99% SUCCESSFUL People Think Like This - RICH Mindset ft. Sandeep Jethwani | FO 50 - Raj Shamani

Summary

In this engaging discussion, the speaker delves into the concept of wealth, highlighting how a small percentage of people hold a significant portion of the country's wealth. The conversation explores the true meaning of wealth, emphasizing time freedom over material possessions. The speaker reflects on personal experiences with wealthy individuals and the importance of trust in wealth management. They also discuss India's economic phases, the shift towards wealth creation, and the role of expertise and compounding in building and retaining wealth. The conversation concludes with insights on the power of storytelling and future investment strategies.

Takeaways

• 🤔 Wealth is not just material possessions but the freedom to do what you want, when you want, without sacrificing personal time on things you dislike.
• 💼 The traditional FIRE (Financial Independence, Retire Early) movement is not about retirement but about the freedom to pursue passions and interests without work constraints.
• 💡 Wealthy individuals often have the luxury of time, which allows them to explore new ideas and opportunities without the pressure of a daily job.
• 📈 Wealth creation is about making enough money to buy out time for personal freedom and helping others do the same, fostering a collective creation mindset.
• 💰 The concept of wealth varies; for some, it's about having disposable income to invest in ventures that generate more wealth and opportunities.
• 🔑 Trust is a critical factor in wealth management; wealthy individuals often rely on experts to manage their finances due to the high stakes involved.
• 🌐 The compounding effect of trust, expertise, and consistent decision-making in favor of stakeholders is essential for long-term wealth retention and growth.
• 🚀 Embracing uncertainty and taking calculated risks are key traits of successful entrepreneurs and wealth creators.
• 🎯 The ability to envision and believe in a future-oriented story, like Tesla's impact on electric vehicles, can drive wealth creation through innovation and disruption.
• 📚 Education should focus on concepts like compounding and probability, which are vital for understanding wealth creation and making informed decisions.
• 🌟 The next big opportunity for India may lie in businesses that revolve around the flow of money, such as credit, lending, and insurance, as the economy develops and individuals have more disposable income.

Q & A

What is the main theme discussed in the video script about wealth and its distribution in India?

The main theme discussed is the concentration of wealth among a small percentage of the population in India and the concept of wealth as not just material possessions, but as the freedom to do what one wants when they want.

How does the script define 'real wealth'?

The script defines 'real wealth' as the freedom to do what you want when you want, rather than just the material things one owns.

What is the speaker's view on the FIRE (Financial Independence, Retire Early) movement?

The speaker is not a big fan of the FIRE movement, as they believe that what people truly desire is the freedom to do what they want when they want, not necessarily early retirement.

What role did the acquisition of Flipkart by Walmart play in wealth creation in India?

The acquisition gave many young people a significant amount of money, which they then used to start new businesses, potentially creating billions of dollars of wealth and employment opportunities.

Why do some people struggle to become wealthy according to the script?

Some people struggle to become wealthy because they may not have had the opportunity to discover their talents and passions due to societal pressures and the obligation to conform to traditional career paths.

What is the concept of 'trust' in the context of wealth management discussed in the script?

Trust is highlighted as a crucial factor in wealth management, where the wealthy rely on experts to manage their money and trust plays a significant role in building long-term relationships and ensuring responsible management of wealth.

What does the script suggest about the importance of storytelling in wealth creation?

The script suggests that storytelling is essential in wealth creation, as it helps to convey a vision or belief that can attract investment and drive the development of new industries or businesses.

How does the script relate the concept of 'compounding' to various aspects of life?

The script relates 'compounding' to career growth, reputation building, and trust development, emphasizing that consistent, small efforts over time can lead to significant outcomes in various life aspects.

What are the three phases of India's wealth journey as discussed in the script?

The three phases are income management, wealth management, and wealth creation, with the latter being the phase where people focus on generating wealth and freeing up their time to pursue their interests.

What is the script's perspective on investing in the future versus investing in the present?

The script suggests that investing in the future has the potential for disproportionate returns compared to investing in the present, which may yield average returns.

What advice does the script give about dealing with uncertainty and insecurity in the pursuit of wealth creation?

The script advises embracing uncertainty as a natural part of growth and wealth creation, and dealing with insecurity by acknowledging it and using it as a motivator to learn and grow rather than a barrier.

Outlines

00:00

😀 Wealth Inequality and the Concept of True Wealth

The paragraph discusses the stark wealth inequality in India, where 1% of the population owns one third of the country's wealth. It emphasizes the difference between the common perception of wealth as material possessions and the true meaning of wealth as the freedom to do what one wants, when one wants. The speaker shares personal experiences from interacting with the wealthy in India, highlighting their luxury of time and the realization that wealth is about not sacrificing time on things one dislikes. The conversation also touches upon the ' FIRE ' movement and the desire of people to have the freedom to pursue their interests rather than just retiring early.

05:02

🤔 The Shift in India's Wealth Mindset and Trust in Expertise

This paragraph delves into the changing mindset towards wealth in India, moving from income management to wealth management and potentially towards wealth creation. The speaker discusses the rapid increase in investment accounts, indicating a growing interest in making money work. The paragraph also explores the reliance on expertise when dealing with high-stakes decisions like health and wealth management. The wealthy are portrayed as individuals who trust experts to manage their wealth, focusing on whether they can trust the person with their money rather than the specifics of investment strategies.

10:04

💡 The Power of Trust and Its Role in Wealth Retention

The role of trust in personal and financial relationships is the central theme of this paragraph. It discusses how trust can provide leverage, allowing individuals to delegate responsibilities and create more time for themselves. The speaker shares anecdotes about trust in business relationships and how it can lead to better performance and commitment. The paragraph also highlights the idea that trust is a compounding asset that needs continuous investment and that it is crucial for wealth retention as well as accumulation.

