Why we are obsessed with money

What a way to exist!

For most of us, practically the whole day all we are thinking is about money and more specifically how to have more money!

As if money was the only thing in life. Unfortunately for most of us, circumstances just do not permit any other thought!

We are running behind money most of the time which is almost akin to have become obsessed with money. Everything that we are doing in life is centred around money.

Unfortunately, this is because we need money for anything and everything that we do. There’s nothing wrong and what are you doing, however the problem is that over time, it becomes a compulsive habit to keep earning more.

That’s where the danger is. The problem is that there is a point where from we chase money as an addiction, we chase money because we like to do so. If we did not chase money we would not know what to chase now because we get out identity from money and the amount of money we have.

Another thing is that right from childhood we are always taught and our minds are conditioned that everything that we are doing is going to be for the sake of earning money.

There is no one who told you that money is just a means, and then there is something greater in life to achieve. Some examples are legacy; building something, charity; to giving something / helping someone, passion; pursuing something and living; simply to enjoy life and your money

We have got addicted to this and how!

There are three reasons for this:

First, we are what we do. It is the human behaviour. I know I should exercise and I don’t. I know I should eat healthy and I don’t. I know I should spend time with my kids and I don’t. I know that, yes, money isn’t going to make me happy and I still keep trying to make money.

We live by the laws of inertia, in a pattern which is hard to break. But we have to break it. For ourselves and for the sake of people and reasons for which we are chasing money.

Secondly, we need signals of progress. Money is a measure of how far you have progressed in life. The more the money you have the more you can make sure your progress. It’s simply the logic of evolution. People need validation of their success. Bigger house, bigger car, branded goods and list goes on.

Thirdly, it’s the easy way out. It’s only human to avoid difficult things. Important things are very difficult to measure.  Have I been a good father or husband? Have I groomed my child well?  Such things take years to measure and we still don’t have answers.

So, should we not be focused on creating money for ourselves?

I’m not saying that. Definitely create. Take care of yourself for sure!! Use it to the maximum to make yourself happy!!! You need a certain amount and beyond that is extra.

The definition of their certain amount is naturally different from one person to another. If that extra is going to happen easily, without stress and without your involvement, then its fine. Basically don’t kill yourself for that extra. Be Smart.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a certified financial planner, wealth manager and financial freedom coach.

How the RBI actually helps you


Most of us in Mumbai, see this huge structure called the Reserve Bank of India and wonder what it really does. It’s also a tourist attraction!! It has so many other offices and again one wonders why they need to have so many offices. I’m going to try and highlight a very interesting part of RBI’s work and how it helps us directly on a day-to-day basis.

The RBI does a review of the monetary policy of the country at frequent intervals during the year. So how does the monetary policy help us investors to take smart decisions?

Monetary policy is a tool by which the RBI decides to raise interest rates or reduce interest rates or keep them steady.

In our country, as we’re an oil importing nation, this decision is very closely linked to Oil. Oil to a large extent contributes to inflation. We all know what happens when inflation keeps rising. We in India unfortunately do not see too much of inflation falling and things becoming cheaper.

Oil is Not Well

So when oil prices rise i.e. we see a rise in crude oil prices almost instantly we can expect rising food prices. This is because there is going to be a rising cost pressure for manufacturing & services. This rise obviously gets passed onto the retail consumers.

When this happens RBI adopts a hawkish stance, tries to pull money out of the system by raising interest rates. Now when interest rates rise no one seems to be interested in borrowing. This immediately puts a brakes on money circulation.  Less money chasing goods decreases the demand for money. This way it controls inflation.

There is yet another tool that the RBI has and that is known as the CRR or the cash reserve ratio.  This ratio in simple words means the amount of cash that the bank must maintain with the RBI as the percentage of the total assets. So when this increases banks are forced to park more with the RBI and this is also a way to control inflation.

On the other hand when things look dull, when there is a recession of sorts, the RBI comes to the rescue and gets into action to kickstart growth in the country. It does this by lowering the interest rates. This we all will understand quite easily because we see a direct benefit of this happening. We see a fall of interest outgo in our EMI’s for the home loan that we are carrying. New loans become cheaper.

