Staying informed

 

eco-timesA behavioral pattern observed when it comes to senior citizens’ personal finance and investment habits is as follows:

  1. When they make investment decisions on their own, they tend to be very conservative and safety conscious. Left to themselves, they choose risk-averse, stable products which place safety above profits.
  2. However, when they are approached by product sales people from financial services with product pitches, they tend to take decisions that are completely opposite from the above – going in for the promise of high returns without taking caution or doing due diligence. Sales people often find it easiest to sell bad and ill-suited products to senior citizens just for this reason.

Why this dichotomy? How does a person who generally has a conservative outlook to finances easily fall prey to such sales talk?

Honestly, I do not know the answer to these questions, and a study about this behavior is not the objective of this article. Rather, I think we need to be aware of this pattern and recognize if we or a friend or a family member fit into it.

More importantly, we need to identify how to avoid this pattern of behavior. And for that, I believe the answer lies in staying informed.

When we are working in an office, we get a chance to interact with different people during the course of a day. It provides us with an opportunity to get to know both about genuine new opportunities as well keep away from scams and bad products.

After retirement, such opportunities are scarce, and this is one of the main reasons, I believe, that senior citizens make incorrect financial decisions.

Hence, it is especially important for our retired elders to make reading about personal finance and economics a regular part of their news intake.

This can be done quite easily actually. There are quite a few publications that recognize this and provide useful articles regularly.

For example, the Hindu Business Line had a great article by B Venkatesh a couple of weeks ago about how to save and invest in the post retirement period of one’s life:

http://www.thehindubusinessline.com/features/investment-world/personal-finance/how-to-adjust-retirement-portfolio-for-inflation/article4178597.ece

I also noted another article by Dhirendra Kumar on Value Research Online a few weeks back along similar lines:

http://www.valueresearchonline.com/story/h2_storyView.asp?str=21516

Specifically, I would recommend two weekly publications that every senior citizen should at least skim through regularly:

  1. The Hindu might be staple reading for local and national politics coverage, but when it comes to personal finance, the Hindu Business Line’s Sunday edition’s Investment world takes the cake. This 3-4 page spread does admirably well in general, but more so while addressing the needs of post-retirement finances.
  2. The Economic Times might be heavy reading on a daily basis, but their Monday edition comes with a personal finance tabloid supplement that is very good and worthy of perusal.

Just by getting these two issues – Sunday issue of the Business Line and the Monday issue of ET – will keep one well informed about the happenings in the personal finance – good and bad.

Happy reading!

This question has been answered by Srikanth Meenakshi of our financial advisory team.  Write to advice@oldisgoldstore.com if you would like us to answer your question.

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