15:05

🚀 The Importance of Storytelling in Wealth Creation

This paragraph discusses how storytelling can be a powerful tool in wealth creation. It highlights the ability of stories to convey complex ideas, inspire action, and create emotional connections. The speaker shares examples of successful individuals who have used storytelling to their advantage, building brands and creating lasting wealth through the power of narrative.

Keywords

💡Wealth Inequality

Wealth inequality refers to the uneven distribution of assets among different segments of the population. In the context of the video, it is mentioned that 'one percent of people in this country own one third of the wealth of this country,' highlighting a significant disparity in wealth distribution. This concept is central to the discussion on economic disparity and the concentration of resources.

💡Wealth Management

Wealth management is the process of preserving, growing, and transferring wealth. The video discusses the evolution of wealth management in India, noting a shift from 'income management' to a more recent era where people are realizing the importance of saving and investing money to generate returns, as illustrated by the increase in the number of investment accounts.

💡Time as Wealth

The video script emphasizes that 'wealth is the freedom to do what you want when you want,' suggesting that having time at one's disposal is a form of wealth. It contrasts the traditional view of wealth as material possessions and instead focuses on the value of time and the ability to choose how to spend it.

💡Compounding

Compounding in the video is discussed as a concept where small, consistent actions or interests grow over time to have a significant impact. It is related to wealth creation, career progression, and even trust-building, where the idea of 'everything in life compounds' is used to illustrate the long-term benefits of consistent effort and behavior.

💡Trust

Trust is highlighted as a critical factor in wealth management and personal relationships. The video explains that trust is essential for leveraging wealth, as seen in the example of a tech entrepreneur who entrusted his portfolio to someone based on trust, freeing up his time and allowing for better management of his wealth.

💡Expertise Gap

The expertise gap refers to the difference between the potential returns on investment and the actual returns earned by investors due to a lack of knowledge or guidance. The video uses the example of a mutual fund's performance versus the actual returns made by investors to illustrate this concept, emphasizing the need for expert advice in managing wealth.

💡Retirement

In the video, retirement is discussed not as an end goal but as a transition to doing what one loves. It challenges the traditional FIRE (Financial Independence, Retire Early) movement by suggesting that people want the freedom to pursue their interests without the constraints of a job, rather than simply ceasing to work.

💡Economic Situation

The economic situation is alluded to as a factor influencing people's attitudes towards wealth and work. The video mentions that growing up in a time of scarcity and competition for limited resources has shaped the way people in India approach work and wealth accumulation, with a historical emphasis on securing stable jobs and education.

💡Entrepreneurship

Entrepreneurship is presented as a path to wealth creation in the video. It discusses the emergence of a 'Flipkart mafia' of entrepreneurs who, after selling their businesses, have used their wealth to start new ventures, potentially creating significant economic value and illustrating the dynamic nature of wealth creation.

💡Investment

Investment is discussed as a means to grow wealth and as an area where the flow of money dictates business success. The video suggests that as India's economy develops and people have more disposable income, businesses centered around money, such as credit, lending, and investing, will thrive.

💡Scarcity Mindset

The scarcity mindset is a concept where individuals perceive resources as limited and compete for them, often leading to a focus on securing basic needs over wealth creation. The video implies that growing up in an environment of scarcity has influenced the way people in India approach opportunities and wealth accumulation.

Highlights

Wealth inequality in India is stark, with 1% of the population owning one third of the country's wealth.

The wealthy understand the importance of time and the freedom to do what they want when they want.

Wealth is not just material possessions but the freedom to do what you want without sacrificing your time.

The FIRE movement's goal of early retirement is misunderstood; it's about the freedom to do what you want, not necessarily quitting work.

India's economic situation has historically led to a scarcity mindset and a race for limited opportunities.

The concept of wealth varies; for some, it's having the time to pursue passions without financial constraints.

India's wealth journey has evolved from income management to wealth management and is now entering a wealth creation era.

The 'Flipkart Mafia' is an example of wealth creation, where former employees have started new ventures, potentially generating billions in wealth.

Wealth creation is about freeing up time to pursue passions and helping others do the same, creating a cycle of wealth generation.

Trust is a critical component in wealth management; the wealthy rely on experts they trust to manage their finances.

The power of storytelling is essential in wealth creation, as it can attract investment and drive innovation.

Compounding is a fundamental concept for wealth creation, whether in money, trust, or expertise.

Investing in the future, rather than the present, can lead to disproportionate wealth creation.

The importance of not breaking the thread of compounding in any field of work for long-term success.

The next big opportunity for India may lie in businesses where the flow of money dictates success, such as credit, lending, and insurance.

The need for an education system that teaches concepts like compounding, storytelling, and future thinking.

Transcripts

[Music]

