Hey QnAers,
Retirement Planning is one of those topics that gets swept under the rug a lot. That alarm clock that gets snoozed for 5 minutes, every 5 minutes. Which is understandable, because us humans are rather poor in visualizing and planning for outcomes which are way into the future and it causes anxieties. But this makes this uncomfortable topic even more important in this instant gratification world.
PGIM India Mutual releases an annual survey of retirement readiness among Indians, and the last one was in 2020.
Given that we’re living through this mega COVID shock that has disrupted the personal finances of pretty much everybody, we thought it would be the perfect time to talk about the importance of retirement. So we caught up with Mr. Ajit Menon, the CEO of PGIM India Mutual.
In this conversation, Ajit talks about:
- What does retirement mean
- The good, bad, and the ugly from the Retirement Readiness Survey 2020
- Why are Indians saving less?
- How has COVID changed retirement planning
- Why should you think about retirement?
- Thinking about how to structure various aspects of your retirement
- How to build that mindset to think about retirement readiness
- Retirement readiness around the world
- Advice for someone starting to think about retirement today
And a whole lot more. This conversation was brilliant and full of insights. We hope you enjoy it as much as we did recording it.
We’d love to hear your views and opinions on this. Please feel free. Thanks 
Transcript :
Timestamp
10:10 - The good, bad, and the ugly from the PGIM India Mutual Fund Retirement Readiness Survey 2020
14:40 - What does retirement mean?
28:18 - Why are Indians saving less?
40:27 - How has COVID changed retirement planning
45:00 - Why should you think about retirement?
48-30 - Thinking about how to structure various aspects of your retirement
1:08:38 - Retirement readiness around the world
Sahil: Thanks for tuning in. Welcome to this episode of Zerodha Educate and today we discuss Retirement. Retirement is the elephant in the room. When it comes to finance and investment, it is one of those things that we keep putting off for the “future”. As if everything will magically take care of itself. It’s a fact for most of us that one day, the salaries or income will stop coming into our accounts.
The young ones are indifferent about it. The older audience is concerned. So let’s talk about it. To help us out. We have with us Mr. Ajit Menon today, the CEO of PGIM, India mutual fund, he manages all aspects of the asset management business and has a deep understanding of this Topic. So let’s begin and as always enjoy the conversation.
Sahil : Ajit, so good to have you on our show. Welcome.
Ajit : Sahil, Thank you very much for having me on your show and I’m very happy to be here.
Sahil : It’s an absolute pleasure. So retirement is an amazing topic. I’m sure listeners have a lot of questions, a lot of opinions, and a lot of anxieties relating to that.
But before we begin on this interesting topic, let’s start with you, Ajit. You’ve been in the industry for many years, decades,in fact. You’ve worked with some pretty big names, you worked in a lot of profiles, strategy, business, sales, marketing, everything under the sun. So tell us about your journey, how it has been in the financial service industry, all that while.
Ajit: Well, I didn’t come into the financial industry when I started, Sahil. So just after I finished. MBA college in 1994, I joined a very traditional industry, Crompton Greaves, and I was selling bulbs and tubes for Crompton Greaves at that time. The only thing I knew is that I wanted to be in sales. I didn’t want to sit in an office. I didn’t want to be what usual MBA guys would like to be in terms of being ahead, you know, getting into marketing and doing all of what they wanted to do. I wanted to be on the field and I got that opportunity with the second company that I moved to, which was then called Hutchison Max Telecom, which is Vodafone India, or VI as we know it now.
And, in a sense, I was literally one of the first people to start selling mobile phones in the country because the first license in India for the Bombay circle came to Hutchison Max Telecom. And I was part of the earliest recruits.
So I was going around with a mobile and people asking me cricket scores, thinking it’s a radio as I was speaking into it as well. So those were interesting times, but that gave me a solid footing in terms of selling a new concept, meeting clients and explaining them what a mobile phone does and those were interesting times. But having seen the institutional business and the dealer business I felt I should do direct to client kind of business and I was teaching back at the MBA college, a couple of random topics I would to take up.
And I finally through networking got into Standard Chartered Bank and that’s how I came into the financial services field and I hated it from day one. Simply because being in banking at that time was, you know, whether you lived or died, didn’t matter. The business went on and I came from telecom where every day was an exciting one, because it was a new concept. Fortunately for me, it was also the start of the mutual fund industry at that time and Standard Chartered was one of the first banks to start selling mutual funds. I had an opportunity to involve myself in that area, loved it so much that I wanted to get onto the other side.
And that’s how the opportunity for me to join DSP Merrill Lynch came way back in year 2000. and, that’s how my journey and mutual funds began, and for 16 years, I was with DSP Merill Lynch which later became DSP BlackRock, which we know now as DSP. I have ever since been fascinated by the fact that in the mutual fund industry, everyday counts, because there is something happening in the world somewhere that has an impact on your savings and investments on the economy, on the market. So you’ve got to be updated, you are learning all the time.
So I think it still is my biggest motivator that this is an area where you can keep learning everyday and I continued that journey, and after 16 years at DSP, I had an opportunity to move into Tata Mutual Fund as their head of strategy. My initial reason for doing that was because I was actually quite passionate about retirement and I felt that Tata as a brand was one of the best brands to express that over a period of time. But as all things are, everything doesn’t work the way you want to and at that point in time this organization came by PGIM, And I felt that, PGIM was at that time and still is one of the world’s largest brands within the retirement space, the pension space. And so I felt that, having a large multinational with whom you can learn all of what has been and is to be in the area of retirement, which was a personal passion, could be something that I could follow alongside being part of the mutual fund industry that I wanted to be. That’s how I made the choice with what was then DHFL Primerica and now PGIM, and I’m glad that I did that because I have a lot of support from PGIM. It is the 10th largest asset manager of the world. Technically, therefore the largest multinational brand currently in India.
So it’s been a fascinating journey and I had the opportunity to lead the firm during a time of crisis. I think we had a great team built up here and we did wonderfully well. We had a brand crisis. We had a pandemic as a crisis, and then we look at where we are today. It just makes me proud, but we have a long way to go.
Sahil : Brilliant. So speaking about this crisis, the road to DHFL MF becoming PGIM has been a long and tricky one. I’m sure the challenges were tremendous. So how has been this journey from ownership’s end to ensure the performance of the scheme hold up. Is it just merely a brand change or everything has changed from the ground up?
Ajit: Well, I wouldn’t say that everything has changed from the ground up Sahil, simply because even in the erstwhile DHFL Primerica it was one of the most unique joint ventures in India because it was the only 50-50, there is no 51-49 there, and it was a 50-50 where the business and the investment processes were still being well overseen by not just the local team, but by PGIM, and DHFL as a brand was part of us as they had a good distribution network and like most mutual funds in the country, the opportunity for us was to see if we could leverage that distribution network.
