I am signing copies of my book in Mumbai. The store manager and I are sitting in an alcove and doing the signing ceremony, where he hands me the book and I sign while he cracks open the next one before handing it over. Two native European (for want of a better term in trying not to say “white”) customers are watching from the other end of the shop and begin taking pictures of this book gig. We get chatting and I learn that they are colleagues from a North European country and are in Mumbai as consultants to some infrastructure project. Three minutes into a conversation with a stranger, an Indian in Mumbai, and they are shaking their heads and tut-tutting over the Indian bureaucracy and general state of things. Back from a longish visit to their part of the world and having seen their super slothful bureaucracy, weird processes and long waiting periods for service, I am in no mood to hear this. I retort. Maybe a little too loudly. Or a little too harshly. They seem to melt away into the interior of the shop. Then I notice choking noises coming from my neighbour, the book store manager. He saw the exchange and my pushback, and then just cracked up. He was recovering, he said, from an episode where a British guest of an author made racially degrading comments because one book was not in the store, but the Indian author just stood by and allowed the colonial rant to continue.
The manager does not come from that closed club of elite Indians who boast of correct English pronunciation, the right accent, similar higher education institutions, the correct home address, a common reading list, non-Bollywood movies, similar music playlists and foreign brands, but is a newly emerged middle-class Indian.
An old colleague calls up. He is quite distressed. He wants help to stop lending. It seems, he says, his forehead has this sticker called ATM: “I have been lending all my life and it has never come back. People I have lent to now joke about not paying me back. I am just fed up. What can I do?” I feel his pain. I’ve been through my own journey of lending and not recovering the money. Losing respect for yourself and the person who borrowed and then losing the relationship as well—it falls into a pattern. We’ve all been there—been trapped, set up, emotionally blackmailed or asked outright for a loan. It could be a child’s wedding, a child’s education, medical bills, a business investment, or money to fund lifestyle or even a drug habit. I remember a distant uncle landing up on our doorstep many years back asking for a loan. I must have been eight or nine. Wide-eyed, I eavesdropped shamelessly, as my dad politely told him no. It was only later that I understood that the guy was a swinging junkie who was collecting for his next fix! Whatever the sudden emergency, you need to have a standard operating protocol in place to deal with the loan leeches.
The dust has settled for the moment on the question of whether retail investors should exit debt funds. The answer is no, they should not because in terms of flexibility and post-tax returns they do better than fixed deposits. But, both the regulator and mutual funds need to make changes that identify clearly risks investors may not know they carry. Debt funds are far more difficult to understand than equity, and unless the risk in these funds is clearly marked out, retail investors will hesitate to cross over from fixed deposits to debt funds. Debt funds are used more by firms than retail investors. Firms own two-thirds of the debt funds, while retail investors less than a tenth. Compare this with equity, where retail investors own almost half the assets. Corporate treasuries are constantly looking for that extra return from debt funds and choose those AMCs that bargain down costs and offer an extra return kicker. But higher return comes with higher risk.
Money With Monika Season 2 is a weekly personal finance web series focused on all things mutual funds. In episode 13, personal finance expert Monika Halan seeks to bust some common myths about mutual fund investments. She explains that mutual funds are not just about equity and stocks. “A mutual fund is a way to invest in something else. That can be stocks, bonds, gold and very soon real estate,” says Monika. And if you thought that top rated funds guarantee better returns or dividend option is better than the growth option, then this episode is a must watch.
Women’s Day imagery often shows a sari-clad woman with multiple arms bearing various implements that run the home and work—a laptop, a belan, detergent, kid, a phone. The woman is usually smiling and looks serenely on top of all that there is to do. Not a hair out of place. If women don’t think deeply about this image, there can be a feeling of pride in being able to manage and stay on top of all there is to do. But step back and see the subliminal messaging of this image. It says that a successful woman can do it all. Work outside the home. Inside the home. Be the one to take off in case of a family emergency. And manage to keep it all together while looking good. Look again and you see that most of these images don’t have money in her multiple arms. Why not? Oh, she gave it to the father, husband, brother or son to manage. In doing that, she has tried logically to reduce one job from her already packed schedule. Hand over money and its investment to the trusted man in the family. Notice that the monthly household spends are still part of her work load. She is fully capable of managing the home spends. It is just the control over asset creation—and therefore the assets—that is not part of her work. The social messaging around money to women aims to stop her from claiming her share of assets.
n this episode of ‘Money With Monika’, personal finance expert Monika Halan emphasises on financial independence for women and how they can start building their investment portfolio. Start with gold and FDs and build on from that, she says. If choosing mutual funds, consult a financial planner to design a portfolio that suits you best, she adds. Also, “don’t give up your financial independence at any cost”. Monika Halan is consulting editor, Mint, and author of ‘Let’s Talk Money’