Updated: Apr 20, 2022
1. Misunderstanding Insurance Policies as Investment Schemes:
Most Insurance policies at best are saving schemes (that too with lower return) and not growth oriented investment schemes. Insurance should be used only for covering risk and not for creating wealth.
Unfortunately schemes that promise both growth and insurance look very attractive to people with poor financial literacy
2. Over dependence on Bank FDs:
This quote from Robert G Allen probably summarises it very well "How many millionaires (crorepatis) do you know who have become wealthy by investing in (bank FD) savings accounts? I rest my case."
Though many of us understand this, most of us don't have the right education required to invest in other assets
3. Not creating a Financial plan for your Goals:
Are you one of those millions of people who have not calculated the inflation adjusted amounts you would require for your goals like your retirement, children's education and marriage or your after retirement travel plans?
Are you one of those who are unaware about how much you need to save and invest every month to meet your future goals? It's time to get serious about your finances
4. Take Investing advice from your Brokers:
Next time you decide to take advice from your broker, Remember this Warren Buffett quote "Don't ask a barber whether you need a haircut".
A broker would always want you to buy or sell something because he makes money on every transaction. No matter what you are buying, a stock or a house Mr.Buffett asks people to do their own research.
5. Don't know how to use Power of Compounding to Create Wealth:
Einstein once said "Compound interest is the eighth wonder of the world". Unfortunately most Indians do not understand how to use this powerful tool to create extraordinary wealth
6. Buy Stocks based on tips, without any knowledge:
When the markets are up, you see people around, making money and you start thinking tips from friends, family or so called market experts will help you make money.
This Warren Buffett quote humorously explains it, (When the tide is up everybody is swimming) "Only when the tide goes out, you discover who's been swimming naked.”
7. Unnecessarily accumulating lot of Gold:
Gold could be a place to just park money like a FD, but is definitely not an investment in the long run. An investment is something that generates income every year if you continue to hold it for ever.
8. Buy expensive things to show that they are a class above the rest (Unnecessary show-off):
Next time you see a dull colored helium filled ballon going higher, remember it's not the color of the balloon that takes it higher, it's what is inside the balloon that takes it higher. The same holds true for us. Your social status will finally be decided by the knowledge you posses and not the clothes or things you own
9. Buying things just because they are on Discount:
Are you one those who buy things not because you need them but because it is in sale? Remember this Warren Buffett quote next time to control your urge to splurge, "If you buy things you do not need, soon you will have to sell things you need.”
Not realising that being impatient kills your portfolio*: The easiest way to be more patient in the Stock Market is to always remember this Warren Buffett quote "The Stock Market is a device for transferring money from the impatient to the patient.”
10. Lack of Knowledge:
If like millions of others you feel that you lack knowledge and understanding on how to start investing yourself and take control of your finances, the easiest way to start is to attend a Free webinar by Mr.Varun Malhotra.
Mr. Malhotra has been working for last 11 yrs to spread financial literacy in the country. He has also worked extensively for BSF & Indian Army to educate Jawans and Officers on Investing. More than 60k Jawans and Officers started investing after a 2 year long Free campaign at BSF.