Convenience Kills
Gone are the days where you had to wait in line to eat at your favorite restaurant. It hardly takes 4 minutes to order your food while sitting in your couch without moving your body. Convenient, isn’t it?
Remember you had to convince a rickshaw driver to take you to your destination? Now, you simply put your location on an app & reach there without even speaking to the driver.
Start-ups are trying to solve every single problem that exists by creating revolutionary apps & software.
Sometimes, this convenience is detrimental to our well-being. Shocked?
Let’s go back 10 years from now. We had to visit the bank to create an FD & again visit the bank if we wanted to redeem it. We had to issue cheques to invest in mutual funds & had to fill forms in order to redeem them. This was a time consuming process but led to huge benefits.
People who invested money into mutual funds or shares through physical mode had simply forgotten them or took effort to withdraw it only in case of extreme emergency. This ensured that people truly stayed into the investment for longer term and reaped the benefits of compounding.
My dad invested Rs. 10,000 in the NFO in 2007. His advisor helped him with filing of application form. I got to know about this in 2017 when I started my wealth management business. He simply had a physical account statement. He had even forgotten to check the status of investment. The value of Rs. 10,000 was Rs. 52,000 i.e. 5.2 times. That’s a decent return by any margin in the span of 10 years.
When I asked him about how he managed to hold on to this investment for so long, he said he didn’t knew how to withdraw it. Sheer inconvenience of doing the entire process caused him to stay invested.
Inconvenience helped him generate returns that works only in long-term.
We live in a world where we are looking for convenience of doing things with respect to our investments too. A long-term investment made for retirement gets withdrawn within a few minutes for buying an iPhone. This happens due to convenience. More convenient a certain process is, lesser is the time spent on decision making. In case one had to go through all the physical process in order to withdraw money, one would have had enough time to give it a second thought about withdrawing the retirement money for gadgets.
We should embrace inconvenience in certain things. A redemption button on your investments app can be detrimental due to convenience of pressing it & withdrawing the money even when there is no good reason to do so.
If you deal with an advisor, he would also work as an additional layer of inconvenience to stop you from making a mistake. All this inconvenience is for your own good as it keeps you away from own mistakes.
Moral of the story:
We should embrace inconvenience in certain things in order to stay away from committing mistakes.
Personal finance is really PERSONAL. What suits others may not suit you. Confused about where to invest your money?
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