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The best financial advice I ever got

January 8, 2008

There’s more to financial success than buying a hot stock, a good fund or prime property. Does that sound odd in a personal finance magazine? But consider this: some of the most financially successful people aren’t necessarily financial wizards.

Their claim to fame, and wealth, lies in what they do best—business, sports, entertainment, politics…. If the country’s rich and powerful don’t spend their time chasing the best performing funds or the hottest stocks, how did they create their wealth?

In association with India Today, we asked a selection of celebrities in every field what guided them to success. In almost all cases, we found that it was advice given to them that made or changed the course of their lives and careers, and, therefore, their finances.

Even if the advice was not purely financial, it helped them achieve financial success. In fact, not one of those we spoke to named an investment idea as the best advice they got.

Instead, they spoke of simple strategies, attitudes and philosophies that we wouldn’t normally associate with money matters. And in this simplicity lies the profundity of the ideas.

In fact, some of the advice might seem too simple, almost simplistic. But the beauty lies in how this advice was acted upon. Another insight we got was that an overwhelming amount of advice was career-oriented. But for more on that, turn the page to start learning from real-life success stories.

Shah Rukh Khan

Don’t cut expenses; earn more

Shah Rukh Khan, Actor

My mother was a positive thinker with a unique perspective on life. She told me never to waste time thinking about cutting back expenses.

The time and energy spent on plugging holes could be more constructively used in trying to increase income. This thought has always stayed with me. And I have found the advice bears results. Another piece of wisdom I hold dear is from one of my oldest friends Viveck Vaswani.

He told me: “When you start acting, don't go by what films you want to be in because you won't have much choice. First, become a star and then fulfil your artistic and storytelling instincts.” In short, as he said, you must deserve before you desire.

As told to Kaveree Bamzai

 

Balance ambition and realism

LN Mittal, Steel Tycoon

LN Mittal

Someone once told me: “Reach for the stars but always keep one foot on the ground.” It’s a piece of advice that’s more philosophical than merely practical in nature and hence can be applied to every sphere of life. I have tried to incorporate this philosophy in everything I do and these words have never failed me.

It is a fact that ambition can be overwhelming. While challenging yourself to reach the next peak, it can sometimes prove difficult to hold on to values such as integrity. It also might get difficult to stay in touch with reality.

This advice to keep one foot on the ground while reaching high has always kept me grounded, even when I was flying high. Success, whether it is in business or in investing, is really no reason to lose sight of reality.

As told to Shankkar Aiyar

Without risk there is no reward

V Anand, World Chess Champ

V Anand

There is never a shortage of advice, particularly when it comes to finance. Every other magazine and newspaper tells you how you can beat the markets.

But I feel that this is ultimately self defeating, because if everyone is following it, how can you benefit? Rather than general platitudes, I value advice that is more specific and tells you how to crack a problem.

For instance, people are always telling me that real estate is the investment that will yield rich returns. My father has been handling my Indian investments and tells me that stocks are the best investment.

I’ve concluded that stocks are the best way to beat inflation. One thing that emerges from most good financial advice is that you have to take risks to get good returns.

As told to Sharda Ugra

 

Invest in your career

Prasoon Joshi, AD Man, Lyricist

Prasoon Joshi

My father always told me that I should love life not money; money will come without you chasing it. Following his advice, I spend a lot of time in activities that would further my career and other interests. This has been very rewarding.

I believe that investments are essential. Going by my father’s advice, I invest in my profession, and I make money from that. I don’t think it’s a good idea to count when you are investing in yourself. You will certainly save if you calculate, but it’s not worth it in the end.

As told to Narayan Krishnamurthy

 

Don’t neglect your key skills

Karan Johar, Filmmaker

Karan Johar

Money was never really a big thing for me, until I lost my father in 2004. Several things changed then. My closest friend, Apurva Mehta, became my CEO and he told me to play the stock market like my father used to—he said it would be all right as long as I didn’t become bullish about it.

Shah Rukh Khan told me that I had better start leveraging my brand and that I should not be embarrassed about being paid for certain endorsements and appearances.

