What money really means to urban India

Expense Account, Mint

he son-in-law of a friend is part of the under-30 young crowd that lives salary cheque to salary cheque and firmly believes in the Keynesian tenet of being dead in the long run. His wife and my friend worry about it, but are indulgently helpless even as he lugs home the next-generation gaming device, takes the family for extravagant holidays (I wonder if his generosity will extend to friends of mum-in-law) and is happy to flash out the card for money that he may not have today. There’s always next month’s salary and the next.

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Plan design, testing key to make money work for poor

Expense Account, Mint

Indu makes the world’s bestaloo parathas—thin, crisp and dripping in oil. Many economists shrug off their cholesterol worries at our doorstep to sample my housekeeper’s fantastic breakfast treats. So when Indu asks for a morning off when another macro being is planning to drop in for a micro bite, I want to know why. She’s been summoned by her son’s teacher to sign on some forms. What forms, I ask, even as the mental image of the planned breakfast pops and dies. It seems that government schools in Delhi give Rs500 twice a year for assorted school-related expenses to parents of disadvantaged children. Now, the government was getting each child to open an account, with the parent as a joint holder and would henceforth directly credit the account. But the child would only get the money when he finished school. Thinking that Indu would be upset at this reduction in money in hand, I was surprised at what she said: “We don’t get the full amount. The teacher sometimes gives Rs200, sometimes Rs300—she gives the full amount to kids of a minority community and those of lower castes.”

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Zeros are heroes, but for villainous bond issuers

Expense Account, Mint

Targeting a distant financial goal is a scary prospect. Apart from the possibility of the instrument you choose not delivering, there is a real fear of the target itself changing due to either circumstance or inflation. When targeting faraway goals, typically a child’s higher education or marriage or a retirement corpus, we use rough thumb rules. These are based more on what we can afford today rather than a theoretical number-crunching exercise of what it will cost us in the future.

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Eating chicken at 80 with the help of RBI

Expense Account, Mint

Would you like to buy a bond that not just gave you guaranteed interest at an increasing rate but also doubled your principal in 20 years? If I were about to retire, I’d queue up to buy this product. And maybe even pay a transaction fee on it.

One of the biggest worries a person retiring today faces is that of his corpus losing more than half its value in 10 years and worse, the interest stream buying fewer and fewer goods each passing year. Inflation dislikes retired people and maliciously takes incrementally larger bites out of their consumption basket, year on relentless year.

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Why is this the last rush of CEO greed in the US?

Expense Account, Mint

The last year has seen a few (well, okay, just two) financial sector chief executive officers I know question their Rs3 crore remuneration packages, even as their peer group races ahead for that “bonus at any cost” management mantra. Those racing forget, of course, the old Indian adage that the shroud has no pockets. Parallel news of greed from the US sees some frenzied sewing of pockets as we hear of taxpayers paying companies to take luxury junkets and multimillion-dollar bonuses from companies still on taxpayer-funded life support. How is it that a small group of people have been able to corner so much of the world wealth? Is it some special skill, some special attribute that allows sellers of coloured soda water or creators of products nobody can understand to earn exorbitant numbers? Not just while they work, but even when they bail out for errors that cost investors, employees and customers losses and hardship. How did the manager get so powerful?

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