So the investments part of it was always very solid at following a lot of the norms and the processes that we have internationally. And I must say that that has only improved and enhanced or the last couple of years as we became a hundred percent PGIM entity here in India. And I think that was probably both as a partner and as well as the strong experience and process that a multinational like PGIM brings to us was the biggest reason why we were able to overcome that crisis in the early part of the period, keeping the focus on being as transparent as we could be for our clients, partners, every stakeholder actually.
And of course, it is a people’s business, I will say that we had a fantastic team. Srinivas Rao Ravuri came over to us from HDFC Mutual Fund as a CIO in 2019 and we were then able to further make sure that everything to do with the investment platform was strengthened both on the equity side and including on the fixed income side. We did a good job in terms of making sure that we steer our portfolios, our partners through that crisis period.
And I think I’m glad that we did what we could at that time. You still, probably the only AMC where most of our fixed-income strategies for up to a year’s investment periods are declared on our websites on a daily basis. So those portfolios where people tend to put money, their emergency funds, their EMI’s and all of that. I think people, we felt that people would need the confidence to see that our portfolio are as strong, and we decided to put them up on our website daily rather than on a fortnightly basis or a monthly basis that was happening at that time. So we added to the transparency. I think the values of the purpose of PGIM we were focused around that.
So in that journey, this aspect of focusing on the process, focusing on what delivers consistent performance has only helped us and it is there in the numbers for everybody to see. We’ve done well and I think that it is not been yet a long journey, it’s been good two years and we are very confident of the future as we look at ourselves internally and the plants that we have as well.
Sahil: All the power to you! So coming to retirement, PGIM had published a report titled, Retirement Readiness Survey around this time last year. How did it come about and what were the objectives and motivations of conducting the service? What were you looking to find?
Ajit: So retirement is an area which Sahil, you will agree, and many people will agree is definitely top of mind for a lot of people. However, every time we spoke about the subject in my earlier years of experience with DSP and talking to advisors, talking to clients, it always seemed like retirement was always pushed to the bottom of priorities, at least in India.
One could see that it was always making sure that your children’s education, your spouse’s security, and various such goals came much before retirement as a goal. Even though people knew that that is something that was very important and people were anxious about it. It was something that I also personally was passionate about because when I used to talk with my colleagues at BlackRock and we look at markets abroad, many of these developed markets and others have social security systems, which is absent in India barring some of the tools that we have to invest.
So in a scenario where there is no social security for every single individual, how does one deal with this? And Sahil, let me put this a bit more in perspective for you and also for our audience, think about it this way. We have a lot of financial goals, the typical financial goals of getting our children’s education going, buying a home, starting a business, buying a car and going on a holiday. These are typical financial goals that everybody has. Now amongst all the financial goals, retirement is the only financial goal for which you do not get a loan. Let me repeat that. Retirement is the only financial goal for which you don’t get a loan.
You want to buy a house, you want to buy a car, you want to start a business. You want to get marriage done, you want to travel abroad, you can get a loan for it, not for retirement.
So this is something that you’ve got to do yourself. Every individuals got to do themselves and therefore the importance of this cannot be understated. So for me, it was exploring this aspect as to what have you doing, what can be done, what should be done. How can we help that process, sitting inside a brand like PGIM, given our international experience, what are the learnings that I can bring into this market, to my team, to my advisors and partners, to the audiences at large. Was the beginning of wanting to do something more solid. Which is where we said that there have been a few retirement surveys that have happened typically from a couple of insurance firms. I will say that even asset management at some point would have done it, but at least when we did ours and came out with a report in 2020, I don’t think that in a few years past that any asset manager had done a retirement survey, and it was good to do it because that gave us solid evidence.
The second reason is related to that evidence, which is that I do think that when we are trying to deal with a subject, it is important to gather some evidence about it. Some relevant evidence. And therefore we partnered with AC Nielsen, which is the world’s most preeminent research organization for this particular study. And what we really wanted to do was that just seeing that retirement is important and that we as a fund house have international experience, and we want to do something about the issue wasn’t enough. We wanted to work on what solid evidence we can gather, what insights we can probably get and then shape our strategies, our approach, our recommendations accordingly.
That was the sort of preamble to why we got the retirement survey going and why we chose the best in the business to go with getting it done for us and getting us the answer.
Sahil: That’s a great insight. Retirement, you don’t get any loans for that and the report is full of insights. I will urge the listeners, the link would be in the show notes. Please go through that report. Some really fascinating facts I found there.
Now we have listeners of diverse age groups, retirement, like happiness means different things to different people. So we have our old listeners and we have a younger crowd. What retirement means for our older listeners might not be the same, what it means for the younger.
So, can we set a context going forward? What is retirement? How has its meaning changed over time? Or what does retirement mean to you, Ajit? Watch?
Ajit: Sahil, that’s a great question and it’s important to frame the context around that subject of retirement for different age cohorts that we may have amongst our audience. And you’re right, for an earlier generation, retirement was how they understood it by seeing their elders, their parents, which is that you’re working for a company. And that is if you’re working for a company, that there is a certain point at which you step off the treadmill, possibly around 60, and then you’re free to do what you want to do. You’re with your family and your passion and for a new generation of people, retirement is a very old fuddy duddy term, which they don’t relate to. They believe that they have purpose, they have passion, they can work forever as long as it allows them. So I would say that when you think about different age groups, whether you’re talking about the elder age groups, whether you’re talking about the younger age groups, the way to reframe this and the way we would like to reframe this is probably to look at retirement not as the word retirement, but as financial freedom.
And there is a reason I see this and it comes from the insight that we have from the survey, Sahil. Which is that people like to plan for happy outcomes. I think that’s one of the most beautiful insights that we got from the survey. People like to plan for happy outcomes. They do not like to plan for unhappy or morbid outcomes. And for some reason, in our history and context as India, whatever experience that people had about probably the larger experience about retirement was not a very happy outcome as they saw it. They saw elders bouncing between their son’s house or their daughter’s house, taking grandchildren to school and back, and having a few ailments and knee pains and diabetes, health conditions and things like that. And it just felt like, well, that’s not where I want to end up. And so for the newer cohorts, it’s like, well, I don’t want to retire, I want financial freedom. So when we heard people both in our group discussions, and as we surveyed, we realized that for almost everybody without taking any specific age group, what they’re really talking about is we would want financial freedom.
Financial freedom is a positive term, unlike retirement for probably a good segment of people as I mentioned, it’s a bit of a negative connotation and that’s how we would like to reframe this conversation, that what you are looking for is financial freedom. The, and what it means is to be, to have enough money from your primary source of work to at a point, then go forward doing, not worrying about money and doing what you really love to do, what you’re passionate about doing. That’s how we would sort of reframe this conversation.
