Wednesday, February 3, 2016

The In'vest'ment De'brief' recently reminded me that this domain is about to expire in the coming 7 days. So, acting swiftly, and using my friend’s credit card, I extended the subscription for another year, with more than 23 seconds to go for the deadline. By virtue of such agility, here I am again, your favorite blogger (for quite a few have cropped up of late), giving a few fucks about things you don’t give a fuck about. The reminder also told me that I haven’t written for a while, which is surprising since the fanmail continues to come at a same rate it did during my golden years: a Concord-esque speed of one self-addressed letter per year. In any case, it would be a fair assumption that I have been missed, as fair as patriarchy in our culture or gender inequality in Saudi’s.

So let me give in to temptation and begin by saying that ‘All investments are subject to market-risks. Please read the scheme information document carefully before investing’. Now that I have absolved myself of all the crimes I am going to commit in the coming few paragraphs (and also arson, theft, murder and sedition), let me just clear the biggest misconception people have about investments: no matter how much the word ‘in-vest’ points at something which is inside a man’s vest and no matter how much 80C seems to point at the measurement of something which is inside a woman’s vest, investments have got nothing to do with anything remotely close to a man’s/woman’s torso. In fact, it’s a subject of the heartless and occasionally, of the brainless.

The idea behind investments is to increase household savings so that instead of buying a hatchback today, you buy a Sedan 5 years later. It also gives you an opportunity to save some tax, and hence have more in-hand income by investing away a part of the same in-hand income, leaving you with lesser in-hand income. But the key assumption, by far, is that you will be smarter and more mature five years down the line than you are now, and hence be better capable of managing your own resources. Clearly, Shahid Afridi will have a tough time trying his luck as the brand ambassador of HDFC Life!

Having proved that the very idea of investments is counter-intuitive, let’s delve deeper into a few terms our insurers frequently use: ‘Risk’ is something you always take while ‘return’ is something you never get; a ‘lock-in’ period denotes a period of time when all emergencies will happen in your life and you will desperately want back the money you have just invested; ‘PPF’ is something that will borrow your car today and return the same car thirty years down the lines, albeit with new seat cushions; ‘Mutual Funds’ and ‘ELSS’ will take all your money and return either all of it or none of it depending on the outcome of the toss of an absolutely, totally, completely, Mukeshly, Adanily biased coin; and finally ‘ULIP’ is the astute all-rounder Imran Khan which is supposed to provide both life insurance and tax saving, but is the Irfan Pathan (with astuteness of brother Yusuf) that provides neither.

From the days of ‘Eat breakfast like a King*, lunch like a prince and dinner like a pauper' to ‘Declare like a King, invest like a prince and take salary-cut in Q4 like a beggar’, mankind has indeed come a long way. ‘Tune FD kiya ya LIC’ and ‘1 lakh kiya ya 1.5 lakh’ have become the grown-ups’ versions of ‘Tune option A mark kiya ya B’ and ‘ek page likha ki dedh page’. Even the additional 50000 exemption limit under NPS is like that bonus question with negative marks only a few dared to answer.

I would like to end by making a plea to the Indian government on behalf of my esteemed readers and everyone else who has missed his/her investments for the current financial year:

  • Allow FDI in investments where some friend of yours sitting in Dubai with no income tax and surplus savings can make the investments on your behalf. It will only extend the definition of FDI because an investment in an investment makes logical sense
  • Rename section 80C as 40C. If you think size 80C is possible, you’ve been watching the wrong genre of porn all this while!
  •  Interchange every occurrence or ‘high return’ and ‘low return’, clearing all the confusion and leaving just one instrument in the market: PPF  
  •  Ban the Indi-McSpicy burger at McDonald’s

*: subtle product placement #1 for employer