50+ Financial Mistakes and Illusions

Welcome back to NMAX.

Here are 50+ Financial Mistakes and Illusions. Hope we wise up from now on, because it’s never late to start.

Financial Mistakes and Illusions #1. Just can’t manage to fit our Expenses within our Income. And, even when the income increases, the expenses invariably rise much faster.

Financial Mistakes and Illusions #2. Generosity is in our blood. We happily pay 30-50% p.a. as interest charges to the Credit Card companies.

Financial Mistakes and Illusions #3. We respect our culture and old customs. We keep our money in the OUTDATED Bank Fixed Deposits.

Financial Mistakes and Illusions #4. Another example of respect for our tradition… creating a huge pile of (useless) gold jewelry.

Financial Mistakes and Illusions #5. Yet another example of holding our customs in high esteem… feeling proud if we can leave behind a “20-25 year old dilapidated property” for our children as a legacy [and not a “20-25 year old equity mutual fund portfolio”].

Financial Mistakes and Illusions #6. Spent more than half a lakh of rupees on a top-end smartphone — just to show off (even though we will not use even one tenth of its smart features).

Financial Mistakes and Illusions #7. Replaced the same top-end smartphone in just 6 months? Oops… wasn’t it smart even after paying all that money? (Psst… the new model is no different from the previous one, except for some minor tweaks).

Financial Mistakes and Illusions #8. Haven’t read the blog post ‘My name is Insurance and I am not an investment’.

Financial Mistakes and Illusions #9. More than 50-60% of the monthly take-home pay is gobbled up and devoured by various loan EMI’s.

Financial Mistakes and Illusions #10. Hotel and restaurant owners love you. You are found at these places, far more than even their most regular staff members.

Financial Mistakes and Illusions #11. For you (financial) PLAN is a four-letter insulting and derogatory word.

Financial Mistakes and Illusions #12. Believing that “budget” is only the Finance Minister’s job, not ours.

Financial Mistakes and Illusions #13. Believing that “managing inflation” is RBI’s problem, not ours.

Financial Mistakes and Illusions #14. Financial lethargy… not paying the bills by the due date (often resulting in late fees and penal interest).

Financial Mistakes and Illusions #15. Financial shortsightedness… thinking only of today or tomorrow; and not the next year or next decade.

Financial Mistakes and Illusions #16. Still waiting for the so-called BEST DAY to invest in equity mutual funds.

Financial Mistakes and Illusions #17. Never seen our Credit Report, even though it is now available free of cost… forget about working to improve the Credit Score.

Financial Mistakes and Illusions #18. The Emergency Fund account shows a Zero Balance.

  1. 99% focus on earning money. Mere 1% attention on managing the same.
  2. Never heard of (or not knowing the meaning of) “delayed gratification”.

Wasteful-money-habits. You may be blowing away your money due to carelessness and stupidity.

Financial Mistakes and Illusions #21. Repeatedly falling below the minimum average monthly balance in one’s Savings Account.

Financial Mistakes and Illusions #22. Making our neighbors jealous with our extravagant lifestyle is our life’s primary goal.

Financial Mistakes and Illusions #23. Replace is our motto. We don’t believe in Repair and Reuse.

Financial Mistakes and Illusions #24. Blindly and needlessly chasing Maximum Returns from our investments.

Financial Mistakes and Illusions #25. You ask “what does this investment or financial product offer” instead of “how is this investment or financial product beneficial for me.”

Financial Mistakes and Illusions #26. Investing in the world’s biggest con job — a scheme that has the word “child” in it.

Financial Mistakes and Illusions #27. Paying ₹.150-200 for a cup of coffee, when the same stuff is available at 1/4th the price.

Financial Mistakes and Illusions #28. You suffer from ‘investment paralysis’ due to Fear of Loss.

Financial Mistakes and Illusions #29. Not having a ‘professional’ financial mentor as your friend, philosopher and guide.

Financial Mistakes and Illusions #30. Blissfully unaware that Gym is an expensive fad. Running, walking, yoga are free and superior alternatives to remain as fit.

Financial Mistakes and Illusions #31. IRR, YTM, CAGR are bouncers that simply go over your head.

Financial Mistakes and Illusions #32. You think you can beat Roger Federer.

Financial Mistakes and Illusions #33. SIP, STP and SWP is all mumbo jumbo for you.

Financial Mistakes and Illusions #34. Hear the word RISK and your legs go jelly with anxiety.

Financial Mistakes and Illusions #35. Hear the word TAX and again your legs go jelly with anxiety.

Financial Mistakes and Illusions #36. Spending ₹.250 on a pizza every week? No issues at all. Buying a ₹.250 book on personal finance even once a year? No, that’s a waste of money.

Financial Mistakes and Illusions #37. In your opinion Stock Market is a Casino and buying equity shares is gambling.

Financial Mistakes and Illusions #38. If you think that ups and downs are good only at roller coaster rides; and not at the stock markets.

Financial Mistakes and Illusions #39. The word Pension is music to your ears.

Financial Mistakes and Illusions #40. Our portfolio is a carbon copy of Rakesh Jhunjhunwala.

Financial Mistakes and Illusions #41. The biggest gamble we play with our finances — no mediclaim policy.

Financial Mistakes and Illusions #42. THICK forms and FINE prints scare you.

Financial Mistakes and Illusions #43. Not yet realized that SUVs burn more fuel, burn more money, burn more environment (thus creating a hell for our children).

Financial Mistakes and Illusions #44. Not yet realized that Extended Warranties are almost always a waste of money.

Financial Mistakes and Illusions #45. You are more brand-conscious than price-conscious.

Financial Mistakes and Illusions #46. Pay for 400+ cable channels. Watch at most 10-12 of them (many of which are anyway free).

Financial Mistakes and Illusions #47. BUY TWO GET ONE FREE. One of the best ways to make money… for the mall owners.

Financial Mistakes and Illusions #48. We shamelessly (and foolishly) seek free financial advice and tips on hot stocks.

Financial Mistakes and Illusions #49. Buying lavish and luxurious Dream Homes, way bigger than our budgets (that often end up as bad dreams).

Financial Mistakes and Illusions #50. Our plate is often filled with pizzas, burgers, samosas, chips, colas and such other junk food.

Financial Mistakes and Illusions #51. We forget that “Trust” is an extremely rare commodity in the financial world.

We hope you liked these insight into common Financial Mistakes and Illusions.

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Bye for now and see you back again soon.