What is your understanding of money and investments?
I wish there was a lot more that was being done in terms of our system of pedagogy and how we educate our young about anything finance. We spend 15 years teaching somebody how to get a job but we don’t spend any time teaching them how to manage the money they might earn from doing that job.
So a lot more attention has to be paid there and to be really fair, I think in India we are lucky. We have great regulation, we have had bodies like SEBI, RBI, the government who have come down and curtailed a lot of the nonsense which has gone on across the world.
have just been reading and watching the news about FTX and their token and how it could just have wiped out billions of dollars of retail wealth overnight. At least our regulators and the government had the gumption and preempted this as a country.
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They made it significantly harder for retail and the millennials and Gen Zs to access such risky asset classes here. But I think people have to make the effort to go outside formal education, get practical experience, learn, there is so much content available out there, good quality content in books available online for free. So, people really should make the effort to learn more about finance because the journey to wealth is as much about managing money as it is about making money. Everyone should get better informed and take the initiative to learn about this.
How do you look at the current layoffs that are going on in different sectors? Who is to be blamed? Do you see this going deeper because it is not only the financial impact that would hit an individual, it is mental and psychological. Also people who are being laid off are mostly the freshers entering the workforce. How do you look at it?
It is a part of the cycle at large. We saw extreme optimism and hubris in the tech sector in the last few years. People were raising tremendous amounts of money before they were profitable. There were companies being formed with a large funding even before they knew what the product was. So I think it is a course correction.
To watch anybody lose a job is sad. It is hard to empathize but I see it around me. A lot of people I know have lost their jobs. I see the situation to be a lot starker in America or the western economies, where companies are firing at a faster pace than we might be here in India. I think this trend will continue.
Inflation being as high as it is right now, interest rates at some point will have to go significantly above inflation to bring it under control. I am not suggesting what happened when Volker was at the Federal Reserve. The rates had gone up to 18% or 17%. I do not think they will not go up to that level this time but even at the current inflated levels, mortgage rates in America are now at 7%, the risk free rate is over 4-4.5%. This will have a significant impact on the amount of money coming into India.
Venture capital and PE funds were able to borrow at significantly lower rates and bring money into India over the last decade. When that rate of capital goes up, their risk taking ability will proportionally go down as well.
This problem of job losses, companies having to get leaner will continue for a prolonged amount of time. I blamed it on the circumstances of the last decade where excessive amounts of money and valuations were attributed to companies across the board.
To a job applicant or somebody entering the workforce today, the only thing one could do is spend more time and effort on skilling. We could be moving towards a gig economy, an economy where skill set is given more importance than traditional qualification and certification overall. I think the time is apt for people to find skills, equip themselves, get training outside of formal education, get experience on different projects which necessarily are not formal employment and be more competitive in the job ecosystem.
Do you believe in giving back to society? How do you do it?
There are many different ventures that I am part of. I happen to be lucky to be in an ecosystem where people criticize over consumption. Most of us, rather a lot of us in the world today are consuming more than we need. There are different projects that I am part of.
We have something like Rainmatter in Zerodha where we do a lot on climate. I have a charity called YIPP which does stuff in education and malnutrition. I am part of this foundation called GivingPi, there are plenty of these. I see myself progressively spending more time with these. I would not say altruistic because these to me are also not truly altruistic. I feel they are a very subconscious way of me massaging my own morality and probably feeling slightly superior on a relative basis in terms of morality by virtue of doing all of this.
Even this is not altruistic but I see myself consistently spending more time on this. If I would spend 5% of my time on pursuits like this three years ago, right now it is closer to 15% and in the next three years it is probably going to be 25-30% of my time.
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