Editor’s Note: Learn, Act, Repeat

When I sat down to write this column, my first instinct was to tackle the year gone by, but then I realised that it won’t be long before the phone notifications start buzzing with similar information and more. Instead, maybe it’s time to look at what remains more or less permanent in our financial lives, year on year. As another year comes to a close, we are none the wiser than we were last year. Or are we?

Bank relationship managers and a section of distributors still get away with selling products that are high cost, or schemes that will neither provide adequate returns nor security, or sell us loans or products that we don’t really need. The tentacles of the cyber fraud monster multiply and multiply, each disguising itself into different forms—sometimes into a threatening authoritative figure, sometimes as someone in need, and sometimes simply as an innocuous weblink—to trap you somehow. The list can go on.

While government representatives, regulators and entities working on financial awareness continue to warn us and that’ll hopefully ensure we are in a better place sooner than later, we are equally at fault.

We still get sold on a scheme even if it is too good to be true, precisely because it seems too good to be true. We easily get lured by guarantees, not realising or caring to calculate the cost we pay for that. We have started loving the equity market, but don’t pause to understand its working, and rather plunge into it for the short term. The result: 90 per cent of retail individuals end up with losses on account of stock trading, but we still don’t stop. We still go for bundled plans because we don’t want to make enough effort, and an all-in-one solution makes us happy even if it comes at a cost.

The fact is that we cannot control what others say or do, or what trap they lay for us, but we can definitely control our responses and actions to those, and therein lies the key to decisions that you may not regret making.

So, here’s a small solution (and I am quite sure it’s not the only one) that may help you. The easiest way to safeguard yourself is to not go for anything unsolicited (read: that which you haven’t asked for of your own volition)—whether it be phone calls and messages or financial products or discounted products.

So, if someone calls you wanting to deliver something which you haven’t ordered, or to implicate you in a case that can definitely not be true, ignore it. Similarly, have your own list of financial goals, another for the instruments or products you need, and so on. If you have those details chalked out already, you will never get lured by a scheme promising huge returns because you would already be familiar with the lay of the financial land. In the same vein, buying a new dresser just because it’s discounted may not make sense and may even upset your monthly budget.

A measured and well-thought response and action to anything unsolicited can stop you from making or repeating such mistakes. But that will only come with practice.