Individuals are motivated to go out and make purchases, whether it is for a washing machine or a piece of real estate. Businesses are motivated to go out and borrow to buy more machinery, to expand capacity, to hire more staff and manpower and basically do everything that will add to the growth of business.

Economic growth results as a result of all this. It is also during this time that stock market rises, we see a rally in stock prices and mutual fund NAV’s jumping higher and higher each day. There is prosperity all around.

Critical Role

As you can see that the central bank of the country has a very very important role to play.  If it makes a mistake, things can go really wrong.  Imagine like the USA or Japan if our interest rates were very low; everyone would run to borrow, they would borrow more than they require because it would be cheap and easy to borrow. And that is very individuals would run into what is known as the debt trap, because someday you’ll have to pay back.

Each day the central bank attempts to make sure that everything in our country remains stable and financially there’s nothing that goes wrong dramatically.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

The year of the bond, once again!

We are not talking of James Bond, we are talking of investment bonds.

We are in a situation where the fixed deposit rates are at a general low and there is a lot of discontent among depositors of fixed deposits.

Whenever we see a situation like this, one way or the other, the bond markets come to the rescue. It comes to the rescue of smart depositors, who are agile to move their money from fixed deposits to bond funds.

Let’s understand what is happening and why.

What Exactly is Happening in the Bond Markets?

It is likely that in this year, investors of bond funds will make handsome gains. Bond prices may rise and there may be capital gains. Investors of bond funds not only earn the rate of interest, but also earn capital gains. So that way, they make more than the return they would make on fixed deposits. The returns could be a high single digit or sometimes as high as double digits.

Over three years, this will become practically tax free or the tax would be a very small amount. So, basically, I am thinking that a rally will happen in the bond market. There are three main reasons for this — reduction in government borrowing (which is favourable), recovery of trading losses (which is favourable) and no change in monetary policy (which is neutral).

A word of caution, however, that such bond market investments are also subject to bond-market volatility and should be considered ideally with the help of a financial expert.

Before proceeding further, let us, therefore, quickly explain a bond, bond fund and bond market. We need to do this because few people understand the bond markets and even fewer invest in the bond markets.

Bond is nothing, but a commercial transaction where the borrower is issuing a bond to the lender and the lender will earn a certain rate of interest. When interest rates fall, everyone becomes interested in owning that bond.

As a result, the demand for the bond increases, the price of the bond increases and the bondholder makes capital gains.

A bond fund is a fund where ordinary investors pool in their money and a fund manager buys them a portfolio of bonds.

Moving onto the Reasons For a Rally in Bond Funds…

Now, the fundamental reason for a rally is reduction in interest rates as it stimulates economy and growth.

Firstly, the government is a massive borrower of funds. So a reduction in government borrowing reduces the demand for money in the economy. As a result, prices of bonds rise and this contributes to capital gains for bond holders.

Secondly, the Reserve Bank of India (RBI) recently announced that the commercial banks and RBI, which are the largest lenders to the government, will have another year to offset losses they have incurred on account of buying government bonds in the past. This action will lead to a rise in the price of bonds and this contributes to capital gains for bond holders.

Lastly, on one side due to the rise in oil prices, there is more inflation and thus more money is needed for circulation in the economy. On the other side, many government bonds are maturing, which will provide money supply. So, it is likely that we see a neutralising effect and thus RBI will take no action. This inaction here will support capital gains as explained above. Hence, this year might be a year of good gains for the bond investors.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

Five new financial goals for you this summer

I am going to try and explain to you why the summer holidays of April and May are great months to get a lot of things started, financially speaking.

This time period in a way resets the financial clock. You also have the option to hit the reset button on everything you have done so far; financially speaking of course and hope to do better things better than you did last year.

Let’s look at some of the new and unusual things to do in April.

