Logical vs Emotional Reasons

People usually invest for the wrong motive. They get life insurance for the wrong reasons: fear, greed, pity, frustration, taxation, and so on. The true motive for purchasing a life insurance policy to safeguard your family in the event of your death is never explained!

Similarly, whether it is for child education or retirement planning, people prefer insurance to mutual funds since the former is sold on emotions while the latter is sold on logic.

It has also been observed that high-performing salespeople play on emotion rather than logic. They are aware of the client's weak point and pitch the policy accordingly. Furthermore, when people buy insurance, they feel emotionally comfortable and keep the policy for decades. When it comes to pure investments, the majority of SIPs are terminated within three years. They are not deeply attached to their investments.

                            

 

 

Again and again repeating basic mistakes

Investors are roaming from here to there with no destination, blueprint, or investment planning in the hopes of double their money.

You always stray if you don't know where you're going. For example, if you want to go to Mumbai, you look for the Mumbai route, establish a strategy, and follow through on it. If there is a hiccup along the way, you may be delayed, but you will definitely arrive at your destination if the goal is already set.

Investors never consider what they should get after 10-20 years. They just have one purpose insight: I have free money for the next one to two years; where should I invest it now? In that situation, they choose the products that delivered the best returns in the previous year, with the expectation that they will make similar gains in the future as well.

Sometimes investors invest in gold, silver, stock market, mutual funds, commodities, insurance, bitcoin, and even in ponzi scams. They eventually stuck up for years. Finally, they perform even worse than FD returns, and after suffering significant losses, they prefer to choose FD. The bulk of investors have a similar narrative to tell. They keep switching from one product to the next because they are unsure about their financial objectives.

Any professional planner has a role to play in setting up a road map for what you can accomplish with your funds. A detailed financial strategy to help you achieve your objective. They assist in removing roadblocks to make your experience more impactful and pleasurable.  Hand holding is important.