Sadly this goes to the pocket of the guys collecting it and not to the authorities. I have no comments to offer, but looks like goondas, corrupt officials, and the government all seem to agree that the tax rates should be 30% of Income. Frankly most people I meet end up paying this amount – willingly or unwillingly. Even a businessman who cheats on Income tax has to pay service tax on his mobile bills, securities transaction tax on his equity dealings (thanks to Pranab da now he will start cheating on his cap gains, LOL).

This brings us to the question why people do not like to pay tax. I think people want to be sure that the money gets used well. Does it happen, well no. Recently an engineer of Kalyan Dombivili Municipal Corporation (KDMC) Mr. Sunil Joshi was arrested. He has a salary of Rs. 49,000 per month. Not bad. He was arrested taking a bribe and there was a raid on his house. They found a 5000 sq ft. house (worth Rs. 2 crores, 3 cars worth Rs. 40 lakhs, Jacuzzi, 7 plasma television sets, gold jewellery….the people making the inventory got tired .

He must have of course tried bribing them…but nothing has happened. This reminds me I know of a customs ware-house in-charge (he makes and holds inventory of confiscated goods) who has 2-3 houses in one Mumbai suburb .

Surely these people were paying income tax on their salary – it it not paying taxes on the bribes that people are angry about

Wockhardt and then Emaar had withdrawn their IPOs. Withdrawn was a joke. The public did not buy them, therefore the issue had gone back. What was the learning? Even a rising market nobody, really nobody has any interest in saying that the issue is overpriced and the end customer should not subscribe. A greedy promoter supported by a greedier merchant banker, and then a bunch of bankers, brokers, etc. try to palm of all issues by using the most dangerous market terminology – “this time it is different”. What about the press? The less said the better. No press report spoke about NTPC vs. Reliance Power in pricing! NTPC has actually built the capacity. In case of Reliance we are hoping that the company will build it. Then commission it. Then earn money.

Then the press was full of stories about Emaar being pricey, Wockhardt being far more expensive than Apollo Hospitals! You needed THESE articles BEFORE the issue hits the market.

Ok all this happened a few months ago – approximately 24…this was just to remind you what happened. However now there is an action replay – the government picks the phone and asks SBI and LIC to pick up the NTPC issue. They oblige. No press comments, no merchant banker cribbing (he would have pocketed the fees), brokers still calling up ‘Sir United Bank of India is not an FPO, so pricing is fair, I am told. Fantastic. New IPOs coming, power sector will boom, ..all over optimistic predictions. One big banker was telling me how NTPC was a great buy now – and the price will touch Rs. 300 in a year and Rs. 500 in 2014. I have no clue whatsoever.

What about the Merchant bankers? Enam, Kotak, Goldman Sachs, Morgan Stanley, Merrill Lynch -surely none of them know valuation. Or they do a valuation which is different for their own hi end PMS clients and a different valuation for the masses. Choose your pick.

One merchant banker admitted that Maruti issue would never have come at Rs. 125 if the merchant banker knew it could sell for 1250! That is the truth. The market has acted as it should – prices rise and prices fall. You have to act sanely.

Yesterday a friend pointed out an interview of Mr. Azim Premji in Economic Times.

One quote was: “Subhiksha was unfortunate. I think it is a retail equivalent of Satyam. I think the media has completely ignored it, its a very interesting minefield for you. It is an out and out fraud, there is no question on it. The Company Law Board is investigating it. There was an overstatement of accounts, fake inventory, fake bills, fake companies that money was transferred to. At the time of investment that was not visible to us.”

Very strong statement from a very trustworthy man. However he did not say what conversation he has had with ICICI – and how he does not hold them culpable. And to think this is a ‘Qualified Professional’ who did it.

One venture capital CEO told me ‘Subhiksha is run by a very intelligent man. Sad he is too intelligent for me to deal with him. He scares me.’ And this was not a compliment.

However Mr. Premji may have come across such a company for the first time in his life. If his managers had done a due diligence…..a lot of this was visible. Just that Subhiksha got away with it so long.

About 23 years ago a clients driver hit somebody on the road – and the person eventually died. The lawyer advised him not to go anywhere near the hospital to inquire about the patient. The lawyer found out that nobody had claimed the body – and was disposed off by the Municipal authorities. Nothing happened.

You have heard of ‘Getting away with murder?’ I have seen it.

There are 2 sets of India – one which follows the rules. One which does not. Wipro belongs to the first lot. Subhiksha belongs to the second lot.

Recently I was doing some research on Tube Investments – they make steel tubes and other steel products like doors for Hyundai Santro and Nano. Of course their brand which is really famous is Hercules and BSA. Their most expensive cycles are in the region of Rs. 12000. Now this may sound high to a ‘doodhwala’ kind of an attitude towards cycling, but it is really at the bottom of the market. The middle and upper class which has taken to cycling is forced to look at bikes like Trek, Raleigh, Firefox, – and they are in the Rs. 25,000 range.

