The tag line of this blog is admittedly a bit over ambitious. It says “Changing the way we learn and manage our money”.

I admit that it seems too difficult thing to do. You cannot change the status quo just like that.

And it’s not that the financial services industry is immature or fragmented. It’s a mix of seasoned, professional people as well as snake-oil sellers. There are very good financial advisors as well as the agents mis-selling for their own self interests.

Somehow I get a feeling that we get the financial service we deserve. Part of the blame of getting lousy financial service lies with us.

However there are a few common pain points with the financial services industry which is not being addressed in totality. This brings me to my three components model of managing money. Take a look.

Lights-camera-action

Learn, Focus and Manage

The Three Components
To my mind, the Financial Services industry is not addressing all the three components of the above model. Let me explain what I mean.

Lights or Learn
The industry has a responsibility to spread greater financial awareness among the buyers. But the information asymmetry present in financial services is huge. Maybe it’s because of the buyers own reluctance or old habits. But I think there’s a good opportunity for someone to come up with a business focused on this education vertical. There doesn’t seem to be any competition (+) or big money making (-) right now. But who knows!!

Camera or Focus
After you get the knowledge, you need to translate it into action. But not before you start using the tools for such actions. Measuring your money would be the first steps towards managing your money or taking concrete action.

In India, the tools available for managing your money are not very popular or easily available. I know a few efforts (including mine). Again, I guess the perceived lack of market/potential or money making opportunity is responsible for not many efforts in this vertical.

Action or Manage
This is where the action (pun intended) lies. It’s a huge market where every Tom, Dick and Harry makes a mark for himself with a little bit of effort. So, as I said earlier you can get a very good advisor and a equally bad one! In any case, everyone is after your cheque and not bothered about your needs (Knowledge, aka Learn) or (Tools, aka Focus).

And as I write out this post, I realize that:

• The financial service provider has an incentive to get the cheque out of you. So he’s only bothered about the third component (Manage). That’s a given.
• You, as a financial service receiver have an incentive to learn more and use tools to manage your money. This means you must focus on the first and second component (Learn & Focus).

In any case, it takes all the three wheels (Light, Camera, Action!) geared together and work in tandem to manage your money in a holistic manner. Half baked efforts at doing one/two of them at a time wouldn’t make a good picture!!

Reminder to self: कार्य कठिन है , इसलिए करने योग्य है

What do you think? Agree/Disagree?