Here’s something I read just now and wanted to share with you.

A statement of fact is insufficient and often not even necessary to persuade someone of your point of view.

Your position on just about everything, including, yes, your salary, your stock options, your credit card debt and your mortgage are almost certainly based on the story you tell yourself, not some universal fact from the universal fact database.

Read the full post by Seth Godin

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Last week, our family mourned the loss of a beloved cousin who lost the fight against Liver Cirrhosis. While it is a big personal loss, I will try to sublimate some of my sorrow through this week’s MoneyTree column by raising some philosophical and psychological questions that revolve around money.
Let me start with a story.

In Mahabharata, the great Indian epic, there’s a story of a Yaksha asking some intriguing questions to Yudhisthira. The story goes like this….

One day while living in exile in the forest, Yudhisthira finds that while attempting to drink water from a lake, all his brothers have been killed by a mysterious Yaksha (a celestial entity). When Yudhisthira arrives the Yaksha challenges him to answer all his questions or else face the same consequences as his brothers.

One of the questions was ‘What is the most surprising thing in the world?’

Yudishthira answers that the most amazing thing is that even though every day one sees countless living entities dying but no one can imagine himself/herself taking that last journey!

I guess that’s why even though Insurance is an important financial product, people have a natural tendency to avoid it. In fact most of us cite the agents pestering and tax issues as reasons for taking insurance!

The same things happen with financial planning and retirement planning. We are not able to visualize the future when we will get old even though we see other people getting old and facing financial distress.

This is what this post wants to point out. That all of us have difficulty at a deeper level at visualizing our own futures! So that’s one plausible reason why we avoid all the issues of insurance, retirement planning and financial planning.

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It feels good to be recognized and applauded, right? It’s all the more nice since it is for things that I enjoy doing! Yes, it’s about blogging.

HT has a story on the business of blogging and features “yours truly” as one of the bloggers who is taking blogging seriously. Here’s the excerpts about me:

Ranjan Varma, finance blogger
Branching off to host a Rs 3,000 workshop

Ranjan Varma took off, after 20 years in LIC to work full-time on his blog, www.ranjanvarma.com in 2010. From banking, filing returns, claiming amount in case of death in the family, paper formalities, tactfully managing multiple credit cards, Varma’s blog talks about it all.

“With this, I was able to interact with readers and could understand their problems. I understood that just reading up articles can be daunting as well as confusing and may not suffice for real action on improving their personal finances,” says Varma.

He also designed RupeeCamp, structured workshops on personal finance with activities and case studies. The one-day workshop costs Rs 3,000.

He is also currently working on a RupeeCamp software, essentially a tracking tool to manage personal finances, by measuring expenditure, savings, and investments.

The online revenue is from advertisements. His future plans for RupeeCamp include a virtual financial mall.

“I will forge partnerships with financial products and services and create a distribution network,” he says.

That’s not all. Another mail from Tracy says that my blog has been featured on the list of World’s 50 Best Money Management Blogs. They have hand-picked a list of their favorites and outlined the unique reasons why they love them.

All this is good for the ego. But the real reason I blog is because of YOU, the reader. Thanks for reading this.

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For the last two days, everything I consume is going down the drain very fast. I had diarrhea. The reason: some good looking street food including jalebis that were dressed attractively but contained evil virus and bacterias!

It’s easy to panic. Just go to Wikipedia’s page on diarrhea and you’ll see that in 2009 diarrhea was estimated to have caused 1.1 million deaths in people aged 5 and over and 1.5 million deaths in children under the age of 5!

Another perspective would be talking about the percentage of fatal diarrhea. I mean a very small percentage of people with no medical aid would have turned fatal, right?

Any way stock markets the world over is having diarrhea too.

I being an incorrigible optimist, think that all will be well. I have taken some medicines, eating bland food and am fine now.

