Talk, Walk & Walk the Talk

Posted on September 28, 2010 by Ranjan

Yesterday, I had the pleasure of meeting Mr. Parag Parikh, Chairman PPFAS, who has written a very interesting book called “Value Investing and Behavioral Finance” published by TMH.

The takeaway for me was the remark by Mr. Parikh that he regards what he does as a “Profession” and not just a “Business”. Most of the people who provide financial services see their work as a business where their own profit motive takes precedence over what their clients need and requirements.

It’s a significant (and often ignored)point to remember while I build my business as a profession where ethics and value systems are paramount.

In the process of building a business (err.. a profession) in the financial services vertical, I am juggling with various elements of what I can offer. I see the following components of my profession.

1. To start with, there is my blog and website to organize information on personal finance. I also have an e-learning module on personal finance.

2. The RupeeManager software that can help you track and manage your money. I am also building some spreadsheets that can help you with a DIY Financial Planning/Budgeting.

3. The advisory services where I provide actual solutions to your investment needs and insurance needs. This involves a gamut of services like retirement planning, tax planning, credit management, liquidity management, financial review, etc.

1 is “Talk”, 2 is “Walk” and 3 is “Walking the Talk”

Walk and Talk

Your thoughts are most welcome.

Coming Soon! RupeeCamp "Financial Planning Workshop". "Join us"

Welcome back! Join me on this journey to improving our financial IQ and sharing what we know. Updates at RSS feed or Email. And spread the word please Thank You!

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InvestorFirst: Be Aware, Be Prepared

Posted on September 4, 2010 by Ranjan

InvestorFirst, an initiative by NISM, is a cool, clean and useful site for financial literacy. And it’s live in Beta now.

There has been an ongoing debate among policymakers and academicians about the best way to provide financial awareness to the people at large. It is increasingly being felt that financially aware and capable citizens are crucial to a country’s long-term economic health. A population that chooses financial products well and stay informed about financial matters encourage healthy financial services markets. On a personal level the ability to manage our own financial affairs brings us freedom, increases our life choices and contributes to our psychological wellbeing. By building our own financial resilience, we contribute to that of our families, communities and society as a whole.

But getting unbiased information and resources on making financial decisions is not easy to get. That’s why a SEBI sponsored NISM’s effort in creating a website is a worthwhile one.

The website has been organized under
1. Investment Guides, where you can the basic concepts.
2. How tos, where you get practical info and demo.
3. Investor Protection, where you get info on how to get protection from fraud and mis-selling.
4. Resources, where you get useful tools, videos and calculators. and
5. Blog, where you can stay updated on the latest happenings.

The website looks cool. There are no advertisements and product pushes. They are also on Twitter @investor_first and they say that their priority is clear, “Investor First”. Looks like they’ll be happy to hear from you how to improve. Take their survey and it might help you with greater awareness about your own situation and how you can improve!

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There is no such thing as financial planning or advice; it’s all just salesmanship

Posted on August 2, 2010 by Ranjan

Dhirendra Kumar writes this on his website:

All financial planning and advice that is provided apparently gratis (but is actually paid for through commissions) is suspect.

I agree.

But this post is about asking the right questions. The point of the article was a lament that he’s not able to answer tons of questions posed on his TV show and his website. I have a problem with answering questions on a TV show or on a website.

On a TV show, you really don’t know the person behind the question. I mean that you need to understand the personal situation and background before you can attempt an answer.

In the one TV show that I watched, the questions were being asked just for the sake of asking. I suspect that the main reason was to be on TV!

I too get questions. While there are some great questions, there are questions like this one from 30 year old MBA Student on how to become a crorepati!! My three word answer was “Can’t help, Sorry”.

But my point is that if you need help, there are tons of ways to getting help. But it’s rarely from a TV Show or a website. It mostly starts with YOU.

You need to do a bit of research by reading around and asking powerful questions. Not just “How do I” questions but a question detailing your situation and also fucusing on the “Why’s” part of the question.

That brings me to an insightful post on asking the right questions:

Asking the right questions
Most people ask lousy questions that cripple their results. Lousy questions turn your focus away from what you want and towards more of what you don’t want. And since we ask and answer mental questions every day, our questions wield great power over our results.

One example of weak v/s strong question that is mentioned in the above post: When considering a dietary improvement

Weak: What foods am I going to have to give up? How am I going to deal with the deprivation? Am I going to have to eat like this forever?

