Cost of laziness
We all know that laziness can be expensive in any area of life, be it health or finance or family but that never seems to deter us from committing one sin after the other.
The other day, I was surprised to learn that a online firm that enables investment into mutual funds had crossed a major landmark in terms of investment routed through them.
Now, the money they gain comes at the cost of the investors who have invested through that person and the total amount which is a few crores of rupees is no small sum either, especially since as long as the investors have their investment in those funds, the trailing commission will keep accruing to the agent concerned.
But since the money is not taken out directly – in terms of asking you pay separately, this is generally missed out as non consequential though if you are a real long term investor, the difference at the end of the period can be a very substantial number.
Just like most stock brokers have no clue as to what is the best stock to buy, so is the arena of fund advisory. But since when faced with the deluge of options, our mind wants the security that is generated by having some one advise us, we fall prey to advisory agents who at the end of the day may be no better than what we are.
A financial planner is supposed to work for you for a fee but since we Indians want everything free, he makes it seem as if the whole service is free while actually taking more money than what you would actually be charged if done as a service the way a stock broker charges you a commission while enabling you to buy / sell your shares.
In the years gone by, Stock Brokers used to charge an arm and a leg to let you enter the arena but with development of technology, it now costs less to make a trade worth a few crores than a Coffee at a nearby cafe.
The same technology can be used by Individuals sitting at home to invest directly into mutual funds and hence saving the money that would go to the distributor. Remember the adage, “a rupee saved is a rupee earned”. Hence our belief – Go DIRECT
We, at Portfolio Yoga are hoping to shake up things a bit by enabling you to make the right choice without having to spend a Rupee.
“Good things come to those who wait” and we hope to provide in the coming days and months, tools and information that can that make you a better investor – both in the arena of Mutual Funds as well in selecting the right portfolio if you are a believer in Direct Investments.
A couple of links on what you are losing out by not choosing the Direct way of Investment
Following is a chart I had tweeted on the difference in percentage terms between the HDFC Top 200 Direct Scheme and the Regular.
As you can see, the longer you continue in a regular scheme, the larger is the loss that you accrue. So, why wait?
“A life spent making mistakes is not only more honorable but more useful than a life spent doing nothing.” – George Bernard Shaw
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