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Don't invest your money in T20 style

In India, IPL T20 cricket has become a 'big hit' with all and sundry.

Once upon a time, mainly the men and boys were interested in cricket. But the advent of IPL T20 cricket has brought about complete transformation. Even the womenfolk have taken to cricket in a big way. In fact, many of the IPL teams are owned and managed by women.

Unfortunately, the brash T20 attitude is creeping into the world of our personal finance... with very serious implications.

1. Myopic outlook
As our brain gets tuned to thinking in terms of just 20 overs, our approach towards crucial money matters too has become short-sighted. Life, on the other hand, is rather more enduring and long-lasting, just like a Test Match. As such, this focus primarily on the near term, is hurting the long term wealth creation. 

2. Quick returns
In a T20 game, one has to pile up quick runs. Scoring rate per over assumes prime importance. Similarly, with our investments too, we have come to expect quick returns. Slow and steady growth sounds so boring and monotonous. This craving for "face-pace" in money making is an open invitation to disaster.

3. Eye on the Unconventional 
Without the unconventional shots, T20 is as good as a lost game. But such a high-risk approach doesn't matter because even if you lose a few wickets on the way, you know that the team has to survive a mere 20 overs. But unconventional financial products that expose you to high risk are "strictly avoidable". Even one bad deal could bring financial misery for years and decades. Remember the US sub-prime crisis in 2008 and its subsequent fall-out, which is still hurting millions across the world?

4. The 'big-over' fixation
Every batsman in a T20 match is constantly searching for the next big-over that can turn the game in their favour. But big investment ideas, that can turn you into a multi-millionaire overnight, are very rare. As such you can't be solely dependent on finding one. Instead, you can achieve 'consistent' success in making money through patience and discipline... qualities that rarely matter in a T20.

5. Lure of cheerleaders
A T20 game is incomplete without its cheerleaders. It adds to the fun and excitement of a fast-paced game. But the slick and glib talk of the fast-speaking salespersons — who dazzle and distract you with the glamour of freebies and discounts — could end-up hurting your finances pretty badly. You have often been warned that 'there's no free lunch'.

6. Coloured vision
The simplicity of a spotless white dress in a Test Match is lost in the coloured clothing of a T20 game. Similarly, the flamboyant and flashy brochures obscure the 'toxic' terms and conditions underlying any financial transaction. And by the time you realize that you have been taken for a ride, it might be too late. Well, its your fault as you didn't spot the bouncer.

7. The unholy trinity
In IPL T20 we have the 'shady' Corporate-Bollywood-Underworld nexus that is allegedly involved in betting and fixing matches. Likewise, in the world of our day-to-day personal finance, we have the unholy alliance of Banks-Insurers-Agents. And the ignorant aam investors are losing crores of rupees every day to rampant mis-sellings, scams and frauds perpetrated by this group. To protect our money, we need to be extremely vigilant against them.

In short, beware of the T20 modus operandi when it comes to playing with your money. I am sure you don't want to lose it to a lose shot.

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