Let's talk money | Monika Halan | TEDxHinduCollege | Monika Halan | TEDxHinduCollege
Summary
TLDRIn this talk, the speaker emphasizes the importance of financial stability and wealth, advocating for a long-term approach to building wealth through equity markets. They caution against socialism and the poverty mindset, encouraging an abundance mindset and the pursuit of wealth through legal means. The speaker advises on financial strategies such as separating spending from saving, building an emergency fund, and investing in index funds for long-term growth. They also highlight India's economic growth potential, suggesting it as a foundation for future wealth creation.
Takeaways
- đŒ The speaker emphasizes the importance of financial stability and wealth, advocating for a long-term approach to building wealth rather than seeking quick riches.
- đ« A warning is issued against socialism, equating it with a 'distribution of poverty' and advising caution against such ideologies.
- đ° The speaker counters the notion that money is inherently bad, arguing that it can be used for good when earned and spent responsibly.
- đ± Encouragement is given to the audience to adopt an 'abundance mindset' and to not be ashamed of wanting to become rich, contrasting with the 'poverty mindset' of previous generations.
- đ The equity market is presented as a viable long-term avenue for wealth creation, with a focus on systematic and regular investing rather than speculative trading.
- đĄ The idea of 'seat belts' in investing is introduced, which includes separating spending from saving, building an emergency fund, and purchasing insurance to mitigate risks.
- đŠ The speaker shares historical data to illustrate the potential of the stock market, using the example of a 1991 investment in various financial products and their growth over 33 years.
- đ Despite market volatility, the speaker argues that the long-term trend of the market is upwards, suggesting that patience and consistency in investing can yield substantial returns.
- đŹ The concept of 'India's unluckiest investor' is used to demonstrate that even investing at market peaks over 30 years can result in significant growth, highlighting the power of compounding.
- đ The speaker expresses optimism about India's economic growth, suggesting that the country's development will benefit individuals through job opportunities and wealth accumulation.
Q & A
What is the main message the speaker is trying to convey about wealth?
-The speaker emphasizes that being rich is good and that wealth can provide education, healthcare, and a better life. They encourage the audience to pursue wealth legally and responsibly, and to not be ashamed of wanting to be rich.
What warning does the speaker give about socialism?
-The speaker warns that socialism leads to a distribution of poverty, citing their own experience growing up in a socialist country. They advise the audience to be cautious of socialist promises.
How does the speaker describe the mindset of their generation towards wealth?
-The speaker describes their generation as having a 'poverty mindset' due to growing up in a poor country, which led to viewing poverty as a moral good.
What is the speaker's stance on the use of money?
-The speaker believes that money is inherently good and that it is the manner in which it is earned and spent that can be good or bad. They stress that these are personal moral decisions.
What financial advice does the speaker give for long-term wealth creation?
-The speaker recommends investing in the equity market for long-term wealth creation, specifically through index funds, and advises against day trading, futures, and options.
What is the significance of the example given about investing 1 lakh rupees in different financial products?
-The example illustrates the potential growth of different investment options over 33 years, showing that investing in the stock market (Sensex) can yield significantly higher returns compared to fixed deposits, gold, or public provident funds.
What are the 'seat belts' the speaker suggests to protect one's financial position?
-The speaker suggests three financial 'seat belts': separating spending from saving, building an emergency fund, and purchasing insurances like medical and life insurance.
Why does the speaker recommend investing in index funds?
-The speaker recommends index funds because they represent a diversified portfolio of stocks that track the market's performance, providing a relatively low-risk way to invest in the growth of the economy.
What is the speaker's opinion on cryptocurrency investments?
-The speaker views cryptocurrency as a gamble without an underlying asset, akin to a lottery ticket, and advises against considering it as a serious investment for long-term wealth creation.
What is the speaker's outlook on India's economic growth and its impact on stock market investments?
-The speaker is optimistic about India's economic growth, citing structural reforms and expecting a 'giant wave of growth' that will benefit investors, especially those who invest in index funds for the long term.
