Do you feel information overload in a world where every other person has their opinion on finances and investments? Are you also confused about which asset to buy given so many options? Meet Rajeev Prasad, an accidental investor who ended up diversifying his portfolio to include a lot of profit making assets and eventually creating wealth out of money.

Discussion Topics: Being Rich Is Not The Same As Being Wealthy

• Who is Rajeev Prasad?
• Rajeev as a single parent
• Rajeev does not believe in calculated risks
• Who did Rajeev start his investing journey
• Rajeev’s portfolio diversification
• Rajeev’s opinions on Real Estate
• What is the difference between rich and wealthy?
• What should you do when your salary increases?
• How does disciplined investments work
• How does socioeconomic surrounding impact your wealth

Transcript: Being Rich Is Not The Same As Being Wealthy

Amit: This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, so many kinds of things. But have you ever stopped to wonder why you’re trying to make all of this money or even to build wealth? Is wealth really only about money? Or is there more to it? So today, we are talking to Rajiv Prasad, who has spent several decades investing in quite a few actually quite a variety of assets. And he has an interesting viewpoint about being rich versus being wealthy. But before we find out more, may I please request you to follow the show. We host a lot of diverse perspectives on money.
And I would hate for you to miss out on any one of them. So thank you so much for following us. So Rajeev, thank you so much for being with us here today. Before we begin, perhaps you could tell us a little bit about yourself, and maybe your background in money management or investing on your own account.

Rajeev Prasad: Thanks a lot for inviting me and letting me speak about myself. To quickly get on to what my background is, I initially started my career in an NGO and NGO stands for Non-Governmental Organization. And that was in two welfare schemes, etc. But very soon, I got fed up with the setup, the type of delivery they do for the welfare things. So I decided to move on to the corporate sector, instead of working for a profit-making organization. So and then from there, my journey started, I have my specialization in running it, eds, it enabled services companies. And basically, I have worked for American and British clients, and the bulk of my career has been devoted to these companies. So I really got exposed to their setups, how they operate the whole businesses from their hometown, or from their country, etc. And, my expertise to establish businesses from scratch, or midway, if there is a crisis, to restart. So that sort of expertise, I gradually developed. I am a single parent, my children are still studying, and down the cages, whatever you said, I have been investing cautiously. But in the beginning, it was so smooth at all. It’s a lot of learning. So there I am, in front of you completely at your disposal to know whatever you want to get from him.

Amit: Yeah, thanks a lot, Rajiv. I think that lays out the kind of background fairly well, and actually as a single parent, or a single earner for that matter, because many people are, only a single breadwinner in the family. It must be a lot of pressure, I think, not only to earn a living but also to save up enough for all of these, goals that you might have such as potentially college or maybe your kid’s wedding, yes, like that. Yeah. So so that’s a lot of different things to work towards as a CES.

Rajeev Prasad: I mean, the very start was not a single parent, but midway, I went into that home, the situation and circumstances added to this to offer so I had no choice. Yes, you have, you’re more cautious. You’re more planned. You’re more cautiously aggressive. It’s the time when you have to understand that you have to do a lot of tightrope walking.

Amit: Do a lot of types of actually, that’s a really interesting way of putting it I haven’t heard anybody else say that. But you’re absolutely right. Because you can’t be so sort of passive and risk-averse that you put all your money into things that aren’t really going to return a yield that will work for the long run. But you also can’t gamble it all okay?

The importance of discipline in managing your money

Rajeev Prasad: Because you have a line of divided line of divide a gamble is a risk again, not race, but its seriousness. And somehow I mean, I don’t believe in the theory of calculated risk. Okay, Excel sheet business is somehow I feel it’s just a constellation for your power thinking. We will arrive at so good Taylor, you put some maths there, and that’s what it is. So at some point in time, you have to decide what is your purpose in life. What values do you have, that you would like to follow? And then once these things are a bit clearer, and these completely depend on your socio-economic background, what background you’re coming from, what level of education you have, what level of financial situation you are going through? What kind of domestic issues are there the purpose and value? And another thing I strongly feel is discipline. I was not so disciplined, at least from the perspective of earning because the earning was not much. So, how do you I mean, still, I managed to always one thing I will always say, whatever you earn, you have to be disciplined enough, either inherited or you in a carpet to save at least 15-20% of whatever.

Amit: Yeah, so, speaking of that, maybe it’s an see for most people, and nobody is born with the knowledge of how to manage their money. And everybody develops that over time, either early in life or later in life. But eventually, you have to figure out what to do with your money. So how is it that you got started on this process? Or how did you learn maybe initially how to go about it?

Rajeev Prasad: I joined an American law firm. And then I met my Celia. And he was a New York Stock Exchange trader. And he was kind of talking about what we do now in India, buying things from Amazon or buying things. They were doing it so many years back, you could buy his shirt. So I watched him very carefully. And then I saw that people also investing or doing so from there. And he told me that look, I am trained. So whatever I tell you, will be from a slightly better platform. So that’s how the journey started. And then, of course, I was always saving money. So at one visit to my bank, at that point in time, Standard Chartered was my principal savings account, right? I walked into the branch, and then this relationship manager came with me. And then he said, Okay, I have a cup of coffee. And then he opened my account. And he said, What is this? And said, what? He said, Sir, so much of money lying in your savings account? They’re the story started.

Amit: Okay, well, at least you have, you’re lucky you had a motivated relationship manager.

Rajeev Prasad: So out of suppose 10 lakhs was mine there. I said, okay, I’m fine with investing with one lakh of rupees. I watch it for some time, et cetera. So this is how the journey started.

The different types of investments he’s been into

Amit: Right, Okay, so that’s interesting. And what are all the just for context for everybody on this conversation? What are all the different kinds of things that over time, you’ve ended up either exploring or investing in?

Rajeev Prasad: I started with one or two stocks, but I was not in a position to handle so I kind of sold them off and then switch to mutual funds. So initially, my journey started with mutual funds. And it went on for a couple of years wearing, I out saw that all those mutual funds 60% at a later stage, I
realized, which was advised by these people was really not the money that I should have been putting, or betting on, they will rather completing the targets, right? Because the rate of return was really not so worth it. So it’s a mixed-match learning everybody you have their own learning, I have my own done, others will have their own level of money who are ready to risk and what age group? Right. The younger you are, you can take this risk.

Amit: Yeah. So and you have Okay, so it’s interesting. You started out with equity and then mutual funds. What about like, I don’t know, maybe property or gold or the other things that people normally 10?

Rajeev Prasad: Okay, I’ll tell you a very strange story I had gone through working in private firms, in between the job situation and at that point of time and my brother-in-law came in and said trajectories society coming up the apartment are you interested? I said yes. So, at this point of the situation what I did was whatever bulk of money I had 50% blocked in the property. So, that’s the property business started. But omit one thing we must realize in order See, that is why I said calculated risk is a bullshit story. Why? Because you are not calculating the appreciation of that property. In eight years, it becomes doubled in PPF or imbalance on a fixed deposit, the property is doing better than these other things. So, first, started with mutual funds equity, not I did not have the competence system mutual funds, then I invested in property where I had to also pay the EMI in a
a crisis situation, right?

Amit: Okay, so Rajeev, let’s move to, one of the topics of today’s conversation. So, the way it sounds, you started out but you were a strong saver. And then you had all this money parked in the bank, and then eventually started investing it in various places, to the point where you now have investment properties and actually just investment-oriented kind of objectives as well. So, no one would say that you’re in a conventional sense, you’d be called a rich person, or at least a very well-off affluent person.

Rajeev Prasad: No, I mean, Midway, right.

What’s the difference between a rich person and a poor person?

Amit: So, when you say, when we talked about this topic before recording, so you mentioned something about, how being rich is not the same as being wealthy? And like I was saying, conventionally speaking, one would consider you to be affluent, or as you said, halfway towards being rich, let’s say, but yeah, what do you define as likewise, rich or wealthy different they’re synonyms after all right? Or what’s the difference?

Rajeev Prasad: If for instance, on the persona, see, I am speaking to you from Delhi. Delhi is a flashpoint of cloud not like Bombay, which is a contrast, but Delhi is dominated by a staff of a population that believes in extravagance, which high lifestyle, has been understood very wrongly by many people. They think, driving an expensive car, living in a rented big house, buying branded clothes, and mobile phones is the average. The average, because they will take photographs of a very expensive restaurant, put it on Facebook, and wait for the likes to come of Commons to pump. Now, that persona is different than a wealthy person. A wealthy person need not necessarily go and show off that I am rich, please consider marriage, it becomes an aura. But with this mentality, the investment is more towards expenses. And when bare minimum, they’re safe, and that’s why they keep working. The difference between an asset and a liability is very thin. For example, for me, a car is a liability, because it depreciates but it gives ease of transportation and provides extensive ease of transportation. What about a laptop? Is it a liability or a capital asset? A laptop is an asset now comes to point can you manage with Lenovo? Oh, you have to buy Apple, right? Mac I will manage with Lenovo. The rich were the ones we’ll manage. We’ll go and buy the most expensive bath which he or she is currently using. So acid is something that has the capability. A well-established person will know about these things, but you’re talking about muscles to understand. Acid is something that can grow on its own. With the benefit of compounding having a gestation period, it will not start showing in the figure winning a couple of years. It goes. So, Systematic Investment is a good route for the service class, lower income, middle income, and even higher income. I have ventured into many areas, I went even for the Boolean part of it, I used to buy those small biscuits 50 grams you know why? Because I thought that I will use it when I have to buy ornaments from my daughter, right? Because the making charge will be saved, right? You just give that and you say, Okay, now you charge otherwise you pay twice making these kinds of calculations is their cash component, I feel I keep it on the Lean principles. Slightly more. And lean has a very simple, I mean, you have to eliminate all kinds of waste, or cash lying in your drawer is of no use. It just gives you an emotional and psychological feeling that Oh, I bought a lacquer. It’s probably lying there. So you should have said a pause. Say for example, if your monthly expenses are 20,000. Maybe you can print it out or within your drawer, not Milan. These kinds of things are very important for an investor to understand initially, right in the beginning itself, to minimize your waste. Waste means going to restaurants having a bottle of beer for 500 bucks, and then going to a Gucci, and then you’re buying Tommy, okay, fine, you want to show your status. But be careful about these kinds of instincts.

The difference between a millionaire and a rich person

Amit: Right, actually. So essentially, what you’re saying is that a rich person spends on expensive things or spends on expenses, whereas a wealthy person takes that money and puts it into something that will grow now, and that would be an asset.

Rajeev Prasad: I have done that. I’m not wealthy, but I have to and very important thing I met here, please try to understand anybody who is having a house or a big car is not a millionaire. Because that one 1 million in India is called to 10 lakhs of rupees. So if you have 20 lakhs, you can say I’m a millionaire. But internationally, it is not the case you have to have 1 million USD, there is a risk to the exchange rate at that point in time. For example, a millionaire in India, can we call a real millionaire if he has 1 million multiplied by seventh or a three rupees which is eight crores so that thinking has to be corrected. You’re not even rich now, please. That’s what the basic thing is.

Amit: Right? In fact, I remember when I started out investing, there was 15-20 years back maybe my start was with this book called Rich Dad, Poor Dad, which is a book I have read that people seem to have either read or been inspired by the rich dad, son and the professor some.

Rajeev Prasad: Yes, yeah, remember that.

Amit: And the whole point of that book is that you’re not rich, just because you have a large salary. You become rich by taking that salary and putting it into something that will generate money for you, which is your point as well.

Rajeev Prasad: Absolutely. See, these are the fundamental principles, you cannot change. It was thanks to that gentleman who wrote a book about it. But that was the hidden reality, which always existed, he only pinpointed something and gracefully. He wrote a book, which was further spread to the masses, right?

Amit: So you know, something, Rajiv, I think a lot of people sort of get the point. I feel like people fall into three categories.

1. One kind of person is well-educated about money and is also actively doing something about it.
2. The second kind of person understands but doesn’t do anything.
3. And the third kind of person doesn’t know.

Now, the problem is with the second category, which is the third, hopefully, if they know they will do one of the two things. But the second category I feel like a lot of people fall into this, this slot, which is either they find it too much to handle, oh my god, I have to learn so many things before I can even start, or they get stuck in very minute details, or, they’re constantly tracking their portfolio and spending way too much time on it. So in either case, I think these people tend to give up, like, oh, you know, too much work too much effort phase in my life also similar?

Rajeev Prasad: Yeah.

Amit: So that’s the point. And same for me, I’ve had a phase again, I think, for years, where I just did nothing, because it was like, other things are happening in life, and I’ve bought some property and my money is going towards that property. So I’m done. So, my question to you is, since you also face the same problem, somehow, what is the system that you evolved for keeping this investment process and no desire to invest? How we kept it going,

Discipline is very important

Rajeev Prasad: Gradually, I enhanced my percentage of savings, as the salaries grow, you have a tendency to waste more. What I did was, I started putting in the mutual funds because I knew I will not be touching this money. So that’s the kind of practice and discipline I adopted and kept on saying whatever 1000 to 10,000-time passes, your compensation enhances, and then you can allocate. So that was one mutual fund. For me, it was very same back, gradually, I entered into the equity side. And equity was something which is, you don’t really know. It’s not very technical. Now, it is very easy. Because you have so many portals, you have so much information, so much information on the computer. But there are multi-baggers. One thing I would like to convey here, while you are getting into the mode of investment, please ignore media as much as possible. Don’t go by CNN, don’t go by NDTV don’t go by the popups that you read receive multipower please try to learn something very simple how a line becomes an exam and you will learn what is the choice. And then you have to drop down one day 30 days, six months one, hardly go through it and see, and whatever matrices you will have selected for yourself because there is no benchmark for it. And you will see whether it is PE whether it is debt to equity, or whether it is just simply the if you don’t MRP and just see the chart, it will go whoa. And then don’t need to unnecessarily go and discuss with people the have the courage to take the risk for 500 rupees and see what happened. And if watching the chart, you will learn after 2345 mistakes, and you will understand. So that’s how I learn. Of course, I keep reading. I keep reading all the time. I mean, you have to put in efforts, disciplined efforts. That’s why discipline is very important. Very important.

Amit: So actually, let me pick up on that point. You mentioned discipline actually a few times throughout this conversation. So tell me more about that what do you mean by discipline? Is it the discipline of timing like you will only do things every month? Or is it the discipline of a philosophy or investing approach? Or is it a discipline to, make sure that you save money by not spending too much? What exactly do you mean it’s a mix of all there is nothing called one standard formula,
there is no mass that can define the discipline.

Rajeev Prasad: I mean discipline is basically related correlated to your action. And there comes in between decisions and this is a discipline that will teach you how to take almost the correct decision or wrong decision if you’re not disciplined. So decision making comes through a regulated discipline life where you remember there was a very famous thing we all used to hear which nobody bought us now. Be healthy where Early and wise, right? See, these are very three huge terms le rally. And one. Why is knowledge decision action? Well, he is assessment in hell, these people? What if you pay for your god to pop up? So I would rather say these things disciplined should be interpreted in a customized way for yourself how I think to remain healthy, how I can I become wealthy? And then how should I remain wise? That’s it.

Amit: Right. And I think maybe this is kind of leading nicely into the next point, which is we’ve talked about, you know, asset building and becoming rather becoming rich. And then we’ve talked about wealth as being the ability to take all that excess money and put it into something that will actually generate money for you.

Rajeev Prasad: Yeah, I mean, invest capital into a compounding, right instrument.

Amit: Right. So that is wealth building. And more than that, I think you’re talking about maybe a more holistic life and that’s where the whole why are you doing this thing comes in. So, when you talk about healthy, wealthy, and wise wealthy is one component, which enables hopefully, the other two things. So, tell me more about you know, your thinking on you know, on in that area, like I know, before this conversation, we talked about purpose and goals, and you know, these things that elicit action, yeah. Yeah. So, how, how do you relate these to the concept of wealth?

How do you relate these concepts to wealth?

Rajeev Prasad: See, first of all, you will see what we do are we also have an impact on the socio-economic surrounding we are living in a rich person I met whom he copies a minimum millionaire who copies a billionaire. The biggest answer to the question is who the billionaire’s copy is, I have the answer the monarchies okay. They copy the monarchies they might have mansions in Dubai, the yachts, but at the same time, see their wealth-making is very strong. If Mr. X was delivering books, houses on his bike or on his car, whatever, but he didn’t remain, he was not only kind of exclusively doing book distribution, then He multiplied into various products.

So this copying business should start, you should know where you are, and where you want to be. That is strategy. Embedded strategy. See, for every company when you create a map, you have a mission, what is a strategy, where you are, and where you want to be. And what you have to do in between, is the strategic startup. So in that, that is the purpose. The purpose, then the discipline, and the action, and then the execution.

So you have to choose whether you want to be rich, whether you want to be wealthy, what is your lifetime target, how you can keep your family happy, and how you can make your kid’s education safe. So holistic, I would say is something which is not making you two, three all the time. We are not scared of taking risks, that’s very important. This is not an elephant, and on the other side is actually an elephant, it will never bother you. It will just pass. If you stand part, don’t be afraid of risk. And don’t over-calculate risk.

Let’s take a risk. If you’re taking a risk in your profession. You also have to take risks for your capital. And that is so once you have these kinds of attitudes inculcated within yourself in your persona and your personality, you are a holistic person. If you’re doing business, your bloody sole motive is not to evade taxes. And being an Indian, you think you are smart or you are an idiot because you don’t know how to evade taxes. Now, that’s not a good thing.

I have seen people the whole energy. Poor energy is wasted in evading taxes, don’t shoot into how can I talk to my uncle, I talk to my ERP technology and what is it and at some point in time, you will find that you have noticed this coming in a very important point you cannot keep your money in one place, you have to diversify, you have to have a portfolio, you have to have a reallocation, learn about these things, Google is there being an omen of the digital world, go ahead, ask him to play google. You know, so, it has to, I mean, there is no clear-cut definition of what is holistic life view. But there are five elements like love, money, sex, authority, and belief.

So, naturally, love is the thing that has more inclination toward the creation of holistic life. Love is a very universal thing. It’s not only a man and a woman, it is very, very empathetic, and then how much money you are wasting on sex, authority. Belief is relative, you are giving a longer and you think, the holistic at the same time, you’re taking a bag of cash and bribing the officer. So that’s not one instance. In my opinion, I may be wrong.

The framework of wealth creation

Amit: The world might say that this guy’s trying to be you your framework, that you outlined earlier, which is you start with values, then you move to purpose. And then you develop a strategy around that, then you have the discipline to stick to that strategy. Yeah, taking actions, you know that that strategy is dictating this is a really good way of looking at it. Because, interestingly, I was talking to somebody yesterday, who’s a business owner, and she was telling me about how they have this vision for the business and why they sometimes choose not to do certain kinds of work or take on certain clients, or pursue certain business opportunities. Yeah, because it doesn’t fit within their vision.

So effectively, what you’re saying is the same thing, which is, as individuals, we should have a vision for our life, or that vision may change over time, but at least at any point, you should know where you’re trying to go. And then you should orient your wealth creation towards fulfilling that vision. And therefore you should you would know, which things to pursue and which things not to, because, one of the things that I find a lot of people do is, if you ask them, like, what are you saving for? Or what are you investing for, and they will basically say something, no, no lines of wealth maximization, like I’m trying to maximize how much money I have.

But, there is no end to that you can maximize still the as you said, a millionaire can become a billionaire, and so on. So there is no one is finite, no one is finite, right? And because there is no end to that, I feel like these people will never achieve that goal, because there’s always going to be somebody richer or other with more money than them. So well said. So therefore, you know, your framework is a good one for people to start with, like, normally on MoneyTok, we talk about the money part, which really typically starts with goals. So, what you’d call strategy and then downwards. But if you don’t have the upwards bid, which is why are you doing this? What’s the purpose? What are your own values? Then maybe you cannot even define a set of goals. So you lost your last?

Rajeev Prasad: Yeah, sometimes you are chasing a country to land worth of cars, sometimes you are buying a Mac, and sometimes you are just going for a vacation got lost. You don’t know. Because the same money invested in property can really make you higher than rich, that is, well then you can
become wealthy. That’s what I feel.

Amit: Right? So So Rajiv, thank you so much. I think this whole framework, values purpose, strategy discipline, and to action. This is a really good way for many people to evaluate their own wealth journey. Let’s put it that way. And I think this is a really good takeaway for folks on this call or others on this in conversation. And Rajiv, it shows like you’ve spent a long time investing your money and trying to figure out your life and clearly it shows because it’s a really neat way of putting it together, packaging it into You know, into like a set of five action plans.

