THOUGH INDIA IS going into the 5G era, it is best not to forget the 4Gs of wealth—get, guard, grow and give. If the investor is philosophical or spiritual, two more Gs—God and gratitude—could be added, said K.S. Rao, head of investor education and distribution development for Aditya Birla Sun Life Mutual Fund (ABSLMF). Rao led the panel of the World Savings Day webinar hosted by ABSLMF and THE WEEK.
Other panellists were Amit Trivedi, popular personal finance writer and founder of Karmayog Knowledge Academy, and Dr Radhakrishnan Pillai, award-winning author and director of Chanakya Institute Of Public Leadership, University of Mumbai.
Opening the session, Rao reminded viewers that unless the first two Gs were met, ‘grow and give’ did not stand a chance. He highlighted the famous case study of Anne Scheiber, a former employee of the Internal Revenue Service of the US and arguably one of the most successful dividend investors of all time. Her annual salary never exceeded $3,150. She retired at 51 in 1944 and died at 101 in 1995. In the intervening years, she grew her portfolio to $22 million and bequeathed it entirely to Stern College for Women, Yeshiva University, New York.
Trivedi said that investment does comprise of art and science. “Like the saying goes, science can be taught, but art needs to be caught,” he said. “Unnecessary expenses, unnecessary risks and one’s own mistakes are the three things every investor must watch out for.” Trivedi also reminded viewers that money earned would most likely be spent anyway, but the discussion was about when the expenditure would happen. “Deferred spending,” he said, “is something every child should be taught.”
Chanakya’s Arthashastra has been Pillai’s core area of interest and research for long. So, it was not surprising when he highlighted the importance of paristhiti (environment) and manasthiti (state of mind) in financial management. “State of mind matters a lot,” he said. “For example, there is a difference in being money minded and money conscious, just as there is a difference between having a trading mindset and a vision to create wealth.”
Among other things, Pillai stressed the need for investors to have a rational and inquisitive mind. And also for the need to educate this mind. The example he shared was about an annual competition between Warren Buffet and Charlie Munger, vice chairman of Berkshire Hathaway. “Whoever reads the most number of books that year wins,” said Pillai. Not a laughing matter, considering that Buffet is 90 and Munger 96.
The webinar ended with a Q and A session, where panellists took questions from the viewers and provided focused answers. The next webinar in the series will be at 4pm on November 11. Topic: Path to prosperity: Celebrating Diwali with personal finance.