIA / By /

Finfluencers have a large influence on investors which can be used both for educating them but also for misdirecting them. given their larger than life impact on investor education some form of regulation is a must. Many learnings are available from the experiences of Pranjal Kamra a “Finfluencer” with very large fan following whose firm has a RIA License from SEBI. Harsh’s article in Business Standard on how relatively relaxed regulations coupled with a strict scrutiny of those with large number of investor complaints may be one possible route to bring the “finfluencers” within the regulatory ambit but retaining their ability to educate investors. Its a complex issue and Harsh is aware there is no magic bullet solution so this is a suggestion that can be considered along with many others that the regulators must surely be examining.

An innovative approach to domestic staff loans

Banking, Financial, Personal Finance, Press / By /

Middle class households are used to giving advances against salary to their domestic staff who do so much to make their day to day life easy.
spurred by a challenge thrown to Harsh by Harsh’s spouse Harsh proposing a solution that can transition these advances (and it’s repayment) to India’s formal credit system giving a big boost to availbility of formal credit to trustworthy low income domestic staff. Please assist in influencing the policy makers to consider the suggestion. It will convince his spouse that he can actually make sensible suggestions in household matters as well :). Harsh’s article in Business Standard today

High pension recipients can get short-changed in bailouts

Financial, Governments, Personal Finance, Press / By /

Do not transfer large sums of money from your tax free Employee Provident Fund to the Employee Pension Account in the hope of getting a large pension in the future. As per the EPFOs own calculations the deficit was Rs. 15,000 crores as on March 31, 2017. The deficit position for the years ended March 31, 2018 and 2019 has not been released by the government but is likely to be much higher. Even the calculation of the deficit figure has not been made for the last 4 years. A pension fund that has not even calculated its liability is a scary place to invest your hard earned tax free Employee Provident Fund money. Those people depending on government bailout should be aware of the precedents whenever governments have stepped in to protect pensioners – those entitled to larger pensions inevitably get shortchanged in the process”.

Debt fund growth option: A smart choice for retirees

Investments, Personal Finance, Press / By /

Growth scheme of a moderately low risk debt fund allows lower tax payment on the income earned as compared to a bank fixed deposit of like maturity even if the interest rates till maturity are similar. This is due to the inherent tax friendly structure. Besides, the Debt MF allows easier encashment and part encashment facilities with no prepayment penalties. Harsh’s article in Business Standard today provides an interesting analogy of a water tank to explain the inherent structural advantage of the growth scheme. look forward to your comments.

Wealth creation is simple but not easy, requires discipline

Financial, Investments, Personal Finance, Press / By /

“Sleep well, eat healthy and exercise regularly” are the “simple” rules that enable a healthy life. However it is not “easy” to follow these simple rules. Similarly wealth creation has simple rules which require discipline and patience. Most people prefer complex solutions in their search for faster results and it takes a dedicated coach to keep them on the path (pardon this bit of self promotion for our profession). Harsh’s article in Business Standard. Your comments welcome as always..

Beware! Govts do default on pension liabilities

Financial, Governments, Personal Finance, Press / By /

Employees who are taken in by the promise of old pension scheme could do well to learn from Gandhi ji. In 1942, while the II world war raged, the Cripps Commission made a vague promise of granting Dominion Status after the war was over, if Indians would support the war effort. “I refuse to accept a post dated cheque on a failing bank” Gandhi ji responded. Politicians who are making the promise of restoring the “Old pension scheme” know that they will not be around when the time comes to actually pay the pension. They are just looking to save on making the employers contribution to NPS. The demand for the “Old Pension Scheme” explained through a Fable in Harsh’s article in Business Standard

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