one percent of people in this country

own one third of the wealth of this

country see what do the really wealthy

really smart people know

they know what they want to do with

their time but why there are certain

people who are able to make wealth and

certain people are not wealthy

i was reading on your website the first

thing it says that 50 000 crore managed

in the past i was in a business where i

would sit across the table from

some of the wealthiest folks in india

okay and talk to them about how to

manage their money uh help them with

that you would meet people who are 25

crores 30 crores

and then you suddenly start feeling that

money is available like there is enough

money to go around

it's just that it is concentrated in the

hands of a few people

like india has

one of the craziest uh ginny

coefficients which is the wealth

inequality thing right okay

one percent of people in this country

own one third of the wealth of this

country that is

incredible it's mind-boggling it is

disturbing and that's when you started

feeling like how how can this be like

more broad-based like how can more

people have access to wealth the other

thing was like what does what is like

wealth for everyone right like if i ask

you what does wealth mean for you raj

having time in my hand

and

i should not sacrifice that time by

doing the things which i hate yeah

that's exactly for me also that's what i

discovered is the concept of wealth

right a lot of us believe that wealth is

things that you own

or the houses that you live in or the

cars that you drive

wealth is that what you don't see right

you don't see real wealth yeah and it

makes sense because every time you buy a

new car

you have less money in your account so

you have less wealth yeah and i agree

with you that wealth really is the

freedom to do

what you want when you want

uh and therefore it's not about retiring

it's not about like this i like i'm not

a big fan of this fire movement okay

which is retire early one thing i hear a

lot of people say is i want to retire

early i think what they really mean

is that they want to do what they want

when they want somebody who's working in

a bank retirement might mean stepping

back and writing a book yeah right

that's not retirement they want to do

what they want when they want other

things right

and i think that truly for me is wealth

and that's what i realized when i met

the really wealthy folks in india they

had the luxury of time

like they didn't have to get up in the

morning uh brush bathe have breakfast

and dash to office

like they were like okay

today i want to think about this like

what are you doing today i'm just

thinking about this new thing that i'm

going to work on right

and i think

that for me was a big realization that

how that can change the destiny of india

also in many ways

like what is the best thing about

flipkart being bought by walmart it gave

a lot of young people a lot of money to

put in and start doing their stuff

absolutely and they started so many new

businesses exactly and that's becoming

like a proper flipkart mafia now yeah

exactly there's a flipkart mafia who's

gone ahead and spawned these hundreds of

startups potentially creating

next tens of billions of dollars of

wealth for themselves and the multiple

people who work for them that is really

wealth and i think india needs uh

certain things like this they need that

we need that very very desperately every

young person who's watching this or even

in the room everybody's like hey

i want to get rich quick so that i could

retire from my job i can retire from all

the things right yeah why do you think

that is coming like why this is a

mentality all of a sudden because

aren't we all taught from the beginning

that study hard and then go to get a

good job or maybe start a business and

then do it for rest of your life like is

it that we are taught and now that is

getting challenged so why all of this

everybody's thing you know i think

that's a lot has got to do with

india's own economic situation and in

the time that we grew up i'm an 80s kid

we grew up in a time of scarcity

that there were not enough jobs and

there was a right race to get into the

limited jobs that and therefore limited

number of engineering colleges medical

schools etc and all of that so you're

constantly in that

race to

uh and i think as indians we generally

couldn't discover ourselves

uh what our true potential is

right and therefore when people make an

association with work

they it is an obligation it is something

that you have to do right

whereas actually i feel that

if we had the luxury of wealth of space

and time we could have discovered our

talents

better and differently much early on as

well

and which is why people want to then

retire like instead of like doing what

they love because they probably couldn't

discover what they really love we all

live in society where we've been taught

from from the beginning we've never been

asked

so if you go to school teachers tell you

hey this is how it needs to be done yeah

parents tell you this is the way yeah

your

uncles advisors everybody keeps telling

you you go to a job you do a job as well

most of the

old bosses they're like this is how

needs to be done yes you've never been

asked so you never question yourself and

because you never question yourself

you're not

curious enough to find out what you

really love and that's why you're like

you know one day i'll be like leave

everything and do it so is that do you

feel is the reason because we have

always thought never been asked

absolutely and i think you know one of

the

things people get really nervous is when

they're asked a question

like uh as a country

we love when somebody solves things for

us

yeah like

tells you that these are the three

things if you do and i think we are now

for the first time going through a

little bit of a shift beginning to

happen

thanks to

social media creators uh where

these questions are now are exposure to

the how globally people think

is much more than what it was say 10

years ago as somebody in finance i try

and relate everything that we see in

society

to

economy right and

like i personally feel there are three

phases of

india's wealth journey the first phase

was income management

right and a large part of our population

still doing that which is that

here is a certain amount of salary you

make

you make your ends meet within that and

you practically retire with nothing

there was a survey and people were asked

that how will you survive post

retirement

60 people said my children will support

me

yeah okay uh

so that was the

era

and in some cases still is the era of

income management and i think when i say

error it's not that

uh it's like distinctive periods in time

even today there are parts of our

country which are dealing with that the

second was this whole wealth management

era

and it's a very recent era it's like

probably the last four five years where