Sahil: That’s a good way to frame it. So as an extension to the question and moving forward with the report, in the foreword of the report you talk about slowing population growth and an aging population. So this is one of the major points, which we, while I’m stating that India has the youngest population in the world, sometimes miss out, that we also will have the oldest population in the world going forward.
So of course, as you said, we do not plan for unhappy outcomes. We seem to miss this. Japan is having a population crisis with regards to the elderly population, geriatric population. How are you thinking about this problem from the economic perspective from the top floor?
Ajit: When you look at it from an economic perspective, Sahil, it is about dependency ratios. It is about how many young people do you have in your working life and workforce that can support a retired individual or an individual that has stepped off your workforce in the economy. And of course, for many of the developed countries, not just Japan, Japan is obviously at the top of that list probably as we know it but for many of the other developed countries, whether it be Europe or even the U S they have high dependency issues in terms of older population to a younger population.
In India, of course we are, as you’ve mentioned, a young country and so those dependency ratios are much lower and therefore we have a much longer way to go. But by the time we get into the 2040s and the 2050s those dependency ratios will rise. Essence population growth will also not necessarily grow at the same pace as before. So from an economic standpoint, it is about dependency ratio, it is about the more young you have who are working and producing part of their life and economy can then support those who are not in the working age groups and have retired.
And I think therefore India is in a very good place as far as that is concerned. Of course, any listener to this will say that, well, you got to keep those young people productive. You got to give them jobs and that’s a crisis as well. But probably that’s a subject for a totally different conversation, Sahil, at this point. So just to make that economic connection to this it is about dependency ratios and it is about how we can have more productive people compared to less productive people. It is not to say that people who have retired are less productive in any way. It is just that the quantum of productivity and what is done compared to how usually these measurements happen it’s to do with people within the working and productive phase of their life, versus those who have slowed down or have moved out and slowed their pace of production. That’s it.
Sahil: Fair, it’s a far-reaching ground realization with a lot of variables that itself will take up all the time in the world and hopefully even after that, we won’t reach somewhere. Right. So, okay. Let’s speak about broad numbers. What are the major findings from the report and how bad is India prepared for the retirement readiness, but rather how good give us the good, bad, ugly all of it,
Ajit: I think that I would stop short of calling it either good or bad because this is the first survey and we definitely intend to keep this going in a reasonable frequency so that we can look at the trends that are developing. Our survey of 2020 seem to suggest that 51% of the people surveyed were not really prepared for retirement. Whereas 49% of the people felt that they were ready for retirement and I would say that that’s almost close to a 50-50, and without the numbers to suggest what this was five years ago, one wouldn’t be able to call it opinion on this. But I would say that what you are aspiring to is a much larger percentage of your people feeling ready for retirement.
So that is still some way to go for India. That’s number one. Number two is that we also looked at AC Nielsen’s surveys that they had done earlier to see if there were certain aspects that we could possibly bring into our survey. We looked at their usage and attitude survey in 2017, we asked some of the same questions and the trend that seemed to pop from there is that more people are reducing their focus on security, for instance, and looking at things like fulfilling dreams or better health or acquiring better lifestyles. And security and safety seems to be reducing in their focus. I would say that’s probably indicative of a trend and further surveys would probably tell us why, and maybe intuitively we know that the more younger cohorts of people, whether you label them as millennials or gen Z or whatever you want to, we know that for them experiences matter more than anything else. And therefore, I think it’s obviously therefore something common, different to see that they want better standards of living, comfort of life or better health. That was the other thing that came out of the survey.
The third aspect that I would say that sort of came out of it is that if you look at younger age groups and let me tell you that the average income of the respondents we had was somewhere around the five, five and a half lakh mark. So one can call it low or high, but representative of a larger part of India, and I must say that the report is more an urban metro and a second tier metro kind of study, but very representative of what’s happening all over. And in that cohort the younger you are or lower you are on the income stream then your objectives are largely towards generating higher income from your investments or to get financially secure. But if you are at the higher end of the income spectrum, or if you’re on the higher end of age, people tend to give more importance to reaching a certain position in their work or improving their skills or monetizing even their hobbies.
Which brings me to the aspect that one insight that we got from our study is that a lot of people out of that 49% who said that we’re more ready for retirement, a large percentage of them had some second source of income. Whereas for the 51% of people who we surveyed and said they weren’t as ready for retirement, a very small percentage of people had a second source of income. For some reason therefore the second source of income is a great giver of confidence for people in terms of retirement readiness.
It could be hobbies that they think they can monetize multiple skills that they think that they have. It could be existing investments, which give them income and the confidence of income. So that was one insight, I think the numbers brought forward of that 49% who felt rady more than 37% of people said that they do have some sort of second source of income. So that’s an interesting insight. And the other insight that I would say, from the numbers is when we ask people about financial freedom, the feeling of financial freedom, the feeling of financial security, and we were looking for the feeling and it’s always difficult to quantify something like this but we were looking to ask people what makes them feel financially secure and financially, and have an aspect of financial freedom.
What’s very interesting, Sahil. There is that people who came from large families and joint families felt more financially secure versus people who came from nuclear families or maybe slightly disconnected from larger social circles and friends and family. Now just for a moment, if you think about this, this probably is an aspect world over, but in India, since we all have come from a joint family sort of system and we are going very nuclear especially in the metros and I’m sure this pandemic itself would have brought some of those differences starkly to relief in the sense that people who have been isolated and alone, not with a large circle of friends that they could talk to or get on zoom calls with or whatever would have probably had more anxiety compared to people who had larger social networks or came in joint families. So let me stop there. These were some of the few ones that were things that came out of the retirement survey.
Sahil: It’s really fascinating how big of a chunk of retirement, this branch of finance is about feelings and emotions, say compared to something like quantitative finance or something dryer like debt speaking about debt. One of the things that will make you feel really bad is being in a debt trap. And then there is this worrying pattern that’s going on. One trend that seems to be worrying is that urban Indians are saving less, 90% of the income is going to meet expenses like EMI’s etc. In this time where there is easy availability of credit, everyone is trying to sell you a loan, one tap loan, 15 seconds loan, no financial document loan. So is it because of this or do you see something else emerging?
Ajit: Sahil, I would say that there are probably multiple factors at play here. Some of the factors that you spoke off, which is the fact that things are so convenient and in the digital world where you can tap in and get a loan and tap and buy a product, you’re probably spending more than you have. But it’s very difficult to say that spending more than you should. It sounds talking down people, but it is just that you probably are not so much in control or in the discipline of saving because the digital conveniences around you today sort of tend to make you spend more than you otherwise would have.