Strong: What foods that I like will I get to eat more of? What new foods can I experiment with? Won’t it be great when I reach my goal weight? Won’t it be wonderful to finally master this area of my life once and for all? Once I succeed at this, who else can I help?

Exercise: What question would you ask for financial improvements (Instead of dietary improvements)?

Another excerpt from the above link:

Strong questions are empowering. They keep you focused on solutions, on what you can control. When you focus on what you can do, you avoid falling into analysis paralysis. Ultimately the way out of any negative situation is right thinking. Wrong thinking leads you in circles. Right thinking leads to action.

The right questions are not in lacs of numbers. There are few but powerful. For starters why don’t you check out the Frequently Asked Questions. And also check out this search engine as well as this ask engine. Thanks.

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Tapping Technology for Financial Literacy: My Interview with Joseph

Posted on July 31, 2010 by Ranjan

Joseph Jude has an interesting blog on Consultancy, Life and India. He asked me pretty interesting questions and has published my answers on his blog. Check the link below:

Technology is Powerful; But Its Not The Panacea – Says Ranjan Varma, a Personal Financial Expert

It feels good that Joseph calls it an interview. It feels odd because I am not really a big guy. Though I aspire to be one.

Thanks Joseph.

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Search Or Ask: India’s First Personal Finance Search & Ask Engine

Posted on July 27, 2010 by Ranjan

Technology is a powerful tool to build an environment of learning. And I am excited about building two simple sites on personal finance.

One, India’s first personal finance search engine

Two, India’s first personal finance ask engine

The search engine will search my own websites and blogs which now comprises of over 900 posts and articles.

If you have a question, you can visit this page. I will attempt to answer your question to the best of my ability.

Another site which I am building is the FAQ. It will consist of very direct answers to 6 compelling questions. How, Why, Where, Who, When and What.

I keep six honest serving-men
(They taught me all I knew);
Their names are What and Why and When
And How and Where and Who.
-Rudyard Kipling

I believe there are simple solutions to seemingly complex issues of personal finance. Examples:
1. Become Our Member

2. The 88% Solution

As always, I will be delighted to read your views via comment/email. Thanks.

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The Web, Laggard’s Lock And Our Financial Wellbeing

Posted on June 29, 2010 by Ranjan

While Man has stepped on the Moon, flies on supersonic jets, has built a Large Hadron Collider (LHC) to test the Big Bang theory, he still struggles with the simple affairs of Money. I often wonder why.

Being a web enthusiast, I also see the power of the web and it’s potential to make a huge difference in the way we manage our money.

For example, the web is a media with opens up infinite possibilities of interaction and networking. The web can bring down the information gap between the buyer and the seller. And I see the web evolving from just sending emails to a semantic web where we would be able to perform tasks automatically and locate related information by using intelligent systems.

So the question is, “How can the web help us with our money decisions?”. More importantly, “How can we innovate and use the latest technologies to change the way we manage our finances?”

To my mind, Blogs, websites are just an extension of the old media and is a small part of an innovation. There are three areas/problems that the web can solve. They are:
1. Information asymmetry.
2. Distribution Costs.
3. Product Development through crowd sourcing.

Before I discuss the three problems, it is important to be aware of the laggard’s lock.

Our mindsets do not keep pace with new technologies and we fail to use these new developments to their fullest, or optimum potential. We are trapped, and boxed in by the parameters set by our old way of thinking.

So we are using the web as an extension of the old media (Print/TV) by adding blogs, websites and videos that mostly mirror the thoughts of the old media.

The Information Gap:
There is a huge information asymmetry between the buyers and sellers of financial products. It was there with the old media and it’s the same even with the web.

It is true that there are some very informative blogs and websites but the readership of the most popular blog is not more than 5000 subscribers. The top money portals appear to me as ads-driven rather than focusing on content. These top sites are a play to get more advertising revenue and I don’t see them use the latest web technologies to narrow down the information gap.

I have limited technical expertise, but I see immense possibilities of using the latest developments in the web to bridge the information gap in the financial services industry.

The Distribution:
Any product comes with a distribution cost. And so does financial products. But these financial products have not to be transported or go through elaborate supply chains as they are intangible, paper products.

Isn’t there a huge possibility for cutting down on the distribution costs by doing business on the web? But the distribution cost of a financial product continues to be around 50-60% of the total expenses

The distribution cost includes the cost of giving advice. Imagine that you have decided on the financial product yourself and do not need any advice. Even then, you pay the same distribution costs as another uninformed guy who needs the advice. Can’t you be given the benefit of making an informed choice yourself? Presently, it’s not possible.