people have for the first time realized

that the import you have to save money

and find ways of

employing that money right

like

one interesting uh

the first like bse is it gives out the

data of number of accounts that were

opened in by investors right

from we went from one crore to two crore

accounts in

about 1300 days which is about three and

a half years

we went from nine crore to ten crore

accounts like that one crore was added

in

barely 90 days three months time wow so

imagine three and a half years it took

us to go from one crew to two crore

accounts

and from nine to ten which is adding

that one crore took us only three months

which means that people are for the

first time now thinking about putting

money some to work right

but that is still a wealth management

error where you have money

you just wanted to earn some return

i think that the real

uh potential of india will get unlocked

when we enter the wealth creation era

okay where people start thinking how do

i really create wealth and which is free

up my time to do what i want to do when

i want to do it what i'm

really excited about is we are seeing

signs of that like

entrepreneurs potential entrepreneurs

there's this conversation you go to a

cafe in bangalore

on the adjacent table somebody is

pitching to the new co-founder somebody

is pitching to an investor i think parts

of our country are entering that wealth

creation era

and i think that is the solve for

where we are today so wealth creation

technically you said it means

just like you make

enough money so that you buy out time to

do things which you love yeah and then

you help other people to do the same

thing yeah so that you all collectively

keep doing you all get in the creating

zone rather than managing so yeah yeah

so like for me also like the first

startup

which we had uh which was 2008 to 2021

uh

helped us create deserve in many ways

because it freed us up personally

from the obligation of working in a job

right

and today we can

uh

deploy whatever we have learned over the

last couple of decades

to be able to helping other people with

their wealth creation journeys fair and

i think which is why it's a huge

leverage

for individuals and for the country so

there's a misconception or probably

right thing that a lot of wealthy people

know what to do with their money is that

right or wrong see what do the really

wealthy really smart people know

they know what they want to do with

their time somebody

who sold a business made thousand crores

they really know what they want to do

next

right

some people might do a

become a yoga

monk some people might travel some

people might start a new business some

people might start a new foundation to

help other people right so there are

many other things they know what they

want to do with their time yeah when it

comes to money

majority of them

rely on expertise

because at that level the stakes become

so high you need somebody else to handle

it for you like i have a construct in my

head which is that

there are low stake

things and they're high stake things

high stake things is health your money

low stake things are what you want to

wear where do you want to travel to

vacation etc

now in low stake things

you don't need expertise

because you can spend your time etc

and figure that out but when it comes to

high stake activities that's when you

really rely on expertise

imagine like if i

had a health issue would i should i

google it

and self-medicate myself and you'd

advise against that and the same thing

with money and i think the really

wealthy folks have figured this out like

look at the la the most wealthy folks in

the world right they've set up these

family offices they've set up full teams

to help them with their money even the

people who are not as wealthy as them

are relying on experts to handle it for

them yeah so i think what

do they spend time on when it comes to

their money is figuring out whom they

can trust

with their money are there components of

how you can find these people and what

do they look for they're trying to

figure out whether they can trust you

and it's not about

where you will invest their money it's

not about how much fees will you charge

them

it's not about what is your

scientific strategy and because that's

all a given like

yeah i mean if you don't like have

transparency and if you don't have a

logic around how you deploy people's

capital you shouldn't be in the room to

begin with

but what they really figure out is

can does this guy have the right

ethical

uh you know frameworks does this guy

have the right

intent at heart

uh to grow my capital

and which is why a lot of these

discussions when it comes to

uh money are discussions like these

in most cases you're not discussing

what you will do with it or what

portfolio or which mutual fund or what

stock or which bond

that discussion doesn't come up it's

more about these conversations that what

sandeep like how how do you think

i should be deploying my money

or

what do you think i should be doing and

what they are assessing in that

conversation is can i trust this person

and once they do that

then

it it creates a responsibility on the

person that they've trusted

right my like i wrote about this this

recently uh

you know there was there's this tech

entrepreneur uh i met him for the first

time in early 2008.

and i said i want to come to your office

he's like no i'm going to and we're

talking about money so i want to meet

you outside so we met at this

there's this hotel called sun and sand

uh

inju at that point i don't know what

it's called now so we met i remember the

sunset was it was happening at that

point

and

all we did all he did was talk to me

about my background like

where did i grow up what did i do etc a

few days later i get a call saying that

you know i'm transferring my portfolio

to you now you handle it

all that happened a few years later we

became close friends uh i asked him uh

over a drink

about that first meeting and said so he

said i was figuring out whether i can

really trust you

and i said why because he said trust

gives me leverage

like now that i trust you

i don't have to be involved at all yeah

and it's opened up a whole

part of my life and time which otherwise

i would be micromanaging trying to

figure out where to deploy

and he he said that look you're gonna do

it full time that's all you do so i know

you'll do a better job than me all i

need to know is whether you have my

interest at heart and i think that's

like generally in life

trust is crazy leverage i feel like

how we build our teams right is also

about trust that if you have a trusted

person

then you as a founder can step back and

do so much more yeah and i think trust

creates that sense of

responsibility on both sides

okay uh like if you are entrusted with

something

you will rise to the occasion and

deliver for that person it's not about

the economics

[Music]