And then, Aditya Chopra sat me down one day and drew a diagram for me, saying there were three aspects to my life, which I should compartmentalise: I was a filmmaker, a creative producer and a brand up for endorsement.

But I should never do anything to compromise the master brand because everything else is dependent on my making films. Finally, there’s my mother, who constantly advises me to invest in property, which I tell her I will do once I have the money!

As told to Kaveree Bamzai

You don’t have to be an industrialist

Rahul Bajaj, Chairman, Bajaj Auto

Rahul Bajaj

One evening when I was 16, my father sat with me for a post-dinner conversation. He said that according to Indian tradition, when a son turns 16, the father should start treating him as a friend.

And so, he was speaking to me both as father and as friend. He made it very clear that though I was born in a business family, there was no compulsion for me to take on the reins later.

I was free to pursue whatever career my heart desired. I specifically remember him telling me that it was absolutely fine if I wanted to be a tennis player or a mountaineer. But, he added, I must always aim at being the best.

There should be no compromise on this. If I chose tennis, I should aim at winning at Wimbledon, or if I climbed mountains, I should aim to climb Mount Everest.

Even if I wanted to be a cook, he said, there was no harm in it as long as I aimed to become a top chef. It was my choice to stay with the family business. But his emphasis on excellence has always inspired me to push boundaries.

As told to Shankkar Aiyar

 

Know when to give up support

Alok Kejriwal, CEO, contests2win.com

Alok Kejriwal

Our start-up was in its second year when the dotcom bubble burst in 2001. I decided to ask our venture capitalists, ICICI Ventures, for more funds. Renuka Ramnath, the CEO of ICICI Ventures, patiently heard me out.

When I was done, she said something that changed the way I thought about business. She said that at some stage, every child has to learn to walk on its own. At first, it may stumble, fall and hurt itself. But it learns an important lesson—self-sufficiency.

With that, Ramnath refused to finance us any more. But her words inspired me to look for finance the way real businesses do. From then on we not only became profitable but also created three new companies.

As told to Shankkar Aiyar

 

Security is in excellence, not in the job

Javed Akhtar, Poet

Javed Akhtar

I have often narrated this incident when asked to speak in schools and colleges. The best professional advice I ever got was when I was 15 years old. I had just completed my schooling from Aligarh when my father took me to visit his friend, Khwaja Ahmed Farooqi, in Delhi.

He took us out for lunch and asked me, “What do you want to do in future?” Now at 15, you think you can do anything and everything, so I gave him five or six alternatives. He then suggested that I should become a grass cutter.

I was naturally somewhat startled by this piece of advice but he went on to say: “But only on condition that you become the best grass cutter in the world. So, if the President of India wants the Rashtrapati Bhavan lawns to be trimmed, you should be the one person he thinks of.”

He then said something which I will always remember: “Koi kaam mamuli nahin hota, kaam karnewallah mamuli hota hai (no work or job is small; it is only the worker who may be small).” Success is ultimately not in the job itself; it is in how well you do your job.

As told to Kaveree Bamzai

Look after cricket, money will look after itself

Rahul Dravid, Cricketer

Rahul Dravid

It was my international debut. Advice and suggestions poured in but the one piece of advice that I still remember has nothing to do with cricketing techniques. A senior teammate told me to look after my cricket and the money would look after itself. This advice worked.

After so many years in the game, I can say the same with conviction. In fact, this is the advice that I pass on to younger players: think about your game and the money will come.

When players wonder if they should do some additional business, I tell them cricket is the best business. The satisfaction you get from playing well compares to little else, and you get paid well too.

As told to Sharda Ugra

 

Be content with enough. And ‘enough’ is what you have

Arun Shourie, Member of Parliament

Arun Shourie

The best advice I got with regard to money was from my wife Anita, soon after we got married. She said, “We must learn to be content with enough. And ‘enough’ is whatever we have at the time.” In terms of specific investments, land has been the most lucrative bet of all.

The appreciation in real estate has given us some great returns. However, it is a little difficult to sell property, especially at short notice. Agents will always tell you of missed opportunities. If you are out to buy, property prices have ostensibly shot up. If you are out to sell, the market has just gone dry.