So, really appreciate your time being here today. And thank you so much for that really refreshing take on wealth. So, I feel like many people talk about how to make money and build wealth in lots of detail. But very, very few people talk about why one should want to do this whole wealth creation whitewashed one, why should one be on this journey at all? And your discussion? It’s important. Yeah. No, and really, I think your discussion on purpose, and, aligning with that, and also therefore enjoying life, healthy, wealthy, wise, kind of thing. I think that really struck a chord with me, and I’m sure it will resonate with a lot of our listeners as well. So thank you again, Rajiv, so much for being here with us today.

Rajeev Prasad: Oh, you’re most welcome. Amen. It was fantastic. And it was a very nice discussion. I believe that some people will appreciate it. But it is very easy to learn the nitty gritties from an Excel sheet for X, Y, and Z goals. But if you don’t know when that goal is finished what you want, you have to have a bigger vision, and then go through these things step by step, buying assets, aligning them in a portfolio, and then reallocating part of the Investment Board. So thanks a lot. And it was a beautiful thing that I suddenly had to stop and discuss with you. I really enjoyed it.

Amit: Yeah, thanks a lot. And for those listening to them please do remember to follow our show and do rate us five stars if you like this episode. We will Rajiv and I met with MoneyTok. See you next time.

Rajeev Prasad: Yeah, all the best.

Our Guest: Rajeev Prasad

Our guest, Rajeev Prasad, is a senior management professional with the exhaustive capabilities of a “Business Head” in establishing robust businesses with hands-on business strategy, analysis, intelligence, continuity, compliance, operations, R&D, and quality production deliverables.

The post MT30 | Being Rich Is Not The Same As Being Wealthy appeared first on CrazyTok Media.

Are your CAs charging a hefty amount for advice on investments? Meet Varun Fatehpuria, Founder of Daulat, a wealth management app designed for Indians. Varun talks about how GenZ is impulsive when it comes to investing and ignores the two Ds of investment – Disciplined approach and Diversification. He also breaks some myths about Real Estate investments and Bitcoin. Tune in to the episode to reach your investment goals.

Discussion Topics: How To make Daulat In Times Of Economic Uncertainty

• Who is Varun Fatehpuria?
• How does Daulat help in uncertain economy?
• Covid induced economic volatility
• Panic calls from relatives during economic volatility
• Psychology of investing
• The 2 Ds – Diversification and Disciplined approach
• Investing 101
• Risk in Investments
• Who is a pseudo investor?
• How to invest in Real estate in an economical way
• Is Bitcoin gold?

Transcript: How To make Daulat In Times Of Economic Uncertainty

Amit: Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own personal experience. I’ve been doing this for about 20 years now, and through the expertise of my guests, and today we have one such expert guest, which is Varun Fatehpuria, who’s the founder of Daulat. And Daulat is a wealth management platform. So he’s going to be talking to us a little bit about how an individual investor can construct a diversified portfolio, which is also customized to their needs. But first, before we begin, May, I request you to quickly follow the show, so that you don’t miss any of the great content that we have coming up. And if you do like this episode, and I’m sure that you will, please do rate us five stars, it helps us a lot. So thanks a lot for that. So Varun, thank you so much for being with us here today. Before we start, maybe you could introduce yourself, you know, your background in money management and investing. And also tell us more about Daulat. It sounds very interesting. By the way, for those of you who are not based in India, Daulat actually means money or wealth. So that’s why it’s a very appropriate name for a wealth management service.

Varun Fatehpuria: Right. Thank you so much for having me. On the show, right, I was really looking forward to this one. So just as a quick introduction, I’m actually a finance professional by training. I went to Hong Kong and Italy for my undergraduate studies, and pursued a degree in finance and information systems, quite honestly, I think, prior after subsequent to my studies, I actually also spent a year working with Blackstone, which is the world’s largest alternative asset management firm in the real estate private equity team. And prior to that, I also had some experience working with Bloomberg in the equity research department. So really, I think that was the starting point for me in terms of, you know, finance and money management in general, right? I mean, both of these experiences individually, and cumulatively, not just allowed me to be in a global financial center, like Hong Kong, but also really just get a front row view and see it in terms of how these big institutions actually thought about investing. Really, what sort of tools and software do they use, what sort of people that they hire, so that really helped actually, in setting the tone in terms of how I actually want to approach investing, and stuff. So that really helped me actually, you know, get into this whole money management thing?

Amit: Yeah. And in fact, you worked in, I would say, the big name companies in this particular space. So that’s when I’m sure that was formative to, you know, to Daulat than what you actually decided to now to. So tell us more about the Daulat itself? What are you trying to do? What’s the purpose really, of the company?

Varun Fatehpuria: Yeah, I think Daulat, you know, just, I mean, just going over years to just quite honestly, it’s very simple just to help Indians invest better, right? I mean, we try to put this whole investing thing into a lot more perspective and structure, which honestly, I think if you asked me got a bit lost in the last 18 to 24 months, due to this, I would say whatever COVID induced bull market, right? I mean, obviously, it ended up being this double edged sword, which actually helped a lot of people come into the markets experience, you know, what investing is, and stuff, but also created this wrong set of notion and expectations in the mind, right. And pretty much they saw a market, which is traveled in only one direction up into the right. So they basically had this notion that you could pretty much you know, just lay down on the couch, hit a few buttons here. And that and pretty much that’s it, I mean, investing is done, right. But I think people who have spent time studying investing spent time in the markets would actually appreciate investing is just more than that. I mean, it’s a whole discipline in and by itself, it actually requires a lot of study and research. So we try to basically actually provide that customized solutions to our investors, where we actually just take care of the heavy lifting, heavy lifting of investing. So thinking about risk tolerance, thinking about asset allocation, thinking about how actually portfolios needs to be constructed, do the portfolios need to, you know, change over time, so they that they are in sync with the market, stuff like that. And we just, you know, present a customized all in one solutions to the investor so they don’t have to think about all of those things. And also, I think what we had seen roughly right, I mean, obviously, the first 18 months, pretty much everyone was doing fine, but in the last six months, the kind of downturn that we’re actually seeing in the markets I think at that point in time, people started realizing, you know, maybe, Hey, maybe I need someone like an expert or someone who does this full time to help me out with how do you actually go through situations like this? So that’s really good for us.

How did you get into the space?

Amit: Yeah, I think you’ve, you’ve hit upon a couple of important points here. I think in the last 18 months, or 24 months, like you said, the world has been a very strange place. And, in fact, while a lot of people may have been enticed into the market, they would have been enticed at the time when it began to boom, and so therefore, they probably facing the brunt of that now that things have started to tank. But it was also a very good time for a patient investor to have gotten. So for example, in March, April, 2020, even you know, everything really crashed, was an excellent time to get into buying stocks. Because, you know, you, you would have taken the benefit of the entire Upswing after that. And it’s an interesting thing about markets, which is, so so I’ve been investing for a while, I would say often on I’m not, I’m not a very heavily, you know, focused investor in the sense I like to buy and hold. And then the thing is that because I’m a buy and hold kind of person, I don’t have a very good entry plan, I don’t have a very good exit plan. And so therefore, you know, the market went up, and then it went down, and I went up and down along with it, I’m still, I think, come out overall positive, actually fairly decently positive. But it is a fact that, you know, for most people, you don’t have the time or frankly, even the inclination to sit around managing this all the time and trying to figure out what’s the macro economics, and then what’s your stock and all of that. So service, like, Daulat, I’m sure actually helps a lot of people who are savvy, but not, you know, don’t have that much time or energy to put into this. So tell me a bit more about how, how you came about this, because you’re obviously working in great companies, you would have made a fair amount of health yourself if you had continued working there. So why do all of this,

Varun Fatehpuria: Think how I actually got into the politics, so I’ve been personally investing my own wealth, whatever lever that I had with my first check for the first four to five years, right? I mean, I fairly did, okay, given my experience. And at that point in time, that sort of like, also slowly graduated from managing my own money to managing my friends and family’s corpus, so on and so forth. I’ve been doing this for about four or five years right now, I mean, didn’t really have so to speak a grand plan to get into this space, I mean, started getting a lot of these calls from my friends and family asking, you know, Hey, what should I be doing at this point in time? My portfolios Correct? Is this a good time to actually double down so on and so forth? So I think that that’s when you actually start realizing that obviously, I think the I buy apps and stuff have made the entire transactional part really easy. But it’s, when you’re managing something as personal as one’s worth, right? I mean, you need at that point in time, some level of human intervention to manage that. So that’s really I would say, where the whole idea for Daulat Tree started to germinate. I mean, at that point in time, I was still going and speaking to investors, seeing how I could just, you know, potentially help them. And what we ended up seeing is this basically whole ad hoc portfolios that had been created with no sort of an agenda, no sort of a perspective structure put in place. So maybe, as I went and spoke to a lot of people, I think, at that point in time, where I started to realize that maybe, you know, this is something that could be taken, taken up upon.

Amit: Right, you mentioned that, during this whole, whatever the ups and downs of the market recently, is when people started reaching out to you. I’m sure there were some panic calls, as well.

Varun Fatehpuria: Absolutely. I mean, when you see a portfolio, I mean, during a course of a week, you’ll see pretty much a portfolio drop over 20%. And that means pretty much hard earned money for you that you’ve saved for five years, 10 years. I mean, so no amount of literature can basically just tell you that, yeah, I’d be fine with that. Obviously, it’s chittery. You sort of like to see overnight, your portfolio value just crashing with the amount of velocity that it did. Right. So yeah, that’s basically then gets a bit touchy.

The psychology of money and investing

Amit: Yeah, and I think it’s underrated the amount to which psychology plays a role in investing. I mean, of course, there’s now a very popular book, The Psychology of money, but it’s, it’s only when you do it, and then you go through it. I mean, go through the downs, go through a downturn, not upwards, everybody’s happy. But only when you go through a downturn. Do you truly know what you’re like as an investor and I think People don’t appreciate that until they actually go through a downturn. And the challenge is that over the last 10 years, pretty much, there has not been a sort of definitely a prolonged downturn, there have been corrections, but there has not been a major drop, like, let’s say, 2008 or 2000, or something like that. Also, I think people don’t quite get it without having gone through it.

Varun Fatehpuria: Yeah, I mean, I think a lot of investing actually also has to do with the temperament, right? I mean, if, if you have the right temperament to actually see through that entire market cycle, so to speak, I mean, you’re there and the ups and the downs, are you able to sort of like withstand that volatility? And I think a lot of it also, I think, at least specially people in the younger generation, right, because a lot of the apps are made it really easy to just go and pick stocks, right? I mean, there is this itch, to somehow make it believe that you could do better than someone who’s doing this for a living. So you just go on an app, you see, okay, I’m just gonna go and buy this large cap stock, this mid cap stock, this multi bagger, this whole thing, so on and so forth. And I think that’s, that’s where a lot of the problems actually also stems from this desire to constantly keep busy with investing this desire to constantly think that you’re probably adding value to what you’re doing, which perhaps you would not be. So that’s, that’s, that’s, that’s, I think, where I would say you need people to actually come and calm you down, and just obviously, also stems from the trust that you want to have in people that’s doing this.

Amit: Yeah, it’s, it’s effectively FOMO. The only news that you’re going to see when markets are going up is news is good news. Yeah, but he’s not telling you about the losses they’ve made in an upward trending market, they’re only going to talk about their wins, then you feel like everybody around you is winning. So therefore, you should also get in. And similarly on the other way, on the other way, as well, when things are going down, the only news you’ll hear is doom and gloom, and everything’s going to hell, which, and neither is is the ever really true. So. So I think all of this points to maybe, I think what you’re trying to say here is that if you adopt an ad hoc approach to doing things, and you’re everything is DIY, and everything is simplified, you’re probably making sort of a patchwork of things versus something that has some sort of structure and logic to it. So and I know, that’s really the core of what we’re going to talk about today. So So what is, what is it that enables this? I mean, you know, people talk about maybe sort of a disciplined approach, maybe Is that what you’re talking about?

How do you construct a portfolio?

Varun Fatehpuria: Yeah, I mean, minute talk about, let’s say, again, a lot of like, disciplined approach that I’m talking about, right? I mean, essentially, when you just go and really speak to people, right? I mean, these could be even first time investors who again, got into the markets for the last few years, or even more seasoned investors who have been investing through an old school broker or a distributor for the last 1015 years. I think, even though the psychology of both investors continue to be very different. The underlying sort of like, the problem remains the same where again, there’s an ad hoc portfolio approach. So let me start with just give you an example. Right, people have this sort of like notion of diversification, right? So now, I think intuitively, they would think that if they invested across 10 funds that diversified, I mean, essentially, if all of those 10 funds ended up holding the same stock, or at least, let’s say, even 60 to 70% of it, I mean, you’re not diversified when you could go and invest in five large cap funds for small cap funds in the name of diversification. But you need to put that into a lot more structure, you need to think about, okay, what sort of an asset classes exposure that you have? How much of an exposure do you have to that? Is that in sync with what’s happening currently? And then that sort of like forms the basis of, actually how do you construct portfolios? I mean, you’ll be surprised to know, I mean, I sort of like feel a bit sad saying this, but there are countless number of people who are investing 20 3040 funds in the name of diversification. And it’s not that they have been sort of like they’re doing it by purpose, it’s just that they have been fed with so much of information, just by the virtue of reading it on the net, or being taken that 70 A call from their banks RM telling that so go and please buy this, this is going to give you X percent of return in the next two years. So you just keep on doing that. And over a period of time, they sort of like left with this hot potato, that essentially is not even beating the benchmark.

Amit: Yeah. In fact, one other driver of all of this is tax savings. So at the time, when you got to file your taxes, you suddenly do this last minute mutual fund investment because you’re trying to maximize your savings over there. And that’s also going to be some very random thing, which you did two days before the filing deadline, and that tends to also I think, proliferate this problem. So let’s talk a bit more about portfolio construction itself. Right? So how so maybe just walk me through step by step perhaps like, if I were now if let’s say I had a hammer, let’s say I’m an early career sort of persons who have 10 lakh rupees, investable or maybe 20 lakh rupees investable. What. And again for those who are not in India 10 lakhs is about 20,000. Well, about 15,000 US dollars, and 20 lakhs will be worth 30,000 US dollars. So, let’s say I have that kind of a corpus, how am I? How should I be thinking about portfolio?

Varun Fatehpuria: Yeah, sure. Um, it. So I think a couple of things, obviously, I think helps in setting the tone and the expectation and really keeping a portfolio in a more solid footing. Right. Obviously, I think when you’re looking at investing, you need to ask a couple of questions to yourself. Number one was really the time for us. And I think that really sort of forms the bedrock. When we’re thinking about how do we actually go about constructing portfolios, a lot of the answers will stem from what really is the time horizon? How long can you really stay invested in the markets? Because let’s be honest, this is not a gambling approach, where pretty much overnight, you can have your money doubled, or at least do that consistently over a period of time. So you need to understand what sort of time horizon Do you have? And number two, are you really saving towards the goal, whether that could be a down payment for your house, whether that could be saving up for a child’s education, or just generally, even if you don’t really have a goal, per se? I think it’s just good that even if you’re investing for gender, you have those questions in your mind. So once we have that in place, obviously, then sort of like comes to question of okay, how much risk can you actually take? And I think pretty much in a bull market, I think when you go and talk about risk, you end up looking silly. I mean, people do not want to talk about risk, they do not understand the risk. And they they’re like, I don’t want to have to do anything with risk, right? I mean, just give me something which gives me the best returns, fine, you can have that. But what happens in a situation again, like March or April of 2020, or just really what we’re seeing in the last six to eight months, do you have the temperament? Do you have sort of like that mindset to actually withstand that. And maybe a risk questionnaire could be a good shorthand for that. But if you’ve had the opportunity to actually live through moments where we have actually experienced that down third, do ask yourself those questions that maybe am I actually set up to handle this much portfolio drop? So once we have these couple of questions in place, right, I think that sort of like helps in then deciding what sort of an asset allocation you have. I mean, that really also is, I would say, one on one of investing, right. And asset allocation, simply I think, for the audience is just that how much of your money needs to be invested into different asset classes, whether that could be equities, whether that could be debt, whether that could be gold, or even Within equities, that could be domestic equities, international equities, I think it’s really important to actually put that into structure and actually align it with what your risk tolerance is. So let’s say if you are or can’t tolerate a high amount of risk in the market, probably you’d be having a higher exposure to equities, just by the virtue of the nature of the asset classes, which tends to go up and down over a period of time. So just

What is risk? What is volatility?

Amit: One, one quick interjection. So, you know, when we talk about risk, I think the word risk to a normal person has sort of slightly different connotations. Maybe not. Yeah, exactly. Whereas I think what we mean, here is more volatility. So how much of up and down? Can you take? So this means, so it’s not like something is inherently risky? Something which is high risk, doesn’t mean it’s a risky thing in normal English the way we would think of it, it just means that yes, you can, it’s gonna go up and down wildly. And so therefore, you could make a lot of money, you could lose a lot of money, I think,

Varun Fatehpuria: Yeah, inherently risk is not bad per se, as long as just that your ability to actually withstand that. Rollercoaster. Right. So maybe, let’s say if you have want to invest for a longer period of time, obviously, I think sort of like that risk level actually smoothens out so you just that you need to give that asset class that amount of time, so that you’re able to get the kind of returns that you’re expecting from the risk, or whatever that movements that you’re actually undertaking so that that’s basically what we actually mean by risk.

Amit: Yeah, also, the point of time as a is a good one things can be highly volatile in the short term, but directionally, you know, up into the right in the longer term, unless you get extremely unlucky and you bought at such a weird point of, you know, history where it’s gonna take, like decades to recover to whatever level it was at. But generally speaking, I think you When equity stocks and all that even if things look like doom and gloom right now, in the long run stocks have performed fairly well. And so in most points of time, if you entered and you had a long term horizon, you’d make better money than you might make with perhaps other forms of investment. Yeah,

Varun Fatehpuria: I mean, if history is any example, right, even if you go back last whatever, three, four or five decades and start to look at the trajectory of how a typical stock market index, whether that’s an India or the US or the euro has performed, right, it’s pretty much sort of like directionally has gone up. It’s just that I think as soon as you start zooming into those micro periods of three months, six months, 12 months, maybe at that point in time, you could see those up and down. But let’s say let’s be honest, if you’re not sort of like doing this for a living, you’re not an active trader, you sort of like do not want to make money on a day to day basis, pretty much sort of like, you know, go to just adopt a disciplined approach and let sort of like time take care of itself.

How should a beginning investor construct their portfolio?

Amit: Right? Okay. So let’s, let’s look at this hypothetical person, who is, you know, has this 10 lakh 20 lakh rupees to invest? How should, how should they construct their life, then there’s a beginning investor, right. So, how would you think they should construct their portfolio?

Varun Fatehpuria: Again, I think, again, alluding to the points that I made earlier, right, I think, once you have an understanding of, let’s say, how much of a risk can you tolerate, what sort of time horizon that you have, once we have those basic questions answered, we then get to the point where we start thinking about how much of your money should be allocated to different asset classes. So let’s say just for sort of argument’s sake, you want to invest for a long period of time, you’re fairly early into your professional career, you don’t really have a lot of dependents on and so forth. So squarely you would fit into the aggressive category, where obviously, there’s a much higher exposure to equities and riskier assets, as opposed to more stable and safer assets like debt, or bold, even for that matter. So let’s say we invest about 80 to 85% of your wealth in equities, right. And even in equities, there are multiple sub asset classes. So you could be invested into a large cap, or a mid cap, or a small cap stock, or you could be invested into international equities in the US or the Europe. And even within that, that different styles of investing. So again, don’t want to make it sound like too technical. But it’s just good to have an understanding that even within each of the asset classes, you need to have an understanding of what sort of an exposure do you have to each sub of that. So let’s say once we have that sort of like formed, right, about 75 to 80%, of wealth is going towards equities. And then we come down a bit deeper. And then we think about debt, right? I mean, people typically think about datas. Investing again, they probably invested in test in some form, or the other maybe in the form of fixed deposit or recurring deposits. It’s just that those are also debt instruments, but they just tend to be extremely tax inefficient from a tax point of view. So once we have that also formed, right, how much of your money needs to be invested into debt. So maybe that’s, let’s say, like 10%. And that’s also invested across corporate bonds and sovereign bonds, and public sector undertaking bonds. And then the final piece could be, let’s say, in gold, I mean, obviously, maybe you could have physical gold, but I think the purpose of including actual gold into the portfolio is just as a hedge. So let’s, if we rewind about six months back in time, right, let’s say January, February of this year, when sort of like we’ve seen the geopolitical uncertainty due to the war, the rise in the oil prices, at that point in time, when a lot of people investors actually started exiting equities, you could see the demand for gold actually started, right, if you would have invested in gold at that point in time, obviously, would have delivered a positive return. But just try to understand that gold is not there to sort of give you that return. It’s just from more of a hedge and a diversification point of view that you need to have these things in your portfolio. But let’s try and put these things into structure. Let’s try to think about how much risk can you take what sort of an asset allocation you have, and then build towards constructing a portfolio that would rather than just taking an ad hoc approach, and go into a money controller or something like that, and just buying based on whatever you have read or heard.