but you will go out of your way to help

the guy whom you've tried who has

trusted you and said that raj you're

handling this for me i don't now care

and imagine like that's like i've heard

team members tell me this that you know

i i'm under tremendous pressure why we

have not like he said no because you've

left it to me

like you're not interfering in that and

i think like and that for me is like

something that i really believe is

is something

to spend time on like

we should be spending time on figuring

out who we can trust why do you think

certain people

depicts more trust or certain brands

depict more trust because and certainly

we will not on trust right and it's like

a very deep uh

topic to delve into i feel like

we all are looking in general in life

for hacks

right trust is one of those things where

there are no hacks

right there's no like this if you do

this somebody will trust you if you do

this somebody will trust you trust is

one of those things that you to live on

a daily basis and then it compounds

and when it compounds it snowballs into

something very massive look at the tata

brand for example in india right

it is trusted because

people believe that over time

over hundreds of years or maybe a many

decades they have done right by the

consumer by the various stakeholders

that and therefore today that brand

commands significant uh trust so i think

trust is again one of those compounding

things that you have to keep investing

into if you want to build it as an asset

right so which means that on a daily

basis take those decisions

which are in the interest of the

stakeholder you're talking to so if

you're

let's say you have an employee

in your company like how are you doing

right by him or her

on a daily basis and not just like at

the appraisal cycle similarly if you

have a customer as a business you're

faced with so many different decisions

at some point right where you can cut

quality

increase prices increase the margin and

so on

but the thing is that do you take those

decisions when you're under pressure or

do you say no i will not break the

compounding of trust i will do right

by my user or client or

whoever is consuming my service on a

regular basis so that is i think at the

top

the long term trust creation when it

comes to people however on the other

hand there are like certain types of

people you trust

people like in our business on the

investing side it's about are you

willing to listen to the

user

the client the person who's placing

money with you because if you're not

listening

then uh

you're just projecting your own biases

onto their portfolio we go to a doctor

there are some doctors which are whom

you instinctively trust

because about it's about the way how

they communicate what you have right

yeah like and the best of doctors by the

way can you can go in and

they'll tell you

quietly examine you write out a

prescription and send you out

but you'll be like wait a minute like

what just happened like i'm not sure

that did he actually figure

but and they might have like but then

there's other doctor who will actually

explain to you what

happened right so those are like

individually

category level differentiators but at

the overall level i think trust is a

compounding game yeah so would you feel

that

people who are highly trusted are the

ones who attract wealth more see again

wealth is one of those things it's not a

race right it's not like a sprint where

you have to get wealthy by the time your

x years and so on okay

it's about again that same thing

flexibility do what you want when you

want

and

there are cases where people attract

wealth in a very short span of time but

are they really able to

uh

retain wealth i think that is

a function of how continually trusted

they are

because there are times when you make

money in the short run and then you look

look back and today let's say 10 years

later that person is you don't hear

about them anymore and the reason is

that

they couldn't retain that trust

they did something some shortcuts along

the way

which caused them to lose that wealth so

i think trust

the

uh

trust is something that

will allow you to

accumulate but also retain uh wealth

why do you think certain people are

wealthy and certain people are not like

because everybody wants to create wealth

yeah i'm sure that nobody gets up in the

morning and be like

right everybody's thinking about it

reading about it finding ways to do it

they're going to the job in a hope that

they'll be able to do it they're doing

starting their businesses to do the same

thing

but why there are certain people who are

able to make wealth and certain people

are not wealthy if you look at a lot of

mutual funds and you look at the funds

performance right i was recently looking

at a data that one asset management

company put out

and they said that

the performance of

this fund has been over many years 19

annualized

and i was like wait a minute like this

fund must have really made a lot of

money for people

so we looked at the data of how much

money actual investors made in that

particular font we looked at when money

came in when money went out and we

modeled that to figure out

and actual returns of

investors in that fund was 12 to 13

which is six percent

lower than what the fund actually made i

call this the expertise gap a lot of

times when it comes to managing your

money

you need somebody to hold your hand

and tell you and help you with what is

right at which point of time

otherwise our emotions kick in

and take control of that situation right

so i think

that for me is uh

is the reason why some people

continuously make wealth with their

investment and some people don't which

is the use of real expertise is that

happening or not

uh when it comes to high-stakes things

like money when it comes to life i have

a different theory everything in life

compounds i like i wish and i try and do

that with my kids i try and explain to

them this concept of

making money on money which is

essentially compounding over time right

because trust compounds as we spoke

but also everything that you do in your

career also compounds right

sometimes there's a temptation that

for the same job i'm getting 15 higher

in another company

maybe i should make a switch and if you

look at it in a completely dispassionate

rational basis maybe that is the right

thing

but what you are breaking is the

reputation

that you created in company a when

you're switching to company b you're

starting reputation afresh so you're

breaking the compounding of that

reputation

right and that then hurts in the long

run

so when people ask me should i like i

have this new job offer should i take up

etc

my first thing is to them is that ask

yourself are you breaking compounding in

any way form

uh that could hurt you in the in the

long run and i think like that for me is

like a big lesson of wealth creation

like don't break the thread

of compounding in any

any field of your work and the problem

with compounding is when you're living

that moment it doesn't feel like a

progress yeah right because it's like

0.01 on a daily basis

but

over time it becomes something magical

and very large there's this amazing book

one of the most favorite

things i've read uh ever is this book

called range by david epstein

which is as you know about uh gender

lists

and what are generalists they've tried

different things but over time they've

accumulated

uh

insight in that field right like we

talked about roger federer who uh

played tennis much later in life and

played a lot of other sport right he was

building a sense in i mean not

consciously maybe but around sport

right which then got channeled into

tennis and once they he got into tennis

he built on top of that right he played

for many years after that i would think

that

uh if it's conscious if it's thoughtful

it is potentially compounding too and

here's you here's how i look at you give

an ex beautiful example let's say

if you are leading a team in finance

then you're leading a team in

pharmaceuticals then you're leading a

team in

let's say law your compounding would be

in leading in leadership in the

leadership and i'll trust you on that