Of all the advice I received about my career, one has stuck in my mind is: someone once told me, “Don’t change your job every five years. Instead, change your profession.”

As told to Rohit Saran

 

Know your subject before hiring an expert

N Karthikeyan, Formula 1 Driver

N Karthikeyan

When I started out as a racing driver, there was a deluge of offers from agents who wanted to represent me and manage my career. I was still in my teens and terribly excited.

But my father stopped me from signing up anyone. His logic was simple—be your own man first. He wanted me to understand the ins and outs of the racing business before I entrusted someone with the responsibility of managing my career in this field.

This knowledge would ensure that I had a control over my career path and was not dependent on others’ opinions. Following this advice, it was after 10 years in racing that I finally took on an agent. By that time I really did know my way around.

As told to Sharda Ugra

Acquire dual skills

Suresh Prabhu, Member of Parliament

Suresh Prabhu

I was all set to join a law school after I graduated. My father thought I should meet one of his friends and get some informal advice from him. The friend suggested that instead of law, I should consider studying chartered accountancy.

His rationale was that this would give me a dual skill-set: I would learn accounting as well as gain some knowledge of the laws related to this field. His foresight was remarkable. I followed his advice and had a successful practice as a chartered accountant for over 20 years before joining politics in 1996.

As told to Rohit Saran

 

Get out of ‘comfort zones’ and explore

Kalpana Morparia, JMD, ICICI Bank

Kalpana Morparia

For years, I had been working in the treasury unit of ICICI. I am a lawyer and it was what is popularly called my “line of work”. The job was challenging and I was good at it.

Needless to say, I was very comfortable with my work profile. In 1995, KV Kamath joined the ICICI board as non-executive director (before taking over as CEO in 1996). In one of the meetings I had with him, I made a strategy presentation in which I said that the biggest challenge for ICICI (in those high-interest and low-liquidity days) would be funding growth.

Kamath was impressed. When we were considering people who could head the treasury, he suggested I take up the job. I spent nights thinking of reasons why I didn’t fit the bill but he convinced me.

In fact, he told me that he did not want too many lawyers and that if I wanted to be counted, it was time I looked beyond. It was a risky move for me. Looking back, however, it was the best advice I got. Had it not been for Kamath, I would never have realised there were other things that I was interested in and could do well.

As told to Shankkar Aiyar

 

Share wealth with others

Captain Gopinath, V-C, Kingfisher Airlines

Captain Gopinath

Observing Narayana Murthy conduct business is a learning experience in itself. He once told me that a public limited company is a trustee of public wealth and we must value their contribution.

Protecting people’s interests should come before personal wealth accumulation. I have tried to incorporate his advice in my company.

As told to Narayan Krishnamurthy

Build assets, then indulge

Krishnamurthy Vijayan, CEO, JP Morgan AMC, India

Krishnamurthy Vijayan

It was 1988. I was planning to buy a car—my first big purchase. Like all youngsters, I was extremely excited about it. But my mentor, KG Vassal, retired executive director of UTI, was against it. He advised me to take a loan and buy a house instead of spending on a car.

Of course, at that time, I could only afford a property in some remote place. However, he insisted that it would be very rewarding in the long run. When I did buy a house years later, I remembered his advice.

The value of that property has appreciated remarkably and is my best investment till date. I think everyone should concentrate on building wealth first. Other expenditure should not be priority.

As told to Rajshree Kukreti

 

Leap before you look

Jairam Ramesh, Minister of State for Commerce

Jairam Ramesh

Some of the most important decisions in life are better taken instinctively and not after deep analysis. Once you start deliberating, it becomes extremely difficult to reach a definite conclusion.

In 1979, when I was working at the World Bank in Washington DC, Lovraj Kumar [an IAS officer] advised me to come back to India. He actually wanted me to join him as a consultant in the Bureau of Industrial Costs and Prices.

Relying on instinct, I decided to return to India and agreed to start working with him from 1 January 1980. I was all of 25 years old and had absolutely no idea of what was in store for me in Delhi.