  • Make a learning budget

Learn something about money or anything you like. The best way to make money is to learn something about money. Just like if you wanted to learn cooking you will get into the cooking class. If you wanted to learn swimming you would enrol in the swimming class. If you find learning about money is too daunting task than learn something which is close at to your heart or related to your work. If you learn something new, there’s a possibility that you will use your new ideas to generate new income and in turn that will generate new wealth for you.  So make a budget, enrol somewhere and spend that budget. How about a % of your annual income? Spend it for sure!

  • Plan a unique holiday 

When you’re by yourself and without your mobile phone you will have the opportunity to think! When you have time to think, suddenly good ideas will come to your mind.  You may think this is silly but you can be sure that you will be amazed if your drivers experiment just once. So it might be a good idea to go for a holiday just by yourself. If you find that too intimidating, join a group of strangers. You can combine that with the adventures experience if you like.  Be extra careful if you’re going with your special buddies. Do this only if they are going to be in a position to help you discuss your idea and make it bigger. They must play the role of complimenting your thoughts. So make a schedule to do this holiday and obviously make a budget to make it happen. Think & create new ways of making wealth.

  • Make a prediction and make it happen

Be brave. Let’s aim to grow and multiply net worth by 50% by the time you come to the end of this financial year. This is not a joke and it is easier than you can imagine.  I’m speaking about NETWORTH and I’m not talking about return on investment. If your networth is Rs. 100 today, all I’m saying is that let’s aim to make this a 150 by the end of this year. This networth comprises of all your savings till date. This can be achieved by simply saving aggressively every month for the next twelve months. Just put this into a recurring deposit or liquid fund so you don’t spend it.  We just have to prove to ourselves that this is possible. Where and how we will invest this money will think about that later.

  • Eliminate a negative belief 

I want to give you an exercise here. Write down all your negative beliefs you have about money and wealth. Most people are not able to achieve the desired level of wealth because they think about wealth negatively. So even if you are earning a good amount of income you will never see yourself becoming wealthy. Examples are money causes problems, money causes a fight, managing money is complicated etc. Then for each negative thought, you have written down the positives i.e. the opposite for a few months. Soon negatively biased feelings will evaporate.

  • Make a new investment; something you have not done before

Again here you do not have to be a financial expert. The idea is to learn something new. There are hundreds of investment options. Our objective here is to learn something new. Talk to your advisor and seek his or her guidance. Just a word of caution here; don’t do anything which is speculative or is something that you just can’t understand. Do what do find easy you understand and do that then.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

Seeking financial freedom? The time is NOW!

John Lewis famously remarked, “If not now, then when? If not us, then who?” This is so appropriate in the current financial world that we live in.

That statement will leave to rest every other argument that is conservative and against the idea of wealth creation. We are often faced with the situation where there is no option but to create wealth. Read on to know why!

Interest rates are painfully low. For all those diehard fans of guaranteed investment returns, there’s hardly any place to go to. Thinking of fixed deposits? Feeling happy with 7%? And fully taxable? That period is over. Period.

That doctrine of investing into pure fixed deposits and similar instruments is unfortunately standing challenged. There is no option but to sprinkle it with a combination of a little something that will add to the returns earned from fixed income type of securities. In fact this category of investors are in a way, best placed in terms of the current tax laws.

They can earn about 9-10% with minimal or near zero tax over about five years and more. Starting to generate rate of return above the inflation level of 7% is starting to create wealth. So there it is; there is no option but to move in the direction of creating wealth.

For more evolved investors, who invest in equities and who and still sitting on the sidelines tend to run out of patience every now and then. They are sometimes waiting for the right time, sometimes waiting for correction, sometimes waiting for valuation and sometimes waiting for just nothing. Sometimes, just too busy to take action!

I totally understand not wanting to lose hard-earned money. But if the money does not move it will stagnate. That’s the problem with money.

Hit the Ground Running

Inaction and inactivity kills it. Makes it costly to hold. Makes us lose opportunities, sometimes small and sometimes significant. I know of many people including my dad, who just kept investing into equities and holding forever. No doubt they were hugely (big HUGELY) better off then the people in the same time zone. I think they could have done far better with some smart lessons on asset allocation. This is because if they compare the growth rate of their holding over a period of 20 or maybe 30 years the compounded rate of return earned is often not impressive.

