There’s a lot of hoopla over Insurance commissions and Mutual Fund loads these days. To my mind, all this is noise as the real issue is different. Read Why. One more post on the issue.
All of us are different. My buying behaviour is different from you as our needs, mindset, self concepts and financial status are different. This changes with demographics too. But all of us have to take common buying decisions like buying vegetables (and/or insurance too!) Take a look at the following image
Different Buying Behaviours
For each behaviour pattern, there would be a different cost involved. Other than the cost, there’s the risk too.
For example, you may buy from your friend at a very low cost. But the risk is that you may not get the right quality nor an efficient after sales service.
Other than that, there’s the trade-off for your time too. Do you want to spend so much time haggling and negotiating?
As I write this, there’s another option (Option 6) that I can think of. Why can’t we start our own farm? Or become a Financial Planner ourselves?
But, the main take away from this post would be to start with becoming conscious/aware of our own buying behaviour. The next step would be to consider whether we need a change in our behaviour. We can factor things like commissions, costs, risks to make an informed decision.
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