Financial planning experts are surprised that even college lecturers from a reputed college in Udupi fell prey to risky Ponzi scheme that lured people with attractive offer — invest now to get goods at half the rate in a few days. One expert said most investors are aware of the risk but let the greed overtake them.

The experts suggest that people can protect their hard earned money by investing in schemes that are regulated by government bodies and banks rather than unregulated schemes offering huge but risky financial advantage.

Radhakrishna Sharma, associate professor, Justice K.S. Hegde Institute of Management Nitte, and resource person of the Stock Exchange Board of India (SEBI) for its investor education programme, said common people could simply save regularly in bank deposits or the public provident fund (PPF) available with banks and post offices. Since PPF money cannot be withdrawn for a long period, those who do not have pension — especially the self-employed and the small businessmen — could invest in PPF for post-retirement security.

They could invest amount as low as Rs. 500 in mutual funds provided they can afford not to withdraw the money for about five years or more.

Pointing out that share market has given annualised yield of over 16 per cent historically, those who can open Demat account can regularly buy Nifty Bees again for long term gains.

One share of Nifty bee is equal one-tenth of Nifty index and purchasing the share is equivalent to investing small amounts in the top 50 companies of the country. Cautioning that there is risk in investing in shares, he said this was highly regulated by SEBI. People could invest in New Pension System introduced by the Central Government for post-retirement security.


Certified Financial Planner Naveen Rego said people usually lost their hard earned money in emergencies requiring hospitalisation of themselves or their family members.

Hence they must take adequate medical insurance cover.

Second, to prevent family members do not suffer on the death of earning member, such member should buy adequate pure term insurance. Buying pure term insurance online is 60 per cent cheaper these days, he pointed out. Insurance policies other than term insurance should be avoided, he said.

He too suggests that people could invest in mutual funds and shares through systematic investment plan (SIP) for achieving long-term financial goals such as education of children or their marriage. They could ensure that the amount is debited from their accounts to fund the SIPs and they need to go physically to the mutual fund houses for the purpose.

Instead of investing in Ponzi schemes, people could look at opportunities from their chosen fields – an autorickshaw driver could buy a second autorickshaw and a doctor can expand his business, for example, he said.

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