Today, I cannot even remember what exactly prompted my decision. But instinct won that day. The rest, as they say, is history.

As told to Rohit Saran

 

Invest for the long term

Ajay Bagga, CEO, Lotus India AMC

Ajay Bagga

Be patient and invest for the long term. This is the advice that I have got from many people, and I pass this on today to others. The advice has proved its worth over time. I have picked up investment nuggets from books. Yet, this simple advice is, I think, the best I have ever got.

As told to Narayan Krishnamurthy

Fight for justice

Rajeev Chandrasekhar, CEO, Jupiter Capital

Rajeev Chandrasekhar

A political leader once told me that one has to always fight for justice. The advice triggered my fight against the government’s wireless in local loop (WLL) policy in 2000.

Despite the trauma of fighting the system, I never regretted the decision. The experience taught me that the tainted Indian “system” still had people who believed in values like honesty and integrity.

At one point, I came across a quote by singer Bono: “We have to follow through on our ideals or we betray something at the heart of who we are. The culture of idealism is under siege.” This further boosted my spirits and I have never looked back since.

As told to Shankkar Aiyar

 

Create a family trust

Kishore Biyani, MD, Pantaloon Retail

Kishore Biyani

One of the best pieces of advice I ever received was to create a family trust. In fact, this topic came up in several discussions with family and friends. The rationale I was given was that setting up a trust would separate my family’s finances from that of my company.

This would also protect the interests of both. I went ahead with this advice and am extremely satisfied with the results.

As told to Kamya Jaiswal

 

Work hard— results will follow

Jeev Milkha Singh, Golfer

Jeev Milkha Singh

It was during my days as a young golfer that I got the best advice in my life. Doug Sanders, a senior player at the PGA Tour had helped me get a scholarship to the US. When I started out, he told me to keep working hard and the results would automatically follow.

His words were a reinforcement of the values I was brought up with—of discipline and hard work.

As told to Sharda Ugra

Know the route to success

Rajiv Rattan, Co-Founder, Indiabulls

Rajiv Rattan

Sometimes, you don’t realise the importance of specific advice until many years later. I was studying in Motilal Nehru School of Sports in Haryana. It focused more on extra-curricular activities than on academics. When I was in class VIII, a teacher suggested that I join the Indian Institute of Technology (IIT).

From that point, it became my dream to join IIT. Someone who heard about my ambition advised me then to switch schools. He suggested that after I completed class X, I would do well to shift to Delhi Public School in RK Puram, Delhi. I was comfortable in my school, so moving was a difficult decision.

But, as it turned out, it was a good move. Had I continued studying there, it would have been extremely difficult to make it to IIT. As things worked out, I graduated from IIT and got a job with Schlumberger.

They paid very well and it was while working there that I managed to save enough for the seed capital of Indiabulls. So, as you see, the advice to switch schools had a chain reaction.

As told to Shankkar Aiyar

 

You can’t bypass the test of marketplace

RK Pachauri, Director-General, TERI

RK Pachauri

Marketing guru Peter Drucker had said that the best management in a non-profit organisation is better than the best management in a corporate firm. He gives several reasons to explain this theory: a higher number of stakeholders, non-stereotypical problems, and so on that an NGO faces.

I consider Drucker’s views as important advice. It identifies many of the challenges I face in The Energy and Resources Institute (Teri) and before that when I was with the Administrative Staff College (ASC) in Hyderabad.

One of the key challenges in running a not-for-profit organisation is sustaining its success. The ASC, when I was there, grew very fast but revenues could not keep pace.

Consequently, the college had to sell some of its property to raise money. To me, this demonstrates the fact that the biggest test of sustainability is the test of the marketplace.

For an idea to succeed it must be able to hold its own in the market. Fortunately, we are living at a time when it is not really difficult to find market acceptance for a good idea, which was not the case in the past. In fact, this is as true for companies as it is for not-for-profit organisations.

As told to Rohit Saran

 

Learning is more important than earning in your first job

Raman Roy, Venture Capitalist

Raman Roy

After completing my chartered accountancy, I received four job offers. Unsure about which one to take up, I approached my mentor, Vinod Mehta, a chartered accountant, for advice.

