Let's talk money | Monika Halan | TEDxHinduCollege | Monika Halan | TEDxHinduCollege

Summary

In 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

• 💼 The speaker emphasizes the importance of financial stability and wealth, advocating for a long-term approach to building wealth rather than seeking quick riches.
• 🚫 A warning is issued against socialism, equating it with a 'distribution of poverty' and advising caution against such ideologies.
• 💰 The speaker counters the notion that money is inherently bad, arguing that it can be used for good when earned and spent responsibly.
• 🌱 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.
• 📈 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.
• 💡 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.
• 🏦 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.
• 📉 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.
• 💬 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.
• 🌐 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

00:00

💰 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.

05:00

📈 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.

10:00

🚀 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.

Keywords

💡Wealth

Wealth refers to the abundance of valuable resources or material possessions, which can include money, assets, and property. In the video, wealth is discussed as a positive goal to strive for, emphasizing that it can provide education, healthcare, and a better life. The speaker argues against the negative connotations often associated with wealth and encourages the audience to pursue it legally and responsibly.

💡Socialism

Socialism is an economic and political system where the means of production are owned and controlled by the state or the community as a whole. The speaker warns against socialism, citing their personal experience in 1970s India, where they argue that it led to a 'distribution of poverty' and a poverty mindset. The term is used to contrast with the potential for wealth creation in a capitalist system.

💡Risk Aversion

Risk aversion describes the behavior of individuals who prefer to avoid taking risks, especially in financial matters. The speaker mentions that many people are risk-averse when it comes to investing in the stock market, which they argue is a hindrance to long-term wealth creation. The video encourages embracing calculated risks as part of a long-term investment strategy.

💡Equity Market

The equity market, also known as the stock market, is where shares of stock in publicly traded companies are issued and traded. The speaker advocates for long-term investment in the equity market as a means to build wealth, contrasting it with short-term speculative investments like day trading and options trading.

💡Index Funds

Index funds are a type of mutual fund with a portfolio constructed to match or track the components of a financial market index, such as the S&P 500 or the Sensex in India. The speaker suggests index funds as a safe and effective way to invest in the equity market for long-term wealth creation, citing the example of 'India's unluckiest investor' who still saw growth through consistent investment in index funds.

💡Financial Stability

Financial stability refers to a state where an individual or a system has sufficient resources to manage financial obligations and absorb economic shocks without significant hardship. The video emphasizes building financial stability as a long-term goal, which is achieved through careful saving, investing, and financial planning.

💡Emergency Fund

An emergency fund is a reserve of cash set aside to cover unexpected expenses, such as medical bills or car repairs. The speaker advises building an emergency fund as a 'second seat belt' in financial planning, to provide a safety net during times of market volatility or personal financial crises.

💡Insurance

Insurance is a risk management tool used to hedge against potential losses. The speaker mentions medical and life insurance as essential financial products to protect against the financial impact of health emergencies or the death of a primary breadwinner, respectively.

💡Investing Horizon

The investing horizon refers to the length of time an investor plans to hold an investment before selling it. The speaker discusses the importance of having a long-term investing horizon, using a 30-year period as an example to illustrate the power of compound growth in the equity market.

💡Economic Growth

Economic growth is the increase in the production of goods and services in an economy over a period of time. The video connects economic growth to the potential for wealth creation, arguing that as the Indian economy grows, the profits of companies will be reflected in the stock market, providing opportunities for investors to grow their wealth.

💡Systematic Regular Investing

Systematic regular investing, also known as dollar-cost averaging, is an investment strategy where a fixed amount is invested in a particular security at regular intervals, regardless of the price. The speaker recommends this approach as a way to mitigate the effects of market volatility and to consistently invest in the India growth story.

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