Papa Kehte Hain is a famous song from Hindi movie “Qayamat Se Qayamat Tak” starring Aamir Khan and Johi Chawla released in 1988. Verbatim translation of “Papa kehte hain” in English is “father says”. Now this not an blog on hindi movies. Rather we will discuss what is meant by Papa Kehte Hain syndrome in personal finance.
In simple term it means you blindly follow what your father keeps telling regarding your financial decisions. And what are the symptoms of this syndrome?
- All your financial decisions are taken by your Papa (father) or other elderly person in family like uncle.
- You don’t keep track of investment details or documents and leave that for your father.
- You blindly believe that all your father’s financial decisions are correct; don’t validate or question them.
You don’t have any clue where your father is investing your hard earned money. You don’t even keep track of investment details or documents. Very dangerous. Your father will surely not always be there to handhold you regarding your finances. What happens when he passes away? How do you know which instrument he has put your money in – PPF, NSC, KVP, FD, RD? Which banks or post offices are these accounts with? Did he take the service of any agents for them? When is the next deposit/payment due? When are these investments getting matured? Where has he kept those passbooks, bank statement, and certificates? Did he take any insurance policy for you? So in addition to mourning the loss of someone close, you will have to grapple with all these questions.
You blindly believe that all your father’s decisions are correct. After all he has got years of experience with him. Wrong. Today’s investment avenues and choices are far more in number and complexity. Back in his days, only avenues for investment were FD, RD, NSC, KVP, endowment and money back policies. Mutual funds, ETF, SIP are relatively new concepts in Indian financial sector which he is not aware of.
For example, my father has done very well in managing his finances in spite of many responsibilities and limited investment avenues then. He has married off 5 sisters, built his own house, funded education and marriage of two children and still managed to build a retirement corpus which will outlive his retirement life. Does that mean I should following his ways and means of investment? While I look up to his discipline and patience in saving enough from his earning and investing the same, there are far too many investment avenues now which are more profitable in the long run. Most of his investments were in FD, RD, MIS and other government saving schemes.
There are far too many investment avenues today which are more profitable than those available in yesteryears. It is proven beyond doubt that most viable way of building a large corpus in the long term is through equities. Thus one has to be aware of all equity related basics like mutual fund, direct stock, SIP, ETF etc. Moreover, now investment is just a mouse click away; with internet banking and brokerage investment can be done anytime, anywhere without making rounds of banks, post-offices. Now it is way too much to expect your father to pick up all these concepts afresh and make himself tech savvy.
One more reason is our social upbringing; wherein questioning elders decision is considered disrespectful. However, concurrence doesn’t mean respect. If we explain things with valid data points there is no reason why they shouldn’t understand. While it's wise to consult elders and benefit from their experience, final decision making should be your own responsibility. For example it was tough to explain benefits of term insurance to my father vis-à-vis endowment policy, as in term insurance premium is not paid back to policy holders. But it was easy drive the point once I explained in details with data points.
Bottom-line : Take final decisions regarding your personal finance on your own; since consequences will be yours to face.
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