yeah not trust you on pharmaceuticals or

health or money or anything absolutely

so that's how that's what you meant like

congratulations ceos are able to switch

across companies

because they've figured out leadership

they've figured out how to help people

deliver to their best potential and

that's their compounding game so for

wealth like people who end up getting

wealthy

are a who understand that there's a

price of expertise which they have to

pay yeah so either they become the

expert or they find out the expert who

can help them too absolutely right and b

is

understanding consciously the power of

compounding in every field of their life

not only just money correct because

whether it's talent whether it's the

field or the domain expertise or just

trust or relationship anything at all if

you understand that consciously you you

become this person yeah who would a you

would attract a lot of things in life

which will make it easy for you to

become a wealthy person absolutely and

you know i was telling my wife the other

day that

uh

our education system is split into

subjects right

instead what if it was split into

concepts right and compounding being one

concept

and it's

i feel like it's the most important

thing that

uh drives progress

like we look at human history there are

so many small decisions or small things

that were discovered along the way that

made human beings what they are today

right you know sapiens uh you will know

that he's written about this that these

are small things which at that point in

time doesn't seem like such a big

event right and that's how you will feel

when in your daily lives also even in

your portfolios right

because uh

one of the things about most portfolios

is people are seeking excitement

right that uh yes

this is not exciting etc let's do

something more exciting what do they do

they break compounding and move to this

new

uh

instrument or something which is

potentially fresh

and again your broken compounding uh

so i think it's about just that that

allow compounding to play out uh tim

owen spoke about this this concept of

the instant gratification

right which is sitting somewhere in your

brain trying to make you do

things which will make you happy at that

point in time and almost always they

break compounding so i feel education

also this one problem

that we have never we always are taught

about past we never talk about future

like there should be a class on future

like what would you want to build or

what would how would you want to imagine

your 10 years from now or what would you

do like

just challenge the curiosity and

possibilities so that it helps in

nurturing the thought of innovation

rather than just finding patterns of the

past no absolutely like you know i was

at a singularity university in the bay

area

i think in 2019 and it was eye-opening

thing for me i think in many ways that

contributed to me starting deserve

uh there was this uh so

you know we were a bunch of like 50 60

folks and

there was this

futurism class okay

and there was no reading material

nothing given in advance so we didn't

know what we were going in for the

professor walked in

she divided the team and the group into

like 10 groups

and said that you pick one concept

and explore that towards

uh

next level and the next level and so on

so i'll give you an example

uh she gave my team the concept of

driverless cars

right now what does driverless cars mean

driverless cars one way of thinking

about them is that you won't need to

drive anymore therefore you will have

free time

but there is also another angle to it

which is that

if there are driverless cars

will you need to own a car or not

right so that is the next level effect

because if it's a driverless car

there is no shortage of drivers anymore

and cars are easily available

why do we have a problem getting an uber

or an ola is because the driver is not

available not the car is not available

right so if drivers were not a

bottleneck

then you will have any amount of cars

available

therefore the moment you walk out you

will get a car

therefore you will not own a car

what will it mean for

companies which lend against cars and so

on so forth right

so uh and that for me was a very

eye-opening thing in that

you look at one thing and explore what

it means

and i wish like our kids were

enabled to think like that

like take

uh the like button on instagram

right

and

then what like so what will happen if

you if the if the designer who

introduced a like button

uh if you he was asked okay so what will

happen so people will change like so

what will happen so people will focus

spend more time on instagram so what

will happen they will try and look

better on instagram and so on so forth

right imagine the implication of that

one feature

which was a like button

right just just having this thought

process of what will happen next like

that one like button will

will breed an entire generation which is

which is wanting validation constantly

on everyday basis and absolutely

absolutely just having that thought

process is great yeah so also in the

wealth creation process right i've

i've been a big believer of this and i'm

sure you would agree to this as well

that the maximum wealth is created by

investing in future not investing in

today

right you can make average returns by

investing in today but if you invest in

the future

right you can make crazy return so let's

say for example

jeff bezos so he was not he was working

on amazon 20 years from now

right 20 years 20 years ago facebook he

was working on the technology 20 years

ago right so everyone who works on the

future

ends up getting disproportionate

advantage over other people and making

wealth yeah right but when you look at a

lot of wealth managers and that's

creation right they all look at data and

patterns of what's working what's not

working yeah i look at the look at try

to understand the logic the quant the

mechanics all of these things yeah so

what do you feel is a better way to

create wealth like is it to take bets on

future because when you think about

future

it's very less logic

it's a lot of

gut feeling and maybe pattern behavior

shift which you have seen i think that's

a amazing question and i think that's

something that for us informs portfolio

strategy also uh

what do you look at when you

decide if you want to invest in a pms or

a mutual fund

and invariably the first data point you

look at is how that strategy did in the

last one year last three years last five

years and so on right

there is this very small disclaimer at

the end which is that past performance

is no guarantee of future returns right

and actually i think that should be the

main thing and the old return should be

in small font sevi did a great job of

introducing that disclaimer

and yet i don't think we pay enough

attention to it right a lot of times we

are investing into instruments funds

fund managers asset classes which have

performed in

recent times the recency bias

and invariably

you are ending up buying a thing which

has already done its thing

right it's moved already and now you are

coming into it like i was looking at the

inflows that happened into bitcoin

uh the amount of inflows that we got in

the last six months

or six months ago was much more than

what they got in the collective history

of

the currency

which means majority of people who've

come into this currency have lost money

now

right

and why did they come in because they

were looking at past returns

i think

great portfolio managers fund managers

wealth managers

look for patterns

and figure out what performed

in what kind of economic environment

right okay so if a particular fund

manager was doing really well when

interest rates were low

uh

will he or she perform when interest

rates are rising

is a question mark

like and we when we look take asset

allocation calls we also end up looking

at what is the stage of the economy in

right one of the things we find a lot of

similarity is

10-12 years ago

when our economy was in a similar state

what it is now right okay uh

and therefore to say that maybe the

markets will behave as they did then

