Choice overload scares most people into inaction because they’re afraid of making the wrong choice and regretting it. But it’s not such a big problem that it takes a PhD to figure things out. 

Psychologist and Professor Barry Schwartz call this the paradox of choice in a book by the same title. He says that more choice doesn’t always make us happy, in fact, it makes us anxious and miserable. Barry's TED talk is a must watch. Barry Schwartz makes an excellent case, that more choices are not necessarily good. 

It’s the same with personal finance content—crores of blogs, books, videos and podcasts. There’s so much information today that, frankly, it’s a nightmare. There are over 1500 mutual fund schemes. Then regular, direct, growth, dividend plans, exit loads, etc. Say you somehow manage to pick a mutual fund. There are some 150+ health insurance plans, 30+ term insurance and plans and 1000s of other ULIPs, endowment policies and lakhs of bank relationship managers (RMs) and insurance agents trying to mis-sell them to you. 

People starting their personal finance journeys today have to go through this jungle and not lose their minds. All these choices and noise are the biggest reasons why most people who can invest do nothing and keep money in their savings bank account. There’s a psychological explanation for this. We’re all loss-averse—losses hurt twice as much as gains. When we have to deal with so much choice, our brains start to think, what if I choose wrong and lose money?  So, most people end up:

• Doing nothing and just putting money in a saving account. 

• Do something random. 

• Rely on defaults like recommended mutual funds on a platform, best-performing funds from lists, asking friends for recommendations, listening to bank RMs etc. 

• Rarely, people choose to delegate, like hire an advisor, for example.

I shall soon write about each of these points in greater detail if you are interested. Follow me on twitter to stay tuned.

Now, if you, like me, were intimidated by all things when starting, I want you to pause for a second and think about these 8 tips. They aren’t complicated at all. They are simple rules that cover most of the important financial aspects.

Do these rules cover everything? Of course not, but that’s not the point. You can waste your time doing nothing or get started with these rules, which cover 70-80% of things and then figure out the other things later. There’s an old quote that’s quite apt here:

“Don’t let perfect be the enemy of good”

If you want to have a comprehensive financial plan that covers all your goals and more importantly, put your plan into action, reach out to us. We have learned the art of planning :)