The story of a horse that eats grass and not oats

Expense Account, Mint

At the Financial Planning Standards Board’s annual congress last week in Mumbai, in which Mint was a media partner, the theme was consumer protection. Panellist Nilesh Shah of Axis Bank began his comments with this horse tale. In emperor Akbar’s stable there was a horse that preferred to eat grass over oats. No amount of cajoling could get him to eat the more nutritious meal. Then trusty Birbal comes up and says give me a month and I will ensure the horse eats the oats. Akbar says OK. A month later the horse is eating oats. How did you do that, asks Akbar. Each time he ate grass, I hit him on the head, smiles Birbal with some satisfaction. Now he’s learnt to eat oats. In Shah’s story, the investor is the horse who’s learnt to eat grass (real estate and gold) because each time he tried to eat oats (market-linked financial products), he was hit hard on the head

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Money is about what goes on inside our heads

Expense Account, Mint

A friend worries about not doing enough for her daughter. The daughter’s now married and has a girl of her own. The single mum, my friend, periodically calls up to ask what she should do for her daughter. Of late the calls have been more frantic. She’s afraid that she’s been left behind in the real estate boom and is chasing the multi-bagger that has eluded her. People all around her have made huge pots from smart real estate investing and she’s just not done anything. A self-employed person who lives off her own small business, she wants to give a good start to her child. Egging her on is the Rs.30 lakh sitting in her bank account telling her to go ahead and do something bold. I ask her three questions. One, if you stop working what will you live on? Two, do you have the energy and patience for the run-around that land requires? Three, do you really need to do more for your child than you have already done?

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Investing in 2013 and why higher IQs lead to cheaper funds

Expense Account, Mint

How should we invest in 2013? Notice I said how and not in what. Maybe it’s age. Or maybe it is just more emotional quotient. But I find myself throwing out the old textbook version of advice on money more often. The textbook version says that your life sits in a neat box. You wake up every morning and revisit your financial goals. You have this perfect asset allocation. And each time this changes, you rush to sell the winning class and buy the losing one. Classical financial planning falls into the same trap that classical economics found itself in—of assuming that we are rational economic agents who maximize utility and do not respond out of emotions of fear or greed. Of course, we’re messier in real life. Our money lives are chaotic and we take emotion-driven actions that come back to bite us more often than not.

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Delhi protests forced us out of our bubble

Expense Account, Mint

The aftershocks of the torture and gang rape of the young woman in New Delhi, who died in a Singapore hospital on Saturday, are still palpable almost three weeks after the incident. In the form of the woman who suddenly stares down the man eyeing her in the closed confines of a lift. In the introspection within small social and community circles on how we bring up boys in this country. In most of us who are finally shoved out of our blinkered urban mass affluent slumber. Maybe that’s why that jewellery ad before the movies is suddenly insufferable. The second of two girls born more than 40 years ago, I wonder what it must’ve been like for my parents in this son-crazed paternalistic nation of ours to bring up two girls and no boys. When nurses in affluent clinics in Delhi still raise an eyebrow at fathers who distribute sweets when a girl is born, it must have been a struggle all those years ago to keep the chatter of being a son-less house from reaching our ears. I suddenly realize why I cringe each time I see that horribly regressive jewellery ad—it perpetuates a social system that programmes girls from very early on about their future. The ad goes like this: a little girl is turning the pages of her parents’ wedding album. The dinner table discourse is about how a prince will come and marry the girl and how she will get fancy gold jewellery from her parents on this occasion. The underlying thread of thought in that household is about a girl and her marriage and how her parents will gather resources for it. I can’t remember what exactly our dinner table chatter was about, but it surely wasn’t about how much jewellery we’d get at the wedding.

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