This is old, but brilliant. John Oliver on Investments, Retirements and All Things So Funny.

Some of this stuff needs to change for India. You don’t have retirement funds in India other than the NPS or the EPF/PPF combinations and it’s bloody complex. Setting up and using an NPS account is complicated and takes time to get going. But all NPS fund management is active (they don’t passively follow an index) and most of their equity portions have fallen short, in returns, of pure index funds! And these are the lowest cost products in the market. So it tells you one thing – lowest cost doesn’t mean anything, because people can *say* they are lower cost, but that doesn’t mean their returns will be higher.

Second, in India, there is no across-the-board fiduciary responsibility. You can’t take your banker to court for misselling you a product, yet. In the US, they’ve made a law that by 2017, advisors will have to be responsible for misselling. In India, banks have been fighting being labelled “brokers” which would give them some fiduciary responsibility (as in they have to look out for your best interest, not theirs). And for others, there is very little and slow enforcement through the legal channels, so you can be rest assured that people will try to scam you.

 

Finally, retirement annuities are horrible. We’ll speak of that too but most of these products give horribly low returns compared to even a government bond!

Much about finance in India is just screwed up. More on this coming up in a lengthy series. But John Oliver, he carries that information so much better!

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2 COMMENTS

  1. I am 32 years old and looking for investment opportunities, basically for retirement purposes, since I am just 32, I am ready to take bold investment ideas that bring me great rate of returns.
    What would you suggest is better, p2p or mutual funds?
    Thanks

    • Mutual funds please! Never put retirement savings in things you can’t understand. There’s a big difference between bold and stupid – with P2P risk only your “extra” money that you don’t mind losing until you see some losses (and there will be losses). Then figure out if this is what works for you. For retirmenet, just use the MF route or go with stocks.

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