Reminds one of the Bajaj Auto family fight – where Rahul started making motorcycles just to keep Rajeev in the family business. Today Bajaj Auto is prospering because of motorcycles. There is in fact a M’knsy report on why Bajaj Auto should not make motorcycles. LOL.

It takes an upstart to teach an old foggy a new trick or two – a Nano (made by a company constantly reinventing itself – Locomotives, Trucks, Cars, worlds cheapest car, luxury car……Nirma teaching HUL, Hero Honda teaching Bajaj auto that there is a market for a HIGH end motorcycle priced upwards of Rs. 100,000.

Will Tube Investment start making alloy vehicles, aluminium cycles, disc brakes, and the like or will it be slowly ground to the ground?

The Murugappa group is normally proactive – they were the first to get out of the money sucking Mutual fund business. Surely they will get out of the equity brokerage and mutual fund distribution business soon (however these businesses do not bleed)…let us hope to see a Tube Investment 21 gear alloy body Mountain bike with disc brakes – at a price of Rs. 18000. Trek 4300 and 3700 can go for a ride!

If you belong to a category of people who mix personal relationships and business relationships, welcome to being an Indian! However there is a marked change happening – and there is no age group which is changing. Let me give you some examples.

I deal with a person who heads training in a Wealth management company. He replies to all my professional emails promptly. He engages me often, gives feedback, shares concerns, rarely talks about the rates I charge, and pays bills on time. No doubt he is a good customer.

However, HE NEVER replies to mails outside of training. Never. And nothing comes out that he will not. Have travelled with him on 2-3 ocassions from Kol to Mum – longish journeys. He is jovial, talks about a lot of things,….stumps me.

There is another person for whom I write – anything from copy for an ad to an article which a top executive in the BFSI space wants to ‘publish’ …you get the drift, do u not? Again this person reacts ONLY to professional mail. For example I have no clue whether this person has seen my book, leave alone read it.

Another CEO of a big bfsi company – reacts to all my sms’s but IGNORES all my emails. One more Director Finance of a huge corporate – replies to all my emails, ignores SMS.

One CEO promoter of a tech company – has ALWAYS reacted to emails within 4-6 hours of my mailing him. Once his secretary told me he is travelling. I recd. a reply in 1 hour (much before blackberry days!) – he had connected from Paris – at a stopover!!

One CEO of a media company even SMSed me in the midst of a concall…asking if it was urgent .

Amazing – does one worry about how people communicate? Does one feel ‘ignored’ if a sms or an email is not replied to? Does one go about saying ‘as long as he/she is engaging with me and paying on time, they are respecting me’ – very difficult to answer. Also Iam not using this as a forum for complaining. Just that different people communicate differently. Some people keep their business relationships diff from their personal relationships. Some do not.

To each is own, but for the young professional reading this, a simple lesson of life. Each person is an individual style of communicating – learn to respect that. Some like to do all business face to face. Some like email. Some like sms. Some like the telephone.

You have to like all communication media – and adapt to each person. In communication, sales, and generally in life, keeping your ego in a seperate box helps.

‘I was surprised that there was no book on Retirement in India till you wrote one’ – one doctor.

My answer: Not true. There have surely been attempts earlier, but you may not have been searching. There have been books by Gaurav Mashruwala, Outlook Money, Times of India, – at least 3 that I know of.

‘You should have included more about investments like trading, speculation, etc…one Engineer.

My answer: You are asking me to write a book on investing . I seem to have already missed some important ‘Retirement’ material. A book on investing will contain one chapter on investing, speculating and trading.

‘This is not like a book – it is like you are talking to me’ – 3 different people ! One is a classmate, one a 21 year old kid working in a media company, and one a 24 year old English Literature student trapped in a financial journalism job.

My answer: Thanks! Do not know what to say. Meeting so many people from different walks of life – entrepreneurs, senior executives, junior executives, men, women, boys, girls, children and talking about money should have had an effect on my writing, I guess!

‘The print, the font, the get up of the book is nice’ – a life insurance professional.

My answer: you should be thanking the publisher Cnbc (Bestsellers 18), Anusha Ramani, Bijal Shah, and their team. I have had no role to play.

It is too much like you are lecturing – a 44 year old insurance professional (with a negative tinge).

There are many chapters which I did not understand – a Software Engineer from Bangalore.

Sorry. I thought I had made it simple.

The tables are fine – but it should have been available on your website.

Me: Sorry, will try to incorporate.

The Christian community is quite conspicuous in its absence in the financial services field – especially in the investing areas like equity. They are largely in the bank deposits, company fixed deposits and in certain pockets in real estate. I had to reassure them that investing was not against the scriptures.

The first topic that needs to be considered is whether investing is or  is not scriptural as in many cases, the answer depends on the situation.

The question to ask is  ‘Why are you investing’?

