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Shortcuts can ruin your financial health

Today one can post a questions in various blogs, forums, WhatsApp groups and Facebook groups, etc. and get it answered. Mostly it is just someone’s opinion on a subject. Again, there are a multitude of such opinions which can be confusing.

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Last Updated: Jan 07, 2020, 11.54 AM IST
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By Suresh Sadagopan

Before the advent of internet, information was scarce. A few people had access to it, and they derived their power from it. The world is a different place today. In the past 15 years or so, everything changed. Thanks to the mainstreaming of the internet, there is now an information explosion. There is too much information on virtually every subject available on tap.

Information used to originate from a few sources. That used to be the media houses once. There were clear producers and consumers then. Now, anyone can create content and share it through their blogs, social media and they can even create sites themselves. The world has certainly become flat and no one can really control information any longer, like before.

There are problems that such unlimited information access has spawned. One is that such abundant information availability overwhelms most people. Many times the information they get to read may be contradictory and confusing. One may not be able to verify the veracity of the information presented. Someone searching for information can hence end up even with wrong information. That is happening a lot in financial arena.

While there are primary sources to go to for certain information (example: RBI website for FEMA related information or Sebi website for information on capital market), most of us rely on secondary and tertiary sources like articles, blogs and analysis. This is a heuristic for most people as the information in the primary source may be too elaborate, difficult to understand and overwhelming.

Today one can post a questions in various blogs, forums, WhatsApp groups and Facebook groups, etc. and get it answered. Mostly it is just someone’s opinion on a subject. Again, there are a multitude of such opinions which can be confusing.

Wrong Information & opinions
The information that flows in such forums need not always correct. The content that we see are meant for general purpose in nature and does not address the specific situations that people may be facing. There are comments and chat section in every financial portal. Lots of discussions happen in them and you can also find a lot “advice” here.

In such forums anyone can be a knowledgeable pundit and dole out advice. The problem here is two-fold here. The person giving advice may not be qualified to do so and may be doing so based on their “experience” in an area. The second problem is that the person giving advice does not have too much context about the person who has a problem. Still, people act on such advice!

For instance, stock advice and tips on investing are all over the internet. This is a red-hot area. Then there are those who want advice on the portfolio they have. There are many who post questions giving their portfolio. There are others who are worried about the returns that the schemes they have invested are offering and want to know if they are good to hold. There are others who want to know where to invest for retirement, children’s education, home etc. These are certainly important concern areas.

Accessing right advice
The right thing for people to do if they want solutions or answers to specific problems/ situations is to approach a competent professional in that area. Most people do not have advisors and rely on the information that they can glean out from the public domain. Considering that people are dealing with their savings and investments, it is ironical that they are willing to take advice from any and every source, without regard for the veracity of the advice. In these kinds of forums, advice can be self-serving.

The advice may be coming from a distributor or product originator who is interested in promoting a product. There could be others who already have built positions and advising others to buy or sell so that they can make money.

The perils of such a course should be reasonably evident. The simple thing to do is to find a credible adviser who can provide counsel or build one’s capabilities enough to take informed decisions. If one is still sticking to enticing shortcuts in financial matters, it can be ruinous and they would have no one except themselves to blame.

(Suresh Sadagopan is principal planner at Ladder7 Finanicial Advisories, a Navi Mumbai-based financial planning firm)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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