Why Greed is Great

What is this book about?

It all started with my friend asking me to write a book for him on ˜what ticks money™ in general and˜financial planning in particular, both in a simple and user-friendly way.

The need lay in the fact that there's a lot of ignorance on this matter, when it’s really very simple to understand.

While people from the financial services industry may have a fairly decent understanding of the subject, for all others (which is an exponentially bigger audience) it lies within touching distance of rocket science.

I have been fortunate to be associated with an industry which worships money. The experiential learning here is immense. How and when people respond to greed or fear, in itself, is a teacher.

Different people react differently to these two emotions, under similar set of circumstances, at the same point of time. One’s perspective, one’s reading of the situation drives one’s response.

Equanimity (quality of remaining calm and composed) is rarer than a blue moon. In an unending race of time, fear hands over the baton to greed which in turn hands it back to fear. And this cycle of emotions is what makes the market.

It’s my firm belief that the root of anxiety lies in the ambiguity about one’s financial position, lack of organization of one’s finances and poor understanding of how our inaction on financial matters effects our (family’s) future.

The following quote sums it up aptly.

“If a man gets his attitude towards money straight, it will help straighten out every other area in his life” – Billy Graham

We have examples like Michael Jackson, Mike Tyson, M C Hammer, who were filthy rich at the peak of their careers and were in dire straits till last heard. There could be two causes for it, either their careers took a nosedive or their finances were mismanaged.The latter cause would include overspending and living beyond one’s means. And given, that they had the talent and competence, the former looks a little tough to believe!!!

This book mentions also the key ingredients required for acquiring peaceof mind, financially. It outlines the thumb rules to follow and the landmines to avoid.

It is written with the hope that it will spur people to KARMA, keeping in mind that, “The greatest productive force is human selfishness” (Robert Heinlein).

It emphasizes upon the need of financial planning which is the first and important step towards achieving financial well-being in a proactive way.

It builds on this concept in a simple way through 12 life stories establishing the cause-effect relationship between various components of money management (or financial planning, as I have alternately used). It magnifies and highlights the importance of the critical cornerstones of a financial plan.

The process of financial planning is an intense and engaging exercise on one hand but common sensical in approach on the other. It requires customization. It aims to minimize risk, optimize returns on our earnings while ensuring that we cross milestones and reach our goals as planned.

A job of a financial planner is to marry ‘what you want’ to ‘what you need’.

To make a case in point – despite being frequent users of white goods like fridge, A/c, oven, TV, cars, etc., ourunderstanding about the technology that goes behind these goods  is very limited. Also, we do not have the time and inclination to gain in-depth knowledge about the same.

Similarly, regarding financial products, our understanding on different financial ingredients used, the quantities put and their reaction to one another may not be up to the mark.

We may have answers to a few basic questions like mileage, power consumption, uniform cooling, maintenance costs, etc. on white goods; and rate of return, risk undertaken, situations covered under insurance, premium amounts and dates, purpose of investments, goals it seeks to achieve, etc., on money management, we couldn’t be bothered with how or what happens to deliver this output.

And is it required? Wouldn’t we rather live and enjoy life!!! Don’t we prefer spending time on our professions/ vocations which earns us our bread-and butter?

To decide from various experiences available, whether it is brands for white goods and a financial planner for money management, we usually rely upon feedback from the actual users or trust our judgment in choosing one over the other.

The attempt in this book is to throw light on the basic pillars of money management process namely, risk control, wealth creation and wealth transfer.

This book is not intended to be a do-it-yourself tool or a quick-fix for financial ills.

It aims to build understanding on money management in a very simple and lucid manner.

Why is it needed? How is it done?

What are the basic terms one needs to be conversant with to understand it better?

Hope you enjoy reading the book, as much as I enjoyed creating it.

About the author
I am Deepali Sen, a proverbial small town girl, who has spent time in excess of 15 years in the corporate world, out of which around 13 years have been spent across mutual fund companies like Franklin Templeton AMC Ltd., Axis AMC Ltd., and ICICI Prudential AMC Ltd.
 
I am a financial planner by profession, a dreamer at heart, an entrepreneur in attitude, worshipper of Karma and a believer in miracles.

I have recently co-founded Srujan Financial Advisers LLP, a firm set-up with the mission of helping clients define their relationship with money and find their own equilibrium with money. More specifically it sets them on track to achieve financial well-being through planning.

This book aims to demystify the recipe to financial independence. The learning on financial well-being for self and others has been more empirical than what my MBA degree or CFP certification would have taught me.

Fortunately or unfortunately, reaching financial well-being is far simpler than one would envisage. It is a fine balance between planning and execution. The God lies in execution, though. As Nike says - “Just do it”.

I have very closely seen the ills of procrastination. That extra information needed to take the call, waiting for that perfect timing to enter the markets, aversion to dealing with forms and documents, very detailed analysis required, consulting, or taking views from people who may have no competence, skill sets, or understanding etc...

Mr. Bachchan sums it up very aptly in one of his movies “Jab soch gahri ho jaati hai toh faisle kamzor pad jaate hain” (when the thoughts run deep, action is mostly compromised).

Randomness or chance plays a far vital role in our lives than we would care to admit, and therefore, it is important that we worry only about the controllable; manage what’s in our hands.

Over the years I have been forced to acknowledge the reasons behind why Mr. Gareeb Gates is wealthy and why Mr. Doulat Mallya is forever in need of funds.

The difference does not lie between how much they earn but what they do with that money and their spending / investing habits. Is their money magnetic enough to attract more money?

The book is an attempt to elaborate on all this.

I’d like to thank my friends and family for moulding and shaping my beliefs, my understanding all through the years.

Special thanks to my parents for egging me on, Soumya Sen for being my sounding board, Rohas Nagpal for seeing in me what I didn’t know existed, Gaurav Mashruwala and Amit Trivedi for mentoring me and influencing my thoughts over the years. 

I feel blessed and am grateful for having the friends and family that I have.