Saturday, April 29, 2006

Money Matters!!!

'The main reason people struggle financially is because they have spent years in school but learned nothing about money. The result is that people learn to work for money... But never learn to have money work for them'. -Robert T. Kiyosaki.

Everyone, no matter who he/she is, no matter what he/she does, has to deal with money all along his/her life and yet nothing about it is tought in school. Years and years are spent in learning world history, geography, science and other abstract things, which probably won't be even used by the students in whole of their lives, but the very practical and fundamental things that each and every child will have to deal with in their lives, are never even taught. Parents don't teach their children anything about it, teachers don't, infact no one does. Life itself might teach them a lesson or two about it, but only if they are willing to learn from it. But, more or less thats it. Infact, in most of the Indian households, like sex, money is also considered as a dirty black thing which needs to be shoved under the carpet and never even talked about.

A few days back, I was with my friend and as it was around the end of the financial year so the discussion happened to circle around taxes. He was very happy that he didn't have to pay any tax as he had taken two policies and paid 50-60K as premium for it. When asked about the details about the policies, he could only say that it was from Aviva and that one was Life insurance and the other he didn't even remember which one. When enquired further, he didn't even knew any term and conditions of the policy, when he will get any money back and how much. The answer was - probably after retirement, but not sure. 'But, you see - I don't have to pay any tax' was a happy reply from him.
I came to know that some guy had befriended him and sold 2 policies to him, saying that it will save tax. My friend will pay that amount every year, probably for 15-20 years or even more and I am not even sure - How much he will get back after that.Moreover, there is. no one dependent my friend, he is not married and his parents are quite well off and don't require any of his earnings. So what was the point in take the life insurance? About the second policy, neither he nor I know, what it was - so can't even comment on that.Point to be noted is that - my friend is quite well educated person.
This was just an example. I meet many people frequently that don't have any knowledge about - How money moves, how it increases, how it degrades. People selling various financial products like policies, mutual funds etc. take advantage of these facts and use it to fill their own pockets. In most cases the victims are highly educated people.
Many people are also of the type - Who buy everything on credit cards,spend like kings and queens and then keep paying hefty interest rates for the credit. Credit card companies love them - Why should they? They are making the companies' rich. The most common pretext on which the credit taker does it that - he will be able to pay it easily in monthly installments. He forgets the hefty price he's paying for it.
There are people at other extreme end also. They have a habit of saving everything they could. Everything goes into their saving account in the bank. Little do they know that - the value of their savings are decreasing with time - due to inflation and increase in cost of things over time. So even if they save 1L today its value over time will decrease unless that 1L grows and increases faster then the inflation and rise of costs over time.

I am not saying that anyone has to be an economic expert, but a basic understanding of finance or money is a must for everyone, so that he/she is better equipped to handle his/her money/finances.


At 10:25 AM, Anonymous Mehak said...

good post ...agree with ur views on policies n credit cards.

At 2:22 PM, Blogger Silky Moon said...

I completly agree on the educational structure, policies, credit cards and even the savings.

A nice post :D.

At 2:31 PM, Blogger Silky Moon said...

Are you sure that the book is "Phantom of the Opera" by "Susan Kay" as there is same title by Gaston Leroux too.

The book is available in Amazon but it costs US $13.00 + shipping. Why don't you try to find at Delhi as there are so many good bookstores.

At 11:23 AM, Blogger The Bhandari's said...


At 11:46 AM, Blogger anks said...

Oh yes, i completely agree with you that the knowledge about money is an important thing and many of us are ignorant about money matters!

in my first year, a prof said that an engineer's job is to do a job in the most economical way... and we were taught nothing at all about economizing costs of operation... the practical things that we should have been taugt, were never part of our curriculum!

At 12:56 AM, Blogger Pinks said...

now here's something to ponder on...

At 5:24 PM, Blogger Navjot Kashyap said...

Thanks. It would be really nice if that sort of things are taught at school.

At 5:25 PM, Blogger Navjot Kashyap said...

Dono virgo, virgo could we differ? hehe

At 5:34 PM, Blogger Navjot Kashyap said...

Yes its by Susan Kay not Gaston Leroux. There are many many versions of this - phantom of the opera - Gaston is the most popular one. But, its not the one I am looking for. The one I am looking for is by "Susan Kay". At amazon - shipping charges itself are around 10$.So, it will make a bit costly. Moreover, I am not sure that the book I'll recieve will be by Susan Kay only because Gaston Leroux is the most popular one and it can be that I end up recieving the wrong one.
I have tried at Delhi shops. They don't have it, but they say that they'll order it, just to be polite but never actually take the pains to bring it.
As a last resort I might buy it from Amazon.

At 5:35 PM, Blogger Navjot Kashyap said...

Arey bas hmmmm? kuch bolo bhi to?

At 5:38 PM, Blogger Navjot Kashyap said...

Yes, I completely agree with you. There is a huge mismatch between the things taught in college and that which are used in real life.

At 5:38 PM, Blogger Navjot Kashyap said...

Don't just ponder ji - same something too

At 4:07 PM, Blogger Silky Moon said...

Seems you are still not sure exactly about which one the exactly book that you are talking about. If you have still doubt then I can send you the book by Gaston (I have one) and then you will figure it which one of them is the correct one. If it is the same then your search ends and if it not then it must be by Susan Kay and you can buy it from Amazon.

At 6:24 PM, Blogger Navjot Kashyap said...

Thanks a lot. I have that Gaston one with me. But, its not the one I am searching. Its Susan Kay one only.
I'll but it from Amazon. What I was trying to say was that, even if I buy from Amazon, there is no guarantee that the guy who will send it will send the Susan Kay one, bacuase Gason one is the more popular one.
Anyway I'll give it a try.

At 10:38 AM, Anonymous deepakjeswal said...

An excellent post, and agree with u cent per cent. Our education needs to add a lot of practical stuff, rather than reservations! But then HRD Ministry will not get votes coz of this na...

Coming back to the post, its very lucidly written, and arguments presented excellently. Loved it!

Yes, prob i also belong to the 'educated illeterate' who has a life insurance policy/credit cards, but nothing about their details :)


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