My 2 cents on all things Finance - Part 1

Finance is THE hot topic now, with the banks going down the drain. Most people would have a rough idea of whats happening, but in layman's terms, its a sea of icebergs out there. In Lehmann's terms, it was just a poor Titanic!

Having worked in a Financial Services company, Insurance company and a Bank, I have a pretty good round up of the sector. Well, they say people who know more talk less, so before I get to know more, let me ramble on :P

I clearly remember the first bank account that I opened when I was entering into 2nd standard. My mom gave me Rs 10, the biggest amount I had seen till then in my own hands, and asked me to save. The next 11 yrs, I did just that; saved, saved and saved. My father was my first depositor, and my sister the first customer. Only that my customer returned neither principal nor interest. I learnt valuable lessons along the way. Seeing my piggy bank bulge and break, rise and ebb, I learnt what is love, sustenance, support, suspicion, sacrifice, despair, hope. Every month, I used to seggregate my 1p, 2p, 3p, 5p, 10p into seperate boxes and keep accounts. Over the years, I saw my beloved 1p and 2p disappear. Why shud those lovely chiselled aluminum coins be given back to the bank? New strange coins of Rs 2 and Rs 5 denomination came into being. My first taste of inflation. I did keep a few 1p, 2p and 3p though. It lost value, but did it?

Once in 6 months, my mom used to "buy" all my coins and give me a few equivalent notes, usually a bit more than the value of the coins. I didnt think much about the interest received, but I did cultivate interest. She used the coins for the daily bus journeys. I used to go to the bank and deposit the notes, way easier than depositing coins. I learnt how to deposit money. Occasionally withdrew money for emergencies, and got to know all the friendly neighbourhood bank employees. The bank used to have its own peculiar smell, just like a hotel.. It smelt of money and burning coils in the fans. I used to wonder why they worked only from 9-11am, until I realised my neighbour aunty working in the same bank came home only in the evening. As time passed by, I realised the bank shut itself inside, and people scribbling hard after people left. "Keeping accounts" I pondered, and mused how many 1p they had inside.

I opened my second bank account. This time my mom gave me Rs 100. WOW! And time went by and money went into the bank account. I ensured that hardly anything left the bank. I would be so delighted when they put the interest entry, as if I had won a lottery! When I ran from home near the closing time, and saw the shutters close agonisingly close, I used to pray to God to extend the banking hours. Its only when my passbook showed Rs 500 did my prayers get answered. And things started to get worse.

Did I open the pandorra box? The question would never go away. Growing up, I learnt it was not my prayers, but the world that was fast changing, but inside I always wish I hadnt wished 9-11 to change. The friendly neighbourhood aunties were now learning to type into the huge boxes obstructing my view of their bespectacled sincere work. I had grown enough to use a computer at school. I knew I could teach them to type faster. But the computers that I was so fond of at school transformed into frustration in their eyes. They were still scribbling in their ruled notebooks and into my passbook.

My balance grew into mammoth figures. I could hardly believe my eyes when I passed my 10th. I had a whopping Rs 1200. I screamed in silence. I wanted to tell all my friends, but I didnt. It was my WEALTH. Then my sister got engaged. My parents had to raise capital urgently for her marriage, and realised how tough it was to raise capital. Maybe people were as possessive about their wealth as I was with mine. I didnt think twice to open all my beloved boxes filled to the brim by then. 5p onwards flowed out.. totalling another Rs 250. They said they needed Rs 2.5 lacs. Thats when I realised how insignificant it all was. I wanted desperately to help my sis I had grown to love in hate. But I couldnt. I had saved all my life, and it came to nothing. I learnt the time value of money. In hindsight, I can see why its the first lesson in almost every financial book.


Quote of the week: Two investment banks were taken off the equation in a day.
Quote of the day: The Fed can take a dead dog as a collateral for lending money.

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