How do you view real estate as an asset class?

Amit: Right? Actually, one other question over here we’re on so for a lot of people, you know, they buy property, at least one, you know, their whatever the home that they want to live in. Now, that doesn’t fall into the typical wealth management portfolio of construct. But how do you view that, you know, in terms of comparing with equity, debt, gold, or like in which part of their portfolio should people think of real estate? Yeah,

Varun Fatehpuria: I mean, so again, real estate as an asset class, again, I mean, whether you’re holding actual physical real estate, right, and I think a lot of the people who would tend to be a bit more older tend to value the importance of seeing something tangible in value. But what they typically tend to forget that real estate as an asset class tends to be extremely illiquid. It’s just that when you actually need the money, you’d probably need another six to 12 months of time to be able to get rid of that. Right. So I think people in the younger generation sort of like do nots ascribe as much value to real estate as it’s a people, a generation about them would have, right. So in the US, and Europe as well, then there’s another sort of like you can get exposure to real estate through what is known as real estate investment trusts. REITs. Right. Essentially, I think REITs are similar to mutual funds, and that in mutual funds, you get exposure to equity, or the stock of the company. And in REITs, you get basically exposure to real estate as an asset class. So if you do want to have real estate as part of your portfolio, unfortunately, it’s a good portfolio diversifier. It’s always a good idea to, let’s say, consider having REIT in your portfolio. So that can sort of like you know, give you exposure to the real estate asset classes without going through that entire process of actually going and buying the property, making sure that it’s in line being illiquid, so on and so forth. So those actually, the REITs as an asset class actually strips out and takes away all the hassle of actually owning a physical property.

Amit: Right. Okay. Okay, thanks for sharing that. The other question I have is, in relation to Bitcoin, specifically, because a lot of people call Bitcoin digital gold because it’s limited in quantity. more limited, in fact, than gold probably is. So any views on that? Is it really digital gold? Or can you use that instead of gold?

Varun Fatehpuria: I think obviously, I think people who sort of like come after me for saying the words, it’s been sort of like the cool thing to do, right? I mean, the for the last four to five years, if you have a conversation with your friends or family, obviously, people would ask you, Hey, are you invested into Bitcoin? And sort of like, if you do not say yes to that answer, probably people will raise an eyebrow as to what is this guy trying to do? Right? Obviously, I think people have gotten into bitcoin in the last four to five years, primarily because of it being a very speculative asset. And obviously, most of the people who had invested in 2016 70, pretty much got on multi fold returns in excess of whatever, like 50 times 100 times what they invested in, right. But for us, as well, and for me, personally, I sort of like do not guarantee I’m unable to see a lot of value in terms of, we want to understand what the actual underlying economic thesis of Bitcoin is where it is actually deriving value from and isn’t just a case of, you know, unlimited demand and finite supply. I mean, if that’s the case, obviously, then you will have something or have an asset which goes up, but is there a fundamental underlying economic reason to the way it is actually performing? So So that’s I mean, if you want to have exposure to Bitcoin as an asset class as, at best, we would, sort of like, you know, recommend to have one to 3% of portfolio again, if you can sort of, like withstand that. But I think regulations are still not very clear, because we’ve seen sort of like this clamp down, which is happening all across Asia, and the kind of fall that we have seen in a lot of these crypto and Bitcoin in the last eight months again, right. So people are still trying to wrap their head around it. Maybe I think it’s probably over time that we’ll be able to find an answer to that.

The fundamentals of portfolio management

Amit: Right. Okay. I think that’s a fair point. And it’s not behaving like a gold. At this point. It’s behaving more like, like you said, a speculative traded commodity, I guess, just like any other thing that you might be trading. Okay. So thanks a lot. We’re on this was, this was really cool. I also like how you laid out the basics of portfolio management very simply, I think people think maybe the most people overthink this. And so therefore, either they’re not doing it at all, like you said, like, you know, just spray and pray. Or they might think, oh my god, I have to do so much of math to figure out what all of this is about. But I think what you’re saying is at the end of the day, you have to understand how will you react in the event of things going down? How you will react when it goes up? Is things same for everyone? And given that kind of reaction? What sort of blend of things should you should you invest in, so that you it will not it will go down only to the levers which you can tolerate. And that being the case, you know, you you you wait more towards highly volatile things if you’re okay with that or you wait more towards less volatile things if you’re not okay with so much fluctuation, and that’s essentially the blend that you have to do. And that’s what the knowledge will help you with essentially and subsequent to that, I suppose portfolios have to keep being updated because markets move and you know, the way it is with my change? Is that something also that that you would do?

Varun Fatehpuria: Yeah, so obviously, I think portfolio itself do not remain static, right? I mean, you probably pretty much what you have on day one, day one would not sort of look the same at the end of five years, or 10 years down the line. And obviously, portfolios need to sort of like be in sync with what’s happening in the markets. But what I would caveat, that by saying is that you don’t get into the mindset of being fairly active that on a day to day or a month to month basis, we have that edge of doing something, obviously led that asset or that that portfolio sort of like, be invested for a certain period of time. And if you do sort of, like, you know, see, or at least have a point of view as to where the economy is headed. What sort of things are you seeing going on in the world at that point in time, you could sort of like, take a point of view, but again, do not sort of like, add this urge of constantly being on top of the things all of the time, and obviously, it’s not as complicated as maybe I’ve made it sound, but I think it’s just that just, if you’re going about your day to day job, I think you’re probably better off putting your energies into maximizing what you do over there, rather than thinking that investing is something as a part time, and I can just do it casually and be done with it.

Amit: Yeah, that’s right. I mean, essentially, if you keep fiddling, then it defeats the purpose of having a portfolio or just changing it all the time. Right. Okay, so thanks. Thanks so much for this was a really nice and enlightening conversation. I had a great time chatting with you today. And I’m sure our listeners benefited a lot as well. So thanks a lot for being here. And for those who are listening to us today, thank you also for joining us. Please do remember to follow the show and to rate this episode five stars. Do check out Daulat if you’re in the market to you know, figure out your own wealth management journey, perhaps you might be able to use the help. So thanks for joining me, Varun and mammoth with MoneyTok. See you next time. Thank you

Our Guest: Varun Fatehpuria

Our guest, Varun Fatehpuria, is a founder of Daulat which is a tech enabled wealth management company. Prior to starting this, he spent 3 years co-leading a real-estate development firm overseeing the launch of its affordable housing project in Kolkata. Previously, he worked with Blackstone — the world’s largest alternative asset manager with over $915bn in AUM — in their real-estate private equity team in Hong Kong.

His professional career was also interspersed with stints in Jones Lang LaSalle and Bloomberg LP in their Hong Kong offices. 

Varun graduated with distinction in Finance and Information Systems from the HKUST Business School at The Hong Kong University of Science and Technology. He is a NiSM-certified (Series X-A and X-B) Investment Adviser.

The post MT29 | How To make Daulat In Times Of Economic Uncertainty appeared first on CrazyTok Media.

Are you fascinated by the world of startups, and really dying to capture some of that unicorn magic for your own portfolio? But that’s hard if you’re not a millionaire because no credible founder is going to take a few thousand rupees or a few hundred dollars. So is there a way to directly invest in a startup when you don’t have a lot of money?

Discussion Topics: How to Invest in Startups When You’re Not Yet a Millionaire

• How angel investing works
• How it differs from crowdfunding
• How to find good startups to fund
• Legalities of small-ticket angel investing in India
• Realistic ROI and time to cash out
• Risks and pitfalls of angel investing

Transcript: How to Invest in Startups When You’re Not Yet a Millionaire

Amit Ray: Welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my personal experience, as well as through the expertise of many of the guests that we bring on the show. Today, we are actually going to be talking with Kanishk Singh, who heads Investor Relations at POD, which is an angel funding site that helps match one of the investors like you and me with early-stage startups that are looking for capital. Thank you so much for agreeing to join us. Perhaps before we start, would you like to share a little bit about yourself, your journey so far and also maybe about POD.

Kanishk Singh: Sure. Thank you very much Amit for having me here. And also, thank you very much to the MoneyTok team for giving me this opportunity to talk about my experience and the entire angel investment ecosystem in India. So yes, I’m Kanishk, I had an investment at POD. Prior to this, I had been working in the US finance industry, and also the Forex industry for more than a couple of years. I started building POD from scratch along with my founder last year, March and onwards, and since then, it’s been only onwards and upwards. Once I got associated with POD, I’ve been fortunate enough to evaluate more than 5,600 startups from an investment perspective and also have been actively making some investments in early-stage startups since last year.

So, this is all about me. Now, talking about POD, so definitely POD is a tech-based platform, we are building a fundraising stack up the future in India, where a startup can easily raise funds and on the other hand, on the buy side of the ecosystem, there are investors who can invest in startups with as low as 20,000. So, in the industry, it has been like generally, people invest two lakhs, three lakhs, five lakhs, and ten lakh rupees to start with to invest in startups. So this is what our efforts had been focused on bringing this investment amount lower. And also, alongside that, we are building an entire ecosystem where the entire fundraising and investment can be managed on its own. So, this is all.

Amit Ray: So that’s actually pretty interesting. So what you’re saying is that, in a normal startup funding environment, a typical angel investor would put $10,000, $50,000 if they are a super angel, maybe 100, $200,000, which is well beyond the reach of regular folk. And what you’re trying to do instead is make it accessible for as little as I think you said 20,000 rupees, which is only about $300 or so. So, that is actually quite incredible. So why is it that you actually are trying to make this happen? What is wrong with angel investing right now the way that it is?

Kanishk Singh: See, before I explain to you why I’m trying to do this, I’ll have to drag you a bit like a couple of years back in the past. So I’m a finance enthusiast. I graduated five years back. So when I jumped into the corporate world, I got to hear a lot about people investing in startups and especially when you’re in Bengaluru, you can’t stay away from this. So then again, a thought hit me either you start a start-up, work in a start-up, or also one way is that you invest in a startup and be in the ecosystem. So when the thought came into my mind, why can’t a person like me who is earning let’s say, 50,000 rupees in starting or 40,000 rupees in his career, don’t have too much responsibility in my family as of now because I’m a young person right now in my 20s.

So why can’t a person like me invest in startups? As I went, I Googled it. I couldn’t find anywhere on any platform with any sort of lead where somebody says, you can actually start investing in less than one lakh rupees or less than 100k dollars. So, I was very much fascinated about this fact, like why can’t this be done and then again this thought process kicked me actually wanting to be in this ecosystem. And then things started from there. We started deep diving into the law, into the regulation, and talking to different people. And we ended up finding that you know there is no legality that stops a person from investing in a startup. There is no legality, if you directly want to invest in a startup, nobody is stopping you, no amount. So this has been the thought process especially since I have felt that is why I can’t invest in startups and that is where the POD started.

Amit Ray: This is really interesting. So, when you talk about regulation, that means there is no restriction on obviously a company raising money from anyone that is supposed to be okay. But on the other side, also, there is no regulation saying that you have to have a certain amount of salary or assets or something like that in order to be able to invest in a startup.

Kanishk Singh: So definitely, when we talk about the regulations, there is a very thin line. Now I’ll explain to you both. So what happens generally, in India, when we talk about angel investment, most of the investment used to happen like I’m talking of a time two or three years down the line in the past. So most of the investment used to happen through AIX. So all these platforms, all these Angel networks, VC funds, like those permanent names in India, or maybe outside also, most of these players have made a fund which is called a venture capital fund or an Angel fund. So this Angel fund falls under the alternative investment, like AIF category one.

Now, anybody who is investing through an AIF, they have to follow a regulation that you need to have a net worth of two crore rupees, where you will be called an HNI or accredited investor, and then only you can join AIF to invest in a startup. So this goes on the side of AIF, but when it comes to investing in startups, on your own, let’s say, you are building a startup and you came to me knowing me as a friend and said, hey, Kanishk, why don’t you invest in my startup, this is the idea I’m bringing, and I simply agreed to invest in you. And there is no check of whether this Kanishk is accredited or not or maybe he’s forming an AIF or not. So when it comes to investing through an Angel fund, or through an alternative investment fund, yes, you have to be legally bound by the law of angel funds accredited investors. But when it comes to directly investing in startups, there is no such law. No law says that you can’t invest. Anybody can’t invest who is not an accredited investor. So this is the entire law about it.

Amit Ray: Okay, got it. This is really interesting; I wasn’t aware of this distinction. And I actually liked your point about when you have a lot of disposable income, and you’re okay to take risks, perhaps it is one alternate route that one can take in terms of trying to build wealth. So speaking of which, how does angel investing actually work? And the corollary is, how can someone with little money actually think about doing this at all?

Kanishk Singh: So, great question Amit. Thank you for bringing this up. When it comes to angel investment when we talk about the nuances, there are some sort of differences, limitations, some sort of nuances that are involved and that is why not everybody tends to go ahead with investing in startups. So what are all those nuances? The first thing is that you don’t get a lot of information about a startup on a public platform or a public forum like Google or anywhere. XYZ startup you got to know how you can get only information from MCA about their filings and all those things, and about the industry on Google but not about the particular startup. So, you have to be sound enough in decision-making or maybe your own thought process to decide whether this is an investable company or not, and nobody is going to teach you this is how you select a startup because everybody’s investment thesis differs.

So, that is point one. Now, again, another point is that there is an e-liquidity issue in private equity or what we call a startup investment. So, irrespective of your investment amount, that definitely will be like a liquidation issue. What the liquidation means, like to all listeners, means that it is not as simple as selling these stocks when and then you want, like you sell your crypto or maybe stocks. So, this is one issue that happens, and also deciding at what point you have to exit or maybe sell your stock is also one point that is a very crucial thing that plays a crucial role in this entire journey. So except for some nuances like I mentioned, like, selecting one startup and liquidation issue apart from these things, there isn’t any rocket science in investing in startups or maybe in stock also.

Amit Ray: So you mentioned that just like with any other investment, there’s an entry point, and then hopefully a gain in value, and then an exit point. Now, with regular stocks, the exit is on your choice, you decide when you want to sell it. But in the case of startups, you can’t well sell it at any old time. So two parts to this question one is, typically, when does it actually happen such an exit event? And the second thing is, to what extent is it in your control where you decide that you’re going to exit in a certain round? Or you just get bought out at some point, and then you’re forced to exit. So how does that work?

Kanishk Singh: Interesting question. So first is that, yeah, definitely I mentioned that there will be liquidation issues, when you are investing in a startup and one has to be reminded about this, for sure. So how does this exits happen? So what happens is you invest in a startup at point A, now the startup is growing, they’re doing good business, then there are two or three things where exit can happen, let’s say after one year one another investor is coming to invest in that particular startup. And all the existing investors, or maybe the founder also proposed that, hey, you know what, you want to put $1 million into my startup.

So you take the 800k dollar new share that I’ll issue and 200k dollar is something which I have existing shareholders so why don’t you buy them out? So they agreed to buy them out. And this is how the exit from a startup happens. And this is the 95% case, irrespective of whichever startup ecosystem India, US, Europe, UK, whatever you talk about. So that is point one. And this is what we call a secondary sale. Also, like, let’s say, Amit, you have invested in any startup, and then you found your friend is interested to invest in a particular startup and you said, Hey, why don’t you buy out my shares, instead of going and asking the founder to give you shares, maybe the founder is not ready to raise another money.

So you found one buyer, and you said to the founder, or to the board of the company, that, hey, I want to sell my share to this particular person. And then the board will do some sort of legal quorum, they’ll approve, you will buy out and this thing happens, you get your money. So this is how typically the exit works. Now other ways are like when the company is making enough profit so out of the profit, they make a share buyback reserve, and then they use that money to give exit to existing investors. And basically, this happens as a share buyback, the company buys that safe back. But what happened generally in the market, people understand that companies can buy shares anytime back but this is not the case actually.

A company can only buy a share when they are making a profit. And you know, the truth is like how many startups right now are making a profit in the market? So this is also one point, like a lot of people brag on LinkedIn, or maybe on some social media platforms. So these are the two most important points. Now other things like let’s say Zomato acquired Blinkit. So all those existing shareholders of Blinkit would be getting an exit and on whatever valuation Swiggy has acquired, or maybe whatever valuation they have, both the parties have agreed. So most of the exits happen on the secondary sale and then this buyout and the last point is IPO. And if you are fortunate enough to get associated with one startup that goes to the IPO, that’s a huge wealth creation.

Amit Ray: My question to you is that as an early and small investor, my impression is that at some point in time, you will be forced to sell out to some large investor at some point because they don’t usually want to carry a lot of small investors with them all the way to IPO. So, is that indeed the case? Or am I mistaken there?

Kanishk Singh: Definitely, as of now, in the ecosystem for retail investors in India, there is a concept of forced exit, but what happens all these whatever, people who are making sure that this facilitation is happening, they’re making sure that whenever these force exits are also happening these investors are getting healthy returns. Again, this depends on the startup to startup the agreement that you signed, what we call a safe agreement, or maybe an SHA. So you have to be very careful when you’re signing the SHA, take time to read it. Once you read it, you’ll be able to know what all other clauses are there, whether you’re going to be given a forced exit or not, and if it is an exit, how beneficial is it for you.

Amit Ray: Yeah, I think maybe the big point to take away from here is that you have limited choices as a micro-investor. So your choices either don’t get in at all, because there are really no options for you to get in directly with very limited amounts of money. Or if you’re getting in with a small ticket size, then you have to compromise on these other things so that larger investors will have flexibility. So for example, the forced exit we talked about, there’s also I guess, liquidation preferences, where larger investors may be able to get their money out first before small investors do at the point of an exit.

Kanishk Singh: So what I was mentioning is that exit for larger investors and smaller investors is not something which I would say happens, because what happens at the end of the day, it boils down to the agreement. Now let’s say if I have put in the agreement that I’m coming at point A and a bigger investment investor is coming at point B. And at point A, I have signed the agreement that whenever the secondary sale is happening, within three years, I’ll be getting that exit. So whether this point B investor is bigger or larger, I have the right and also it depends upon the kind of instrument that you’re investing, like CCPS, CCD equity, all those things have different preferences when you get exit.

Amit Ray: Okay, fair enough. So, another question I have is, you know, there are other ways in which people can contribute money to companies. So, we talked about angel investing, but that’s not traditionally been the way the other ways have been crowdfunding, for example, Kickstarter or GoFundMe, or things like that, where people can give money to a company because they believe in whatever they’re making. So, how are these different crowdfunding versus angel investing?

Kanishk Singh: Angel investment and crowdfunding is a completely different concept, there are different kinds of crowdfunding like reward-based, donation-based, you have equity base, debt base, and a few other kinds of thing which is not too popular in India but yeah, donation-based crowdfunding is something which is popular in India, because those players like Milap and few other players are doing that. So, one thing is reward based, which is very famous in India also where you give a certain amount of money to XYZ company and for that money, they give you some sort of reward and it may be in the form of any product, any article or any sort of thing. You get money or contributions from an unlimited number of people.

Now, in an Angel investment or a startup investment, you are strictly bound by the law, that anywhere you can’t cross a number of which is more than 200. So, if the number of investors is within this limit of 200, it is not at all crowdfunding. Now, how people get confused between crowdfunding and angel investment, is just because you are implementing tech into the entire process like you want to invest in a startup earlier, it used to happen like, you are getting the documents to sign offline, maybe through post on email, you download it, sign it.

So now platforms like POD and a few other platforms, are making things very possible by implementing tech. So whenever the tech is implemented in the process, people think that oh, now you guys are doing this on the basis of crowdfunding, you are providing information to a wide number of people, a wide range of people where everybody can see the details. But yes, details can be seen but implementing tech doesn’t mean it is crowdfunding.

Amit Ray: Got it. And I think also with crowdfunding, you aren’t taking ownership in the company, right? You’re essentially pre funding the product, I suppose and then you’re going to get whatever it is that they make.

Kanishk Singh: Yes, some rewards.

Amit Ray: Yeah, exactly. Versus with this, your reward is hopefully the growth of the company, in which case you grow along with it. And so it’s capital appreciation. And from an investor’s standpoint, I guess if the ticket sizes are small, then between the two I personally might want to invest in the company versus just getting the product or the reward that they’re offering, if both opportunities exist. Actually speaking of that, what are the legalities of this investment? Like what are the things that you know the checks and balances that this investment goes through?

