I think that you have hit the nail on the head. Now if an engineering graduates face these problem we can accept it as a lack of formal training but most of the commerce graduates do not know what they are doing and should be categorised as non - finance professionals. Some problems or mistakes that these non finance professionals commit are:

(1) The first thing that they like to invest is in huge premium paying Insurance policies. I doubt if any non finance professional ever thinks about how much of an insurance coverage he should have. To find out how to compute whether you need any insurance please log on to the following link.

http://www.theequitydesk.com/insurance.asp

(2) The next problem is of asset allocation now every body knows that stocks have beaten bonds and bank deposits over the longer period of time. But people who have little knowledge of stocks prefer to have their disproportionately high weightage of their assets in non equity instruments. The only kind of equity instrument these guys invest in is through IPO's. Of late the Mutual fund industry has managed to attract non finance professionals but that is just scratching the surface. To read how stocks outperform in the long run please click on the following link:

http://www.theequitydesk.com/forum/forum_posts.asp?TID=81

(3) A majority of non finance professionals are also very afraid with financial numbers. In my interaction with quite a few of them I have found that they are more interested in doing things that are from their field rather then try and get across to try newer strategies to develop  financial acumen. It is very hard for them to understand the following quote.

“Do not work for money but make your money work for you”

Before I end I have to confess that the best managers are the ones who have an engineering degree with a MBA (preferably IIT + IIM). Nothing beats this combination.

His wife Malini (name changed) didn’t have a clue to what was happening. She was busy mothering their three-year-old kid and managing the house. But the day she discovered her husband fretting about his bills and excess debt, she decided enough was enough.

Malini had heard from a friend about a debt counselling centre by the name of Abhay and decided to go there for help.

One of the very few credit counselling centres in India, Abhay, started by Bank of India, counsels people who are struggling to meet their repayment obligations. Credit counselling is given free of cost to those in distress on account of credit card and housing loan overdues. It also helps people improve their financial planning.

Bank of India came up with this concept after the governor of the Reserve Bank of India, YV Reddy, said in July last year that banks should set up such counselling centres to help the needy.

“We help all those in debt or facing bankruptcy to cope with their debt problems,” says M Krishnamoorthy, assistant general manager, board secretariat (compliance), at BoI, one of those involved in running the counselling centre. He is accompanied by V N Kulkarni, a retired deputy general manager of the bank.

Started in September last year, Abhay has centres at Mumbai (in Dadar), Wardha and Chennai. The Mumbai centre is open on Fridays, Saturdays and Sundays between 6 and 8 pm. The centres are manned by retired persons of the bank, who have taken up the job on a voluntary basis.

So what happens when you check in at Abhay? Krishnamoorthy says that the first and foremost advice given to debt-burdened persons is that they should swap all their high-cost debts with low-cost ones. “If the loan burden is great, we help them by talking to the concerned bank and requesting them to either reduce the rate of interest or extend the tenure of the loan so that the victim gets leeway to pay off his debt,” he explains.

In Anand’s case, Abhay advised Malini to take up a part-time job from home. The counsellor also prepared a household expenditure budget for them and advised Anand to cut down on wasteful expenditure and spend money only on essentials. The banks they owed money to were requested to extend the tenure of loan repayment. Anand disclosed all his monetary problems to the counsellor and within an hour was relieved of all his worries.

“Till date, 500 people have approached us. Generally, lower and middle class people come to us for help. Counselling sessions are held on a one-on-one basis in a confidential environment,” says Krishnamoorthy.

Krishnamoorthy’s core advice to the younger generation, which is lured by easy finance, is to focus on investment by starting early so that they can avoid the debt trap. “The younger generation must understand the evil effects of overborrowing,” he adds.

He says that most people who take loans and use credit cards do not know the real costs. “In Anand’s case, he was being charged heavily for not repaying his dues, which he was unaware of.”

In another case Abhay helped an individual whose bank account had been debited twice while paying for a purchase.

Enthused by the success of the non-profit counselling centre, BoI plans to start another centre near Mumbai. “During this year, we plan to open a centre in Thane. We will look at places with an increasing population of working class and middle class people,” Krishnamoorthy says.

Other banks are also likely to follow suit. ICICI Bank plans to launch a counselling centre under the banner of Disha Financial Counselling. It will not get into the settlement mode, but will instead educate their clients.

But the underlying message banks are now sending is clear: Borrowing may be good business, but individuals need to understand their own loan-bearing capacity before leaping ahead. So, the next time you swipe your card or borrow money, think twice. “All that glitters is not gold.”

Us121 has put it very nicely. I agree with him.

The heads of many companies are not skilled in capital allocation. Their inadequacy is not surprising. Most bosses rise to the top because they have excelled in some area such as marketing, production, engineering, administration—or, sometimes, institutional

politics. Once they become CEOs, they face new responsibilities. They must now make capital allocation decisions, a critical job that they may never have tackled and that is not easily mastered. To stretch the point, it’s as if the final step for a highly-talented musician was not to perform at Carnegie Hall but, instead, to be named Chairman of the Federal Reserve… [and] in the end, plenty of unintelligent capital allocation takes place in corporate America. (That’s why you hear so much about “restructuring.”)---Warren Buffet