Perils of Financial Indecision

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to mailfpc@ yahoo.com) 


Perils of Financial Indecision:

Former Indian Prime Minister P V Narasimha Rao on being criticized indecisive, famously remarked that “Not taking a decision is itself a decision.” Well, for few it makes sense. But when it comes to one's financial future, indecision can be a real peril for various factors. Indecision hurts one very badly in terms of loss of returns, inadequate life cover, late start in planning etc.,

Financial and investing indecision largely happens due to the following reasons:

Having no financial goals:

This is the case with most of us.. We just don't have long term financial goals in life. May be people think they are really far off in one's life. For instance, a survey points out that majority people in the younger age group do not like to think about their work retirement, meaning it's a long term event and need not think about it now. But the fact is that, it's an inevitable event in one's life and people will land up there @ some stage. With the average shelf life of our careers shrinking, we run the risk of retiring early in our lives.

Extremely busy with work:

Another major issue we face these days is that of being extremely busy @ work, which leaves very little time for our personal priorities. Particularly financial planning is something which is missed out during this phase of one's life.

Too many investment choices:

This is a very genuine reason for becoming indecisive. Just don't know which one to choose and which one not to choose while making investment decisions. But life in general has become such. Take the case of mobile phones, cars, TVs etc.. There are just too many to choose from.

"I can do it myself" syndrome:

With the advent of google, there is no dearth of information about anything, in particular on finance and investing. So people tend to do things on their own without realizing the perils of such unfiltered and too much information which eventually leads to indecision. Remember, too much of information also leads to indecision.

Chaotic past investments:

Past investments continue to haunt people, not knowing what to do with them. Investments made over the period leads to this scenario and this causes lot of chaos and leads to indecision.

Not realizing the importance of Power of compounding: 

Power of compounding is a very powerful tool while investing over the long term and it works very silently. And lack of understanding of this leads to indecision on investing. 

Not realizing the danger of inflation:

Not realizing the danger of inflation which eats into our savings and will have a tremendous negative impact on our retirement, children's education and other long term financial goals and plans. 
http://mymoneyavenues.blogspot.com/2011/09/beware-of-sky-rocketing-costs-of.html 



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(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to mailfpc@ yahoo.com)