The second aspect of it is something we touched upon a little earlier, Sahil. Which is about, in the survey, people talking about improving their lives, improving their standard of living, which therefore makes people seek out the best that they can afford and if that comes through a loan and it’s easily available, then why not? And we’ve known that of larger developed economies and we’ve always felt that India or Asian economies are more conservative, we still are to some extent, but that is obviously set to change. Maybe younger audiences have different ideas in mind so that’s one aspect of it.
On the other side, I’m sure, and this is not from the survey, but when you look at other data that comes about younger audiences, there is lesser intent of owning assets. The younger cohorts are pretty happy staying on rent, one aspect could be that some of this is unaffordable in terms of real estate and things like that and therefore they do it. But I do think that they’re smart and they see that it is better than if there is an Ola and Uber on call, why should I even own a car? Or if rental yields are so low, why the hell should I invest into a property, why can’t I just stay on rent and save the rest of my money for other experiences.
So I would say that there is consumer trends basis of the age groups and how these age groups are exposed to the wider world, the digital influences which are all converging. When we think about debt. I would say that one aspect I would probably highlight here, Sahil, from my personal experience and talking to people is you realize that for any self-respecting adult the two things that they should have a good handle on is health and wealth, and when we think about it, I’m sure that most people realize that you’re not thought a lot about this in school, right? So the most fundamental things that any self-respecting adult should know and learn about is not taught, money management, financial management basics, basics of nutrition and health fitness a little bit, but not enough. And then as you become an adult and as you get into your first job, you sort of stumbled into talking to your friends and colleagues and neighbors, and you do what they’re doing. You buy a stock here, you get into Bitcoin. You’re looking for the next big idea and also the ease of debt. So Sahil, I think that there are many factors that are playing on this trend of debt, and what will help according to me is for people to have a good sense of maybe simple rules that they can probably follow to keep some discipline. And I think we want you to enjoy life and not be so paranoid about things, but simple thumb rules and a simple element of discipline in your habits can go pretty long way in terms of being comfortable on this aspect.
Sahil: That’s a good point you touched on especially the health part and speaking about health, when it comes to finances, mental health also plays a very important role and it would seem at anywhere between 50 to 70% of Indians, especially given the times we live in are anxious about increasing expenses, lack of family support.
This is a huge problem because as poorer your mental health is the worse your performance will be, which will lead to more problems and then more mental health affectations. So anxiety tends to affect mental health. Is this a function of lack of job opportunities, skill mismatch, COVID everything what’s happening.
Ajit: I would say that COVID is obviously the most recent event that no one can put a finger on and say that that has led to anxiety, but this anxiety itself isn’t new. Financial anxiety, as you rightly pointed out earlier is a big factor in lower productivity of an employee and some of the
International surveys that have been done by our parent PGIM have pointed to the fact that more than 28% of employees, for instance, if I remember the number correctly do cite financial anxiety as a reason for low productivity and that affects organizations and more importantly, it affects people.
So just keeping to financial anxiety, having its impact, and like you said financial anxiety or any kind of anxiety can impact your health and that’s a big factor when you think about your future, you think about your savings and investments. When you think about your ability to enjoy the wealth that you might create at some point of time in the future as well. And one aspect that I will add to that Sahil, is that I do think that when you think about an issue like retirement, when you think about the future, very, very, very few people think about the impact of inflation on expenses. And that did come out very clearly in our survey as well, that less than 33% of people actually look at inflation as a factor when they’re thinking about what corpus they require and what they would need for the future.
And the reason I point this out is for a different angle. And that angle is that medical inflation is very high, education inflation is very high as well. So sticking to medical inflation, the cost of procedures, the cost of treatments, the cost of medicines, they’re very high and we know about that at the developed markets and we’re seeing that happen in our markets as well. So taking care of your health holistically, not just physical, in terms of fitness and whatever, but mental as well and therefore looking at wellness in totality is a very important aspect for every person to keep in mind, which is why even our survey is sort of titled about building financial wellness into the future.
It is financial wellness and it has connections to health in many numbers terms, inflation, and inflation related to health can be high into the future. And that those are some important reasons why you must start early. You must consider aspects like inflation when you’re saving and investing. And most importantly, if you can take care of your physical and mental health, if you can take care of that holistically, you’re actually taking the first step towards better retirement, retired life, or whatever financial freedom and the life beyond that.
Sahil: As an extension to this, you spoke about how some of your the coolest customers of yourself survey were the ones who had good financial backing, who had some assets in inheritance, and such like. So there’s this section about how people felt more secure in joint families and less secure and nuclear or separate families, but joint families are ready to now in metropolitan cities. Is it on its way out? What does future hold for joint families?
Ajit: Well I think this is very, very different for different people, intuitively I think anybody from our audience or anybody, who’s reading, everything that we see and hear that newspapers can say that as more and more people shift for better lives and better jobs into the metros, they’re leaving their families behind and therefore nuclear families have been raising for quite some time now and joint families are breaking down and it’s probably happening all over the world because work has now no boundaries, people can shift not just towns and cities, but whole countries and we know about all of that.
But why I said that it is different for different people, is that and I’m sure that you and your friends or colleagues, neighbors, our audience would have had their own experiences during the pandemic, even though you had to face self-isolation or lockdowns. There were people who were on zoom calls with cousins and extended family every day and there were people who weren’t. So I don’t think that just by moving to a city or a town or a country that says that you are alone and you will face more financial anxiety and less security. I think it’s more about connections and whether those connections are physical in nature, where you’re staying in the, in the vicinity and with people, or even though you’re away, you’re fully connected, whatever way that connection could give you comfort. All the matters according to me. I think the point to take away from this is that you think about the feeling and when you think about the feeling which contributes a lot towards not feeling anxious on the other side, that feeling comes from connection. In fact, even if you just move a little bit away from this retirement readiness survey, and you think about what have been experts studying related to happiness and success more of more and more of the more recent surveys do point to the fact that good social connections, deep, meaningful relationships contribute a lot to your feeling of happiness, which then contributes to your success. Personal life as well as professional life. So all of these I think are sort of intermingled.
Sahil: Correct. So I’ve been trying to avoid this topic because I’ve spoken so much about it. I’m sure you will have as well and even in the previous episode, but this elephant is so big and this room is so small that we have to address it. So given your vantage point, what COVID has been like with regards to the perception about retirement savings, investing, has it been a minefield or has it had no effect on people’s mindsets?
Ajit: I see that pendulum has swung on both sides. When you think about saving and investing. If you looked at the data that was coming from the reserve bank of India surveys, it did seem to suggest that savings were going up during the pandemic. And well, that’s a pretty simple conclusion to arrive at, you weren’t going out of your house, you weren’t partying, you weren’t filling petrol as much as you had to do today. When you were traveling around, you weren’t spending on getting things over because you were worried about infections, and so you saved money. People since they were work from home protocols many of the young ones gave up on their rentals and move back to their parents’ place in whichever town their parents were, that meant they were saving on their rentals. And so you had additional money and that’s reflected in the number of demat accounts that people have opened and the trading that’s happened with the frenzy that you saw in IPOs and you continue to see in IPO’s and the discussions around Crypto and all of that. That’s one aspect of it that the pandemic saw. A lot of people clearly I’m sure felt that health was front and center, and I hope that whatever good comes out of this really challenging and bad time is a much, much larger percentage of people focusing on their health and nutrition, and wellness.