Outlines
đ° The Value of Wealth and Long-Term Financial Stability
The speaker begins by expressing their delight at being present and immediately engages the audience with a question about their desire to become rich. They emphasize the importance of wealth and discuss the societal misconceptions about money, especially those stemming from a past of socialism and poverty. The speaker warns against the allure of socialism, drawing from their own experiences in India during the '70s, and advocates for an abundance mindset. They argue that money, when earned and spent wisely, can lead to a better life, including access to education and healthcare. The speaker encourages the audience to pursue wealth legally and to make personal decisions about how to use their money, without shame or external judgment. The focus is on building long-term financial stability and wealth through understanding and utilizing financial products wisely.
đ Long-Term Wealth Creation Through the Equity Market
The speaker delves into the concept of long-term wealth creation, using the equity market as an example. They provide a historical perspective by discussing the performance of different financial products over a 33-year period, starting from 1991. They compare the growth of a fixed deposit, gold, the Public Provident Fund, and investments in the Sensex, highlighting the significantly higher returns from the latter. The speaker stresses the importance of taking calculated risks and the role of the stock market in wealth accumulation. They introduce the idea of 'seat belts' as financial safety measures, such as separating spending from saving, building an emergency fund, and purchasing insurance. The speaker also touches on the volatility of the market and the importance of having a long-term perspective, using the example of an 'unlucky investor' who, despite investing at market peaks annually for 30 years, still saw substantial growth. The message is clear: with a long-term approach and systematic investing, one can benefit from the growth of the economy and the stock market.
đ Embracing India's Growth Story Through Index Funds
In the final paragraph, the speaker addresses the potential of India's economy and the role of index funds in capturing that growth. They describe the unluckiest investor scenario, where despite investing at yearly market peaks, the investor still ends up with considerable wealth, illustrating the power of compounding over time. The speaker encourages the audience to consider index funds as a reliable long-term investment vehicle, especially for those new to investing. They also provide a broader economic context, citing India's growth trajectory and structural reforms as reasons for optimism about future market performance. The speaker advises against speculative investments like crypto and instead promotes a disciplined approach to investing, emphasizing the importance of systematic investing in line with India's economic growth. The speech concludes with a positive note, wishing the audience a prosperous financial journey ahead.
Mindmap
Keywords
đĄWealth
đĄSocialism
đĄRisk Aversion
đĄEquity Market
đĄIndex Funds
đĄFinancial Stability
đĄEmergency Fund
đĄInsurance
đĄInvesting Horizon
đĄEconomic Growth
đĄSystematic Regular Investing
Highlights
The importance of wealth and financial stability is emphasized, with a focus on long-term wealth building rather than quick schemes.
A warning against socialism and its historical association with poverty, advocating for an abundance mindset.
The speaker's personal experience growing up in a socialist country and the impact on their generation's mindset towards wealth.
The moral perspective on money, suggesting it is not inherently bad but how it is earned and spent that determines its goodness.
The concept of an 'abundance mindset' versus a 'poverty mindset' and its influence on financial decisions.
The idea that money can provide essential services like education and healthcare, and should not be a source of shame.
A discussion on the moral implications of how wealth is earned and spent, emphasizing personal responsibility.
The recommendation for a legal and ethical approach to wealth accumulation, steering clear of illicit activities.
The long-term wealth creation through the equity market, contrasting it with day trading and speculative investments.
A historical comparison of investment returns between fixed deposits, gold, public provident funds, and the stock market index (Sensex).
The concept of 'seat belts' in investing, including separating spending from saving and building an emergency fund.
The importance of having insurances like medical and life insurance as part of a comprehensive financial plan.
Advice on investing in equities for long-term goals, with a focus on systematic and regular investment.
The example of 'India's unluckiest investor' to illustrate the power of long-term investment in index funds despite market volatility.
A prediction of India's economic growth and its potential impact on the stock market, encouraging investment in the country's growth story.
A cautionary note on cryptocurrencies, suggesting they should be treated as high-risk investments similar to lotteries.
The conclusion with a motivational message, wishing the audience a prosperous financial journey.
