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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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One Idiot

Posted by Muthu on October 25, 2012

Do you remember Amole Gupte? He is the creative director and writer of ‘Taare Zameen Par’ (TZP). He is originally the director of the movie and it’s said that Aamir Khan later put his name as ‘Director’ and made Amol as ‘Creative Director’. You can Google and see the details. Amol’s version is more convincing to me. Though Aamir is an excellent artist, I feel he is manipulative, chest beating and always project one man ship, even though a movie is a very big team work.

Remember Amair not giving credit to ‘Chetan Bhagat’ for story line of 3 idiots? All is not well:-) 

Amol Gupte also proved himself very well in his second film ‘Stanley ka Dabba’. This movie convinced that TZP would have been his baby and not Aamir’s. 

Well why I’m saying these? Amole Gupte has directed a film called ‘One Idiot’. This is produced by IDFC Foundation, a not for profit organization. This movie would not be commercially screened but would be screened in colleges across 30 cities, some time early next year. 

I had the opportunity to see this 32 minute film. This is purely meant for young adults or college goers about managing money. Amole says “There was this man in our neighborhood in ankle-length trousers, torn hawaii chappals who would pass by every day carrying a green plastic jhola. We all used to think he was a clown. But finally he turned out to be the owner of a 5-crore rupee accumulated savings which he used to give his three daughters the best education possible.

We pointlessly give too much attention to consumerism. We spend needlessly to look more affluent than we are. If we are caught saving we are somehow not part of the ‘in’ crowd. My film is a morality tale based on the 5,000-year old principle of ‘jitni chaadar utni pair phelana’ (stretch your legs only as much as the blanket allows). Somewhere we squander money for the sake of being trendy.

It’s a film on the theme of financial management. When we are young, we know nothing about how to manage our money, and when we see people who are careful with their money, we laugh at them.”

It is not a documentary film. I found it humorous and interesting. Even there are songs! For a 30 minute film, it has enough substance and conveys well the importance of saving, investing, not being a hard core worshipper of consumption, not having debt, asset allocation, couple of Warren Buffett sayings, how people who look rich need not be rich etc. I enjoyed the movie.

The ‘idiot’ wears a T-Shirt containing words ‘Success means never having to wear a suit’. I loved it because I hate wearing suits and ties:-)The maximum ‘formal’ I would prefer is a full sleeve shirt tucked inside the pant with a decent shoe. If you’ve seen me, I normally don’t even tuck the shirt and reserves it for occasions:-) 

Since IDFC mutual fund and IDFC Foundation are both part of IDFC group, I feel IDFC MF can make CDs of this movie and send it to all their investors. That would be really nice. I’ve shared this suggestion with IDFC MF team in Chennai. 

Since I happened to talk about a movie, I also want to share with you that some time ago I was invited for a talk by Boman Irani. You may know him through 3 idiots and Munnabhai series, if not other movies. I did not have much expectation from the session and hence was pleasantly surprised. His father died when he was young and he had the company of his mother and other women relatives. He had no men in the extended family to guide him.

As a child, he had Dyslexia and speech problem. He was denied school admission initially due to the same. He worked in a bakery, ran a chips (wafers) shop which led to loss and then worked as a waiter in Taj. He had a passion for photography, saved money to buy a camera and learnt it on his own. Photography led him to theatre (drama) and subsequently to cinema. He shared lot of interesting information and if you get an opportunity, please do hear him. His only concern is acting as a father to the beautiful girls instead of as a hero:-)  He felt sorry that he is able to get only Farah Khan as his pair:-)

There is an annual knowledge summit organized for advisors in Chennai. People from many parts of the country participate in the same. As always, I enjoyed the whole day, listening to speeches, interacting with other professionals and even participated in a quiz. Our team even won the quiz; never expected:-) 

The speech I liked most was by Huzaifa Husain, head of equities, PineBridge Investments. I share below my understanding of what he said.