And then as you saw the reopening of economies and markets, I came across words Sahil, that I hadn’t heard before, and I’m sure you will sort of relate to that as well. Revenge shopping and now revenge holiday, I mean, think about this, right? These are words that I didn’t come across.
I’m sure that, you know, most of us have and I think that when that’s happened, people have let loose and they’ve put money into the market. So they’ve bought things that they want and don’t want it, they are booking holidays and hotels that were going out of business or restaurants that are going out of business, seeing people waiting in line for booking. So you swung to the other extreme. My sense is that these things are par for the course and at some point sanity, normalization will happen. What would be important for us would probably be some of the lessons that we take out of the experiences we have had, that it is possible to save.
I think that is important. It is possible to live and survive without everything being bought and wherever one would do very instinctively without giving it a second thought kind of thing, And I would also say that it is important to live life and enjoy because I would think that for a large part of the audience, one thought would be my god if this was going to happen and I knew I would have lived my life to the fullest and do so many more things to enjoy because who knows what’s gonna happen next. There’s been the other end where people want to say that forget about this, let’s enjoy life, and let’s enjoy the experiences that life has to give.
So I don’t know where the pendulum will settle, but I do hope that we are able to, in some way, empower people or make people aware of the choices that they can make, smart choices that they can make, habits that can be very simple to inculcate that can provide some discipline and have some lesser anxiety when they think about savings and investments going forward
Sahil: I really like how you take such a negative, depressing topic and give a positive take, really like that. So no more of the depressing stuff now let’s talk about something less distressing or something, even more, optimistic solutions. So starting off with something very obvious, but people need to hear this. Why does someone have to think about retirement planning at all? Why not deal with things as they come?
Ajit: Reasons that people should be thinking about retirement and let me sort of go back to the survey and some of the insights that we had there. A lot of people, even amongst the 49% who said that they felt ready for retirement, did not necessarily say that they have a retirement fund. A lot of people say, “I have a catch-all fund”. It’s one fund. I’m just putting money away, I don’t know if my kid may not study in India, may want to study abroad. I want to be ready. Maybe I’ll use the money for that. Maybe my kid is going to get a great scholarship and I don’t have to pay for her education and then that money can be used for me, for my retirement.
So I think that people think about the future because it is so vague and ambiguous, they think of their savings and investments for that future as a catch-all fund, and I think that when you look at personal finance or what personal finance experts always recommend is to try to bucket those goals because it gives you a lot more, not just confidence, but it gives you a lot more surety about where you’re headed because otherwise, you tend to probably have some accidents in the way or go off track. That’s the only value that bucketing some of these goals have as an advantage. And in my opinion, if you had to start bucketing amongst the goals, yes, I agree that Children’s education is very important. Yes. I agree spouses security and all of that is very important, having a house is very important, but what I would probably say is that, if you are starting to bucket on your financial goals, make retirement your first one, simply because of what I said earlier, which is that retirement is the only financial goal for which you don’t get a loan.
If your kids are doing well or not doing well, it doesn’t matter, they are sure they will be successful, there are ways and means of financing and funding that investment and they will grow big and will figure themselves out as well. I think that trend is increasing in probably the metros and not so much into Tier 1 or Tier 2 town as yet. And again that’s reasonably intuitive for people who are staying in cities and on your Saturday, Friday evenings and get-togethers with friends, I’m sure discussion are in the say way that we don’t want to be dependent on our children and we don’t want our children to depend on us, they can figure themselves out. So I think it’s very important, therefore, that you should have that bucket simply because it gives you a lot more clarity about where you’re headed and how you’re getting there.
Sahil: Absolutely. So you answered one of my follow-up questions with that is that retirement planning seems like a destination, but it will have a lot of stations in between. So we should not see it as once overarching umbrella term, but rather multiple projects that will be coming through. Great. Perfect. So now we’ll go with the fact that say a 30-year-old comes to you and says, “Ajit, I have zero clue about retirement, personal finance. Can you give me a checklist of things?” We all know how millennials like the checklist. So how would you answer this that this isn’t about just investing broad picture. Give us a broad picture about this.
Ajit: Well, I’ll give you a specific picture Sahil, which I’m hoping can be helpful. It’s not an exact science as we all know, but let me take a dig at it. I would say to that 30-year-old to remember two numbers, 72 and 30, and let me explain myself what I mean by trying to remember these to numbers 72 and 30.
I’m sure that through your videos, various podcasts some of the audience may be familiar with the rule of 72, the rule of 72 used by many personal finance experts say that if you knew the rate of return from your savings and investment, you can divide 72 by it to know how much time is it going to take for you to double your money. So if you had a investment that gave you a 10% return, then 72 divided by 10 is 7.2, you know that your money is going to double in 7.2 years. That’s the rule of 72.
But how I would use that when it comes to this 30-year-old who’s thinking about their retirement is to tell them that the first thing to remember is that the purchasing power of the money that you’re earning will reduce over time because of what is called inflation and we all know it, it’s a very complicated thing, but hey, there’s a way to think about it. So let me get into that with a small example, assuming that your monthly expenses today is Rs. 50,000. And you’ve got to try and figure out when you’re thinking about your retirement or financial freedom or whatever, as to when you want to stop working, how much is the expenses going to look like the same expenses today going to look like at that point of time.
So let me say that the 30-year old says, Hey, you know what, I think I’ll go all the way to 50, and then I want to do whatever I want to do. Okay, let’s use the rule of 72 and ask you what’s inflation you think you want to take and maybe that’s where you depend on the newspapers. Definitely with a good financial advisor. And maybe let’s assume that the number that you’ve come up with is 7% and expenses will keep rising by 7% every year. So you use the rule of 72 and you divide 72 by seven. That means that in almost 10 years, your expenses are going to double, which means that if you’re spending 50,000 rupees now, by the time you’re 40, the same kind of things you are spending on now will cost you a Lakh.
And by the time you’re 50, it’s going to double again and it’s going to be 2 Lakh. Now you’ve got a handle on what your expenses are going to look like by the time you’re going to retire. Right? So you’re using the simple rule of 72, dividing it by the inflation rate. You imagine in what timeframe your expenses is going to double.
When you think about retirement and you want to think about it a little conservatively, I would say you need to have 30 times your annual expense when you retire as your kitty, as your retirement kitty. So you multiply that 24 lakhs now by 30 and you arrive at the number 7.2 crores.