Kanishk Singh: So, see, everything goes through like the Companies Act, the Securities Act, the Contract Act. Now, why the Contract Act, because you and the startup are signing a few sort of agreements or contracts. So, the agreement and Contract Act comes into play like you have to make sure that it is being complied with this law. Now Securities Act because you will be issued a security. So, you will have to make sure that all the laws mentioned in the Security Law have been being followed. Companies Act because you are investing in companies so there are certain sorts of legalities like how you will be issuing your shares to the company and you as an investor how you will be investing. So there are two methods one is private placement and one is right issue in India, especially Companies Act 2013. So the startup can issue shares with these two methods. There are no third method along with that, so only two either the private placement or right issue. So, it says that the shares have to be issued or any security has to be issued making sure the private placement methods are being followed where the investors KYC would be done, investor will transfer money into the start-up account and until and unless shares are issued, the stamp duty to the government is paid all these sorts of things are done startup cannot use the funds. So those are the checks and balances and to make sure these things are happening we have Company Secretaries and compliance people in India who make sure these things have been checked. So yeah, this is pretty much.

Amit Ray: And what does that mean from a process standpoint? Like, what do I have to do as an investor to actually get the shares or share certificate or whatever?

Kanishk Singh: So see, basically with such platforms, or maybe Angel networks or VC funds in place, you as an investor really doesn’t have to worry a lot about the process until and unless you are investing on your own, like some startup came on your LinkedIn and says, Hey, do you want to invest in this and you liked and you’re investing, then you have to be worried about the process. But if you’re associated with any Angel investment platform, or maybe network, actually, those networks do all heavy lifting.

So there, you have to just make your investment decision and wait for some agreements to arrive, and sign it. And once this is signed, wait for the mail, once they ask for the call for money, deposit the money, wait for some sort of calls or whatever instructions are being given. Because of all these platforms and Angel Network, they were prominent, like experienced law people or legal people who take care of all those processes. So, if you’re investing through such platforms, you definitely have to don’t worry about it a lot.

Amit Ray: So now let’s talk a little bit about the quality of their investment because like you rightly said, with the share market, you have a lot of data and stats and history which you can base your decision on. And even then you can be wrong. In the case of startups, you don’t have any history. And like you said, the information is not really there, and it’s very limited, and so on. So how does one actually find good opportunities in which to invest?

Kanishk Singh: This is one question, if you are in a startup ecosystem, the most asked question to you. So, see at the end of the day, everything boils down to your own investment thesis. Now, let’s say even if you’re investing in a stock or maybe a startup, you have to be prepared with your own investment thesis. Now, what does this investment thesis mean? There are a lot of people who say, you know what, I will invest in only those startups which are making, let’s say, 100k dollar revenue every month. Some are there, no, I don’t care about revenue, I care about the idea, I care about the team and those sorts of things.

So you have to make your own thesis, like what you want to invest in. Point one is that don’t dive into something which you don’t understand. Like, if you ask me, I don’t understand crypto a lot. So I’m a person who believes in staying away from that because I don’t understand. Yes, it’s an attractive asset class, you will make a lot of money, or maybe not, I don’t know. But one piece of advice is that you don’t dive into any sort of industry, which you don’t understand, and just because people are saying that it is a cool industry, it will grow a lot.

No. So point one is that understand what you want to dive into and what you understand another is to make your own investment thesis, like whether you want to invest in revenue based startup, whether you are comfortable with existing players, are already in the market, but not making revenue and whatever things like whichever crowded market, like what happens sometimes, you find a startup, and there is a lot of startups who are already doing that. But you still believe that the team is something that can actually pass these things. So those are the basic checks. And also, it is more about learning and adding value to your knowledge source, especially for the startup ecosystem.

So it boils down to your research on a particular industry and all those things. Now, what do I think that if you don’t know how to decide your own investment thesis and how to do these things, the best thing is to try to connect with people who are already investing, follow them, read about them and the most attractive thing is these pitch events that happen. It teaches you a lot of things you simply sit there, listen, to how the startup is pitching, and how those experts who are already investing in the startup, ask questions that help you to add a lot of value, and also decide which industry you want to be in. So yeah, this is pretty much about how to select startups.

Amit Ray: So it is interesting that you know, I think the investment thesis idea is a good point. I do a little bit of angel investing. And I think it basically falls into two categories. One is you back the founder or you back the project. And if you know the founder, it makes life easier because you can make your own judgment about that. But in most cases, you won’t know the founder. So then it comes down to backing the project. But I think you gave some interesting proxies, which is back the project, which is backed by somebody else whom you trust. If there is somebody who has a track record of success, and you can somehow figure out where they are investing, you might be better off just following them into that because you will have the same probability of success as they have. So that’s interesting. What are the statistics on POD so far, you’ve been around for two years so what’s been the sort of funding rate just to give people an idea of really what are the ratios like?

Kanishk Singh: As an idea, we have been working on POD for the last couple of years, but we launched in January. So till now, we have received some 800 plus maybe applications, and we have a very stringent process to evaluate and identify startups out of that, those successful deals that went through the platform are 15. So you can relate to this ratio of 800 to 15. It is not also about whatever you get as an application being fundable, or maybe people will like that because we are a platform. So we don’t put our investment thesis, we have a metric that if the startup passes XYZ point, then it is good to go on to the platform. Now, it depends upon the investor, whether you want to invest in that, or whether you want to pass it.

If I talk about investors, so we have been able to onboard like 3,500 odd investors till now. And it is a combination of investors who are looking to invest for the first time, also those people who have invested significant amounts of money into the startups, and some micro VCs and funds also, they take us as like deal sourcing point as well. So this has been the number. We organise pitch events every alternative Saturday, not only for the sake of providing investment opportunities to people but also as I said, for me, pitch sessions were the most important learning point. So I believe the same thing that I can give to society or to the people who are actually following. So we organise pitch events, every alternative Saturday, what we call an interesting name, POP pitch on POD. So next Saturday, we are organising the 25th edition of pitch on POD. So this is pretty much about it like all those numbers are on POD.

Amit Ray: So this is quite interesting, essentially, I think, for me, the takeaway was 2% of startups are getting any kind of funding via your platform, which I assume should be representative, overall as well. And that’s how stringent one needs to be at least as stringent in order to try and identify reasonable or high probability opportunities, maybe not good you won’t know for some time. So speaking of which, so now somebody’s invested in this, and we’ve talked about exits and all of that. But what is the kind of exit that one can make or what returns can one make with start-ups, I’m asking this generically, not with POD, because you have not been around that long. But just generically speaking, what does the industry say?

Kanishk Singh: When it comes to the exits, I’ll divide it into two parts one is a timeline and one other is the quantum. So what happens generally people ask what is the rate of return I’ll be getting once I’m investing in a startup. And that is a very vague question to ask. And if somebody is promising that you know what, if you invest in this startup, and you get this much of a return, I would be probably saying that this is the worst advice you’re getting. There is nobody in the market who can guarantee you that you will make this sort of return because, at the end of the day, everything boils down to the success and maybe the growth of the startup. The amount of success is dependent upon the number of startups you’re investing in because the more quality startup you invest in, the more the probability of your getting returns.

Now, the second thing is like it also depends upon the timeline. So diversification is the one point we should love this word actually, like diversification in startups. So it is not about you came and in the ecosystem and you invested in three-four start-ups and then you are like now of course, it is done. Out of these four two are going to be the unicorn No, it is not the case. Because you see, there are like 105 unicorns out of those 10, 1,500 startups registered in India. So you take the probability of how much it is going to be. So point one is to keep investing in startups idea is maybe to invest in at least one startup every month or not one or two startups every quarter to start with, make a good amount of portfolio in two, or three years invest in 20, 30 start-ups, quality startups when I say startup it is called quality startup and that increases your chance of getting high return a good amount of money back.

Now when it comes to the timeline, one needs to understand how a VC cycle works. So you can’t plant a tree today and say that after two months why it is not giving me fruits? Because everything has a timeline and you can’t expect anything in a quick turnaround time. So in the same way in a VC cycle, what happens a general typical VC cycle takes three to five years, sometimes seven years to complete one round of VC cycle. And when we say VC cycle, this means that once you are investing, give some time to the startup to work, grow, build, raise another round, maybe do good business increase valuation. And once they are going with the entire cycle, then comes a point where they’re receiving a good amount of funding or maybe a buyback opportunity or anything, and there you get an exit.

So typically three to five years is something which you have to keep in your mind that I should not expect anything in less than three to five years. Because even if it happens in less than three to five years, it won’t give you anything healthy. There have been some exceptions for this, like BharatPay was one exception, which gave 90x return to people in I guess, 60x or 90x, in 9 to 10 months, but it was BharatPay, you can’t expect everything to be BharatPay. So in a similar way once you are investing in startup point one invest in a good amount of startup, a good amount of quality startup, make a timeline, make a budget that in two years, three years, you will invest this amount of money and divide it into small, small parts that this is the first startup allocation is going to invest in at least 15 to 20 startup in next two, three years, that will increase your probability of success, getting good returns and also give it a healthy time, at least one VC cycle to grow. And this is how you can make a good portfolio and expect a good return.

Amit Ray: Okay, got it. So, I think what you’re saying is right, this is one of those things where you cannot expect to return anytime soon. And I mean, it almost forces you to be a long-term investor, which I suppose is good in its way. What are the downsides of this investment? I mean, obviously, you are hoping for an exit, but what else could happen which is not so good?

Kanishk Singh: Great, you brought up this point actually. If you are expecting a high return, you should also be ready to lose. So, now talking about the downside see, you are investing 100 rupees the maximum that you can lose in an Angel investment is 100 rupees. So you invest X amount you will lose only X amount so the downside is 1x but when it comes to the upside, it is unlimited it is you take an example of Info Edge, they invested something around like one, one, and a half crore in Zomato, back in 2011, 12 and they got they got like 5,600% when Zomato was making IPO. So the upside is definitely too high, but the downside is only restricted to 1x.

We suggest everybody that invest only that amount into the start-ups that you are ready to lose because you never know which startup is going to grow and which startup is going to fail. So that is one downside. I earlier mentioned that e-liquidity is one thing. That is one restriction in the startup. So it is like let’s say you have invested 100 rupees, and after two years, you are in immense need of some emergency, and then you can’t expect your angel investment amount to be back to you. So these are the two major downsides of angel investment, which can pretty much be overcome through a good financial habits and a good investment thesis.

Amit Ray: Right. And actually, I think we should also look at this from a portfolio standpoint. So you’re right, with any individual investment, you can lose your entire 100 or you could make 10 times or 100 times on that. But over your portfolio, I mean, especially if we are doing what you said, which is you’re diversifying, so you’ve built a portfolio of 50 companies, and let’s say you put 100 rupees into each of them, chances are that if everything follows the venture style distribution and 40 of them might go to zero, but one of them might go to 100x or something like that. Again, if you’ve tried to select very well all those 50 and that one has to make up for pretty much all of the other’s performance.

Kanishk Singh: Yeah, so, as I said, building a portfolio is the best thing like building a quality portfolio. Now you invest in 30 start-ups, 40 start-ups definitely there is a high chance that 25, 30 out of them will not perform anything, they will go from 100 to 0. But out of those 10 that are performing well, there may be a couple that will give 1x 2x 3x return and there will be only one or two which will give you like 20x 30x 50x return which will cover all your losses that you have incurred. And this is with respect to the portfolio, not an individual investment, as you said rightly. So yeah, this is definitely the case there.

Amit Ray: And in fact, I think it’s important to make this point because people shouldn’t do angel investing with oh, I’ve invested in one and now I’m going to hope for the best on this one because that like you rightly said is a 0 or 100 sort of a game. But if you’re doing this in any sensible sort of fashion, you are going to have to invest in many and then you should know that the returns of that investment are not going to be 100 times your total money or anything like that.

It’s still going to follow some percent per year, you know, annualised basis returns, which is not going to be 3x 5x 10x, whatever it is, you think startups actually do. Instead, it’s going to be 20% to 30% if you’re a good investor, I guess if you make 30-35%, annualised, that would actually be a pretty good return.

Kanishk Singh: No, definitely as you talk about those super angels like all of us have been watching Shark Tank. Now take the example of Anupam Mittal. Recently, one of the interviews was published in the Mint. So he says that because he is a super angel, he has invested like 90% of his things in startups that we can’t do, we can’t afford to do this. But even being such an active investor, he has an IR of somewhere around 40 to 45%.

To see how realistic he is in his approach. And what happens, is we keep an expectation that every investment that we’re making is going to be 10x. That is not the case. And this is where when it doesn’t perform, we get demotivated, we say no boss, this was not the thing I had hardcore believe in this particular startup.

The first thing is don’t get too much associated with one start-up idea because one thing like we have taken a lot of examples, couple of things, they raise million dollars, multi-million dollars, and then they shut down immediately. So you never know what is going to happen because you are not sitting there and building that startup, it is somebody else. So don’t take everything in your mind very seriously. Invest, do follow-ups, and don’t expect it to be like something magic.

Amit Ray: Yeah, I think that’s a really good kind of way, to sum up the conversation. Angel Investing is exciting, it’s different, it gives you another kind of asset class that you normally wouldn’t get into. But it is not magic, it follows the same financial returns laws you have to build a portfolio and the portfolio will behave like portfolios, too.

And so therefore, you shouldn’t get into this expecting to 100x your money and also in a short amount of time, you should expect this to be like you said 5, 7, maybe 10-year journey for the whole cycle to end. And at the end of that you might find if you’re super lucky, you made 40% per annum returns. More likely you’re not an Anupam Mittal and so therefore, you would have made maybe 20% returns, but 20% returns are not bad compared to so many other places that you could have invested in.

Kanishk Singh: Yeah, definitely it is 20% higher than what we’re talking about and it is definitely very good.

Amit Ray: Yeah. One last question over here, which is a little different question. But are there any resources and books, articles, videos, or templates I don’t know that you might want to recommend to people in relation to their finances?

Kanishk Singh: See, as I said, the best way to learn angel investment, especially startup investment is to attend these unlimited pitch events that are happening like there are a lot of platforms, a lot of angel networks. We also do as I said earlier that we do pitch on POD every alternative Saturday. So join those pitches because you get to learn both the things there, one you understand how to evaluate one startup and maybe how to understand one startup and another thing is at the same point like live real time you get feedback from experts who are already investing in startups.

So I believe that yes, this is the best thing, these are the best learning resources for a newbie or maybe existing people also to join these topics and learn. There are a lot of podcasts of super angel people who invest in startups and MoneyTok is also one source where you can learn a lot. I listened to all your podcasts regularly and it is quality content that you bring. So definitely being on your platform is also a good source to learn about how to manage your money. So yeah, these are the sources that follow these things carefully, give some sort of time over the weeks to these things and yeah, you’re good to be a master in whatever you’re trying to do.

Amit Ray: Nice. Thanks a lot, Kanishk. It was a fun conversation. And I also think our listeners will benefit a lot because you’ve gone a little bit into the next layer of how to invest in angel investments and demystified some of this stuff. And potentially also, I really hope, taken away the whole rosy glasses that you know, if I do this, I will suddenly get a 100x kind of return. So, thanks a lot. Our listeners will definitely benefit from this conversation. And thanks for being on our show. And for those of you who are listening to us today, thank you for joining us. Do remember, if you haven’t already, please follow the show. And if you liked this episode, then please do rate it five stars. We were Kanishk and Amit with MoneyTok and see you next time.

Kanishk Singh: Yeah, thank you very much.

Amit Ray: Thanks Kanishk.

Our Guest: Kanishk

Kanishk is the Head of Investments and Operations at POD, prior to which he worked in US Mortgages as well as Forex. He’s built POD to be a fundraising stack that allows small investors to access startup funding rounds with as little as INR 20,000 (~USD 250)

The post MT28 | Kanishk Pratap Singh On How To Invest In Startups When You’re Not Yet A Millionaire appeared first on CrazyTok Media.

Can you live a happy, financially secure life, even if you start investing only in your 30s? Or if you start so late, do you need to boost your returns with day trading derivatives or crypto? Not really. Today we talk with Prasenjit Dasgupta, who shares with us his journey to financial wealth and freedom despite just starting in his 30s.

Discussion Topics: Prasenjit Dasgupta on How I Built Wealth Despite a Late Start

• Starting his journey with Fixed Deposits
• Buying residential and investment property
• Maxing out his retirement account
• Purchasing company stock
• Nearly losing everything on options trading
• Investing in goals vs chasing a ‘number’
• Lessons from his financial journey

Transcript: Prasenjit Dasgupta on How I Built Wealth Despite a Late Start

Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own experience. I’ve been doing this for about 20 years now. This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, and so many kinds of things.

Amit Ray: Today, we are chatting with Prasenjit Dasgupta, who’s the Chief Financial Officer of Digital.ai. And he’s going to share with us his journey building wealth, and all of his learnings on the way, but Prasenjit Dasgupta, just before we start, let me just ask you this, you say you’re a normal investor, but you’re actually a CFO. So surely as a finance person, you must have knowledge or access maybe which regular white-collar professionals such as myself don’t have. So did your finance background actually help you on your journey at all?

Prasenjit Dasgupta: Hey, Amit, thanks, and love to be on your podcast. Thanks very much for having me. As far as being involved in finance and having more access none of that’s really true because it’s a statistical fact that 80% of professional money managers are the people who are paid very, very well to invest they fare worse than any investor could have if they had just bought the market and get investing in the market and achieve market returns. So even as a finance guy, I’m interested in this stuff but I have no more access than anybody else. And it’s borne out that even the people who have access don’t necessarily manage to do it any better off than the vast majority of other market participants.

Amit Ray: Right. Actually, that’s a really interesting point Prasenjit, the fact that even professional money managers often struggle to beat the market.

Prasenjit Dasgupta: Even more Amit, because, unlike professional money managers, individual investors have two major advantages. The first one is, you’re on your schedule, right? So you’re not on any quarterly schedule, or any yearly schedule, or even five years schedule, that money manager has to be on this sort of quote-unquote, prove their worth, and make money for their investors, otherwise, they will churn out of it, you’re in it for yourself, you’re in it for your family, and whatever causes you’d like to support.

But this is if you’re investing in your 30s and given average lifespans are in the 70s and 80s, you’ve got 50 years of investing ahead of you and hopefully 20 to 25 to 30 years of that is going to be with income, right? So you’ve got a lot of money and a lot of time and time is on your side, which is not the case on a money manager’s side. So you have that. The second thing you do is even if you want to dabble in sort of individual equities and stuff, I think your universe is much more than the typical money managers because they manage such insane amounts of money that their returns are always going to be challenged because they have to hit some really, really big shots to actually make it work while you don’t because you’re investing for yourself.

Amit Ray: This is really good. Actually, the first point is something I mentioned in an earlier episode of MoneyTok, which is that you have time that a professional money manager doesn’t. I mean, you take how much time you want, you can invest and forget about it, whereas they have to actively manage because as you said, otherwise, people will pull out money if they’re not hitting their target returns. So they have to work within a box. And you certainly are not restricted by any such thing.

Prasenjit Dasgupta: Exactly.

Amit Ray: So Prasenjit, tell us more about your money management or investing journey. As you said, you started a little bit late. How did you start and what did you do?

Prasenjit Dasgupta: I graduated from Amcal in 2000 and started working immediately after that. My first job was with the Boston Consulting Group in Germany in Munich, and I wasn’t personally sure whether I would stay abroad permanently or move back to India at some stage. And so I kind of did what the traditional Indian, growing up for 50 years had done, I put all that money into fixed deposits, I was single and didn’t have a lot of expenses.

So now I was able to save a fair bit, but I put that all into a classic like 8, 9% yielding Indian Forex, you know, and honestly, providentially, that turned out to be okay, because if you remember 2001 2002, those were not great years for the stock market with the dot com crash. So it turned out okay, but even if you had started investing in the markets at that time, and just kept on investing, you’d probably have done better. But it’s really when I moved to the US that I had to start investing. Now, I first started off with basically zeroing out all our savings, because we wanted to buy a house. And we had to basically pretty much put down everything.

But I had to do it because I mean, that was the only way I could for my down payment. But again, I bought a house in the middle of that recession. So that was not a bad investment either. But that’s really where my journey started. And the first couple of few years were really sort of plain vanilla in the sense that, you know, in the US, you have what they call a 401K, which is basically a retirement account. Earlier it was about 16,000, now it’s about $20,000 a year, and Microsoft matches 50% of that. So if you’re sort of a double-income household working in one of these companies, lots of companies have similar structures.