Surprisingly, he picked AF Ferguson, the company that offered the lowest pay. He explained that my learning should not stop with my degree and that I ought to choose a company that offered the maximum scope for enhancing my knowledge.

My experience in AF Ferguson turned out to be exactly as Mehta had predicted. In four years, I learnt many practical aspects of my profession.

A rewarding career needs a solid foundation and Mehta’s advice gave me just that. Another valuable piece of advice was from my boss at American Express, Anuroop (Tony) Singh. He wanted me to take on the operations division of the bank but I was wedded to my accounting skills.

Singh told me that accounting was my chief ability but I should expand my skill sets. I followed his advice and found the addons especially useful when setting up BPO units for various companies and also my own.

As told to Rajshree Kukreti

Start Small

Shahnaz Husain, Cosmetologist

Shahnaz Husain

I am a first-generation entrepreneur. When I was planning the venture, my father advised me to start small. He cautioned against taking loans that would take many years to repay.

His strategy was to earn and invest the profits to expand the business. I followed his advice to the T. My first salon was the verandah of my own house. I borrowed only Rs 35,000 from my father for setting it up.

For advertising, I relied on word of mouth. Later, my clinic became the outlet for my products. In fact, I built my range of products based on customer feedback.

As told to Sushmita Choudhury

 

Go by your strength, not just by interest

Bakul Dholakia, Director, IIM-A

Bakul Dholakia

When I was in high school, I was adamant about studying medicine. However, my parents disagreed. They thought my acumen lay in economics and mathematics. I always scored well in these subjects and they advised me to make a career in either field.

Of course, I disagreed, and we argued a lot but their logic finally won. I took up arts for higher studies. There were times that I felt bad that I could not study abroad because of my choice of subject.

However, today, I have no regrets. I am happy with my choice of career, which has shaped up very well. There is absolutely no scope for complaint.

As told to Rakesh Rai

 

Make films that you enjoy

Madhur Bhandarkar, Filmmaker

Madhur Bhandarkar

It was 2006. I was shooting my film Corporate but my mind was torn between making commercial films that pay very well and films I believe in like Chandni Bar and Page 3. Almost everybody advised me to go commercial with a vengeance.

Around this time, I met BJP leader Pramod Mahajan, on a Delhi-Mumbai flight. He was a good friend and a keen Bollywood enthusiast who had seen all my films. Mahajan told me that I had a select audience and must follow my heart to make films I enjoy.

Come to think of it, the advice was simple but I had to hear it from someone I held in such high esteem. Setting aside all doubts, I made Corporate with complete conviction. My only regret is that Mahajan passed away before he could see the movie.

As told to Sandeep Unnithan

In business, all parties must succeed

Vijay Amritraj, Former Tennis Player

Vijay Amritraj

There is no specific advice that made a big difference to my life. My no-nonsense upbringing has much to do with that. However, someone once shared a business philosophy with me that proved to be invaluable— in business, there is no victory unless all parties come away feeling like they have won.

I have followed this and my experience now endorses this outlook. I also received some wise advice in the field of money management, when I was advised to always try and save up to 25% of my income.

As told to Sharda Ugra

 

Borrow within your means

Vimal Bhandari, Country Head, AEGON

Vimal Bhandari

Early in my career, I was very keen on buying an apartment. That meant taking a substantial loan. It didn’t worry me much but my father cautioned me against a possible debt trap. He advised me to limit the housing loan to eight times my annual income.

Expected salary increments were not included in the calculation. This would ensure that I repaid the debt in 10-12 years. Since then, I religiously follow these rules for borrowing and have so far successfully avoided piling up unnecessary debts.

As told to Shankkar Aiyar

 

Be financially independent

Milind Deora, Member of Parliament

Milind Deora

Nothing is as important as standing on your own feet. All through my student years, my father hammered this in. So even though he wanted me to join politics, I had to study business management to join our family business.

In retrospect, it was the best advice I ever got. Financial independence gives you great flexibility. However, I sometimes regret not following my mother’s advice of staying away from politics!

As told to Priya Sahgal


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