Once you have that target go online, get onto any retirement calculator, and try to figure out, Hey, how much should I be saving from my income today so that I can get to that 7.2 crores. It looks like a big number, but let me tell you that if you went onto any calculator and you said, okay, what is the SIP that I need to do to get to that number, you would arrive at a number something like 40,000 rupees per month. Now I can tell you the moment you say that number to that 30-year-old, who says my monthly expenses are 50,000. And you tell him that you go to save 40,000 rupees now for your actual retirement, he or she is going to stop thinking about investing in retirement and say this is crap. I can never get there. This is exactly why I can’t plan for these future things. But here’s what I would tell that 30 year old is that please realize that there are different strategies for investing, and there is something called top-up SIP in mutual funds. For instance, when you’re putting your money in, let’s say a good diversified equity fund or a balanced fund. It allows you to start small and then you, it will automatically increase your SIP’s by 10% every year. So if you start at 5,000 rupees, it’s going to become 5,500 rupees next year, so on and so forth.
This Rs. 40,000, if you look at the calculators online and think what should be a top-up SIP for it. That number is now a little lower, around 18,000 rupees. Now it’s in your grasp. Now it’s within your reach and let’s remember something that I’ve told this person that your corpus, that you required is 30 times your annual expense. That’s how we got to that 7.2 crores. And if you can do that, you are financially free. So that’s what I would say. So I hope I didn’t make that too complicated.
Sahil: Not at all, some really important numbers, and this will help them get them financial freedom. So going ahead, Ajit, one of the other surprising numbers that came from the report was that 55% of the people are worried about health expenses and this is an extension to the point you made that inflation in medical expenditures would be pretty high going forward. So what does this show, does it show that people have no idea about health insurance or something else?
Ajit: I think that it could be, again, a mix of a few things. Yes. The awareness could be below of the different solutions that are available. it is a real worry because you do see, people when we surveyed talking about, wanting to plan for emergencies, and you know, everything that gets thrown at you by advertising about things that can happen to you, the morbid fear of death itself, or disability, and all of that, I think definitely it will scare people and people worry about it because there’s also see examples of real-life around them and therefore, this anxiety is definitely something that is up in people’s minds, even though I would say we found that cost of living itself increasing was the biggest worry followed by the worry for health and for themselves, their spouse and even their parents.
For any individual, as they’re thinking about their financial futures about financial freedom, there are many products and that space is evolving as we speak that can help you protect yourself from a financial expense as regards health. Sometimes people say, here’s something that I can get where it not only protects my life, but it also gives me an investment return. And it also gives me something extra. It’s also free after the fifth year, things like that, that people sort of try to expand the value of what they’re trying to get in.
But I do think that the starting point has to be pure products, pure products for health protection, pure products for life protection, pure products for your savings, and pure products for your investments. And then, depending on the cost of what you’re paying and again, a good advisor could help you with all of that. You can then make your choices of what you should be taking. That’s what I’m excited about.
Sahil: One takeaway from the report is that retiring at 60 or any defined number is an outdated concept in today’s world, why is that? Although numbers are important in retirement, but why should we not care about these numbers anymore or should people?
Ajit: Well, there are a couple of reasons for it.
I would be one of those who would agree with the fact that there is no date cutoff for retirement, per se, and clearly for you and your friends and for much of the audience as well. They would completely agree with that statement that there’s no age for retirement, and that’s because, if you are working in an area or which you are very happy with and you’re passionate about you would work for as long as you can. And even people from earlier generations, you look at them and let’s look at professionals for instance, whether they are chartered accountants or whether they’re doctors or surgeons, as long as they’re physically able to carry on their profession, they are very happy and passionate about what they do.
They don’t have an age for instance, that they retire at, they continue with their profession. Right. So I do think that there is really not a 60 or a 55 or something that you should look for as an age of retirement.
So I would put that back into the context that we discussed at the starting of this chat, which is what’s the financial freedom number that you want, and then working towards that. Even if you’re a professional, let’s understand that, well, you could have, god forbid, an accident or a paralytic attack or some other health fear that can stop you in your tracks from following your profession. You may be a surgeon and you know that you are going to carry on with what you’re doing, but if something were to happen that physically does not allow you to do that, then what do you do?
Are you saved up for something else in that scenario? So there are variables to consider. I would say the better approach is to say, well, I have this, I want to be financially free, and I think that this is the corpus that I would want so that I can do multiple things in life, for which I have some fair idea at this point. And let me work towards that and slowly and steadily sort of transition into what I want to do.
One really interesting aspect, which came up in the group discussions as we were doing this survey was talking to people and in those discussions, what came up was for people who are in a job, if you’re happy with your job, you’re not even thinking about retirement, but most people tend to be unhappy with their jobs, especially their bosses. And for those retirement was at the top of their mind, when am I going to get off this and do something that I like and enjoy so different things can play different roles but I would say that think about financial freedom and what that journey looks like. What is the number of the corpus that you would like to have, which keeps you comfortable to follow your passion.
Sahil: Happy minds do not think as much about retirement, that’s a good insight heading to the next question. The core muscle, which helps lift planning as an analogy of lifting weights in the gym. So one of the muscles that will help this is “Financial Discipline”. And we live in a world where shiny toys and trinkets abound: the iPhone 15s, the smartwatch 16s, 10 different OTT subscriptions, Instagram worthy vacations. Everything is after your money. How does someone build this muscle in this environment? Does planning for retirement require you and your family to live like a monk and head to the mountains? Or is there any other way?
Ajit: I’m sure that for much of the audience, as they were hearing you go through the list of things that are so attractive, they would be screaming, stop, Sahil stop. We know, we know this is what is attracting us to spend our money. But on a serious note, I think you, it’s a very pertinent and relevant topic about how do you build that muscle. Let me give you a quote. From a gentleman called F.M Alexander. That’s probably the only quote that I use in some of my presentations that I do. And the quote goes like this.
“People don’t make their futures. They make their habits and their habits make their future”.
Let me repeat that people don’t make their futures. They make their habits and their habits make their futures. And I think that this in a single line captures the importance of habits, which then flows into whether you want to call it financial discipline. I would put that into many areas of your life, almost all areas of your life. And good habits are a muscle that you can definitely build. And you can start small and then, go ahead. I think there are a lot more writings about tiny habits and we can see how useful they are.
We know that 10,000-hour rule for practice, to become proficient in something, but let’s stick to retirement and planning for retirement and the right habits to build for retirement, that discipline, I think it all boils down to habits, very difficult to tell people how to segregate between needs and wants and things like that. But I think the best way to go about it is simple comparables that one can follow. You know, I would definitely admit that when we as people in the asset management industry are so-called experts like myself and many others, we get onto writing articles and books and getting onto podcasts. We tend to generalize, we can’t help, but generalize and every single individual’s life is different, the context is different. That’s where a good financial advisor sort of comes handy.