over the next few years rather than

assuming that what has happened in the

past will necessarily recur

like

interesting thing that happened

especially on the back of 2021

is that everyone started extrapolating

2021 in various ways in life right

we said that a certain set of stocks and

portfolios have done really well they

will continue to do well

we assume that the digital adoption that

happened in that year will continue to

uh be that and we are realizing to

a lot of surprise that people want to

get back to regular life yep yeah uh

we sort of assumed that

uh we will want to meet people only

online online but now people are hating

it and there's a study done in states

where they've done it on gen z

so 72 percent gen z 72 percent gen z

said that they want to get back offline

they want to go to events they want to

do concerts they want to meet their

friends offline they want to have chill

parties yeah nobody is interested in

forget online meetings they're not

interested in watching netflix wow

they're like i'm done with this i want

to go out and be with friends and 72 is

crazy number based on whatever the size

would be absolutely and that shows up in

the stock prices of a lot of these

companies right it the assumption that

what happened in the recent past will

continue to happen in the same way i

think

and if if there is any evidence of that

that is required it doesn't work like

that it's 2021 to 2022

and which is why you we end up urging

investors like

don't look at past performance review

investing

never works like it's always almost

ending up in an accident in the future

but unfortunately that's what really

happens because it is easy to visualize

and sell like it's one data if imagine i

were to tell you that okay i've done all

of this analysis and this is what i

believe

you will say that's your belief

but there's this real data of last

year's performance

yeah and that's hard data and this is a

belief

right and invariably the human mind

wants certainty so then you chase the

hard data and

that's why we don't end up making the

money that we want to like the same nyu

professor

he quoted that

you know what

who are the ones

who make maximum wealth

what is the indicator which makes the

maximum wealth and how do you judge that

and they all say is the story and the

conviction of the story

absolutely and it's like and like

everybody started laughing it was like

how can you say this what is that but

he's like if you look at he's a finance

professor yeah he's a number numbers

guys like it talks about

capital allocation cash flow all of

these things right and past performances

and he said but if you look at

if you try to chase patterns and you

look at the past data you're only going

to be able to beat that or be

exactly at a position where you'll be

making the same model if you want to

make

insanely extraordinary results

it's the story of itself it's the story

which you believe in and that story

should be backed by logic it should not

be like hey

like that should not come on it's a it

should be

backed by a logic and if it makes sense

i think that's what makes you the

maximum wealth the fact that elon got so

many people to believe in the story of

electric vehicles

enabled

the ecosystem of elect that is needed

around electric vehicles to get created

yeah right because tesla doesn't operate

in a isolated environment they need

suppliers right how will a supplier

invest in a new project unless they buy

into his story

that

he will produce x number of cars every

year right

and i think

how like life is a lot about

storytelling uh i wish that was one

concept beside compounding that we were

taught that how important communication

and storytelling is

in your in your day-to-day work yeah and

i think i think every good story has

three elements in them

one is the promise of future

second is the logic and the

understanding of the behavior which is

giving you an insight of the future yeah

and third is relatability if i can't

relate with you or your problems then

you won't be able to see the same vision

which i am imagining so i mean if you

look at it as a tesla story as well

right

nobody

cared jack about electric vehicles

until he said that this is going to be

cooler and faster yeah so like everybody

who wanted like a cooler cars or faster

cars bought into this and they kind of

believed in it correct

imagine the pre-bookings that happened

at that point of time was crazy right he

got capital to build cars when he had

only a story

there's concentrated wealth creation and

there's diversified wealth creation

concentrated wealth creation is the

highest game that you play and a lot of

that is around storytelling and

believing in those stories that's a

concentration that's a concentration

like uh if i really believe in

the tesla story i'll put all my money

in tesla and may make a lot of wealth

out of it but there's a probability

attached to that yes it's not a

certainty right

whereas there's this diversified where

you potentially believe in many

different stories and create a

diversified portfolio around that

and

the probability of this uh is

potentially higher yeah i think we're

getting getting back to the original

point rich attract which gets richer

money attracts money and one of the

major reasons would be this

that

because

you

are secured now you can place high bets

and have concentrated bets

yes when you're trying to because when

you're secured and certain about their

max to max

then you play high bets

right versus when you're not secure you

try to play secured in certain bets but

actually the reverse happens

there is when you have smaller amount of

money

you tend to

believe that if i do this one thing

then i will uh

you know i'll be very rich i used to

walk to school and along the way there

was this lottery shop you know a lottery

shop is a very interesting place because

it's for sure very colorful

right there is this big mast which is

colorful so colors attract attention so

and these tickets are laid out and every

day i would see

like eight to ten people

uh you know leaning over a big board of

lottery tickets trying to pick out and

stuff and i used to wonder like what are

they looking for

how do they know that this ticket will

do but they would spend a lot of time

figuring that out

and a lot of them potentially would

gamble away a lot of their life earnings

there because of the hope that this will

make me rich

whereas probably what they should be

doing at that point is just investing in

diversified stuff right what do you

think are the like top three concepts

which everybody who wants to create

wealth should understand in their life

so one is probability okay i'll give you

an example

let's say

if i

uh buy a lottery and i can get a million

dollars

and i say that the chance of

winning that lottery

is say one percent

that means

effective outcome is say ten thousand

dollars

for me right because one million

multiplied by one percent ten thousand

dollars on the other hand there is this

investment that i can make that will

certainly give me twenty thousand

dollars right which one should i pick

and

humans are

inherently hopeful creatures right

that's why we got to where we are so we

would probably pick the lottery yeah

right because promise of one million

it's promise of one million right do you

think we should chase incremental

results and not exponential results so

uh if you are secure

in your life and have made a certain

amount of capital by all means go to

exponential exponential results like

when do people start angel investing

right when they've made their money they

have a couple of houses they have enough

capital to

run their family home etc and so on and

then they start investing in angel

investing yeah right it's not the first

thing that you do

right so there is uh

there is this whole probability thing

and i feel like

i also need to figure out how to explain

that to my kids better

right

uh

because uh if i were to be able to

explain that they'll be able to take

life decisions

much better than they are

the second is which i feel is about this

dealing with uncertainty

right

uh because a lot of stress