Let’s hope the market also takes the necessary medicines and will be back to normal. Here are a few thoughts about the situation:

• Value investors have many more opportunities when the market comes down. Now you can buy stocks on distress sale!
• Not everybody who had the same food that I had are suffering from Diarrhea. The defence mechanism failed in me, while others survived. So there are other factors and the street food is just a component of the problem, not the entire problem.
• Stay away from things that look attractive but possibly come with a virus attachment. We all know that, but can’t resist all the time, no!
• Diarrhea is a lesson and learning from that lesson is a good idea while panic is a bad idea.
• Panic creates more problems and interferes with the healing process.
• Does anyone sees the stock market dying due to this diarrhea? Anyone? I do not think so.
• Manshu points to an interesting post on the proper etiquette for market panics

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The financial services market is enormous. And there are enough pain points (lack of transparency, unethical advisors, bad products, misleading financial journalism,etc). This makes this vertical a very attractive place for all sorts of people with business interests. This post is a warning signal about staying away from some of them (us?).

The business is ain’t easy though. If you want to challenge the status quo, you are up against teeming million advisors (30+ million), financial service providers with strong money power and have to analyze between thousands of good/bad financial products. And may be find a way to collaborate with other people who are into “changing the financial world”. (Top 10 Personal Finance Resources)

But while we know the obvious pain points as mentioned above, this post is about another perspective. It’s about being aware of people who are into this business with noble intentions but no real domain knowledge. Beware of these guys. It’s about the famous saying, ” We have found the enemy, and it is us” ?

The most visible example is the level of financial journalism. Subramoney points out some!

And here’s a post by Seth Godin which talks about domain knowledge:

Every now and then, a creative act comes out of nowhere, a giant leap, a new way of thinking apparently woven out of a brand new material.
Most of the the time, though, creativity is the act of reassembling many elements that are already known. That’s why domain knowledge is so critical.
..the way Moby took his encyclopedic knowledge of music and turned into a record that sold millions… if you don’t have awareness and an analytical understanding of what worked before, you can’t build on it.

It’s not enough to be aware of the domain you’re working in, you need to understand it. Noticing things and being curious about how they work is the single most common trait I see in creative people. Once you can break the components down, you can put them back together into something brand new.

My point is that noble intentions without real domain knowledge is dangerous.

Would you like to share such examples from your experience?

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Yesterday, while travelling (and maybe since I was using a mini laptop), I was offered a program to become a crorepati. That too by a bunch of young students.

It was all about the internet, they started. The sales proposition was as under:
You would join a unique program that would:
* Give you access to online education and course material prepared by experts, presented in a graphical, easy to learn format.
* Enable you to test yourself and earn certificates.
* Provide other features like CD ROM containing indispensable software’s, training courses and utilities (only for Indian Associates).
* Create an online presence, and operate 24×7.

Interesting, I said. But soon I found out that it was a Multi Level Marketing (MLM) program where there was just hogwash of a product (link) and very hard sell marketing behind it.

It had brainwashed students into buying the program by paying Rs 3861/- These students had to:
1. Renew by paying Annual Maintenance Charges Rs. 3861/-(Inclusive of all Taxes) (Annual Maintenance Charge Rs.3500/- + 10% Service Tax + 3% Cess Charge on Service Tax to Govt. of India)
2. Must learn and successfully complete the Quiz on any three of the given Computer Courses.
3. Must attended at least two Conventions / Seminars / Contact Workshops organized by eBIZ.com Pvt. Ltd. for Computer Learning / Teaching / Promotion of our Mission and must take active participation in promoting eBIZ Business / Mission.
4. Must sell at least two Advance eBIZ Educational Packages.
5. Must sell eBIZ Educational Package to at least two individuals

I asked the students whether they had gone through the product and if they learnt anything. They said “No” and they have bought it to make money. I tried to reason with the students that these programs really don’t make them money. But the students were quite enthusiastic, signs of a good brain wash!

Though they make good money for the Ebizel guys. One student said they have 3000+ members in Bihar alone and that makes them a cool CRORE .

I know what you are thinking. Infact I am thinking on the same line, i.e. how to build such a MLM scheme in my business area!! (okay, just kidding!)

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