But having said all of that, sometimes thumb rules are what we can boil this down to as long as you can follow the thumb rule, for instance, of keeping your expenses and luxuries to about 50% of your income, 20% towards your savings, the balance 30% going into EMI’s or whatever that might be for you are good to go.
So 50-20-30, that’s all one needs to remember as a thumb rule. 50% for expenses, including all luxuries, whatever 20% for savings, and 30% as a set of gaps for your EMI’s and things like that. If one can even hold on to having a habit and track this, you are good to go.
And that’s for a younger individual, I would say this is more for somebody in their thirties because when I talked about 20% savings the other tumb rule is really that you try and save 20% of your income in your thirties and your forties. 30% of your income in your forties, in your fifties. I mean more later in your forties and fifties, and maybe even 40% beyond that, if you’re continuing to work because some of your commitments would have already got completed, so you might have the potential for higher savings.
So let me stop there. And maybe I hope that I’ve answered that in some way.
Sahil: Absolutely. There is a very fine point that if we take this analogy further, it doesn’t mean that you have to build every single muscle right now. You can take your time with it. Start small. Let’s talk about something that has the biggest muscles in town. That’s of course the government, one of the points that you raised that retirement readiness is a global problem, even in the US and Europe, most pension funds are underfunded.
So given these financial concerns. What do you think the governments can do to fix this situation?
Ajit: What I think is, short of providing social security for every individual, which I think definitely will be the objective of the governments. I think it’s very important for, the government’s role here is dual.
It does definitely have the role to protect the vulnerable and their direct cash subsidies and the things that we have seen, the support, financial support that we have seen in subsidies for food, all of those sort of help people not have too much anxiety. The government’s role is also through its institutions, like the central bank to try and control inflation, which is the biggest villain in the piece when you think about saving up for your future. And I must tell you that to our audience, India is one amongst many countries in the world where our Central bank, the Reserve Bank of India has a specific inflation target with which they work.
And you would see it in the newspapers. It is 4% plus-minus two is the range that they monitor, but they have a target, not too many countries in the world and not too many Central banks have an inflation target. They have an objective to break down inflation, all of them, but they don’t have a target. And India is one of the maybe 30 odd countries in the world that has a target. So I think the government’s role is also in letting its institutional frameworks deal with inflation.
And then of course it is also about providing the means for saving and investing for retirement. We today have the National Pension Scheme, which is a great avenue for people to look at and think about, if you are salaried, you have a PF (Provident Fund) into which you must be putting money aside. And if you are not salaried, then you have things like the voluntary PF that you can take advantage of in India, and of course, I talked about NPS, and of course, then you have schemes that the government has come up with, which is the senior citizens saving schemes and Prime Ministers VI Vandana Yojna’s and things like that.
So it is a complicated role for the government, but there are different aspects from protecting the vulnerable to letting its institutional frameworks work to manage inflation in the right way to providing the tools for people at large, to save for their futures.
Sahil: You spoke about institutional framework. So what do you think that the mutual fund industry and people like us can do to increase awareness about retirement?
Ajit: I have a sort of view on this, which is coming from a lot more of what I’m reading about what experts are saying, and with more recent studies and things like that. And we must remember that therefore, to help the situation, there are two parts to the story.
One is definitely raising awareness and doing everything to raise that awareness. But unfortunately, more financial awareness is necessary. But it is not a sufficient condition for people to actually reach their outcomes. And therefore the second or the other side of the coin is solution design. So awareness building on one side and solution design on the other side go hand-in-hand. A lot of what I read and I hear talk about financial awareness financial. My point of view is that financial awareness is good, it’s great, it’s very necessary, but it’s not a sufficient condition. You need to have the design of your product, the design of the solutions that you choose that actually help people to reach those outcomes.
And these are coming from behavioral finance scientists, like Kahneman and Richard Thaler won the Nobel prize in 2017 about behavioral economics and how behavior impacts people’s goals and you know what they’re doing in their financial lives. And so good design of your products and solutions are, which not just people in the right direction are also required along with building financial awareness.
In the west for instance, when you join a firm, you could tick a box that said, how much will you contribute to your 401k plan or your pension plans? And people would never tick the box. They would forget about it because it’s just normal human behavior or habit or whatever you call it. And then three or five years later, they realize they haven’t saved up anything from a retirement perspective. Now what some of these institutions did is simply change those application forms from opt-in to opt-out. So, if you don’t want them to deduct some money and put it away in your retirement, you need to tick a box.
Now that habit was turned around the head and the design of it meant that some money was always being put aside into a retirement fund. And you were, so you had a pleasant surprise that you realize, oops, you have some good money sitting aside for you now. So, whether it is about a lock-in feature and products or a tax break in products or a certain subsidy of products and the way it’s designed, all of these things matter when you’re thinking about what we as a community can do to make them financially aware. We also empower them with the solutions and the right design of those solutions.
Sahil: Absolutely. If anything, let’s just make them tick the right boxes. Now, heading to the closing questions, with the power of hindsight and your years of experience, looking back at it, if you were to plan your retirement planning all over again, what would be different and what would be not, and how much you’ve learned yourself in the process?
Ajit: That’s a good question. I’m still on my way to meet my retirement goal. I have clarity about where I need to head what my number is and how I’m going to get there. The thing that I would do if I were to start this all over again, is a very simple thing I would have started earlier than I started.
So when I say start earlier, I think a lot of our audience would say that’s a cliche statement. We’ve heard it all over all the time. That start early. When I say start early, I’m talking about start early about appointing a good financial advisor for your finances. Money is emotional. If you are going to manage it yourself, you’re going to swing with your emotions in and out of markets. Having somebody trusted who can help you on that journey and planning for your journey is always an advantage.
I got myself a registered investment advisor and RIA in 2014, and well, I have 20 years of experience in this industry. 2014 is just about seven years ago. So it took me a long time to realize that people in the financial services industry, for instance, all of us, we think we’ll be a part of this. We know what to do. We can do this. We know the markets. We are reading the same papers, things like that, but a good financial advisor has great value.
So I would say that I would have started earlier would be to get a good trusted advisor for myself who can help guide me and who could be my partner in keeping the discipline of putting things aside and planning for each of the goals in a much more disciplined sort of fashion.
That’s the one single advice I would give anybody and selecting a good advisor, therefore is important. I would always recommend that – you’re going to pick references from your friends and family by all means do – but interview a few of them and figure out if you know you like them.
The questions to ask us about what processes they follow. Not so much about how much of a dose do they give their clients and things like that. It’s all a function of the process that they follow, the certifications that they have, the experience, the competency that they have. And then start off on your journey. That’s what I would have done maybe 15 to 20 years ago.