Anyone investing because of
•    Greed (Luke 12:15),
•    To get rich quick (Proverbs 23:4-5),
•    Or to massage his ego (Proverbs 29:23)

Is not participating in biblically-based investing. Today whether you are a Christian or not, largely the sales person is selling to you on the basis of these three ‘appeals’. When a sales person tells you

“See you missed the opportunity of a 80% jump in the market – in the year 2009″ he/she is appealing to your a) Greed – will I get the same / similar kind of return in 2010 and going forward? and b) Fear – If I do not invest I will miss the opportunity to earn…such extraordinary returns.

When he/she tells you “Give me Rs. 500 a month for 2 years, and this scheme will give you Rs. 1000 a month for the rest of your life” they are appealing to your ‘Get rich quick’ mentality.

When the adviser tells you ‘Sir Subramoney is wrong. SIP works only in a rising (falling) market, SIP is not exciting. Also sir SIP is for poor people who can do Rs. 500 or Rs. 1000 investment per month. For rich people like you we are marketing a Venture Capital fund – sir the minimum amount is Rs. 50 lakhs – and you can invest in 3-4 instalments. You need to make it up to Rs. 50L in the next 3 months.Any way sir here is an invitation for a meeting at the Trident /Oberoi /Taj / Sahara Valley /…

Clearly they are massaging your ego.

If you succumb to any of these 3 sales pitches….well you are going against the scriptures!

This was slide number ONE…there are more slides, but am not promising the time frame in which I can write about this…

Here is my (completely unsolicited) advice to the people who meet Corporate India:

a. It may sound difficult, but do not laugh at their ‘Corporate Vision’, ‘Corporate Mission’ and words like ‘monetize the idea’, ‘creating cash’, ’some of our employees work from home’ , etc. It is a serious part of corporate India’s culture.

b. If you think Corporate India’s main aim is to create value for the shareholder, think again. There are corporate presentation which clearly are for fiefdom building, creating size, venture funding pressure, ‘hoping market cap will go up’ , building market share, India growth story,….etc. if you need to get work done from a presentation like this, do not scoff at them. If they are selling to you ask them to start from slide 22.

c. If you think you can sound wise because you are over 40, perish the thought. Their interpretation is simple: Your best is behind you.

d. If you are a rich dad and believe in having many ‘cash value assets’ you are fighting a generation which has been brought up on ’show-off assets’ so do not sound judgemental, if their view matters to you.

e. Going out for a smoke is old fashioned. ‘Cuppa Chai cutting’ is a much in as in as Latte – but the venue has changed from the Udupi to Barista that is all.

f. Do not be skeptical – companies are more optimistic than they were earlier. Look at the market capitalization game. The fund manager is optimistic, the entrepreneur is optimistic, the vendor, the employee, etc. are all optimistic. So do not go and crib about stickiness of the customer, profitability, cash flow,….it will all happen. So what if Keynes said “In the long run we are all dead”. Today long-term in any business is 3 years – by then the MD would have gone to a better job elsewhere…

g. Do not give unsolicited advice – it means nobody is paying for your advice anyway….ha cheap is bad syndrome !!

Get a good degree ——> It will lead to a great job—-> You will earn a lot of money —-> You have got rich.

This is one route. Well there are some issues – every body cannot get a good degree..so the scheme is torpedoed at the very beginning itself.

Set your goals, invest in a mutual fund, do a SIP in a good fund, review your portfolio every 3 months (monthly is bad you see), shift portfolios, churn managers, subscribe to the bank’s monthly magazine. We will tell you how to invest every month…and then sit back and relax. Well have you heard this before? I bet you have. It does not work, at least for most people this does not work.

If you ask me the most important step in getting rich is in getting a good financial planner. A guy or gal who is on your side. Fully on your side. This means a fee charging planner who does not sell the product – directly or indirectly. Such a person is difficult to find.

Once you find him ask him how much TIME he is willing to spend with you. And what fee does he charge. Too low is scary (how long will be here?), too high is not worth it (catch 22!).

Stick to simple things – low cost large funds in equity, a term plan, one credit card, that is all…after all like Leonardo Da Vinci said “Simplicity is the ultimate Sophistication”. KISS works here too….so if your Fin Planner suggests, Nifty linked debenture, PMS, F&O, commodities, …you know what to do, do you not?

Some of the things that he can do are the following:

1. Identify your REAL goals and hurdles in reaching them.

2. Convert the goals into challenges and make sure you are willing to put in the resources to achieve them

3. Identify your personality – some people think they have goals. However, they are only parroting what they have heard. Personally they are happy where they are.

4. Prioritize / Re arrange the goals along with the other stakeholders like spouse and children.

5. Explain the Crucial goals and non crucial goals – again with the other stakeholders

6. Save you time and research hassles while selecting products.

7. Suggest a solution which he is indifferent about where it is executed.

8. Be objective as a sounding board – assuming of course that he is conversant with all the products.

9. Help with the execution and the documentation of an investments – for a clerical fee NOT as a %age or size of the transaction.

10. Allow you to concentrate on your main business – and send you Quarterly / Six monthly reports and suggest action if necessary.

11. Effectively communicate money with the whole family.

……..more to come as time goes by