Jayant Pai, vice-president of Parag Parikh Financial Services, has some very day-to-day yet important personal finance related questions for you. Reply to these questions (be honest) and find out how much you have scored...
Your credit card company advertises that the interest rate on all credit card outstandings have been reduced from 2.5 per cent a month to 1.95 per cent a month. You...
A) Jump with joy, hoping that this will help reduce your mountain of debt.
B) Are pleased but decide that this is not going to change your resolve off paying off all your debt as soon as possible.
C) Are indifferent as you pay off all your outstandings on time.
Your insurance agent tells you that all ULIP schemes are eligible for simple reversionary bonus. You...
A) Believe him as a friend has told you that all insurance schemes (except term plans) are eligible for bonus.
B) Are not sure and therefore decide to cross check with others before investing.
C) Throw him out of your office for misleading you, knowing fully well that reversionary bonuses are not declared in ULIP schemes.
Your mutual fund advisor advises you to invest in a "risk-free" equity index fund. You...
A) Decide to go ahead merely because all your friends have made money in the fund over the past one year.
B) You know that there is no fund manager risk associated with the fund and therefore believe that your advisor is correct.
C) Disbelieve him because you know that all equity funds carry risk in some form or the other.
Your friend says that investing in stocks is similar to gambling. You...
A) Wholeheartedly agree with him because all your friends have lost money in stocks.
B) Are not certain because you have read some articles stating the benefits of stock market investing.
C) Show him examples of how proper asset allocation (of which stocks are an important part) can help you achieve financial goals.
Your home loan company changes the method of EMI calculation from monthly rests to annual rests. You...
A) Are happy that this will simplify your cheque writing activity.
B) Are puzzled over the move but acquiesce with it thinking that maybe this is in your best interest.
C) Threaten to drag them to court as you have calculated that this move will raise you loan servicing costs by a huge percentage.
A. 1 point B. 2 points C. 3 points
0 to 5 points - You would find it difficult to clear the kindergarten class of finance.
5-7 points - You are better off than many but "not yet arrived"...
8-10 points - Most of the ivy league colleges would invite you to give a guest lecture on personal finance.