Transcripts
such a delight to be here uh you might
may have Googled me already I talk on
something which is important to all of
us which is I talk on
money how many people here want to
become
rich yes good okay so what I want to
tell you is why it is good to be rich
and how you should get
there this is not a getrich quick talk I
am not going to give you stock tips or
crypto tips I'm not promising you
instant wealth I'm talking of an
approach to wealth and a very long term
Foundation of building Financial
stability and wealth but before I get to
that I want to warn you about something
that my generation will try and transmit
to you my generation we grew up in the '
70s India was a socialist country there
is no blemish on Earth worse than lived
socialism you have to ask people of my
generation how we had nothing there was
only a distribution of poverty so anyone
who's promising you socialism is
promising you distribution of poverty
you have to be very careful about these
socialist promises I have lived through
it you don't want that
life we have a poverty mindset My
Generation because we grew up with the
memory of a country which has been been
poor for Generations so we all know the
history of India Rich Nation
subsequent attacks on the country two
waves of colonization impoverishment you
know when a generation when a when a
people have no hope of ever becoming
rich they put poverty on a pedestal they
make it a moral good to be poor have we
not heard the Filthy Rich do we say that
filthy rich h
where is this coming from it's coming
from that memory generational memory
that we can never ever hope to be rich
therefore we put poverty on a pedestal
your generation has been born in a
different country in a different time in
the life of this country you are with an
abundance
mindset so the message is don't let
anybody tell you that money is bad
how you earn it and how you spend it can
be good or bad and that's only for you
to decide let nobody else decide that
for you but money is good it gets you an
education it gets you a hospital bed
when someone is sick it gets you a house
it gets you a life that you
want so let no one make you ashamed of
wanting to be
rich the important thing for you to
remember is how do you want to get rich
you know you can get rich growing
marijuana that's not what I recommend do
it the legal way and then what do you do
with that money are you spending it on
putting substance into the body which
gives you bad Health your decision no
one else's business your body your
health your mind or are you spending it
so that you grow as a person you have a
better life so those are moral decisions
which you can take how to earn and how
to spend it but money is good we should
all have it should we not all be rich
what do we want a rich country or a poor
country we want a rich country we want
wealth everyone should be rich now the
next part how do you get
there so whereas the abundance mindset
has come I feel that a lot of you are
still held back by the' 7s products and
mindset of being very risk averse so I'm
just going to give you some examples of
different Financial products so the road
that I recommend is long-term wealth is
created through the equity Market we all
know the equity Market I am not saying
that you day trade I am not saying that
you do Futures and options I'm telling
you a long-term way to build
wealth using the stock market so let's
say there's this person in
1991 he invest invests 1 lakh rupees in
a fixed
deposit in public Provident fund which
is a government of India safe scheme in
gold and in the sensex we've all heard
of the sensex right it's the 30 stock
index on the Bombay Stock Exchange
India's oldest index so there is a
person in 1991 he invests 1 lakh rupees
in each of these four
products 33 years later in 20 32 years
later in 22
23 where have these different products
reached the fixed deposit that 1 L has
become about 16
lakh the gold has become about 19 lakh
the public Provident fund has become
about 19.2 lakh which is not a small sum
what do you think this 1 lakh invested
in the sensex has become it has become
64 lakh so when you start your investing
Journeys
you have to make the choice and not for
a minute am I saying that you should use
the stock market I'm saying these are
choices in front of you how do you take
a long-term considered
risk how do you allow your money to
build wealth using the stock market that
you do using seat belts okay I want to
secure M today if so what is it that we
are afraid of we are afraid of the
volatility of the market stock prices go
up and down so many trillion rupees
shaved off the market cap it is scary
when we see how money evaporates on the
market but you know we know that
longterm there is something which is
happening in the market which builds
wealth so what is happening so companies
are listed on the stock market these
companies make profit they have growth
it is the profits and the growth which
reflect on the stock market it is not a
lottery it's not a ruling machine
longterm your growth of money in the
stock market is dependent on the
country's economic growth but it is
volatile it goes up and down I think
everyone will remember what happened in
2020 when covid came right the markets
dropped by
30% you know what sensex is today is
about
73,000 do you know in March 2020 it
dropped to 29,000 it crashed it's scary
when these things happen so I'll tell
you that you put some seat belts on to
protect your place in the world
today the first thing which you will
remember and you will all start earning
money in a couple of years very soon you
have to separate your spending from your
saving there is a way to do it and you
have to read my book let's talk money
I'm not telling that you right now that
you have to separate your spending from
your saving that's your first seat belt
because if you target your spending
