Here are some stories I’ve come across, some hypothetical, some real, that all have a common theme: the evolving nature of risk and how it impacts our lives.
Raj Mundra along with two colleagues had come to Chennai to conduct a workshop for a business group seeking new strategy suggestions for their weakened traditional business. Twelve key employees attended the workshop, eager to participate and test the new strategies. As the day progressed, my interest and enthusiasm waned.
What bothered Raj was that participants were constantly distracted by their phones. Assuming the workshop ultimately led to a strategic conclusion, the distractions in the workshop could have led to serious failure.
For example, in a workshop, the company may have concluded that it should cater to demand in Uttar Pradesh, so the manufacturing manager would look for a factory in that state, while the marketing manager would be distracted by the beauty of Himachal Pradesh on his mobile phone and think that they should look for opportunities in Himachal Pradesh instead of Uttar Pradesh. Venkat, an unemployed man living in a rural village in India, used to walk by the fields in search of food. He sensed a trend of a major change when he saw that there were fewer rats than the previous year, and from past experience he knew that it meant something. There was a wise anecdote in the village that rats would run away when food was about to become available. Venkat also sensed the danger of food shortages and the wild fluctuations that would see food surplus in some areas and shortages in others. Venkat noticed it, and he thought that perhaps the rats noticed it too. The farmers were distracted by their mobile phones. Unknowingly, the mobile phones were sapping the farmers’ energy and they were ignoring the monsoon trends. Not sowing enough seeds or over-sowing some crops led to shortages of some crops or surpluses at the expense of others.
The number of accidents is also increasing, partly due to distraction caused by using mobile phones while driving.
The list of hypothetical situations in the fields of education, engineering, arts, etc. goes on and on. Mobile surfing is both a new age pastime and a serious problem.
Sales of books on digital detox are on the rise, as are workshops on the subject. Advice is varied, but here is some of it:
– Delete apps, especially social media apps.
– After a certain time limit, put your phone down.
– Access social media apps via the web.
– We keep ourselves busy in the morning by cutting fruits and vegetables, reading the news in a paper newspaper, cooking, writing, cleaning, working on a new craft, etc. We may feel better if we remember what we were doing with our hands before we started a passive activity like surfing or scrolling the web.
Our hands are made to create and live out an active lifestyle and as I read and imagined, I realised that while mobile phones can be a useful tool, they can also have a serious impact on our finances if we indulge in mindless activities like watching reels, chatting with a few people from different groups and seeking the thrill of getting likes on our posts.
– You may forget or delay rebalancing your investment portfolio, potentially reducing stocks when their asset weightings become significantly higher than originally planned.
– Forgetting to renew insurance
– Ignoring KYC completion notices from banks and mutual funds
– Forget about making a will and naming next of kin – this is the most important thing
– Not paying taxes on time
– The more serious risk is indulging in trading or investing the moment you read it.
They try to do something exciting without realizing that it may have a negative impact on their financial and mental health in the long run.
For those who don’t care about money, especially the younger demographic, this is an even bigger and more serious issue as they are distracted by too many apps on their phones.
If not properly addressed, this distraction can lead to significant risks such as inadequate savings and skewed asset allocation. Mobile phones are meant to be a source of productivity and connectivity, but they are now evolving into a source of unforeseen risks themselves.
(The author is Managing Director and Group Head – Equities, Quantum Advisors Private Limited)
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