Consider this chart:



This chart represents the ratio of my saving/investment in one particular financial instrument to my total income each month. On an average, approximately 15% of my total income each month is saved/invested in this one financial instrument. What’s worse though is the fact that I am locked into doing this for the next few years! It seemed like a great idea when I first started it — and to give due credit, it has enforced quite a bit of saving/investing discipline in me — but I realize now that it’s a financial white elephant to maintain.

In this day when your next month’s income isn’t guaranteed, pre-locking 15% of that isn’t a really clever idea. I’ve had to sit and figure out ways and means for continuing to make a deposit each month in the event of financial adversity. 14-months from now, I will at least have the option of a premature closure available and this is the worst case scenario that I need to plan for. Thankfully, that’s the only white elephant in my saving/investment portfolio.

A Recurring Deposit at the Post Office — that’s what I am talking about.

That’s also where this quote came from:

Don’t invest in a financial instrument unless you have the financial capacity to feed it. Examples: Life Insurance policies whose premiums run into tens of thousands of rupees, high-value multi-year Recurring Deposits, and such.

What financial white elephants do you have?