Is Self Financial Planning difficult? Can you do it yourself?
Created on 18 Aug 2021
Wraps up in 4 Min
Read by 5.8k people
Updated on 09 Aug 2022
“The whole is greater than the sum of its parts.” Aristotle was certainly ahead of his time when he said this. You'll understand why. Imagine you go to purchase your dream car, only to find something ridiculous! The dealer charged you a few thousand bucks and provided you with a message -
“Hey, thanks for your interest. You can collect the engine and other important accessories from us. But we don’t manufacture batteries, sorry. You can get it from Exide. Wheel & braking system can be collected from Endurance’s factory. You can fetch the steering wheel from Bosch, lights from Minda, and tyres from MRF. Wiring and mirrors can be procured from Motherson Sumi. Windshield is available at Piramal & music system at Sony. JSW & Kompass would assist you with the body. After that, it’s simple DIY.”
Can you? Is it that simple though? If you are so efficient in assembling stuff and putting them together, what stops you from building an automobile company, eh?
If you were to extend the same logic to the financial services industry, you’ll realise why a 'Do-It-Yourself' model is difficult to replicate in the financial services industry. But as a matter of fact, that’s the need of the hour. Read on to understand why.
First things first, we need to discuss what makes a 'self-service' model necessary for financial planning.
Why should you do financial planning yourself?
The obvious reason is that the you can't make the most out of offline advisory services. Well, here's why.
Firstly, the scope is pretty narrow; i.e, there are very limited options. Many traditional investment advisors are sometimes trained in just a handful of investment vehicles, and naturally, recommend some combination of these selected venues as they deem fit. A stock trader will recommend you stocks. A mutual fund advisor will suggest mutual funds. An insurance agent will sell insurance policies. Period.
Then, there’s this bit about biases and mis-selling. This is very much prevalent in the financial services industry. For instance, if your account-holding bank has its own investment products, they’ll obviously recommend those tools. The bank officials will have an incentive to sell, and they will, in one way or the other, pitch you these products for all of your financial goals. Which is also why you may not find the best solutions to your financial needs.
Now, this bias is not only from the seller’s side. This is also from the customer’s purview. Sometimes, people have mental biases deeply rooted in all of their decisions, especially in financial decisions. Because of which they go for investment avenues that they feel appropriate and not necessarily those that are actually appropriate for them! Consequently, they look out for decade-old trusted family advisors, who recommend a few tools that fail to give adequate returns.
If you were to side-step all of these hurdles and look for advisors online, you’ll have a choice to make - price or quality? If you seek high-quality investment advice, it’ll come for a price, like more than a Lakh per year, which of course is not feasible for a middle-class individual. And if you try to fit it in your budget, you’ll have to compromise on the quality!
If the industry is so biased and rife with mis-selling, don't you think you should financially plan yourself? But then, what stops, you ask?
Why is DIY financial planning not in practice?
Well, to be honest, unless you are used to playing with numbers, finance is boring and over-complicated! There isn’t a sure-shot formula or a single metric that you could follow and pick great assets. Financial planning involves a thorough analysis of goals, objectives, asset classes and their combination, which is not everyone’s cup of tea.
No wonder, only a meager 3-4% of the Indian population invest in high wealth-generating stock markets, which is quite higher in other emerging and developed nations. You know, it’s not like people can’t take risks, it’s just that they feel so. Stock investing, if done after proper analysis and due diligence, can be exponentially rewarding!
Stock market is just an example, there are a number of lucrative investment avenues that people aren’t aware of, let alone investing! That’s why they end up either underinvesting or investing in sub-optimal avenues. For instance, as per Karvy Wealth Report 2020, around 38% of Indian wealth in financial assets was invested in the likes of Cash, Savings deposits and FDs, which were hardly able to beat inflation in the last decade!
You see, the problem is not intellect (in fact, India has some of the finest brains in the world), the problem is information. Firstly, there isn’t adequate information. And even if you get hold of the information, it is so dispersed that putting them together and making sense of all that stuff is not a common man’s game.
No doubt, there are plenty of courses on the web. But most of them are either certificate-oriented or fail to provide actionable insights.
So, what’s the solution to all of this, you ask?
The Bottom Line
The solution to all of this is, undoubtedly, a do-it-yourself platform. Something that provides you with close-to-reality information as well as a self-service financial planner that caters to your individual goals and objectives. So, don't you wish that was a reality?
Well, time to celebrate! Seems your wishes have got answered! Something that could change the way you plan your finances and invest your wealth. This could be your launchpad to a more financially secured future. And all of this for a mere Rs. 499 per month!
So, at such a pittance, you could be planning your finance, analysing stocks and learning investing at the same time! Like your one-stop solution for everything, you need in financial planning! To know more about it, you can see this video -
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