I have been talking about risks all my life. I believe if you concentrate on risk, returns will follow. If you ignore risk and run after returns, one day you will be burnt very badly. Real badly.

Let me tell you one story of a doctor. Remember this could have happened to anybody, just that this was a doctor….

The time frame, name, location do not matter, hence I am not even mentioning it.

One doctor with an income of Rs. 15L was approached by a banker wanting to do more business. He asked the doctor to use his credit worthiness to buy a car (6 seater) and use it as a ‘tourist’ vehicle. The doctor could collect the rental charges in cash (oh la la la)..while claiming the depreciation on the Rs. 12L car.

Great Idea…thought the doctor. CA was so happy to approve it, that he suggested that deal to many of his clients.

Small hitch. They did not see the risk.

Exactly 2 years later the doc got a call from the police.

The driver had hit a man on the Mumbai -Nashik/Shirdi road, and ran away – leaving the man to die and the car unattended. Skin in the game concept. He was not from Maharashtra..and the search for him proved futile. Perhaps he had gone off to his state/country…he could not be traced.

Car was in the doctor’s name. He did not have any agreement / formal registration as a taxi. The documents turned out to be fake. He had received one or 2 payments by cheque – but from the clients. It turned out that this man did not have a bank account. This suited the consultant, bank rm, CA, and of course the doctor.

He spent 5 years of his life in the police station and courts….Do you want me to enumerate how much he lost in the process?

Well, that does not matter, but he surely spent more than Rs. 12L – which was the price of the car.

So when somebody gives you a “fantastic business proposal” and you think there is no risk, it just means that you have not looked hard enough.