It is just marginally better or a few percentage points above the fixed deposit rate. Hence the need for asset allocation, which simply put is not to have all eggs in one basket at any given point in time. These sections of investors anyways create wealth, and, asset allocation is the tool that ensures that the process of wealth creation continues uninterrupted. So again there it is; even for this section there is not option but to start enhancing their wealth creation activities, else returns will continue to remain forever mediocre.

Then there are skeptics and there is nothing much for skeptics of everything, except that they need a serious dose of financial education. Perhaps what if needed is a proof of concept and for that, which better country to live in other than India where financial transparency in investments is so high that I sometimes feel, it comes from another planet.

 Your Money Needs Action

Today, there is a whole lot of variety to choose from and we have never been more spoilt for choice. But the most important thing in all this is to understand that your money needs action. It needs activity and for that the time is now!

And furthermore, if you asked me this question 10 years ago; I would have said that, the Time is NOW. If you ask this question 10 years hence, I will still say the Time is NOW. Any time is the right time to start the process of creating wealth. All that is important is that you take your first step; then continue it all the way with zeal and determination… till you have the level of wealth that you desire. And if you accumulate more than you need, still do it and share it with the world.

If you want your financial freedom; then the Time is NOW!

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager and Financial Freedom Coach.

Young Turks: Here’s the success story of venture fund Aspada

Venture fund Aspada was co-founded by Kartik Srivatsa and Thomas Hyland in 2012 and has made 17 investments so far across Fin-tech, agriculture, health and edu-tech startups.

Young Turks takes a look at their investment thesis, their differentiated VC model and meet three of their portfolio companies – Capital Float that underwrites unsecured loans to startups and SMEs; Dunzo, a hyper local concierge and delivery player that is also Google’s first direct startup investment in India; WayCool, a Chennai-based agriculture-tech startup.

FASTag to become mandatory from December 1

Toll plaza

In 15 days, FASTag will become mandatory across India. As the December 1 deadline nears, there are still massive queues across toll plazas with congestion of up to 30-35 minutes.

CNBC-TV18’s Anu Sharma gets a first-hand demo of the software which uses advanced satellite data and heat maps to get real-time status.

AGR payments: No relief for telecom companies


The Department of Telecommunications (DoT) has issued a notice to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court.

As per DoT’s estimate, the liability of Bharti Airtel Group is Rs 62,187.73 crore, Vodafone Idea Rs 54,183.9 crore and BSNL and MTNL Rs 10,675.18 crore.

So, what does it mean for the telecom companies? Reema Tendulkar explains.

Power Talk: Automation affects jobs but it doesn’t destroy jobs, says former BP chief


Author and former chief executive officer of BP, Lord John Browne on Thursday said that automation affects jobs but it doesn’t destroy jobs.

In an interview with CNBC-TV18’s Shereen Bhan, Lord Browne spoke about his new book Make, Think, Imagine.’

Browne said, “The book took three years. We spoke to about 150 people and 120 of which appeared in the book. To make all of this a bit more human and to invite people into different rooms around the world which they might otherwise not get into to see different views of all the things that I have discussed.”

On the future of technology and innovation, he said, “History doesn’t repeat itself but history does rhyme with the future. Engineering and technology helped without any doubt the development of the human being and of societies generally. If we look around today, we see a world which is healthier, people live longer, they are mode educated, the world is less violent and it is better connected. So, a lot of these things will still be in place as we go through a period of de-globalisation at the moment.”

Speaking about automation he said, “Humans have skills that cannot yet be replicated by robots. Every automobile that you order, for some manufacturers it is a different car and so you have to assemble them differently. Manufacturing has come a long way since the beginning of standardised parts and mass production.”

Startup Street: Deep Kalra’s advise to startups and Druva’s IPO plans

In this episode of Startup Street, we met Deep Kalra, chairman and group chief executive officer of MakeMyTrip, and decodes how the Indian startup ecosystem has fared so far.

