Krishna aka Sarathi in your Financial Lives - Mahabharata Analogy by Ajit Menon | CEO- PGIM India MF

Summary

The speaker, a mutual fund CEO with 22 years in finance, emphasizes the importance of having a personal financial planner (PFP). Drawing from the Mahabharata, he illustrates how a PFP helps manage biases, supports goals, and sharpens financial senses. He also discusses the emotional aspect of wealth and the need for a professional to guide through financial journeys, especially in a volatile world.

Takeaways

• 😀 The speaker emphasizes the importance of having a Personal Financial Planner (PFP), even as a finance professional, due to the emotional nature of money and the need for unbiased guidance.
• 🧐 The speaker uses the analogy of the Mahabharata to illustrate the internal struggle between negative emotions (Kauravas), senses (Pandavas), and purpose (Draupadi), with Krishna representing the conscience and guide.
• 🤔 The role of a PFP is to help control biases, manage personal blind spots, and guide individuals towards their financial goals, not just perform calculations that machines can do.
• 💰 The purpose of wealth is divided into utilitarian (necessities), expressive (status), and emotional (anxiety reduction), with a PFP helping to achieve the emotional benefit.
• 👨‍⚕️👩‍⚖️🤝 The speaker suggests that everyone needs three essential friends in life: a doctor, a lawyer, and a personal finance professional, each protecting health, assets, and lifestyle respectively.
• 🌍 The current 'VUCA' world (Volatility, Uncertainty, Complexity, Ambiguity) increases lifestyle risk, making the role of a PFP even more crucial in navigating these challenges.
• 🔮 The speaker humorously points out that you don't need a PFP if you have a crystal ball or think you're special and exempt from life's risks, highlighting the realistic approach a PFP takes.
• 📉 The potential to destroy wealth is more behavioral than financial; it's about actions taken during market downturns, not just the financial strategies employed.
• 🤝 A successful relationship with a PFP is a 50/50 partnership, where both the client and the planner share responsibility for the financial outcomes.
• 🤔 Trust is key in the client-PFP relationship, and a professional who admits 'I don't know' and seeks to find out is more trustworthy than technology that always provides an answer.
• 🎤 The speaker concludes with an invitation to sing a song together, symbolizing unity and shared experience, although this part seems to be a technical error in the transcript.

Q & A

Why does the speaker emphasize the importance of having a personal financial planner (PFP)?

The speaker emphasizes the importance of having a PFP because they believe that managing personal finances is emotional and complex, requiring guidance. As a CEO of a mutual fund with extensive experience in finance and investments, the speaker personally has a PFP, which they find beneficial in managing their own finances.

What is the unconventional interpretation of the Mahabharata that the speaker discusses?

The speaker interprets the Mahabharata as a representation of what happens inside every human being. Dhrtarastra, the blind king, symbolizes the brain, which perceives all senses but does not see. The 100 Kauravas represent negative emotions and feelings that influence decisions, while the five Pandavas symbolize the five senses that should work together with a common purpose.

What role does Draupadi play in the speaker's interpretation of the Mahabharata?

In the speaker's interpretation, Draupadi represents purpose and passion. She unites the five Pandavas with a common goal, demonstrating the importance of having a unified purpose in life.

Why is Krishna considered the 'sarti' or guide in the speaker's analogy?

Krishna is considered the 'sarti' or guide because he provides moral and strategic guidance, helping individuals navigate their personal and professional lives, much like a financial advisor helps in managing finances.

What does the speaker suggest is the role of a personal finance professional in managing one's wealth?

The speaker suggests that a personal finance professional helps control biases, manage personal blind spots, and reduce ego. They provide objective advice, support the individual's purpose, and sharpen their financial senses, acting as a knowledge partner.

How does the speaker describe the purpose of wealth according to behavioral finance?

The speaker describes the purpose of wealth as having three aspects: utilitarian (for necessities), expressive (to display status), and emotional (to reduce anxiety and provide a sense of security). A professional can help achieve the emotional benefit of wealth by reducing anxiety.

What are the three essential friends the speaker mentions, and why are they important?

The three essential friends mentioned are a doctor, a lawyer, and a personal finance professional. They are important because the doctor protects health, the lawyer protects assets, and the personal finance professional protects lifestyle, which is crucial for maintaining a fulfilling life.

What is the 'vuka' world the speaker refers to, and why is it significant?

The 'vuka' world stands for volatility, uncertainty, complexity, and ambiguity. It is significant because it describes the current global situation, which is unpredictable and challenging, making professional financial advice even more crucial.

Why might someone not need a personal finance professional according to the speaker?

According to the speaker, someone might not need a personal finance professional if they have a 'crystal ball' (predict the future), think they are special (immune to laws and risks), or always want to follow a benchmark (stretch their personal risk to match a standard).

What is the best approach to working with a personal finance professional, as suggested by the speaker?

The best approach, as suggested by the speaker, is to view the relationship as a 50/50 partnership. The individual should take responsibility for their own financial behavior and expectations, while the professional provides guidance and support.