before your saving before you spend you
are already ahead if you are simply
putting aside the money that you have
decided to save before you spend it
you're already ahead so that's your
first safe belt that you are first
saving you are separating your savings
money from your spending money your
second seat belt you build an emergency
fund what are we afraid of when markets
go up and down what if I needed the
money right now that's what we think no
I need the money there is some bills to
be paid something happens for that you
build an emergency fund it's about 6
months of your monthly
expenses that you build maybe in a fixed
deposit or if you understand mutual
funds which is another big discussion
then you use products there but you
build you put on your second seat belt
you build an emergency fund third seat
belt what are we afraid of we are afraid
of a medical emergency we afraid of the
death of the principal bread winner in
the homes right it's a disaster when the
person who's bringing the money in is no
more because that stream of income has
finished so then you use products like
medical insurance and life
insurance Mark these things you as you
go through life you will understand the
depth of it right now you're just
understanding the big building blocks so
you separate out spending from saving
you build an emergency fund fund you buy
insurances once you start earning to
protect your life
today and then you're still not
investing now you splitting your goals
between short medium and
longterm short-term goals are within 3
years you don't invest a rupee in equity
nothing in the stock market for your
shortterm goals Equity is only for
longterm your medium-term goals you have
a little bit of equ it in it and for
your long-term goals you are 100% into
Equity now that you have done that but
you still afraid right you're still
afraid that markets are volatile and I'm
giving you 30-year data who has you know
it's it's grown at an average annual
rate of about
12% but what about the volatility of the
market how do you deal with that so I'm
going to give you example of India's
unluckiest
investor she has been the unluckiest
investor for 30 years what has she done
so we all know that there is a sensex
every year there will be one day in
which the sensex is at the highest point
is that correct there will be one day in
the year for that year the sensex is at
its highest point after which it falls
before which it was
lower this person invests in the market
in the sensex every year when the market
is at its highest
so she does it in year
One Market Falls she does it in year two
Market Falls she does it in year three
Market Falls for 30 years she's the
unluckiest investor and she's been
putting in one lakh she's also you know
very consistent no matter if I'm unlucky
I will still go on 30 years she's put in
30
lakh what do you think after 30 years
her amount has grown
too 30 years unlucky EST investor in 30
years it's grown to 2.3
CR okay India's unluckiest investor with
a 30-year investing Horizon investing at
the peak of the market every year but
the peak of the market of this year will
not be the peak of the market next year
because markets over time go
up so the unluckiest investor is sitting
on 2.3
CR simply in investing in what is called
an index fund write it down Google it
that is your first product your day
trading your futures and options crypto
these are not your first products your
first long-term products are something
called index funds on the sensex and
nifty50 what gives me the confidence of
saying that you have you know you have
this is your next 30 years we've had our
30 years my generation has had our 30
years the whole drop Dr is of these 30
years of studying getting an education
marriage children assets home car then
retirement we have had our 30 years this
is your 30 years what gives me the
confidence to say that markets will do
well because India is on a growth path
my Generations benefited I joined the
workforce in
1991 because of the 91 reforms it was a
giant wave which lifted all the boats of
people who were ready to take the jobs
which were there I have seen structural
reform in the economy I have been a
business reporter for my entire life
money and personal
finance the sort of Reform that I have
seen in the last 10 years GST IBC the
cleanup of the bank balance
sheets uh there is you the sort of deep
reform which has happened happen this is
the level two reforms so a giant wave of
growth is coming in the next 10 years
for all of you to benefit
from we benefited in terms of both
income and growth of our money your
generation has your 30 years ahead of
you because when an economy grows who
grows it is the companies right the
companies have employees the employees
get opportunities there is a startup
Network
and when the entire economy expands
those profits get reflected on the stock
market so at 7% if you're growing we
should be able to grow the money simply
through an index at between 12 to
14% over the next 20 to 30 years so this
is my message to you there is a lot of
um hustling going on in the market to
tell you about this crypto at crypto
crypto take it as a lottery it's a
gamble there's no underlying asset okay
a stock has an underlying asset of a
company a debt product a bond has an
underlying asset which is a borrower and
A lender there's some economic activity
going on in a crypto there is no
underly okay it is a digital token so if
the it is too much out of 100 rupes
invested Take 5 rupes and play a lottery
game with it
but if you are thinking of investing you
have to commit your money to long-term
growth and the best way really is to do
systematic regular investing into the
India growth story of which you all are
going to be such a great part I wish you
a very rich money journey ahead and lots
of wealth thank you
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