I see the possibility of a set of people joining together to negotiate a cheaper distribution costs for themselves. Maybe the web can be a starting point!

Product Development:
The web is a huge social network and the network is becoming more and more powerful these days with Twitter, Facebook, etc. Heard about Elgg today, a social networking engine where you can build your own social network.

Whatever questions you have, the web has the answer if you are intelligent enough to look for it at the right place. I’ll give you my own example. You can’t find a 42+ yr old guy, with no formal technical education and working with a PSU for 20 years, who has more knowledge about the web than me! It is because I have been asking questions in forums, twitter and other blogs and getting patient answers from professional and smart techies.

The reason for bragging about myself is that when I can learn so much sitting on the web and with zero cost (other than the time), financial services companies can do the same.

These companies can listen to the network, design polls and research studies that can capture the insights of the internet savvy people. They can learn more about their prospective customers and design products that suit this internet savvy profile.

I am convinced that these possibilities in the above three areas are real. It’s a matter of time. As right now, India is ranked 43 in the Network Readiness Index 2009-10 published by INSEAD & WEF. It is a measure of how we live and conduct business in a world that is interconnected. And we are on the move, from a 54th rank last year!

Do you think that the possibilities of bridging the information gap, lowering the distribution costs and designing products based on insights captured on the web are valid and real possibilities? Or they are just flights of fancies of my mind.

Would you like to member of a community that can negotiate with financial services companies for lower distribution costs? Or demand a product that suits the collective community profile?

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I am a Personal Finance Blogger to Watch Out For!

Posted on May 9, 2010 by Ranjan

Bindisha Sarang writes in Mint that it is still early days in India for money-linked blogs with a cult following, but points to three that show promise. This blog has been mentioned along with Manish Chauhan’s JagoInvestor and Fisher’s TheMoneyQuest.

The link is crashing my browser and so I am uploading the pdf file of the story. Three PersonalFinance Blogs by LiveMint

Here’s the excerpts about this blog:

Ranjanvarma.com
The content of the blog shows that Ranjan Varma has 20 years of industry experience in and around money. Interactive and informative, this looks like a one-stop-shop for most personal finance needs.

The reader gets the personal finance-linked news of the day as well as Varma’s views on the news. For example, he had a view on the recent guideline issued by the Insurance and Regulatory Development Authority (Irda) on unit-linked insurance policies.

Links to other interesting articles and sites from the blog add to the appeal. The recently begun weekly digest section gives an industry snapshot and should develop well.

The range of the author is another interesting aspect. It doesn’t stop at discussing the basics of money, but goes into larger discussions, too. So you would find views on the turf war between the Securities and Exchange Board of India and Irda, and how would it affect the investors, besides basic tips and principles of investing. The range of topics covered is fairly comprehensive— covering insurance, mutual funds, stocks, financial planning for kids and retirement, savings, loans and budgeting.

The links to different calculators catering to a variety of needs—from monthly budgeting to loan comparison and tax calculation—work well.

On the visual front, we found it a bit loud. The blog is user-friendly, but some text in italics makes it difficult to read. From the comments it seems that the blog has a loyal following.

Bindisha mentions that Media, in a an Internet world, now includes a new species called the blog. This adds to my responsibility and I will strive to make better contributions on this blog

But getting on the “Media” bandwagon doesn’t stop me from taking potshots at the media. Let me defy the ” People who live in glass houses don’t throw stones” logic.

As I said in my post on “Stop Blaming Others…”, that the media’s focus is to bring in advertisers rather than taking responsibility for your finances! Let me elaborate.

Let us be real. The media is NOT a Non Profit. It has to make money or shut down. It doesn’t make money out of the Rs2/- per day that you shell out for the daily. Nor does it charge you for watching content on TV.

What if bloggers and journos charge you for content? You’ll be aghast, no! So the media cuts a deal with advertisers who want to piggy back on the media’s spread to spread their own message.

Now the media is more interested in having a wide readership and a giant subscription figures to get the Advertisers flocking to them. To achieve that, they need to focus on what their readers want and not what’s good for them. So we have the lovely ladies with low necklines everywhere in our Dailies. (I don’t mind that, better to look at them rather than the other shit stories!!)

Btw, I even had a post on Why Personal Finance Articles are Useless!!!

To be fair, the personal finance articles do prod, motivate and inform. They do show you the way. But you need to undertake the journey yourself

Doesn’t all this rant tells you that the media is not to be blamed for your financial mistakes? Now, I haven’t said anything against the media, no!!

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