that we see in life around us is because

of uncertainty a lot of us can't live

with uncertainty

live with this feeling that we it's okay

not to know what's going to happen next

right and which impacts our risk-taking

appetite

and which impacts our ability to grow as

a nation also

right entrepreneurial nations

uh are inherently risky

because they are okay with uncertainty

it's okay not to know everything right

but when we have been taught that okay

do this

five steps to this learn this do that

etc guidelines

uh

notes cheat codes cheat sheets

you know we've got used to certainty

right

and

the third is i think a more a

personality thing that

i feel that

i'm also still learning

is

dealing with insecurity

okay

like uh

which is the fact that you may not know

everything

and that's all right

right so

i wish like probability uncertainty

insecurity

were things we were made cognizant about

and probably would have

it will be helpful and all three if you

look at like the most successful

entrepreneurs they've all got in this

thing okay

so

most of the people who have built crazy

tech products

they

went for the exponential

risk when they knew that yes

correct they were secure in their head

that yeah hey max 50 000 job i'm gonna

get it back again correct right so the

security came yeah so their incremental

level was sorted and that's why they

went for the exponential result they

tried to do something right

um forget tech like even the management

students or anyone who feels like if i'm

a sales person

i'm not going to go down correct down

the right that's why i can place high

bets that's one

second is uncertainty

every entrepreneur understands that

antenna unless there's a play of

uncertainty and i there's that's a

there's a phase of uncertainty and i

cross that i won't be able to

make exponential results in my life yeah

so we all

admit that yeah that yes

i know that it's uncertain but

guess what i'm still gonna get over it

correct okay and third thing insecurity

i feel

it's good to have insecurity yeah

because like it pushes you to do more

like

most of the people i have met

they all will tell that i'm not the best

person to do this i probably don't even

know how to do this but i'll figure it

out so every time you're insecure about

certain thing instead of saying

impossible say i don't know yet so for

example yeah if i'm insecure about

certain things let's say

i'm

i'm i'm insecure that i don't have the

right amount of talent to build a

startup i can say that it's impossible

i've just not built for it right or i

can say i'm built for it i just don't

know yet how to do that absolutely and

that's channeling in security correctly

because you're saying okay i need to

learn more about it right yeah so

instead of just discarding it by saying

him it's not for me absolutely saying

that it's not for me yet yeah yeah maybe

one day it'll be for me yeah and you

know i think it's about the vocabulary

also raj like if somebody were to tell

me there is this concept of insecurity

uh

as a kid that

this is what you are feeling

and it is okay

and

this is how you can deal with it or this

how you can think about it it can in

itself make a lot of difference

sometimes you don't know that you're

feeling insecurity yeah

till many years later when you're more

mature you look back at that time says

was i too insecure what i should

uh and i think this vocabulary uh around

these concepts i think uh sometimes

giving a word to it

is is important yeah so it's there's a

there's a framework right

if you want to make something common

start saying the word yeah like it

starts by saying the word because unless

you won't say the word you won't give it

a name yeah you won't know what that

feeling is called

like fear and excitement right yeah so

when when you're

nervous and you're scared you feel the

same thing versus when you're excited

yeah like your body doesn't know whether

you're fear like you're scared or

nervous right yeah it's just the

conditioning from the childhood yeah

which tells you that these are the

things i need to be scared about and

these are the things i need to be

excited i'm excited about yeah yeah

because

probably the chemical in your brain is

the same

so i was speaking to one skydiver like i

did skydiving a while ago and i was

speaking to him like i'm scared

you know when i look out of the plane

i mean i'm excited about the idea that i

want to skydive i want to jump it but

the moment you open that door i get

scared like do i need to jump or no yeah

and he's like the moment you open the

door i get excited then you jump

and it's like our bodies are feeling the

same thing yeah we both are shivering we

both don't know what's going to happen

our heart is beating faster yeah it's

just i've been trained to look at it as

excitement you have been look at trained

at looking at fear no i think just like

the different words at different time

conditions in a different way and i

think that's this link to the earlier

point of storytelling the power of words

like you know

in deserve you know the what is the job

of so we have a customer support team we

call them member partners that in itself

the fact that they're a partner to our

users uh and secondly what's their job

their job is to delight the user

yeah right and the moment we say it that

way

uh and when we explain the job

description we put it out like that

you're a member partner your job is to

delight the user

and

and some of that stuff then you don't

have to teach

people that this is what you need to do

yeah because the moment you say delight

you know that you have to go over and

above right

so i think i words have crazy power oh

yes instead of saying that you need to

attend calls

you need to

yeah just address problems yeah then

you're not worrying about that

how many tickets you closed et cetera

they know that my job is to deliver the

customer okay last question which we ask

everybody uh on our podcast is

what do you feel where is this what is

the next big opportunity for india the

biggest

concept that human beings created which

is unique to us is the concept of money

right

and as

an economy develops

money becomes more and more central

because we are now moving away from the

very basic day-to-day stuff right now as

the country develops our food

etc is taken care of

so probably the agrarian economy is

stable it's it's reasonable it covers

everyone right

but you have more money in the hands of

people

so any business or any those businesses

where my flow of money dictates how that

business will do i think that for me is

one thing that we should watch out for

very closely

give me an example like uh credit or

lending for example is something that

we're very excited about again because

money's flowing insurance our own

business wealth or investing

uh these are businesses where the

currency or the commodity with on the

top of which it is operating is money

and with surplus economic capital i

think those businesses will do really

well

yeah makes sense yeah nice thanks a lot

for doing this man really love having a

conversation with you i hope you did too

i i really love the the concept of

figuring out uh

i i think it shows

humility in many ways that

you're

if you're not preaching you are learning

along the way so i think that in itself

is something incredible and

congratulations on that thank you thank

you the whole idea is to

genuinely get the right people and learn

from them because so i've been a

believer of this and i keep fighting

with my dad about this right i feel that

dad you know what

me and someone who i feel as a role

model

we don't have a difference

yeah like the same people it's just they

know something which i don't know yet

so i need to ask them and find out ask

the right question or maybe the clear

question

and they will teach me something and if

i execute that right maybe i'll reach

that level so it's just always about

like i'm this curious person who wants

to learn from everyone who i feel is

doing right yeah incredible and i think

i wish

like that was something that was taught

in schools that that you need to learn

from everyone

we are all figuring out yeah even today

everyone is

you