Why is investing so confusing?
By Julia Fernandes
March 22, 2012
Recently, I landed up an opportunity to work in a financial services company. As part of my job I had to read up everything about finance and investing. As I started on it, I came across daunting financial ratios, different kinds of returns, complex financial instruments that could possibly intimidate any average person.
I was reading an investment article which went something like this, “To generate 10 percent returns overall given conditions where 15 percent will be lost on half the investment, the remaining 50 percent must generate atleast 35 percent returns.” I gave up reading the remaining article.
Finally, I asked myself what is investing all about. When I peeled all the financial jargons, I reached the bottomline. It is just about making money and more money. Man has, over the years, used his knowledge to create paper first and then his intelligence to attach value and power to that paper. And lo, you have money -- plain paper which you can buy the whole world with.
What could be more ironic. Man created money and today, money rules man. Man’s desire to earn more and more led to the creation of stock markets, bond markets, insurance, etc. We have not spared anything; we have commoditized everything, including metals, oil, gas.
The only things that have been spared are the Sun, Moon and the Stars. But, I won’t be surprised if tomorrow some smart Alec will start selling Sun Futures based on the amount of sunshine the sun gives in a particular place. Or there will be a Moon Fund, one waxing Fund and one waning Fund.
Somewhere, in all this fast-paced financial developments nobody has really stopped by to think what are we doing? Will our desire for money ever end? We are building such complex financial mini worlds that nobody really knows how and when and who will get busted.
Our ancestors lived happily without much finance and investment. Making money is not bad. But, nobody really knows how much is enough? I wish atleast one financial person gets up from his slumber and tells the world that it is ok if you do not invest, it is ok if you do not understand these ratios, it is perfectly fine to not have financial goals, for that is not what we are sent to achieve on this earth.
We have all been born for a higher purpose. I wish somebody stands up and demystifies this whole money-making business that is entirely built and driven on just one factor -- desire to earn more and more. I wish somebody has the grit to say -- this is enough!