So you’re looking at between 2020 and what Microsoft contributes as well, about 60k a year that you’re putting away for 30, 40 years out. So I think that was my first step towards a regular sort of retirement income plan. There was a lot of stuff Microsoft offered in terms of actually putting a percentage of your salary in what they call employees from the stock purchase plan. So you could put up to 15% of your income into Microsoft stock, and you could buy it at a 10% discount. So I use that as kind of an auto-save mechanism for some time. So in 2012 and 2013, I got into Options trading and this is because I read about it someplace and it was mostly plain vanilla stuff like trading ports. Now what that means is, if you feel that you would like to own Microsoft, but Microsoft stock is at 150 and you feel that that’s too expensive, but if I got down to 100 bucks, I’ll buy it.

So essentially what you will do is sell put options, which basically you commit to buying Microsoft stock at 100 bucks. If it reaches below that price, in return, the buyer of that option pays you a premium for telling him or her the right to do so. So basically the simple thing is, if Microsoft stays above 100 bucks, you collect that premium, and that’s yours. If it goes below 100 bucks, you’re obliged to buy the stock. In 2018 and 2019, I left Microsoft after almost 14 years, I joined Motorola. So again smaller, but still a large company. And I already had the bulk of our savings invested in stocks, it had been 10 years of a bull market. And frankly, I was kind of seeing the frothiness in some areas, particularly in tech, where I actually had quite a bit invested. So I thought I should diversify a little bit. And so I started investing a little bit in non-liquid assets, mostly residential and multifamily real estate. I also did an IPO equity.

Amit Ray: The asset classes that we’ve invested in actually seem to have followed some sort of a continuum, they went from more traditional to more exotic over time. So you started with bank deposits and pension plans and employee stock options, which are pretty normal, like, people do it. And then you moved into Options trading, multifamily real estate, and also unlisted equity investments, all of which are more complex, less liquid, and so on as well. So, why do you think your portfolio evolved in that sort of fashion?

Prasenjit Dasgupta: Frankly, I would say and the jury’s still out on how these will be successful or more or less successful than the more traditional piece of my portfolio, I would say, I think the options trading started because I felt some of the stocks that I was interested in, were really overpriced, and I’d love to buy them and they got more reasonable, and then collect the premium along the way if they stayed above my comfort zone.

If I felt they were overpriced, fine, I would just sell options and collect the premium. And this worked well till you get real over-leverage. And it’s still a fine strategy, I think, for investing in sideways markets, or markets where you know you’d like to get a discount on the price, but you’re pretty confident that you would like to own that stock. So I think that’s where it went. And then the real estate stuff, this was really a couple of years back when I felt that the markets were getting a little bit too expensive. And I wanted something that would sort of both give me somewhat stable and recurring income, which they do because they invest in multifamily real estate.

So they’re really built to rent the kind of investments where you’ve got people there, and the incomes based on the rent that you collect. And I didn’t want to manage real estate. I mean, it’s a pain. My home, managing the personal home loan is painful enough, but I wanted to be somewhat uncorrelated. And the other thing is, frankly, having a long time horizon, and we spoke about this before, I think it’s a feature, not a bug. And also the illiquid, as long as you’re not doing stupid stuff is also a feature, not a bug because you can’t touch it. So that almost forces you to be patient, and right out and you can’t panic because you can’t do it. It’s illiquid. So I think diversification was really the main impetus because I felt the stock markets are getting a little bit too frothy.

Amit Ray: I actually wanted to kind of highlight the point you made about employer match. So interestingly, I worked in the US for about three years. And I worked at Citigroup, and they had an employer match for the 401K as well. And you know, weirdly enough for the first year, I didn’t take advantage of that. I was like, oh, you know, don’t understand, don’t care, I’m not going to be in the US forever. All of that. But then I realized this is free money, I mean, it is so stupid not to take advantage of the match. So if anybody anywhere has a pension plan, or is kind of a retirement fund, where the employer is matching, it’s a no-brainer for somebody to take advantage of that match.

Prasenjit Dasgupta: And that’s a tax saving because you’re taking it out, it’s pre-tax income. So that amount is not taxed, the amount that Microsoft contributes on top is not taxed either till the age of 70 in the US, right? So after that, it is taxed at ordinary income rates. But if you’re not working at that time, your income is likely to be lower. So you’re basically deferring your tax liability, and you’re hopefully paying it out at the time that your tax burden is going to be lower. But yeah, to your point absolutely you know the first thing you should be doing is taking advantage of the match, because that is just not doing it is just dumb because it gets a salary increase effectively. It’s something that the company is paying for you and it’s not tax.

Amit Ray: It sounded to me earlier, when we were discussing this whole options thing that you actually had a pretty bad experience. So if you don’t mind kind of sharing a little bit more with our audience, what are you trying to do, and what happened?

Prasenjit Dasgupta: Yeah, two things A it’s very tax-inefficient because all those gains and premiums are taxable at the short-term tax rates. So basically, if you’re in a high tax rate, it is taxable at that rate, and secondly, it works great till it doesn’t. I mean, it’s horrible in terms of a market crash and it doesn’t even have to be a huge crash if you’re being stupid like I was, and margining stuff and all, which is basically you’re kind of borrowing money to fund these options and if the market goes against you, you can lose a lot of money very, very quickly, which happened to me in 2014 2015, sometime around that, and also 2020.

And the worst part of it is, you know the stocks that you’re then being forced to buy, you know they’re great stocks, and you know you want to hold on to them, but just because you’re over-leveraged yourself, you can’t, and you have to force sell. And by the way, I think that accounts for a lot of the panic selling that we’re seeing now and that we see, that’s why crashes tend to be so fast because they tend to cascade on themselves.

Amit Ray: Yeah, they spiral essentially. And I think, what you said, I mean, this is the whole concept of margin calls, etc. Like, companies and individuals are buying on leverage and then if things go below a certain threshold, or above a certain threshold, depending on how you bet then you have to sell in order to cover that loss.

Prasenjit Dasgupta: Yeah, I have been on margin calls once and it was the worst day of my investing life and it is not fun. So I would not recommend that to anybody. What I was trying to do is eke out more and more option premium, and that’s fine. But I think you got to have the capital to support it and I frankly didn’t. So what ended up happening is the stock went down all of a sudden, so options trading is great for when stocks are going up that is by definition, fine. But even when they go down slowly, that’s okay. I mean, you go down half a percent a day 3% a day, that’s okay, you still can make decent money. You get in trouble, basically when the market crashes.

You can get in serious trouble if you don’t have enough capital because then by the way, you just realise your dream, you are getting to buy those stocks that you like in theory that you like, at the price you wanted to pay for them. It’s just that if you put too many chips against that, I said, Okay, I’m gonna buy 1000 shares of Apple, but at 100 bucks, you better make sure you have 80,000 bucks in your account to cover that. And if you don’t, what ends up happening, if you make too many of those bets, and all those stocks are falling at the same time, what happens is that you will be required, you’re obliged to buy all that stock at that prices, and when your money runs out, then your broker will actually start liquidating or selling those stocks at the current prices, so you will lock in losses, because let’s say you would sell an option to buy Apple at 100, Apple crashes to 100, and then it goes to 80, the broker will sell your stock at 80 and you’ve just guaranteed yourself $2,000 loss on every 100 stocks because you run out of capital.

And that’s definitely something that happens to a lot of people who don’t know what they’re doing obviously at that time, because it happened to me, and it’s one of the most disheartening things that can happen to you because you’re like, No, I don’t want to sell I’ll hold on I’ll wait for it to go up but you can’t because you over leverage yourself.

Amit Ray: Wow that is some story. So effectively, you’ve taken a bet, which actually turns out to be right but you overbet on that. So you don’t have enough capital to actually satisfy the bet. That’s the greed part of it. So it’s like you were taking a bet, but not quite believing that it’s gonna happen utmost.

Prasenjit Dasgupta: In some ways, yes. That’s actually a very good way of putting it because you don’t really believe that Apple can go down so cheap. And by the way, at that point, the last thing you want to do is sell and the thing you want to do is buy more of it at those lower prices but you can’t because you’ve just lost the ability to put that capital to work.

Amit Ray: Wow, that is crazy. And obviously, you simply can’t control it because you’ve set this ball in motion at the start when you made those bets.

Prasenjit Dasgupta: Yeah you might have made those bets three months back, six months back a year back sometimes. And it’s all great till the market crashes, 20% in a month, and then you’re like, Okay, how you’re left holding the bat.

Amit Ray: Wow, that’s huge. Thanks for sharing. I think it’s good to hear it sort of real life from someone because you read about all of these and yeah, some hedge fund has lost money and folded. But a hedge fund is not a person so it doesn’t matter so much to the rest of us. But it’s good to hear it from an actual person and to understand the risks in real life. So what did your family say about this when it was happening?

Prasenjit Dasgupta: I don’t think I was super transparent to them. And thankfully, the market turned just in time and yes, that was a lesson to me and going forward that resulted in important lessons like always having a cash cushion in there where even in that time I could have done certain things had I known how to do them, you know, certain emergency fundraising, I could have consolidated assets and put them into that so that I had some cover, which I actually did put in place, and which by the way enormously helped me in 2020, which was again, the last big COVID crash when the market dropped 30% in that time, so it was a painful loss, it was painful for everyone. But unlike the first time, I didn’t have to force them. To participate when it comes back. Now we’ll see what happens with this one.

Amit Ray: Yeah, thanks for sharing. And in return, let me also say that I’ve had my TTS investment as well, not in options and stuff, because I am too scared to do things on margin and anything that has leverage. But when oil prices had turned negative and stuff, I was looking for oil as a commodity. And I hit upon this one fund, which I really didn’t understand much about. And I thought it was just one normal fund that invests in this commodity. And it turned out to be like a fund that invests in the future and then when oil turned negative, all hell broke loose on this fund Long story short, I think I bought in at 13 bucks or 12 bucks, and it went down to $2 before I was like, Okay, this is it is just gonna zero out at this rate, so I’m just gonna sell it.

Prasenjit Dasgupta: But did you buy before oil went negative or when oil became negative?

Amit Ray: Before. I think oil was dropping, and it seemed obvious to me that it can’t stay at $20 or $30 a barrel.

Prasenjit Dasgupta: You didn’t price in the minus $37.

Amit Ray: Exactly. And it was some future thing that has to roll over every month. And there were a lot of technicalities and something called contango, which I only learned when I was losing money big time in it.

Prasenjit Dasgupta: Yeah, I know. That was just insane because you were literally being paid to take oil off.

Amit Ray: Yeah, so we talked about the disaster. So what are some of the investments that have turned out really well for you?

Prasenjit Dasgupta: See, I think and this goes back to the first one, we talked about some of the most simple things and some of the things where I’ve kind of literally shut, automatically. Actually, my wife’s a great example of this because she’s like, don’t sell my stuff. And she’s been at Microsoft now for seven, eight years. But she’s like, I’m gonna put 15% of my salary into that. And I’m just gonna stay put and you’re not to touch that even no matter how high Microsoft rose. And that’s been a huge success because the stock has done well. But I think over time, it’s raised its dividend. So it’s actually just paying us back also.

Personally, for me, Apple’s been a big success, because I did feel it was seriously undervalued in the early 2010s. So it’s the biggest part of my it’s biggest individual stock on my 401K. So Apple and Microsoft, I mean, very traditional, and then again, but the biggest thing has been really that Systematic Investment in the 401K, mostly in index funds in the S&P 500, a few bonds, like put 80% S&P 500 20% bonds, those have been really the highlights, you know, some of those pre IPO investments have done well, but some have not. So I would say it’s kind of a wash really, the simple stuff has worked out the best for me.

Amit Ray: I think that’s good insight as well, which is the simple stuff often works out the best. And the reason for that, I mean, it’s simple, because it has a long history, and everything is adapted around it, people understand how to do it, there are many ways to invest in those things, and so on.

Prasenjit Dasgupta: Yeah and Amit, one thing, if I might add, it’s actually, if you invest in index funds, it almost is an automatic stabiliser, because the worst performing stocks are kicked off the index. So companies that have lost market share, lost competitive advantage, they’ve kicked off the index, and they disappear and they are replaced with companies that are performing well. So if you look at it over 50-100 years, the composition of the S&P 500 has changed significantly, and the stocks in it have changed significantly. So by just investing in it at an extremely low cost I mean, I think you can buy funds that cost 2 or $3 per $10,000 of investment.

So that’s an insanely cheap way to invest, you can basically get the top 500 stocks at any given point that are doing well, and it almost acts as an automatic money manager for you. And you don’t have to do anything. And like yeah, you will not get Warren Buffett-like returns. But I mean, beating 80% of people who are paid to do this, that’s not the bad outcome.

Amit Ray: Tell me more about your property investments, because that seems to be a large chunk of your investing portfolio.

Prasenjit Dasgupta: I think property has a couple of advantages, particularly in the US. I don’t know about other countries, but definitely, in the US, it’s the one place where the only real way to buy property is on leverage, right, because you’re putting 20 or 25% down, you’re borrowing the rest. Now in the US, the big advantage is that if you buy a property for yourself, you can get a tax deduction on the mortgage interest you pay for it. And mortgage interest rates apart from the huge rise now for a long time I mean, last year, you could get them on a 30-year mortgage, a two and a half 2.75%. And then if you discount the tax deductibility of that you effectively are getting a 30-year mortgage at a 2% effective rate.

It’s kind of a no-brainer investment, and you can do it across both your home or your primary residence and your rental properties, because you can show that as an expense. So if you can borrow at 2%, in an asset that over time, generally tends to grow, you know, even if it grows 3, 4% a year, if you’re paying only 20% so you have a leverage of four to one, right? So that kind of effectively gives you double-digit returns at a cost that is just 2% effective. And the other thing about property is that you don’t get those wild swings that you see in the stock market and it tends to be somewhat uncorrelated and it’s also kind of for saving because it’s illiquid so you can’t say oh my god, my property is down 30% and I have to sell as long as you’re either living in it, or you’re renting it out, and your renters paying their bills, your kind of security from a cash flow perspective as well.

You tend to worry less about depreciation again. I keep coming back to the things, the things you see the least and worry about the least. They tend to be your biggest winners over time if your time horizon is long enough.

Amit Ray: Yeah, that’s right. So actually, that’s a good segue into maybe let’s discuss some of the main lessons that you’ve learned from your investing journey.

Prasenjit Dasgupta: Yeah, I think the biggest lesson is that investing doesn’t have to be complex. All you really have to do is set aside the maximum amount of money that you can afford to do so and put it in the markets to work and just keep doing it over and over every month over your career. And I think that will guarantee you better results than the vast majority of investors, but the discipline to do that every month, regardless of whether markets are going up, down, or sideways, that’s the key thing. I think the two biggest success factors in my mind in investing are patience and discipline. If you have those two, then I think you can really forget about how your stocks are doing in any particular given month or quarter, and just focus on why you’re doing this and when you actually need the money, or the fruits of your investments to cash out against those. So I think that’s the biggest lesson.

Secondly, I would say, if you’re not interested in researching the market and buying individual stocks, don’t do that. Don’t go on tips from friends on, hey, this is great. If I had to trade on it, I would get the direction 50% wrong. It’s funny. But once we printed just a bad quarter at Microsoft, and I was like, Oh, my God, I can’t sell but I wish I could have because I know this is a disaster, the stock went up 5%, because people had expected an even worse quarter. So it’s a fool’s game to trade on individual stocks, unless you really, really have a feel for the market. So I would say that. We talked about leverage, I won’t mention it too much again, but borrowing is dangerous.

Apart from real estate, I would encourage people not to do that. Or if they do that, keep it modest and ensure the markets can fall 30-50%, you will lose a lot of money, and everyone will but ensure you do not get margin calls that take you to leverage to an extent that you’re able to do that. And finally, I think in some ways you think about the end goal in mind, right? Why are you doing this? Or is it for retirement security? Is it to buy a home or put down a down payment for a home? Is it for kid’s education? Because the types of assets you would have to invest in would be different based on the timeframe for when you would need those resources because if you’ve got to pay for your kid’s education in two years’ time, you shouldn’t be investing in stocks.

Because if the market goes down 30%, what are you going to do? If you have liabilities or outflows that you know are going to come at a certain point in time, you should be fairly confident that you are going to have that amount of money with a certain amount of cushion. But if that’s 8 or 10 years old, if you have young kids, yeah, you should probably have a decent chunk of your money in spending in the stock market. That’s the other thing as well. Again, for someone who’s not into this big time, I’d say just think about the goals and what you need to do to fulfill those goals.

Amit Ray: Yeah, actually, this event-based or goal-based approach is something that I’m a big fan of, and I’ve been trying to do it for ourselves. But it’s in theory, it’s something that makes a lot of sense to me, which is you know, you have big life events, and you make sure that you plan around those events. But it’s easier said than done in that aspect, which is why what most people do is just say, Okay, I’m just going to maximise my wealth and do the other way around, which is I will just focus on inputs and not on the output. Is there a way that you think one can actually structure around these kinds of events?

Prasenjit Dasgupta: Look, Amit, I think for us, really, the two big events that we need to plan for people like us is kids’ education, super expensive in the US, probably Singapore as well and our own retirements because I don’t think we can count on any government funding for to fund our retirements, anything that does happen is kind of a bonus. So luckily, both those are fairly predictable in terms of when you might want to look to retire or use the word retire within airports, because none of us might want to retire per se, but at least be financially free to pursue it at the time that we might want to do them without having to rely on a regular paycheck.

That’s what I define retirement as right, you are financially free and you don’t have to work whether you choose to do or not is a completely different question. So I would say those two are the main things. Now in the US again, you can actually plan for your kids’ education, there are tax advantage plans that allow you to do that. So I went ahead and funded four years each of public education, and university education for each of my kids. So that’s done. So I talked about how we pay ourselves first in terms of maxing out our 401k’s and employee stock purchase plans. So that’s the one thing we do for retirement. And the other thing I’ve done that’s event-driven is the college fund for my kids.

Amit Ray: So I think my takeaway from this is all the stuff you said, of course, you’re in the US and there are certain schemes in the US. But everywhere around the world, there are targeted schemes for targeted events. So at the very minimum, one can aim for that. So use whatever the pension or the retirement fund concept is, whatever the education fund concept is, or any such plans that one can use for specific, pretty much-known purposes.

Prasenjit Dasgupta: Yeah, absolutely. And I think for younger investors, one of the big priorities might be saving a down payment to buy a house. So if you start working at whatever 22, 23 if you’re looking to buy a house in five, six years, then I would say you have a fairly good idea of how much down payment you need, you might look at a more balanced outcome where you get some of the appreciation potential from a stock market fund but you also have a little bit of downside protection.

Amit Ray: Yeah, that’s right. So I think what you’re saying is no upfront, what are some of the big ticket items and roughly when that’s going to occur, and then if there’s a targeted fund, just put money into that fund and forget about it. Or if there’s nothing targeted, like a down payment for a house, then just plan for that and put it where it makes more sense to get.

Prasenjit Dasgupta: Yeah, again, I mean, even for a house, you will have some idea hey, given my income, where I’m at right now, given the type of house I’m looking to buy, here’s how much I need to put down as a down payment. So you have to have some idea of how much you need and based on that, and how much you have and how much you can save, you can build up a plan that enables you to do that actually, it’s not too much more complicated. It’s not a very complicated Excel spreadsheet.

Amit Ray: Okay, we’ve talked about your journey, and you’ve actually done quite a few different things and had your highs and lows and so on. So looking back, what advice would you give people who are starting out on their investing journey, or maybe they’re early in their journey right now?

Prasenjit Dasgupta: First thing, I would say I would start early, I would start again, what I call pay yourself first, which is the first few years of your career, yeah, maybe you’re not earning that much. But expenses also tend to be low because if you’re single, you don’t have other liabilities, you know, your rental expense is probably going to be your highest, your biggest ticket item.

So this is the way to really put in that discipline of putting in the maximum of whatever you can save in that because it’s interesting that you’re saving a comparatively small amount of money relative to what we’ll be doing later but that money has the potential to compound for 40, 50 years. So it’s going to give you a lot of bang for your buck in later years because that’s going to snowball and compound on itself. So just put everything that you can maximise your savings potential, and then just invest systematically in the market every month or every so often that you are but focus on actually following that discipline plan. Save consistently, and let compounding do the work.

That’s something I did not do in the first eight or nine years of my career. But I think you’ll do well. The other advantage is I mean, a lot of companies, you will get matches. I mean, there’s stuff like this to any fear of saving X, you can get to at least 1.2x or 1.5x, even in some circumstances, by things that the government or your employer might have put in place for you. I think we talked about that earlier. The second thing is, if you’re not super interested in this, but just want to grow and do other things with your life, unlike me, there’s a human urge to just think and do something. And if you avoid that, you’ll often make more money than by doing nothing and just letting things be.