Between 2000 to 2008, our GDP grew at 7.1% per annum . In the same period consumption grew at 6.2%, investment @ 11.5% and inflation @ 5.2%. The excess of import over export during the above period was 2.8% of GDP.

During the last 4 years, 2008 to 2012, the (average) GDP has still grown by the same 7.1%. What has changed is consumption also grew up by 7.1%, investment growth slowed to 5.8%. When growth rate of consumption is more than the investment, the result would be inflation. So the average inflation rose to 7.6%. The excess of import over export increased to whopping 6.9% of GDP.

The cycle is turning around and over medium term investments would again rise more than consumption. This would automatically lead to lesser inflation which may be followed by interest rate cuts, leading to a virtuous cycle. He gave many pointers as to why we may have a sustainable market rally in the years to come. I was happy to hear this as I’m always confident about the structural growth of Indian economy and markets in the long run, of course with bull and bear cycles and ups and down.

Credit Suisse has published recently its ‘Global wealth report 2012’. It’s a 64 page interesting report and is available here. I’ve given below some of the data points from the above report converting a USD @ Rs.50 for ease of calculation.

For the entire world:

If your wealth is Rs.1.85 lakhs+, you are in top 50% of the population

Rs35.5 lakhs- top 10% of the population

Rs.3.55 crore- top 1% of the population

Top 10% of the population owns 86% of the world’s wealth. And if we take top 1%, they own almost half of the world’s wealth. The lower 50% of the population only owns 1% of the wealth.

India has 3.7 million people who are among the top 10% of the world population. In other words only 0.3% of our population who belongs to this category.  2.37 lakh people or 0.01% of Indians belong to top 1% global wealth category.

HNI is defined as someone whose wealth range is between Rs.5 crore to Rs.50 crore. There are 28.5 million HNIs in the world, which is 0.4% of the population. Ultra HNIs are the one who has wealth of more than Rs.50 crore. There are 84,500 such people in our planet, which is 0.001% of the population.

There are 1.58 lakh dollar millionaires (Rs.5 crore) in India.  

The average wealth of India is Rs.2.65 lakhs per person. Let us see how average can be misleading. 95% of Indians has wealth below Rs.5 lakhs. 0.3% (2.3 million people) has wealth of more than Rs.50 lakhs. There are 1.58 lakh people, or just 0.01% who have more than Rs.5 crore. 

None of us have net worth lesser than Rs.5 lakhs. This means we are already in the top 5% of the country’s population. Inequality is always there over the world and it is more so in India. A good number of us would be in 0.3%, net worth more than Rs.50 lakhs. Whether we relish it or not, we are the ‘elite’ of this country. 

Being lucky enough to be in top 5% of the population, we need not be anxious about money. All of us have aspirations and desires. Quality education, healthcare and other things are unfortunately accessible mostly for the top 1% of the people. That’s why we all aspire to be there. So nothing wrong about aspirations, planning for future etc. But we always need to remember we are much better of in our country and would also be part of top 10% of the world population .God or Luck or Randomness is responsible for this. 

Vedu did some thing 2 days ago which made me very depressed. A one year old girl came to our home on the Saraswathi Pooja day. She gave a nice kiss to Vedu on his cheek. I expected Vedu to give back more than one kiss to the girl. Instead he started crying profusely which scared the girl. I would not have worried about his education, employment, money etc. but this act of his is not in line with our lineage or family honour:-) I hope to recover from this shock in the next few days:-)

6 Responses to “One Idiot”

  1. Vikas said

    very nice post as always!!

  2. It is nice that the film is being screened for students in particular.
    It is better to catch them young than allow them to become adults driven by consumerism.
    Though frugality is looked down upon, it is what actually makes sense in the long run.
    We hope that ‘One Idiot’ is screened in normal theater/multiplexes and multiplexes as well.

  3. Usha said

    Excellent article. We all need to take a deep breath and get some perspective on our lives. Thank you Muthu!

  4. Kathiresan said

    Thank you Muthu for the well written article with clear thoughts.Appreciate it.

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