As the security woman at the entrance to a multiplex turns my hand bag inside out giving competition to an airline security check, she gleefully hits pay dirt. Not a small grenade, she’s found my bottle of gum and my tiny jar of dry fruit. No food allowed. But this is not food, it is something I carry in my bag all the time. An argument ensues and the movie experience is reduced. Once inside the complex, I find myself unwilling to pay exorbitant prices for average quality food that is pushed hard by ushers-turned-waiters who come in the way of movie watching.
What food costs inside a multiplex is suddenly part of the urban middle class discourse at dining tables, at social events, on social media, with the humble popcorn itself at the core of this debate. Popcorn in a multiplex costs about 500% more than what you get outside in the mall. Pop them at home, and the mark-up is more than a 1000%. While there is other food and drink being sold that is more expensive than retail prices outside, the price point of popcorn shows the highest mark-up. To force sales, multiplexes prohibit outside food from entering their premises, making for a captive consumer group who is out to have a good time and is in a mood to eat, drink and be entertained.
Let’s Talk Money with author and columnist Monika Halan
Who is the ideal reader of Let’s Talk Money? What was your motivation to write this book?
I believe that the middle class Indian who is looking for a way to build financial security is the reader of this book. All of us who live in urban India and live the urban mass affluent life are readers of this book. It is for those who know that they need better financial control but don’t know how to go about it. It is for those who are confused with the products, the push and choices out there in the financial markets. It is for those who are afraid of the financial sharks and toxic financial products and take the safe route to real assets. It is for those who are willing to spend the time in learning the basics of managing money. It is for those who want a hands-free system of money management rather than a one shot gamble at getting rich quick.
Why did I write this book? At every TV show I have done, every radio spot, public lecture or a chance meeting on the airport with a follower of my work, the message came to me – is there a book that has all that you keep saying in one place?
As I look around the book space, there are excellent books on investing or financial planning, but there is nothing that relates money to our everyday lives with all its complexities and then gives a system for hands-free money management. I believe that money issues are deeply linked to who we are. A sorted money life sometimes leads to a sorted overall life. At least that is my experience. I want to share this with others like me who are not aspiring to get rich tomorrow but are happy to build financial security one step at a time. I want people to have better control over their money. I want people to stop getting cheated by financial con artists. I want people to get their money to work as hard for them as they work to earn it.
Middle class Indian fathers used to be distant, authoritarian and usually dictatorial. They ran the extended household with an iron fist keeping a tight hold on expenses. The middle class pre-independence Indian father struggled to meet the needs of an extended family with meagre income and prospects. The fight for economic survival translated into the immovable patriarch image. Economic growth has changed not just fortunes of families but also the equations within the home. Smaller, nuclear families, better economic prospects, and more money has meant a larger role for the father within the home. From changing nappies, to school pick and drop duties, to doctor visits, the dads are a part of bringing up the baby. However, in most households, for a variety of reasons, the one thing that has remained largely constant is the control of the finances.
The math does not add up. The real estate refugees from the builder excesses of the past are now stuck between a rock and a hard place. These are the people lucky enough to actually have a finished flat with possession and not a legal case with absconding builders. These are the people who bought the Delhi suburban dream thinking they were getting in on the ground floor to the next Gurgaon. These are the people who live in Delhi, on rent or in own homes, and bought for investment in the greater NCR region, particularly in Greater Noida. These are the people who don’t know if they should sell and take a loss on their investment or keep funding it and hope prices recover.
A typical story goes like this: you bought a 3-BHK flat with a fancy foreign sounding name with a pool, community center, Italian tiles and more bells and whistles for Rs 60 lakh. Took a loan of Rs 40 lakh that costs about Rs 35,000 a month in EMI. Rent where you live in Delhi is Rs 30,000 a month. Rent from your Noida flat is Rs 8,000 a month. Amount of loan left is Rs 30 lakh. Current market price of flat if you can find a buyer—Rs 50 lakh.
It always happens. An introduction to mutual funds results in a feeding frenzy. I’d introduced a childhood friend to mutual funds two years ago. At age 45, she had left money and its management too late, but once she on-boarded mutual funds, she really went all the way. And beyond. Two years later, I’m horrified to see her portfolio. From the three-scheme portfolio she had started out with two years ago, she now sits on some 10 mutual fund schemes without a thought on what problem they solved. From an FD Hugger, she turned into a Feeding Frenzy Funder. I find that investors I meet fall into some stereotypes. Here are eight investor types—who are you?
The Ostrich: You have no plan, your money lies in your savings deposit and you are known to proudly say that you have no money to invest. You push away all help that comes your way because you are convinced that the world is full of cheats and you are just safer not doing anything rather than making an error. Beneath the don’t care mask, you are actually quite petrified about the state of your finance. And maybe for that reason believe that “something” will happen to make that pot of gold that you are convinced will come your way. Dream on.
The $16 billion Walmart-Flipkart deal came closer home to many Flipkart employees when a letter sent to them listed out the process and price of the employee stock buyback. For those who are current employees with already vested options (see this story to know more about this: bit.ly/2wDOsfC), the money will come in three tranches—half on the date the transaction closes in about 60-90 days, a quarter a year later and the rest at the end of two years from the first liquidation. The letter puts the value per share that the firm will buy back from the vested stock options between $125 and $129. At the current conversion rate, a person holding 10,000 shares will make approximately a pre-tax Rs8 crore.
Two and a half months after T.S. Vijayan retired, the insurance regulatory body, the Insurance Regulatory and Development Authority of India (Irdai), has got its 5th chairman, Subhash Chandra Khuntia. A former chief secretary to the Karnataka government, he has his desk overloaded as he takes over the wheel of a body that regulates firms managing over Rs28 trillion of household savings through life insurance and another Rs2.2 trillion in the non-life insurance space.
The insurance regulator has been an outlier in the financial regulatory space. While disagreements with the government by independent regulators are well reported, the conduct of the insurance regulator has left policy makers, the financial sector and analysts open mouthed. Many decisions over the past few years have been in the face of global moves by regulators on issues of costs and transparency. Raising front commissions in life insurance products, repackaging what were illegal payouts as “rewards”, doing away with a persistency target to ensure that agents don’t churn policyholders and continuing with fuzzy disclosures in both life and general insurance products are just some of the actions that have left households even more vulnerable to mis-selling and outright fraud by banks and agents.