Index funds, I think are a very, very efficient way for most investors for 90% of investors, because they’re super cheap, actually, you don’t even have to pay a financial advisor, I haven’t had one and I don’t think I need one naturally, because it’s just all the information’s out there and it’s really not that complicated. And then we talked about real estate. I like investing in real estate, because I think it is for saving, it is a place where leverage actually helps and works in your favour, and the interest rates are tax deductible. So if you can put down the money to buy a house, I would recommend it.

Now, there are disadvantages because housing ties you down, it’s difficult to move, and transaction costs are higher. So you can’t just pack up, cut your lease short, and just move somewhere else. So there are real costs to it. And there are all these discussions where, hey, if you’d invested the down payment, then you might do better than if you invest in a house. But the thing is, housing is also emotional. I think it is very emotional for a lot of people. And it’s a very personal choice as well. I think it can be a good financial choice. But again, there are definitely trade-offs to it that I mentioned, it definitely limits your flexibility.

And finally, I would say just from a big, big picture now the whole point of investing, unless you’re probably a buffet or someone who does this for a living is not to show who has the maximum returns. What I find really beautiful is this quote from Joseph Heller, who wrote Catch-22 when he was at this hedge fund billionaire’s party sometime in the 1950s.

An acquaintance got up and asked him Hey, don’t you feel jealous because that guy’s thought so much. And you’re such an awesome writer, and he basically trades stocks, and he’s got so much money and Joseph Heller said this, I got something that he never has and that’s enough. And that word is enough, I think it is just so meaningful. It’s easier said than done, more is always better, but think about what enough means for you and work towards that.

Amit Ray: Yeah, I think that is one of the most valuable points from this whole conversation, which is the concept of enough for most people, that enough number tends to keep moving. Like I know, I had enough numbers and that seems like four times in the last 10 years or so it also doesn’t help that now within quotes so you can see how other people are living and they seem to be living extremely well, versus you are doing whatever you’re doing saving money and so on. But you don’t know what their lives are like inside you only see the Instagram version of their life.

Prasenjit Dasgupta: I will say, by the way, enough doesn’t mean that you have to sort of never go out or live like a hermit. Absolutely not. I think you should absolutely look. And as I said, it should be tied to your goals. So, for me, having a fancy car was never, it just didn’t appeal to me, I couldn’t care less. So we don’t do that. I drive sort of 7, 10-year-old cars, and I’ll keep driving them till I can’t drive them anymore, because they will just not work. But for some of my friends, that’s part of their aspiration and what their life goals are and that’s fine. Thankfully, my wife and I have relatively inexpensive hobbies, we like biking.

So I’ve got a nice bike. I mean, at some point, my bike was actually worth more than the car I was riding. True story, it was a good bike and it was not such a good car, which I would say it’s very, very personal. So focus on what’s personal to you, and focus on what you need to do to make that happen. And yeah, as you said Amit, what’s personal to you, and what’s important may change, and that’s okay. But again, think about it, Okay, does that really make you happy?

Is that fancy new car going to make you happier? And chances are not really, on the other hand, is that awesome trip to somewhere you’ve always dreamt up. I’m a huge cricket fan, something I would absolutely love to do is travel to Australia when I’m retired, travel to the West Indies, and follow the cricket team around is that something that will make me happy? You bet. So you know, that is part of my life goals and something that is more time than money frankly, at this point. But again, that’s something that is a life goal that I will be working towards. So again, very, very individual, very personal.

Amit Ray: So Prasenjit, thanks a lot for sharing all of this. Just the last couple of questions, maybe which is, given your experience so far, what are some actionable ways in which our listeners can implement these ideas or just get started on the right?

Prasenjit Dasgupta: Yeah, I would say these days, it’s super easy to get started investing in the stock markets, you can open a brokerage account in whichever geography you are located. There are often, no minimum amount, or very, very modest minimums, I mean, in the US, you can open up an account for $100. Actually, I’m going to do it for my 16-year-old, because he wants to get started. I’m like, yeah, it’s actually good that he wants, I’m going to fund a little bit of it, he has some savings and we’ll see how he does.

But look, give a 16-year-old can do it and he can do it on his own, you can do it as well, it’s super easy, and put some money in just low-cost index funds, I would say it’s a good time to invest right now, with the recent downturn in the market, your starting point is actually lower than it would have been just three months back so not about time, it can go lower. But again, remember what I said, put money in that you can put in sort of every month or every quarter, or at whatever interval make sense to you. So that’s the first thing to take action on if you haven’t, and that you should do whether you’re getting started in your 20s or 30s.

If you haven’t gotten started yet, I would say the first thing to do is get started, get started first. Now if you’re interested in researching individual stocks, you have to do a little bit of hard work, you have to learn a bit of accounting and how to analyse financial statements. But there are a bunch of websites and Twitter accounts that are a great resource for this. There’s frankly a lot of really nice knowledge on the internet. There’s this Twitter account by the name of 10K diver that really, really breaks out financial statements for beginners beautifully illustratively. And you don’t need more than 8 trademarks to understand it. Actually, it’s not super exotic. If you happen to be in an industry I think it’s more insightful, and maybe easier for you to get started on stocks that you understand because you know the company and how it operates.

Real estate actually, if you’re interested in real estate, I’m sure there are a number of crowdfunding sites everywhere in the world in the US, there are definitely a few that allow you to participate in opportunities that are typically not available elsewhere or they’re not liquid, you need to have a fairly decent income for this. But if you’re doing reasonably well, it’s not out of the realm for folks. So that’s kind of what I would suggest. I mean, now there are a bunch of entertaining websites. The Motley Fool is really good. There’s a number of books, Morgan Housel.

He’s one of my favorite investment writers he used to write for the Motley Fool. He has a bestseller called the psychology of Money. It’s a quick read, but again, very philosophical rather than focusing on this or that strategy. I found that very meaningful. There’s a guy called Nick Magically, I follow him on Twitter. Again, a great data-driven approach to why a consistent simple, and a long-term strategy works for most people, I’d recommend. And then if you’re in the US or even outside, a Morningstar subscription is pretty good value, it’s probably just 100 bucks for a year. And it’s a lot of good advice on a number of topics, not just stock picking, but a number of different topics.

So I think there are a bunch of ways to get started. Again, with social media, there’s just the cost of entry, or the barriers to entry are very, very low. And people sort of dump on Robin Hood and everything for all the excesses they have been responsible for on the crypto side, but they have really democratised investing. And so for someone who wants to get started and doesn’t have a lot of resources, it is really a good way to get started as long as you don’t get into some of the craziness that’s also out there.

Amit Ray: So Prasenjit, thank you so much. This was a really entertaining conversation, and I really loved chatting with you on this topic and anyway, catching up after quite a while.

Prasenjit Dasgupta: Thanks, Amit. Yeah, it was great catching up again, and I love the conversation. So thank you for having me.

Amit Ray: Yeah, thanks a lot for joining. And for those listening, I really hope you enjoyed this conversation. It was a bit different from our usual discussions around specific financial topics, much more broad-ranging, much more about what a regular person might actually do. And I hope I took away from this the main lesson, which is that you just have to get started and you can make money and build wealth doing normal things. In fact, you could possibly erode wealth by doing exotic things.

Prasenjit Dasgupta: Yes, exactly we can as I have demonstrated.

Amit Ray: Yeah, so thanks a lot for joining. If you liked this episode, please rate us five stars. We were Prasenjit & Amit with MoneyTok. See you next time.

Prasenjit Dasgupta: Thanks Amit. Bye.

Our Guest: Prasenjit Dasgupta

Prasenjit Dasgupta is a graduate of IIM Calcutta and the Chief Financial Officer of Digital.ai. He started investing in his 30s and built up wealth through a combination of stock options and traditional investing routes.

The post MT27 | Prasenjit Dasgupta On How I Built Wealth Despite A Late Start appeared first on CrazyTok Media.

We talk about the importance of saving and investing, and just overall managing your finances well. But what if your specific needs aren’t easily addressed with the one-size-fits-all kinds of products that you have in the market today? Women, in particular, face very specific issues around expenses, credit and disproportionate impacts of difficult situations.

Discussion Topics: Hena Mehta on How Money Works Differently For Women

• How women’s financial journey is different from men
• Why women are more reticent about investing and personal finance
• Barriers to accessing credit
• How women’s financial concerns significantly vary from men’s
• How men might benefit by acquiring some feminine investing traits

Transcript: Hena Mehta on How Money Works Differently For Women

Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own experience. I’ve been doing this for about 20 years now. This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, and so many kinds of things.

Amit Ray: We talk so much on the show about the importance of saving and investing, and just overall managing your finances well. But what if you’re a person with specific needs that aren’t easily addressed with, you know, the one size fits all kinds of products that you have in the market today? For example, try taking a loan if you’re on a career break, I know I’ve tried, and it’s nearly impossible.

And ask all the women who’ve taken time off to raise their children, or to take care of aging parents, and I’m sure they will all express frustration with the same kinds of issues. And this isn’t the only thing not just loans on a career break. Today, we are talking with Hena Mehta, who is the founder and CEO of Basis, a financial services destination for women in India. She is going to help us understand the issues that women face with regard to money management, and also how Basis is trying to make a difference.

But before we begin a quick reminder to please follow MoneyTok, so you don’t miss any of the practical advice and tips that we share on this show. With that said, Hena, thank you so much for joining us. Maybe for a start, you could tell us about your background in money management or investing, and also more about Basis. I’m very curious to learn what you’re exactly doing.

Hena Mehta: Sure, and thank you, Amit, for having me on your podcast. As a quick introduction, I’ve spent my entire career building FinTech products actually. I am an Engineer by training, started my career on Wall Street in 2008, a very, very interesting time to be starting a career, and during kind of the middle of all the mayhem that was happening out there. Building software for an equities trading desk moved into a product management role within Goldman Sachs’s technology, and product divisions.

I spent about half a decade with the company and then decided the Indian startup ecosystem was too exciting to be missing out on and this was when Flipkart was still a startup, still the poster child of Indian startups, this was back in 2014, I took a leap of faith literally sold all my stuff my apartment in New York, moved back to Bangalore, it’s actually where I grew up and joined a startup called Ezetap, which is a Fintech startup in the payment space. So I was employee number 30 there. So it was very different from being in a 30,000-something company, but I learned so much steep learning curves and startups, which I love. So I spent two years there as a Product Manager building a variety of things in the payment space. And then business school happened. And I’ll get into how that experience actually shaped the whole thesis around Basis, which is what I’m working on, and business school.

I went to Wharton and spent two years out in the US again, but long-term plans of being back and building in India had changed. Also spent a little bit of time in the Bay Area, with Square on the capital team in San Francisco. So this was lending products. And yes, I’ve been back in India now for about three years and have been building Bases. And you didn’t introduce us in a line, but essentially what we’re building at Basis is a full-stack financial services platform hyper-focused on urban women in India. I talked about the B School experience and how that really triggered, and how really sowed the seeds for Basis. And essentially, for me, that was a wake-up call, you asked about my money management experience, it was actually fairly minimal at the time. And it did dawn on me that, you know, I had done every possible thing to get into one of the world’s top business schools, except plan for how I was going to pay for it.

I mean, it is a large amount of money for anyone, especially for a 20-something-year-old. And so that was my wake-up call. And then it kind of you know, I couldn’t stop thinking about it and my thesis was that women more so than men tend to get left out of this part of I guess being an adult right if you want to think about it. That way making investments starts early, understanding the market you know, and really taking that keen interest in your personal finances, so that you can A achieve whatever goals you’re setting out to achieve, but B also be prepared for any dire life situations that may come up.

Amit Ray: Yeah, and I mean, it must also have been a sort of formative experience to see the mayhem as you described it in 2007 to 9, actually 2008 and 9. I was actually there in New York, also, at the same time working for Citigroup. And I saw so many people whose basically entire retirement was decimated because they were longtime Citi bankers, 30 years in the company, their stocks were worth a fair amount of money till just before the crisis and after that it essentially all just evaporated.

So it was a learning moment for me as well, actually, at the same time. And you’re right, I think everybody needs to worry about not worrying, but everybody needs to plan to manage their money. And I’m happy that you’re not just planning for yourself, you’re actually taking the effort to take everybody on the journey with you, which is actually trying to create a service for urban women in India. So, tell me more, you know, I feel like I know a fair amount about managing finances. I’ve been doing this for a while for myself. But you’re saying that women’s needs can be quite different from men’s. So tell me more about this, like, what are some of the challenges? Or in what ways is it different?

Hena Mehta: Right. So if you look at a woman’s life, whether it’s career or more personal life events, the trajectories are very different from those of men. I am strongly generalising here but if you look at it, from a macro standpoint, there are stark differences that have not been taken into account with financial advice out there with financial products that are being curated, and designed in the market today, starting with just financial goals that women may have. So one of the most popular tools on the Basis app is our career break calculator. If you think about it, and you talked about when you took a career break, it is a financial event, you are suddenly left without that active income, without that salary, without that paycheck coming in and no one wants to depend on someone else for an allowance or anything like that and women tend to take more career breaks than men do. So that’s one example of a financial event that no one really talks about.

But beyond that, as well, if you look at the financial needs of women, starting with, you know, we earn less for the same jobs we do as men, the gender pay gap, and it’s great that it’s been talked about so openly. Now in India, the gap is anywhere between 25 to like 34%, which is ridiculously high. Women tend to live longer than men, on average, women outlive their male peers by four to five years, and that’s not a small amount of time, which means we’ll have to plan for a longer retirement. And if that wasn’t enough, we also have higher health care costs and higher personal care costs. You might have heard of something called the pink tax, which is this gender-based price discriminatory strategy that companies adopt.

Amit Ray: I actually read about it quite recently, and it was very surprising to me that the same item can cost differently.

Hena Mehta: Exactly. And I mean, it is probably part of some marketers and companies saying, hey, women may have more of a willingness to pay or, I mean, there’s a lot of discussions on why it exists. Hopefully, it goes away. But the bottom line is, with the pink tax with higher health care costs, it also costs more to be a woman. So not only are we earning less than our male peers, we need that money to last us longer and it costs more just to live, so across the board, women have very specific needs, and events that financial services need to account for while designing whether it’s advice, whether it’s actual products or services that target this audience. And so far, I think globally, this problem of women not participating enough in financial services has always been seen as a marketing challenge, right? Like how we target women better, what campaigns we can do, what are discounts and offers, and all of these things that can be done march is obviously Women’s History Month where we see all kinds of campaigns and stuff targeting women but that’s very superficial.

Women are not adopting these because these services and products have just not been designed, to take women’s needs into account. Obviously how women invest also differs, risk appetites differ from those of men. And I know we’re going to dive more into the credit space as well. And if you look at insurance health insurance, and life insurance there are very obvious gender-specific nuances that need to be taken into account, as these products are being designed, and the data that’s being taken into account while designing them needs to address a woman’s life.

Amit Ray: Right, okay, so this is very eye-opening Hena. I mean, I kind of had an awareness. And in fact, we’ve done an episode on investing for women kind of thing in the past a few episodes back. But we didn’t get into this much discussion around why it is different. We talk just about, hey, you know, women need to think more about their financial situation and how to manage that. But we didn’t get so much into, you know, these more fundamental differences, which might be creating that kind of situation.

So thanks for sharing this. I think many of these are new to me as well and I’m sure it’s quite educational to everyone listening. So this being the situation, I mean, I suppose this is maybe what led to the birth of Basis, right? I mean, these are the problems you’re trying to solve. So how does Basis help with all of this or what are you trying to achieve?

Hena Mehta: So we are fixing these massive gaps that exist in the financial services space, amongst the women market. In India, today, the market, if financial services actually cater to the needs of women, it’s we’re talking about a $40 billion tap in the next five years, so it’s not a small market and that’s the market we are operating in. What we started off with a couple of years ago, was financial education and communities because we saw the main gaps that were preventing women or the main barriers that were preventing them from taking that leap into, let’s say, making their first investment or getting adequate health insurance or understanding how credit could work to actually enable different financial goals boils down to a lack of knowledge, a lack of trust, and a lack of relatability.

I don’t know enough so my money is best parked in a fixed deposit at a bank or gold that I may have gotten during my wedding or maybe the insurance plans that are being offered by my employer is enough you know, it’s actually not, we can get into that as well, to other things around just relationships and money there are what we talk about it Basis are these four D’s in a woman’s life, that disproportionately impacts them more than they do to men. So the four D’s are divorce, death of a spouse, debt, as in loans, and a disaster, which we saw play out in the last couple of years with the pandemic. So all of these events tend to impact women more so than they impact men.

Anyway, long story short, we started off by bridging these knowledge and trust gaps, we’ve actually built the largest community of women in the country that is focused on money. And so it’s a learn, discuss sort of a user journey right now on our app, our app is live on Android and on iOS. And where we are now in our journey is launching curated financial products for this audience. So the learn and discuss is now going to convert to transact. And we’re launching something called a power card, which is a credit product. It’s a BNPL card that is again, hyper focused and designed for women and happy to get into our approach there, but it’s the first card in the country that is focused on a very specific demographic.

The gap, obviously, that we saw Amit, in the market was I mean, women aren’t participating in the credit system as much as they should be doing. Credit cards in India are exploding now as we speak, but women represent somewhere between 10 to 12% of the outstanding credit cards which is a tiny, tiny sliver.

And, yes, the education bit does play a big role. You know women tend to not know what credit scores are tending not to have credit scores, tend to maybe think that had an add on card to, you know, my father and my husband, and that’s enough. But as we sort of, again, we’re diving deeper into this space there’s strong appetite to want to participate in the credit markets, obviously, with a platform that women could trust. And so that’s also what gave birth to this our first again customised curated product, a financial product for women.

We are launching it soon and right from pay focused rewards and benefits to, you know, even once we have a good chunk of data to even curate better interest rates for women, because women tend to be more trustworthy, more diligent, you know, just better borrowers. So why should women have to deal with rates and offers that are not really taken into you haven’t really taken their needs and their data into account. So that’s the first product, we’re launching. Pain points in this space, yes, range all the way from access and approval.

Women tend not to get approved for credit without a male cosigner, or a male present. We’ve heard tons of horror stories around that women tend to, you know, even on the collections and repayments front, right? If you do a quick Twitter search, you’ll see all of these, again, anecdotes, where it’s borderline harassment, like your called, but before that people tend to, again, find out who your husband or in laws are, or parents are and tend to call them for your payments and so privacy is out the door. So these were all, again, nuances that were preventing women from adopting this product at the scale at which they should be doing and where we’re changing that from both an experience standpoint, and a product standpoint, with the power card.

Amit Ray: Wow, I really did not know that such things happen and that that is insane. So Hena, well more power card to you. Wow, that’s great. So, again, thanks for sharing that. So effectively, what you’re saying is, you started out by trying to create the education elements so, it’s people should know about finance, and then the community part so they can discuss finance and kind of learn from each other and know that there are other people in the same boat and things like that. And now is when you’re moving into transactions and the actual product space, the first product being the power card, which is BNPL, essentially.

Okay. So, since you’ve been in the community space for a while, and you have a lot of people, at least I saw you have more than 100,000 downloads of your app, which means there are plenty of people in the community. So what are some of the questions or concerns that you’ve seen play out via the community or what are the top issues that people seem to be facing?

Hena Mehta: Sure. And before I dive into that, I also want to talk about an anecdote and experiment we did very early on in our journey where we wanted to get to the answer, is there a need for a woman-only space to discuss money, like, on the surface money isn’t gendered. But what we did very early on, in the Basis journey to test out this hypothesis was, we created a community, all were welcome, men, and women, everyone joined, but we saw that men tended to take over most conversations, and most discussions and women tended to take more of a backseat and be more silent.

And that actually mimics what happens in real life as well, when there are men in the room women tend to not participate in these conversations, whether it’s family, friends, you name it. And as soon as we kind of flipped our community to be sort of a private women-only space, we saw the floodgates just open right from discussing, you know, the basic things on like, what are mutual funds and how do I invest in them to more sort of queries discussions around and women tend to do this more so than men do around like taking care of family, whether it’s kids, whether it’s parents, whether it’s in-laws, questions around how do I not only get health insurance for myself, how do I get health insurance for my 60 plus-year-old parents and in-laws, all the way to even more sort of sensitive topics that, again, women didn’t have an avenue to really talk about before and when we talked about the four D’s like I’m recently separated, I need to reconstruct my financial life, and for her to be able to connect with peers who may have gone through a similar thing, or going through a similar thing and having that space to freely discuss this without any judgment is super powerful.

