“By saving as little as Rs.3000/- a month, you would amass a sum of Rs. 25.00 lacs by the end of the 15th year” was the tantalising assurance that tricked me to get into a unit-linked Systematic Investment Plan, SIP. The sales guy of the financial company was so convincing that a back of the envelope calculation of the interest on the accrued money was exactly half the monthly amount I would need, post-retirement. And I joyfully signed a Rs.6000/- per month investment scheme. “Retire at 45” was still too utopian to be true but a decent extra income after 50 was definitely entrancing that would allow one to do better things in life, than just sweat out to make a living. The two score and a ten lac of rupees to be credited to my account at the end of the fifteenth year was irresistible and I religiously paid my SIP month after month, even when I was defaulting on my utility payments. Skipping an outing or replacing the split air-conditioner with a desert cooler were too small a price to secure the future…or at least so I thought!

And I should thank my stars for having withstood the shock when the mobile SMS alert informed me of the amount credited at the end of the fifteenth year. Instead of assured five million rupees, what I got was less than a fifth of the promised money. Maybe I thought it was the regular mistake that bankers make in placing the decimal at the wrong place while crediting the amount, but on further investigation it was clear that it indeed was the amount that I am eligible for. I frantically called the person who lured me into the scheme and started yelling at him at the monumental loss that I have incurred. The guy gave a very patient hearing to my outpourings that was interspersed with the choicest expletives and waited for me to empty my anger laced frustration. With a voice and a tone that I thought he would have borrowed from some spiritual sooth sayer, he began: 

“ Sir, I understand your disappointment but you missed the bus….” .

 “ I haven’t tried to travel in one for decades” I resorted demanding an explanation for the steep fall in the final value of my investment. 

“ Sir, your investment was indeed worth the amount I promised but that was three months back… before the pandemic…. and you should have exited the scheme then… you missed it!” 

“ But no one informed me that the pandemic is coming….” I played the ignorant card.

“ Nor did anyone to me sir…. But you should have kept tab of your investment and exit at the right time…Investments are like tending the garden…you should know when to pluck the flower” he continued.

“ But I can still wait for some more time… the vaccine is getting ready and pandemic would definitely go away and the market would bounce back…” 

“ But sir your investment has attained maturity and the money is credited… nothing can be done now” 

 “Do not call me ever again” were my final words as I disconnected the phone rather discourteously to express my deep annoyance.

It then dawn upon me to look at my current financial status and if there is anything that I could do about it now. While excessive eating and under working has ensured that the physical weight has almost doubled during the lockdown, my net worth has almost halved in the same period. The body weight can be shed by rigorous exercises, but there isn’t any easy mechanism to gain the loss accrued to the asset built almost over a career span of hard work. Not just the investments that are linked to the market trends have taken the battering, the value of almost all the moveable and immovable assets have moved southwards. Property prices, for instance, are down by 40% while the automobile are selling at 50% of the market value, that is, if there is a buyer. Your house may not be worth half the mortgage amount that you would have paid over the years while the car won’t fetch the money to clear the last year of its loan. Such is the impact of the Corona pandemic on our economy that it has set the clock back by a few decades and the downward spiral has not really ended. 

Added to this diminution of net value, for many it the loss of income that is proving to be the most damaging. When jobs are lost and salaries are cut, many dip into their savings and spend them on subsistence needs and thus compromise on their future financial security. The problem is of such mammoth proportion that the statistics show a multifold increase in withdrawals from retirement funds during the last few months and the phenomenon is only getting acute as the days pass! With shrinking assets, depleting savings and reduced incomes, it’s the triple financial combo that is more frightening than the dreaded virus!

Meanwhile, the financial sales guy had the guts to call me again and is now requesting to invest in another SIP, this time Rs.10,000/- a month. With a ‘ V’ shaped recovery anticipated once the pandemic is over, he is assuring a sum of Rs.10 million at the end of the tenth year! I am tempted to sign-in…what do you suggest?

Yours 

Narayanan