When a person joins a company (actually any job – bank, government, army, private sector….) he/she gets an appointment letter.

This letter has a ‘Gross Cost to Company’ figure…which looks good and impressive…say Rs. 600,000.

Now the kid who gets this letter thinks he is going to get a cheque of Rs. 50,000 every month. Alas, that is not the case.

He is told : Your Gross salary is Rs. 600,000.

Please note that some of the amounts are paid in a quarterly basis (say medical reimbursement), some are paid on an annual basis (like LTA), then there is tax, profession tax, ‘assured bonus’, ‘provident fund’ ‘HRA (if you do not produce the proof, we will not give IT deduction threatens the accounts and tax department.

Thus the employee finds that he is being paid Rs. 27,560 every month …..and in many cases, they have no clue how to reconcile the 2 figures. I have know ‘Relationship Managers’ in banks not being able to do this. Remember, this guy is supposed to plan your finances for the next 120 years!

So what about the soldier (I mean army, airforce, navy…all of them)? Is it possible for him to do this reconciliation? No.

Now put an aggressive bank..which sells him a ULIP. The kid goes off to the front / on a training naval ship..and after 3 years finds his Rs. 30,000 premium of 3 years is now worth Rs. 44,612….

scary. The armed forces needs financial training / planning…is somebody listening???