So we’ve seen conversations range from some of the more technical aspects of finance, how does a mutual fund work? I mean, crypto is another hot topic, which again, as with all of these things, women tend to participate less, it becomes a very sort of a bro, you know with everything, and we’ve also sort of structured our community around topics specific focus, like, it is hard to just like money is a huge topic, but how do we make it highly contextual so when you’re part of this community, you know you’re gonna get information, advice, content that actually works for you, from people you can trust. So that was essentially how we had structured it. And so yeah, conversations range from more technical aspects to softer aspects of life.

How do I know if I’m financially compatible? I’ve just gotten engaged, right? How do I know I’m financially compatible with my fiancé? What are some questions we should be discussing upfront and credit as well? Now, I mean, India has been a very savings culture for a very, very long time. Credit is now super hard making its way to all kinds of segments and we get a lot of queries around how it works. Is it a good thing to have a credit card, what is a credit score, and how does it even help me?

So, these are examples of discussions and conversations we have in the community. We also run masterclasses as sort of a compliment to the discussions that are happening on our app. And so that provides, again, a more intimate space, we don’t post any of these recordings, obviously, by design, but a space for women to actually connect with experts, connect with each other. Again, we pick a topic deep dive into it and always make sure we have actionable advice, not just the typical quote unquote, gyan where you will find a ton of that on the internet, without really any way to activate it and then you’re stuck with your FDs, gold, some bare minimum insurance plan and no credit score, which is what the state of this market is right now.

Amit Ray: Right. So what you’re saying is that the key questions that seem to emerge around, or rather what may be a bit different, versus what you normally read on the internet would be things that are maybe more family oriented. So it’s not just my personal finance, it’s our collective finance, maybe financial compatibility or family issues, those kinds of things. I think how-tos you mentioned, and credit in general.

So, I think that makes sense. And again, to me, the interesting element over here is the family orientation element, because again, even if you’re speaking from a male perspective, maybe but even if, let’s say you’re the breadwinner, yes, you’re supposed to be looking after family, etc. but the orientation tends to be personal finance. It’s not, it’s called personal finance in fact. So that’s interesting. And again, I mean, maybe there could be products, which are more group-oriented or family-oriented, to kind of satisfy these kinds of requirements, which again, there isn’t that much of in the market.

Hena Mehta: Right and if I may also add and that was a beautiful summary Amit of what the community is most popular for. Also, we’ve seen given the pandemic and we actually launched right before the world went into this pandemic is around emergency and long-term planning, and women also tend to be better contingency plans rather than men. Maybe that’s how we’re wired. I don’t know. But this topic of having an emergency fund where to park your money, in the case of an emergency, how many months’ worth of expenses, should you have become super popular as well as long-term goal planning, and obviously kids being a huge priority for at least the moms in our community, but also how do I invest for some of my longer-term goals, and women tend to be more long term thinkers versus just chasing sort of short term returns, which is what we typically see with men in this market, again, broadly generalising, but there is that difference in terms of the approach.

Amit Ray: Which is actually, first of all, I think, from an anecdotal or observation point of view, I tend to agree. I mean, whenever you read or hear about people who want to day trade, oh, how can I make money in the stock market quickly? That’s usually not a woman asking that question.

Hena Mehta: Yeah, unless it’s a professional trader.

Amit Ray: Yeah, that’s their job.

Hena Mehta: Yeah, exactly.

Amit Ray: And frankly speaking, like even the concept of trading for your personal account is not something that even on the show we hear about, from women, per se, or as a question. I think, paradoxically, this whole long-term thinking, you mentioned that the emergency planning, the family orientation, and also the longer-term thought process, I think, paradoxically, these are all things that are the hallmarks of financial success. So, interestingly, all the things that may be potentially holding women back in the short-term game, and the chase for riches, let’s say, I think sounds to me like, these are all things that will actually make them successful in the longer term, wealth creation. So in a way, I mean, things that may seem like it’s holding people back actually might be the exact thing that’s going to help them win the race, you know, the hare and the tortoise.

Hena Mehta: Absolutely. And there are actually studies done globally where women’s portfolios do tend to outperform men, so you can look it up. I think Fidelity has done this a couple of times. So it is super interesting. I mean, women tend to make better investors than men. There’s actually a book titled, ‘Warren Buffett Invest Like a Girl’ talks about all these, quote-unquote, feminine traits that Warren Buffett has that make them one of the world’s greatest investors. So women tend to just be, yes, better investors and we should leverage those skills to your point of just creating just massive, long-term wealth.

Amit Ray: Yeah, I mean, that’s perfect. My wife does a lot of investing in our family, and I need to listen to her more now.

Hena Mehta: Great. Absolutely.

Amit Ray: Yeah, so thanks a lot Hena. This was a really great discussion. I mean, frankly, I learned a lot of things that I didn’t know otherwise and it’s been quite eye-opening. So if you don’t mind, let me just take a moment to summarise some of the points I was writing down. I think the first thing, the reason, the basis for being of your company, is the fact that women have different needs, they have higher expenses, lower pay, unfortunately, greater family orientation, and a kind of desire to take everybody along and so therefore, overall different financial needs, and hence are unable to participate. Even if they’re interested, they don’t have those products available to participate in a manner that works for them. And you pointed out something on the side, which is that people tend to treat this as a marketing problem. Hey, if you just make people aware that there’s this fabulous credit card, they will start using it.

Hena Mehta: And a pink credit card, maybe a pink credit card using that.

Amit Ray: Yes, let’s have a pink credit card, and people will use it. And that’s actually not really the reason. So that’s, I think, your first point. A related point was the risk appetites are different. And you say that later as well, which is that the thought process is more long-term and family-oriented, and therefore, maybe generalising. Most women may not be or many women may not be willing to take the kind of short-term volatility and stuff that maybe men seek out. So that’s the second point.

You had a really good thing with the four D’s, divorce, debt, debt, and disaster. Four things to plan for. These are things I mean, nobody likes thinking about all of this the same way nobody likes thinking about insurance, but life happens and it’s good to know these and in these situations, the woman tends to be the person who’s kind of more impacted than the man is in these situations. So definitely worth thinking about and something to consider. Even if you’re a financially savvy woman, may as well look at your portfolio and see if it works with these as well.

Another thing that you pointed out, you know, the main barriers that may be in people’s minds, and I think you summarised it very well, which is knowledge, trust, and relatability. I mean, the knowledge bit is there. I mean, even on this show, we try to share knowledge in that sense. But trust and relatability were two interesting add-ons. And I can totally see that, like, you ultimately have to feel that the person who is selling you the service is somebody who is like you and is giving you something that you can actually use, versus you’re being hard sold something which, you know, it’s like it’s within quotes best for you. And so therefore, you’re focusing on community and education and that seems to be the right way to move forward.

It was also interesting to me that making it women-only and a closed private community encourages more discussion. But it’s not a surprise. I mean, ultimately, people open up when they are talking to people like them, with maybe similar problems. It’s the same relatability point from earlier. So that’s good to know. And if anybody is trying to kind of work with women investors, this may be something worth thinking about.

And finally, I think you mentioned, some of the key areas, or the topics that women tend to focus more on, which may be a bit different from what men are looking for. One is the family orientation and the collective responsibility thought process versus the individual. The question about compatibility is not just what can I do, but how is it going to work overall. And then, of course, how to understand credit and the fact that women tend to be more long-term focused and therefore are almost naturally better set up for emergency planning and long-term investing.

Again, as we discussed, I really think that’s the recipe for success. I think these are great insights. And really appreciate you joining us today. It was a really fun conversation. And for everyone listening, if you liked the episode, please do remember to rate us five stars and follow MoneyTok, so you don’t miss any of the cool practical tips and insights that we have in upcoming episodes. Also do join our community on CrazyTok.media to access all of the summaries of all of our episodes, and also kind of interact with other people who might have similar thoughts and questions to you, actually very similar to Hena’s community in that sense, but she’s far, far ahead from where we are right now. So, thanks a lot for joining. We were Hena & Amit with MoneyTok. See you next time.

Hena Mehta: Thank you.

Our Guest: Hena Mehta

Hena Mehta is the CEO and Co-Founder of Basis, India’s financial services destination for women. Launched in 2019, Basis helps women make financially well-informed and independent decisions by offering financial education, safe spaces to discuss money, and curated financial recommendations and products that work for women.

The post MT26 | Hena Mehta On How Money Works Differently For Women appeared first on CrazyTok Media.

Discussion Topics: Henley & Partners on Relocating to Achieve Your Financial Goals

• Why do people look for residency and citizenship?
• The comparison of desirable locations now vs earlier
• The top residency programs in the world
• How to get started with residency programs

Transcript: Henley & Partners on Relocating to Achieve Your Financial Goals

Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own experience. I’ve been doing this for about 20 years now. This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, and so many kinds of things.

Henley and Partners have a long history of helping financially successful individuals figure out how to achieve their longer-term goals through alternate residency or even citizenship. Our guests, Rory and Bhairav are going to help us understand the kinds of situations in which you might want to consider such a move, the locations that welcome financially successful individuals, and how you could get started planning such a move.

Rory and Bhairav, thank you so much for taking the time to join us today. Before we get going, would you like to give us a brief overview of Henly & Partners?

Thanks a lot for having us. It’s a pleasure. Uh, so my name is Rory McDade. I’m a director, um, at Henley and partners in their Singapore office heavily in partners.

We are the global leader and citizenship on residency by investment. So that basically means that we help high-net-worth and ultra-high-net-worth individuals acquire new citizenship or residency. We’ve been around for more than 25 years. We’ve got 35 offices globally and there are two key parts to the business.

Number one is private client advisory. Um, that’s part of the business, the buyer of an eye or a. So that’s everything from onboarding clients, monitoring the entire process and it’s ed until ultimately those families come out the other side with a new citizenship or residency on the second part of the business is what makes Henley pretty unique compared to any of the other industry players.

And that’s our government advisory team. So we strategically advise governments globally. In terms of creating, structuring, implementing, and marketing these programs. So you might be familiar, with some of the programs in the Caribbean, for example, countries like in Kids St. Lucia Tega Dominica, and Grenada. More recently we advise the UK, the UK home office on their tier one investor visa. We also designed the most successful program globally, which is in Malta, moving across to Asia where the official concessionaire to the government of Thailand for their tiling residency visa.

Thanks, Rory. I guess it’s no surprise that Henley is such a respected name in the space. I touched upon this earlier in the intro, you know about people wanting to move for wealth preservation reasons. Is that the bulk of your clients? Or what are other reasons why people might want to relocate or look for alternate residency or even citizenship through you?

Thank you, Amit. I’m Bhairav, an Associate Director with Henley & Partners based in Mumbai but service global clients.

Firstly, I would like to distinguish between residence and citizenship specifically in the Indian context. Over 80% of our Indian clients opt for an alternate residence, which essentially allows the individual the right to live, work and study and appears as a sticker in one of the leaves of your passport. Some of our clients have multiple residencies that fulfill different needs, which I shall elaborate on shortly. On the other hand, India does not allow dual citizenship so once individuals gain an alternate citizenship, they must surrender their Indian citizenship. A Surrender Certificate is issued to applicants who do so at the Passport Office in India, Indian Consulate, or Embassy abroad. Subsequently, they may apply for an Overseas Citizen of India Card. Guidelines, eligibility, and processes for Resident Indians and NRIs are available on The Passport India and OCR Services websites.

Individuals and their families seek our advice on alternate residence or citizenship for many reasons:

• Some may want to structure and internationally diversify their lifestyle, core interests, and key assets. Post-pandemic, access to healthcare has been one of the most important reasons.
• Our Caribbean Citizenship programs are very popular from a mobility point of view and offer unprecedented access to about 150 countries either visa-free or visa-on-arrival.
• Many large/joint families look at our programs from an estate and legacy planning perspective.
• Entrepreneurs view these opportunities to expand their business territories, tax and investment planning, travel mobility, and their children’s education.
• Many UHNIs looking at second homes in Greece and Italy, for example, combine international property ownership with these residence rights.
• If there is a risk of violence, persecution, or unfair discrimination, some may want to live in a neutral country that offers more personal security and privacy. Safety for the whole family can be found in these stable, socio-political sanctuaries.

OK, that’s a lot of different and pretty good reasons for wanting another option vs where one is currently resident.

The most compelling reason that underpins the intent is having an insurance policy/safety net/plan B to build resilience against any macro adversity. However, before we contract with them, we perform the initial due diligence on the prospect, as well as their family members who will be included in RBI or CBI application, and third-party remitter/benefactor, if applicable. This is required in order to ensure that we have eliminated every possibility to onboard someone we should not. In case the prospect and/or benefactor declare themselves as politically exposed, or they were previously declined for residence or citizenship, the enhanced due diligence must be performed by an internationally recognized third party.

Haha ok so essentially people want to do it as a kind of insurance plan, but you obviously don’t want to be the insurance for someone with baggage, no pun intended!

So can a person move just anywhere with your assistance or are there countries or locations that are more welcoming of such moves or potentially even more attractive in terms of helping people achieve the goals you outlined previously? And is this for only billionaires or can regular individuals also make such a move? What are some of the popular RBI and CBI programs with examples of a successful transition?

That is an interesting question, Amit. Our popular programs today are more evolved as our market demographics have widened. Earlier we had only the wealthiest Forbes List as our clients but now the affluent seek our expertise as well. In the same vein, we have started observing a broadening of our program uptakes – from popular jurisdictions like the US, the UK, Canada, and the Caribbean, we now get increasing demand for countries like Portugal, Malta, and Greece. Also, many countries have rolled out talent-based programs to attract high-caliber and promising individuals which are at a much lower entry point compared to investment-based programs. The merit-based programs of Australia, Canada, the UK, and the US are therefore a popular option.

The Golden Residence Permit of Portugal is very popular since it opens up the very clear and straightforward option to convert to citizenship after 5 years. Portugal is considered one of the world’s most globalized nations and is ranked among the top five countries on the Global Peace Index. With a low physical presence, it offers access to quality healthcare and education. One of our clients came to us with a very specific intent which was for their son to access the world’s best football training institute.

Driven by its reputation for neutrality, stability, predictability, and security, and with English as the official language, Malta is Europe’s leading investment location for blockchain entrepreneurs. During Brexit, not only were many holding companies set up there but also many head offices too, to better access Europe’s talent pool and “blockchain-friendly” atmosphere. It is highly attractive to families considering a second home in Europe with excellent visa-free travel mobility. Not surprisingly, it currently witnesses some of the highest traffic of luxury yachts and private jets. A family which has taken the Malta permanent residence enjoys a charming property and the Mediterranean climate on the island of Gozo. The younger teen studying in Sweden where education is free and the elder one is currently working in Germany.

Greece is strategically located at the crossroads to Europe, Asia, and Africa and is known for its charm and beauty and is considered the cradle of Western civilization. As a member state of the EU, Greece offers its residents and citizens a number of reassuring benefits including high levels of safety and security, excellent education, opportunities, robust healthcare options, and a dependable rule of law. However, golden visa permit holders may not be employed in Greece but may hold shares and receive income from the dividends of a company registered in Greece.

Many choose the Greek residence as it has a processing time of only one to two months and the physical presence requirement, mandatory in other programs, is not required at all. However, despite this “advantage”, many UHNIs have their second homes in the picturesque islands of Corfu and Crete. One of our clients, who had read Gerald Durrel’s My Family and Other Animals, fell in love with Corfu’s charm. Over the centuries, Corfu had been influenced by the Venetians, French, and British so has become part of the Western rather than the Levantine world. It was here that the first Greek University (the Ionian Academy), the first Philharmonic Orchestra, and the First School of Fine Arts were founded so, despite its size, it is culturally rich.

Australia’s Global Talent Independent, UK Global Talent and Tier 1 Innovator, and US O-1 visa programs are for those who can demonstrate relevant experience and recognition in arts, sports, business, and tech industries. It gives individuals the opportunity to leverage their professional accomplishments. I remember an interesting case wherein a prospect in the cybersecurity space had missed the annual quota for the Australian skilled worker visa. Coincidentally, he connected on LinkedIn and needless to say, he was one of our quickest conversions not only from an onboarding standpoint but also in diligently completing the Expression of Interest process in a few days typically this takes a few weeks. Contrary to misconceptions, Australia has become much more diverse and accepting of different cultures. The family is very well settled in Australia with the children being absorbed into the education system. They always enjoyed the outdoors and Australia has a great outback and many touristy things to do.

OK, so it seems like there are quite a few locations, especially in Europe and Australia where one could go. And the requirements aren’t always financial – you could actually move on the basis of your expertise and qualifications as well. This is great news for those of our listeners who might not meet financial thresholds but could certainly demonstrate the required levels of expertise. I’m sure a lot of people would be excited by this. How should they get started?

Many prospects have specific requests but sometimes, they seek advice on a few of their shortlisted options. I would be happy to share an introductory mail with a comparative summary of our popular RBI and CBI programs and subsequently guide them over a call. I am reachable via email on bhairav.desai@henleyglobal.com

Thanks, Bhairav, I’ll give your email in our show notes.

Just to summarize:

• Alternate residency or citizenship is a good plan B for people seeking lifestyle or business diversification or insurance against risk.
• Places like Portugal Malta Greece are good locations for investment options and Australia, Canada, and even UK and US are options for those with the right qualifications/ expertise.

Thanks once again for joining us today and for those listening, please do remember to rate this episode 5 stars and do follow our show. And if you’re interested in taking this further get in touch with Bhairav via the email we will provide on our website.

Thanks for joining today. We were Rory, Bhairav, and Amit on MoneyTok. See you next time.

The post MT25 | Henley & Partners On Relocating To Achieve Your Financial Goals appeared first on CrazyTok Media.

Discussion Topics: Neha Desai On Can You Be A Full Time Day Trader

• Can you make trading a full-time job?
• What is the alpha and how to generate it?
• High-Frequency Trading and Day Trading
• Don’t let the markets be the boss of you

Transcript: Neha Desai On Can You Be A Full Time Day Trader

Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own experience. I’ve been doing this for about 20 years now. This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, and so many kinds of things.

As a career trader, a question I often get is – can you please tell us how to trade so we can also earn quick money? And this question has become almost omnipresent in the last 18 months, with the unilateral rise in the stock market. Everyone thinks it is the quickest and the most sure-shot way of making money, and that it requires nothing more than opening a trading account and having a shot at it. We are here to discuss how to differentiate between investing and trading, and why they require a very different mindset.

There was a time when stock markets, or trading and traders per se, aroused an aura of mystique and resembled a rich boys club that you desperately wanted admission to but couldn’t. But thanks to the internet revolution, a lot of regulatory overhauls to make the financial industry less opaque and a glut of money, access to markets has become quite a democratic process. You don’t need to have a lot of money, engage a private banker, or post heavy collateral. All it takes is to open an investing account and you can trade virtually any instrument, be it single stocks, commodities, currencies, ETFs, or even cryptocurrencies.  It doesn’t require any upfront investment or capital, and trust me when I say this, it can feel extremely exciting to watch prices, and the value of your portfolio moves every second.

So, Neha, you know my views on day trading. I think it is a very high effort for the kind of returns that the average person is likely to generate. That kind of effort is really more like doing it as a real job, rather than something you do on the side. Can you actually make this a full-time job?

The key to making money consistently from trading is to answer the question. What is your edge? Even the most seasoned money managers struggle to consistently generate alpha unless they have some advantage.

Is that why they are called alpha males?

No, Amit. Alpha means the incremental returns you might be able to generate over and above what is returned by the benchmark index. So for example for US stocks, the benchmark would be the S&P 500 and alpha would be the difference between the % returns made by an equity trader vs the returns generated by the S&P 500.

Ah ok, got it. So it’s basically a measure of whether the money manager is actually delivering any value through their expertise/ knowledge.

Yes exactly. The biggest advantage in the market is information. If you know something that others don’t, you have the edge. If you know for whatever reason, that there is going to be a huge shortfall of wheat, you will buy that commodity in the market, to make money from the eventual price gain that the imbalance in demand and supply will create.

Having insider information on a company, and trading on it is a strict NO NO. and I cannot emphasise this enough. It is a punishable offense. That’s why company CEOs, and board members have a blackout period for trading their own company stocks around the quarterly results time. The idea is that no one should have an information advantage or disadvantage when trading stock.

OK, so if information is the key advantage and nobody is allowed to trade on it then what’s the value of these experts? How do they generate any alpha?

So these people use sources other than insider information. There are various tools. A lot of research, gleaned trends from data, and projected output by trend analysis. There is the fundamental or macro analysis and there is a technical analysis done by just looking at trading patterns and points. People invest substantial time and effort in creating this data and information base. They can go to great lengths, for example, someone might have developed methods to use satellite imagery in order to guesstimate the supply chain situation in China and hence project GDP growth.