Sahil: Great. So I’ve asked about hindsight. Now, I would like to ask about the foresight, someone starting a career now doesn’t necessarily mean that they’re going to retire on their own. One day they’ll show up to the jobs and be told that a robot has taken up their job and everyone jobs on the floor. So keeping this eventuality in mind, how does someone plan their career going forward? Or is there even anything such as planning at this point in time?
Ajit: I’m very fascinated with what I saw by the army and the reason I say that in the context of this question is that the army plans their missions to a fault, they have to make it absolutely perfect when they plan for things.
Ask Captain Raghuraman, which many of the audience might be familiar with ff they’ve seen the videos, The Army is fond of saying, The Army knows perfectly because mistakes come back in body bags. So they have to plan.
And what is interesting is that it is the same army actually talks about the fact that the battle plan is the first casualty of war. Somebody asked Mike Tyson that what is your plan when you get into the ring, how are you thinking about your opponent? What I’m going to do about this challenge? And Mike Tyson is supposed to have said that everybody has a plan till you’re punched in the face. That’s it. So what I wanted to say here, the context that would be set here is that have a plan, but don’t cast it in rock. Don’t write it on a piece of rock, you have to be a bit flexible about where you’re headed. And within that, I think in my personal experience and insight, even from the survey, I would say to those young ones that, think about your skillsets, your primary advantage. If I were to dial back a little bit and start again, I would say that your primary advantage or resources that you have for yourself is your physical health, your mental health, your capacities, your competence, your credibility, work on your back.
When I say work on acquiring more skills. Right. And when you think about skills, you look at our survey and it says that a lot more people who are confident about their future or those who have second sources of income. Many of them were depending on their skills and hobbies. I’m sure that in this pandemic, all of us have known about that family, your friend, or cousin who started baking or cooking or setting up different, all of those kinds of things as well.
So think about your skill sets. Think about having multiple skillsets for sure. Which can be sources of income for you in the future. And when you think about digitization, when you think about the fact that robots can take up a job, think about empathy as a skill. Let me explain that a little further.
A hundred years ago or even more it was an agricultural economy that almost everybody was involved with and the strength that you required to be successful in that was your physical strength. You had to be out on the farm working. And then we came into an industrial economy and you had machines to do your jobs for you, at least partially, which meant that you now needed mental strength and if you were mentally very strong and capable, and you also needed your physical strength, you could be very successful in the industry. And then we came into the internet economy, where, physical strength went out of the door. You could be called a nerd or whatever, but you could make your billions with your startup from your garage.
So physical strength goes out the door. What you needed was intellectual strength. Most of the experts that I like to read and I follow a person known Dov Siedman for instance, who talks about it is that when we are looking about the future, we are again, transitioning into, from an agricultural economy to an industrial economy, to an internet economy, to now into the future. What they call a human economy. It’s very easy now to get your software, get your digital skill sets or whatever, hire developers for all you need. You don’t need that intellectual strength anymore. So it is no longer about physical strength or mental strength. It is all not about your hand or your head. It is all about your heart. Things that a machine can’t do. Empathy comes from the heart, judgment, creativity comes from somewhere there.
If you look at a very big hospital today, that surgeon, that well-known surgeon is being replaced by a robot who can do that surgery even more precisely, but you know what the surgeon is being replaced, but the nurse is not because of his job or her job as a nurse is an empathy. It’s not something a machine can do. So I would talk to the young ones and I say that because I talked about this to my children is that when you are studying, thinking about your future, do what you’re passionate at and what you like, but think about empathy, think about, areas that can’t be done by machines. And it has to do all about the heart, about relationships, judgment, creativity. Machines give you speed, stamina and memory, but human beings bring judgment, creativity, and empathy. So careers that are in that direction, skill sets that are in that direction can be very helpful to keep you relevant for a long, long, long time.
Sahil: Amazing way to look at it. Speaking about up-skilling and this being the final question. This is something we ask all our guests. If there were just one book or podcast store, any resource that you would want the listeners to read and it’ll help them, which book podcast or resource would it be?
Ajit: Wow, you did not define whether they should be reading a book or a podcast video related to retirement or finance.
Sahil: Usually it’s about the finance here, but even something else that can help them in the journey, the retirement journey, nothing better than that, even if it’s not related.
Ajit: So I would say that from my personal experience and I’m a big reader, I read lots of books, from different areas. I like mythology, I like behavioral finance, and things to do with finance, practice management, and fiction, all of that. But there is one thing that I do reasonably consistently and that is, I simply watch TED Talks in the morning, along with my morning tea and newspaper. I look for subjects around to help people overcome challenges of planning for retirement or saving and investing or behavior, success, and things which help people move ahead in life. I think this is a little habit of mine, which has helped me a lot. It’s a great pickup in the morning if I have some time.
And if I’m even listening to TED Talks as a podcast on my phone, as I go for my morning walk or run. One because it’s inspiring and I love being inspired in the morning with good information on the subjects that you like, and that could be finance, and that could be health as well. And so I would simply say that, you know, going back to that quote of saying people don’t make their futures, they make their habits and their habits make their future. I would say that in terms of podcasts, reading, or watching stuff, watch a Ted talk once in a while as much as you can.
The reason i say Ted Talks is because I believe in my experience, what I’ve seen is that most of us, we are stuck in the past in terms of things that we know, for instance, retirement, it’s an old word concept. Financial freedom is new. A lot of things, the science has evolved. Whether it is about success, whether it is about loving relationships, whether it is about finances, you look at a lot of things, health, especially a lot of science is with us today, which has upended all of what we know earlier, where can you find it? Well the best of the best of them come on Ted and talk about it, and that’s the reason why I like that so much because it’s at the cutting edge of science and it gives you something therefore shown of all the myths and what the latest science is talking about. And I think that’s the way I like to look at it.
Sahil: Can’t wait for your Ted Talk. I’d like to see that one, especially you being such a good guest, Ajit. I do not want this conversation to get over, but now sadly, it’s time to retire from this episode. A lot of insights were shared. You have given volumes of information, data analysis, many listeners would have to listen multiple times to get the hang of it and I’m sure they will. But this time, this was all. I hope we can have you another time on this podcast.
Ajit: It’ll be my pleasure. Thank you so much session and yes, let’s never retire, and let’s hope that everybody gets their freedom, their financial freedom, you and all the audience. Thank you so much for having me.
Sahil: Thank you.
Investments are subject to market risk, read all scheme-related documents carefully. The show is intended solely for learning and sharing information. Please do not construe anything said in the show as investment advisory or solicitation to invest. All the statements made herein are the personal and individual views of the host and guest should not be construed as the opinion of Zerodha.
Please consult your financial advisors before taking any investment decisions.