Here are some offers for you.
5 HOT stocks that will double in 6 months
Top 5 mutual funds to own for the next year
Just invest Rs. 10,000 a month and receive Rs. 1 crore in 5 years
Invest in NA farmland plot at just Rs. 50,000 and receive Rs. 5 lac
Get hot tips on stock futures: Trade now to make 50% profits
If you have read or heard or been told any of these statements, you have been subjected to financial porn.
Financial Porn? What’s that?
As per Investopedia, Financial Porn
is a slang term used to describe sensationalist reports of financial news and products causing irrational buying that can be detrimental to investors’ financial health.
Short-term focus by the media on a financial topic can create excitement that does little to help investors make smart, long-term financial decisions, and in many cases clouds investors’ decision-making ability.
The term was first coined by Emmy winning, James Bryant Quinn, an American Personal Finance Writer.
It’s hot and it can hurt
So, you enter the kitchen and you see the hot paratha just getting ready. You mouth starts salivating and so much so that you reach out your hand to take it over to you plate. Ahhhh! You burnt your finger. It was hot.
You get the sense. That’s what financial porn does. In fact, it is more like soft porn but the one that can hit you very hard.
It grabs your attention with offers of “hot tips and investing secrets”. They can expose you to high risks.
No mathematical logic can stand in the way of financial porn. When it says it will double your money without risk, you believe it!
It is out there to heighten your irrationality and drive you into making serious mistakes with your money.
‘Stock market tips that promise to make you a millionaire overnight‘ is the most popular form of financial porn that baits millions of people. Search on the Internet for ‘stock tips and advice‘ and then you will know what is going on.
In recent times, you have heard of the Ponzi Scheme of Bernard Madoff and of course the highly publicized Saradha Financial Scam, a sort of a Ponzi Scheme. There was another online clickbait scam in Noida and many more sophisticated ones emerging throughout the world.
Every one of these has a high potential to hurt us financially and emotionally. Unfortunately, several times, one only comes to realise once the damage has been done.
Can you save yourself?
There goes a mythological story where Rishi Vishwamitra could not hold on to his years of meditation in front of Menaka, the beautiful celestial nymph (apsara). We are mere mortals.
So, I am really not sure. A lot depends on your temperament.
If you love the superlatives and get attracted to words like – the best, fastest, secret, exclusive, top, super, hot, etc., and you are out there to make a quick buck or get rich overnight, then you are an easy victim.
The simple advice is – keep your eyes and your mind open, subject everything to scrutiny based on facts and ask tough questions.
Here are some more dos and donts.
- Don’t watch TV channels specially the business variety
- Don’t subscribe to pink papers aka the business newspapers
- If you have to get news, build your own google alerts for specific interests or follow specific people on your twitter timeline
- You are also better off subscribing to specific blogs. There are several great teachers out there
- Read books that help you build your business fundamentals
- Read books that enable you to better your decision making skills
Finally remember,
If something seems too good to be true, it probably is.
This note is a part of a free course – Investing 101. Want to subscribe to the full course on email?