On a more down-to-earth basis, no pun intended, stock analysts talk to companies to understand the business model and project company results. Or bank research analysts do in-depth research into macroeconomic trends or even company-specific research. There are also dedicated technical analysts who will tell you where to enter a trade, where to put a stop loss or take profit etc based on charts.

And all this – or at least many of the tools – is actually available in some form to everyone on the various trading platforms. But, the important thing is, it is available to everyone. What you are reading, the person sitting next to you is too. And therefore, you are back to square one. You have no edge. If you think you can read up on all these generically available reports and trades, you are in the same position as any tom dick and Harry.

Exactly – it’s like going to the casino. You can win sometimes, but the house always wins on average.

In fact with the advent of HFTs or high-frequency trading, the odds are even more stacked against a daytime trader with no edge. The retail platform that one will use like robin hood or interactive broker, will place your orders on the exchange, where it can be seen by the smart algorithms designed by these funds. They can then use this order ladder to ‘front run’ the orders, i.e. buy ahead of you if you are looking to buy, and therefore jack up your entry price, and can see the cluster of orders around the popular stop losses, and actually trigger those stops. The machines are actually reading the orders and doing the opposite of what you want.

This behavior has come under a lot of regulatory scrutiny but so far is still really the wild wild west of trading.

Yes, exactly. And a lot of this came out as news and caused a ruckus but people still want to trade. So how should they do it, if they really want to?

Well, we still like going to the casino and trying the slot, in the hope of hitting that one-in-a-million jackpot. It is exhilarating and a total adrenaline shot to see a trade that has immediately gone in your favor. You feel validated and excited. But know that this also takes a toll. What the market giveth, it also taketh away.

There will be times you will feel super excited about having got a trade right, and there will be times when you will feel the sinking feeling in your stomach when the trade goes against you. The roller coaster ride is not for everyone. Trust me, being a trader for 15 years, I have seen enough cases of burnout around me.

And the people who survive this roller coaster are those who can suppress the very basic emotions that get triggered on this ride. Greed and fear. Knowing when to take your chips off the table when you are having a good run, and equally importantly when to stomach a loss and get out. Do not make it personal. A right or wrong trade does not reflect your intellect or your market prowess. But your reaction to it will decide your longevity.

When the market is going unidirectionally up as it has been in the last 18 months, it is easy to feel invincible. You just buy anything and see it go up in value. That is not day trading. Day trading is looking at markets every day, and deciding what you want to buy or sell today with a short-term view in mind. It also calls for the supreme discipline of defining stops and taking profits. Even the best traders at best get a 70-30 win ratio, and more generally it is a 50-50 game. The only way to therefore still make money with those odds is to make more money the times you are right than lose when you are wrong. And if you get stopped, have a memory of a baseball player. Forget what happened in the last ball or trade. Don’t get emotionally attached to any trade. Once you are out of it, it is done. Don’t be tempted to go back in in the hope you will be right this time. I cannot emphasise this point enough

And finally, never ever bet your house on this. Keep aside a portion of capital that you know, even if it goes to 0, you will be okay with it. Don’t let a bad bet in the markets ruin your mental and financial sanity.

Words to live by, Neha. Control your emotions. Have a system. Never make it personal. Be the boss of the market. Don’t let the markets be the boss of you.

Amazing! I think we’ve probably come to the end of our time for today. So Neha, good chatting as usual. And everyone, thanks for tuning in. We were Neha and Amit with MoneyTok and we’ll see you next time.

The post MT24 | Neha Desai On Can You Be A Full Time Day Trader appeared first on CrazyTok Media.

Discussion Topics: Neha Desai on Choices You Make Towards Financial Independence

• Ways to reach your financial goals
• Choose your path of Financial freedom, the way you like
• What are the opportunities to reach your goal
• Reducing risks of your investment/ income streams

Transcript: Neha Desai on Choices You Make Towards Financial Independence

Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own experience. I’ve been doing this for about 20 years now. This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, and so many kinds of things.

As you know this podcast is geared towards educating people on the importance of managing your money, and all our episodes address either a specific point in this journey or tools to enable you to walk this journey so you can get to a level of financial independence. But why do we set that goal – why is financial independence the milestone we are hoping you will achieve?

That’s because we believe financial independence is the point at which you truly have the freedom to decide how you want to live, with the resources to afford it. It is what gets you out of having to do things you would rather not be doing, working soul-crushing jobs or spending time at work when you might be needed with your family or dropping out of dinner with friends to meet a deadline.

That’s why if you ran a survey of the top 5 goals of individuals, Financial Independence would be assuredly in that list. It has become the emerald city on the yellow brick road of our professional life.

A lot of us have seen our parents go through decades of work life, almost like an automaton. The salary they earned was enough to meet monthly expenses and rare indulgences, and whatever was left was squirreled away for the eventual old age nest, when you will no longer be able to work, and therefore will have no income stream.

Thinking about building a corpus through investment (be it stocks or land or gold) was not the traditional mindset. Land was purchased to put a roof over your head, gold was for weddings and bequeathing. And the stock market was not a safe venture. In India, retirement or education fund was always associated with a fixed deposit, since equity markets were not that developed or deep. Unlike in the US where 401(k) is almost synonymous with equity holding. Basically, you relied on salary alone to meet expenses, and savings were for the time when you would not be able to work.

But our generation is somewhat different. Pockets of Generation X and to some extent millennials have been able to reap the benefits of the increase in pay from white collar work, or bumper cash flows from entrepreneurial ventures. Wealth has increased, and many of us might already have more money saved than our parents did at similar stages of life. There is a growing desire to live life beyond the narrow confines of working for a paycheck.

The concept of retirement has been revamped: It doesn’t necessarily mean that you are no longer creatively or economically productive, but just that you are free to decide what avenues you want to engage yourself in, regardless of the economic remuneration to do the same. And paycheck is now by no means the only way to earn your way to financial freedom. With a broking account or a digital wallet in everyone’s pocket, market access has become very easy.

I would say in a way too easy and overly gamified but that’s a separate issue.

The internet revolution has created a greater sense of financial inclusion. Now what to think about financial freedom? I divide it into two different ways. There is a top-down and a bottom-up approach. Top-down is assessing what is your aspirational lifestyle, and legacy for children, penning down the amount required for that, and then using your job or investments to achieve that. This may mean that the road towards the goal might be longer, and if you are not enjoying your work, you still have to keep doing it, because it is slowly but surely rowing you to the other side of the river. You build enough capital so that you can live off the interest without any adjustments to the lifestyle or drawdown into the capital.

On the other hand, bottom-up is when you already decide on an expiry date on your job, by which you have done enough to meet the basic needs of life like food and shelter. After which you will untether yourself from the anchor of a known paycheck and start pursuing your dreams. You are not aiming for a huge corpus because you are looking at it more as a contingency fund, with drawdowns for regular expenses very small, and in fact, find other ways to have a small stream of income.

In earlier episodes, we already covered the topic of how to put a defined number to your retirement corpus, and how to spearhead your investment strategy towards it.

In short, the level of aggression in your investment will depend on the gap between the current level of corpus and desired level, and the time horizon you have in mind. It is kind of like driving a car. You want to get from point A to B in x time, and therefore decide how much to step on the gas depending on the distance and the time.

If you are in your 60s, with a decent pool already, you don’t need to go for the more volatile strategies. You could park your funds in a fixed deposit and live off the interest, and remove the tension of seeing your corpus fluctuate with the market. If you are 75, you definitely want to consider moving towards cash, bonds, and FDs, as a tumble in the stock market, or crypto may not correct in your remaining lifespan.

If you are in your 20s, you should have a more tiered approach. 50% in more volatile assets, 25% in relatively safer, and some in cash. Something like a stock market, or real estate, will over decades, almost certainly grow your pie.

Define not just the start and finish but also milestones. If you have a small pool to begin with, first go slightly conservative, so that you don’t lose whatever you have in a single sweep of the market. Once you reach goal 2 (where your savings have gone past the level of basic sustenance), and you have gotten more comfortable with the journey, step up on the gas.

Thus, and is advice everyone has already heard in multiple ways. What I think is lacking is a discussion of the choices you have to make in order to get to the goal of getting savings beyond the point of sustenance.

Defining your financial freedom is about making choices. And defining what your priority is for your lifestyle. Is it about experiences or material comforts? Do you want to leave enough money for your kids so they do not have to work, or do you just want to stop at giving them the best education possible?

Weigh these choices against how much you are willing to tie yourself to the pole of a job. If you feel you are really suffering today with the amount of work you are having to put in to build enough money for a secure tomorrow, maybe you can rethink on letting go of some of the peripherals which might make the burden of working today easier. Like when you are climbing a mountain. Sure you want to reach the summit with a camera, and a chair, maybe to sit and enjoy the view, but if the weight of those is making the climb unbearable, it is not worth it. Time to keep them aside.

Once you have made that choice, you need to put a number to that choice to define the corpus. And then start on your financial journey. Looking for a job that pays, investment strategies that grow your money, and most importantly investing in yourself so that you are always agile enough to readjust and recalibrate if required.

You take the plunge and leave your job and ‘retire’. You don’t like it? You can come back. You realise you need more money than you had factored in, or maybe the new hobby costs more than anticipated, you can come back, work for a bit to earn that extra bit, and go back to pursuing your dreams.

In fact, a term I heard recently was portfolio career, which is about assembling a number of income streams together to get you where you need to go without the constraints and challenges of a full time job. As an example, an ex-colleague who’s a trainer and certified career coach puts in a few hours with a company but also coaches clients and advises startups on the side, giving him variety, reducing risk of income loss, and also allowing him more time than when he had a full-on corporate job.

You can also be creative about it. Maybe you can consider moving into a smaller house. There is a big tiny house movement going on, where you reduce your footprint, become debt free.

Do you want to settle down on a farm in your retirement? Maybe you can look at buying a farm right now and converting a portion of it into B&B which will give you enough income for usual expenses while affording you your dream today.

Do you want to travel the world? There are a lot of ways where you can earn your stay, by working for your host in exchange for lodgings.

You may not have a 65 inch screen, or a 10-bedroom house, but you will have the luxury of time right now. So rethink and refocus your concept of retirement. Cut out the peripherals, and focus on the absolute must-haves. Think about creative ways to achieve those must-haves in a more affordable way.

Yes, this is also another way to achieve the purpose – semi-retirement essentially. Reduce your costs, find a way to work as much as you need to meet those expenses – maybe through consulting work – and spend the rest of your time doing things you want.

My father has this saying that I love. When he had teeth, he had no nuts to chew. Now that he has nuts, he has no teeth. In essence, he spent his entire life-saving bit by bit to have a good corpus in his old age. But now that he has the corpus, he has no ability to spend it as age has caught up.

Don’t do that to yourself. Don’t have a tunnel vision for that corpus to the exclusion of everything else. Look around. There are financial tools that can act as a rope to make the climb easier and ask yourself. Do you really want to get to the summit or is the hike more enjoyable to the smaller peak?

Yep exactly. Only you can decide how high is the mountain you want to climb and whether the trek is going to be worth it. But whatever you decide, know that it comes with choices so be clear-eyed about what it will take and make the choices early while they are still choices and not golden handcuffs.

Thanks for tuning in today and do take a moment to subscribe or follow our show. We were Neha and Amit with MoneyTok. See you next time!

The post MT23 | Neha Desai On Choices You Make Towards Financial Independence appeared first on CrazyTok Media.

Being financially successful and independent is everyone else’s goal and money is an utterly important part of our everyday life. That’s why we have brought to you, our listeners, various knowledge on managing financials, investing tips from Angel investors, interesting discussions about inflation, how to reduce risk loss in trading, and so on, in the last 20 Episodes of MoneyTok. But, we will NOT stop there. We really appreciate your support, and we are motivated to bring more and more interesting and useful knowledge about Finance and exciting new things next year.

To begin with, we have exciting news to share. In addition to our shows, MoneyTok and Jobtok, we are launching our third show called ShopTok offering practical advice and tips for small businesses, bootstrapped entrepreneurs, solopreneurs, and creators. It’s coming on February 22, so stay tuned.

We are constantly learning to create better-suited and quality content for our listeners.

Thank you all. We wish you happy holidays and a wonderful new year.

Transcript: Best of 2021

Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own experience. I’ve been doing this for about 20 years now. This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, and so many kinds of things.

After a hiatus of almost a year, we revived the show in June with episode 9, an exciting discussion about the possible values of Bitcoin, which we presented using three scenarios. We also had quite a hit with episode 11, where Neha drew upon her 15 years of trading experience to discuss ways in which we should approach trading in order to lower the risk of loss. Episode 12, a comprehensive, but complex discussion about inflation, was a bit dry but still garnered a lot of interest, MoneyTok 14, about how and why women should spend more time planning their finances was a breakout hit and our #1 downloaded episode of this second phase.

This was quickly followed by a successful episode 15, about dividend investing as a way to generate the passive income that is so in demand nowadays, but with zero effort vs having to set up a side hustle. And we capped off the year with two back-to-back hits this time with a couple of heavy-hitter guests. Episode 19 with Alex Dwek of Nas Academy gave us some really good tips about how anyone can get started with angel investing and Episode 20 with Mark Reeve from St James Place Wealth Management ended the year quite nicely with a reminder from an experienced wealth manager of how financially successful people think about money.

Together we put out 12 new episodes this year, bringing MoneyTok to the nice round number of 20 episodes published.

What was more encouraging was our growth in listeners from around 60 when we re-started in June to just over 200 today. Our show is small, but growing – and even ranking. A couple of our episodes broke into the top 20 Investing podcasts in India and the top 30 in Singapore, an impressive feat as we beat out a lot of big-name global podcasts to clinch those positions. And we continue to be a steady feature in rankings across various countries.

We owe all this to you and thank you for all your follows, listens, and reviews. We really appreciate you joining us on this journey and we are very encouraged by your response.

So encouraged, in fact, that today I’d like to make a few exciting announcements.

Earlier this year, we formally registered CrazyTok as a company. We believe the world is getting more unequal, with the rewards going disproportionately to those with money, connections, or the inside track. On the other hand, smart, talented, hard-working outsiders struggle and grind their way up the ladder, never really finding the formula for success. At CrazyTok, we provide the platform to connect growth-minded, high-potential individuals with expert and high-achieving insiders so you can get honest advice to accelerate your career, build wealth and shape the life of your dreams. No, it’s not just CrazyTok.

Now that we’ve set up CrazyTok, we plan to shift our content creation into overdrive. I’m happy to announce today the launch of our third show, ShopTok, offering practical advice and tips for small businesses, bootstrapped entrepreneurs, solopreneurs and creators. We’ll drop our first few episodes early Feb, so do look out for it and share it with your side-hustling friends.

But that’s not all on the content side. We realise we don’t have a monopoly on career, financial, and business knowledge. There are many others with excellent knowledge, advice, and expertise in these areas, and we plan to launch more new shows with new creators all through the year so you can get the best advice from the best people, not just us.

All this will take some time, and we are also itching for a break, so we will be off on a hiatus and back online with all these shiny new things by early Feb. Till then, we wish you happy holidays and a wonderful start to the new year.

Thanks for tuning in.

This was Amit with MoneyTok. See you in the new year!

The post MT22 | Best Of 2021 appeared first on CrazyTok Media.

Rome was not built in one-day and certainly, not alone. CrazyTok has released 20 podcast episodes for MoneyTok and 12 episodes for JobTok with support and love from our colleagues, partners, guests and mainly our listeners. We wanted to give actionable, take away for our listeners in terms of financial management or the success of your careers through the podcast we create and we hope that it has been very useful to you all. 2021 was surely not a very easy year but it is coming to an end and we would like to appreciate your contributions to us. May you all have a happy new year!

Transcript: Gratitude

Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own experience. I’ve been doing this for about 20 years now. This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, and so many kinds of things.

Today’s chat isn’t about money or career growth, but about gratitude.

2021 was a tough year, once again, for most of us. Covid really didn’t let up at all, and in fact, soared to new heights – if you consider the virus’ point of view. For us humans, it wasn’t so great, with lockdowns and job losses, soaring infections and death rates, family separations extending into almost two years and other traumatic impacts for each of us in our own way. My family and friends suffered too. But we’re still standing. We’ve got our vaccines, the Omicron variant seems to be more benign and there’s even a promising new pill on the horizon. There’s hope for 2022 and I’m grateful for that.

Working at my prior company was intense and mentally exhausting, especially as we had to work remotely. I never got to meet the team I led for almost 8 months. I learned what Zoom fatigue really meant. I was slowly burning out and probably would have if I hadn’t resigned. But I got to lead a couple of new businesses and suddenly found myself among very few experts in a whole new industry. It was intense, but also exhilarating. New problems, new challenges, a new way of looking at things. I’m a better professional now, and I’m grateful for that.

And speaking of Zoom fatigue, earlier this year I realised that I was losing my voice. A doctor visit resulted in a preliminary diagnosis of something pretty horrible and incurable. Not good news for a podcaster and amateur singer. Or anyone. But then a specialist stuck a camera up my nose and down into my throat, in what felt like the ultimate form of an RT PCR test, and informed me it was nothing more than acid reflux which is affecting my vocal cords. Phew. Well it’s still not wonderful, and my voice still croaks and tires easily, but it’s addressable I think. I’m sure grateful for that!

I quit my job in June without a clear idea of what to do next. I struggled – and still struggle – to answer questions about my future career. I get FOMO every time anyone mentions a promotion or a new job. I could have been that person, I think. But then again, we were recently a dual-income family, we don’t spend much, and if needed we can run for a pretty long time on our savings. So I can take my time and make choices not entirely driven by pay and job title. I’m grateful for that.

And speaking of savings, I didn’t buy any meme stocks, Bitcoin, or Bored Apes. Which means I likely lost out on untold millions of dollars of opportunity. But I did buy into Amazon, Google, and Asana when they were battered down by the market. And they bounced back with a vengeance, adding to a corpus built on years of accelerating earnings, thrift, and investments compounding over time. In a world of get-rich-quick schemes, we’ve had a fair share of opportunities at least to get rich slowly. I’m grateful for that.

Having the space and time now to think about things has been liberating. I’ve taken the opportunity to learn new things. I spent weeks reading about Bitcoin and NFTs. I set up a little hydroponic farm on my balcony. I doubled down on my Bahasa lessons and am proud to report I now sound like a high-achieving toddler. I started to play some music again. Most of this is a calming influence and I am grateful for them all.

This was also around the time I thought it would be fun to pick up an unfinished project. My podcast. But podcasting takes a lot of effort, hours and hours of research, scripting, recording, editing, and chances was that my second innings would also fizzle out like the first attempt. And that’s when I happened to work with Neha, who took off some of the burdens by bringing her own knowledge and perspective to our discussions. And, what’s better, she was also responsible for two of our most-downloaded episodes. I’m grateful for that.

But most of all, I’m grateful to you, our listeners, readers, followers, guests, and well-wishers. When everything was up in the air when I didn’t know what I’d be doing next year, next month, or even the next day, the one thing I could keep doing was podcasting. And that’s because of you. You generously shared your knowledge as guests, you gave us your time as listeners and you shared our posts with the world as readers and followers. And every so often, one of you left us a review or wrote in to tell us how much you enjoyed an episode and how it’s helped you think about things differently. You won’t believe what a rush it is to see those messages. I’m so grateful for that.

Earlier this year, we formally registered CrazyTok as a company. We believe the world is getting more unequal, with the rewards going disproportionately to those with money, connections, or the inside track. On the other hand, smart, talented, hard-working outsiders struggle and grind their way up the ladder, never really finding the formula for success. At CrazyTok, we provide the platform to connect growth-minded, high-potential individuals with expert and high-achieving insiders so you can get honest advice to accelerate your career, build wealth and shape the life of your dreams. No, it’s not just CrazyTok.

Now that we’ve set up CrazyTok, we plan to shift our content creation into overdrive. I’m happy to announce today the launch of our third show, ShopTok, offering practical advice and tips for small businesses, bootstrapped entrepreneurs, solopreneurs, and creators. We’ll drop our first few episodes in early Feb, so do look out for it and share it with your side-hustling friends.

But that’s not all on the content side. We realise we don’t have a monopoly on career, financial and business knowledge. There are many others with excellent knowledge, advice, and expertise in these areas, and we plan to launch more new shows with new creators all through the year so you can get the best advice from the best people, not just us.

All this will take some time, and we are also itching for a break, so we will be off on a hiatus and back online with all these shiny new things by early Feb. Till then, we wish you happy holidays and a wonderful start to the new year.

Thanks for tuning in.

This was Amit with CrazyTok. See you in the new year!

The post MT21 | Gratitude appeared first on CrazyTok Media.