Druva, the Sunnyvale-headquartered cloud data protection company, joined the unicorn club in June this year when it raised $130 million in a fresh round of funding from Viking Global Investors. CNBC-TV18 put Jaspreet Singh, co-founder and CEO of the company on the hot seat.

India’s aviation growth in-line with international standards: Airbus


European aircraft maker Airbus on Thursday said India’s aviation growth is in-line with international standards.

In an interview to CNBC-TV18’s Anu Sharma, Grazia Vittadini, the global chief technology officer, said, “Demand for air travelling is projected to double every 15-20 years and that is an absolute success story for Airbus.”

“However, it is a position of privilege which comes with great responsibilities because twice as many aircraft means also twice as many emissions and noise. So, something we really are committed to mastering for the next aviation of aircraft,” he added.

Don’t see a cyclical pick-up in India at the moment: CLSA

Indian economy

Foreign brokerage CLSA on Thursday said it does not see a cyclical pick up for the Indian economy at the moment, but adds that the real estate sector is showing signs of a potential uptick.

In an interview to CNBC-TV18’s Areeb Sherwani, Adrian Mowat, chief strategist, said he is not surprised that inflation has breached Reserve Bank of India’s (RBI) medium-term comfort zone.

Mowat said, “Inflation is another disappointing economic data point from India and manufacturing has definitely been leading the slowdown. So, to some extent, we are not surprised as it has been a part of the ongoing trend. For markets like India and Indonesia, global investors like these economies because of their high underlying trend rate of growth.”

“You have to see if there is a delta in India that makes this market look more attractive and it is going to encourage more funds to come in. The government has to focus on the NBFC sector, where there is a credit crunch going on. So, the RBI is cutting interest rates but the plumbing is blocked. So, you cannot say they have cut interest rates, we are going to get a monetary stimulus unless the plumbing is cleared and the money gets through and that is not going on,” he added.

On real estate sector, he said, “Real estate has had quite a troubled period. We have had new regulations around the real estate which are structurally actually quite good and help the potential home buyers.”

Experts decode Supreme Court dismissing the review petitions challenging Rafale verdict

The Supreme Court on Thursday dismissed the review petitions that had challenged its verdict in the Rafale case. Last December, the apex court had ruled out a probe into the government deal to purchase 36 Rafale fighter jets from French aircraft manufacturer Dassault.

The court on Thursday observed that the review petitions filed by former union ministers Yashwant Sinha and Arun Shourie lacked merit. To discuss this CNBC-TV18 spoke to Syed Zafar Islam, spokesperson of BJP and Majeed Memon, Rajya Sabha MP from NCP.

Islam said, “If the Congress party has not acknowledged the verdict then what one can say about it. All along what they have propagated was an absolutely fabricated story. They just wanted to tarnish the image of Prime Minister Modi and in return what happened? We took them head-on because sincerity, honesty, commitment to the nation, national security is something that Prime Minister Modi is known for.”

Memon said, “In the parliament, we are meeting just a couple of days hereafter. The parliament can come forward and say that let there be a JPC to find out the factual truth with regards to the whole operation.”

Experts discuss Supreme Court referring the Sabarimala case to a larger bench

The Supreme Court has referred the review petition against the Sabarimala verdict to a larger 7-judge bench. The court said that the issue of whether or not women should be allowed entry into the Sabarimala is part of a larger debate that includes entry of Muslim women into mosques, female genital mutilation in Dawoodi Bohra community among others and this should be decided by a larger bench.

The court had earlier, by a majority 4:1 verdict, in September 2018 lifted the ban that prevented women and girls between the age of 10 and 50 from entering the famous Ayyappa shrine in Kerala. 56 review petitions and some fresh writ petitions were filed challenging the verdict.

Suvidutt Sundaram, counsel for petitioner of Sabarimala Case said, “I am overwhelmed with today’s judgement of the honorable Supreme Court referring the Sabarimala matter to a larger bench of 7 judges.”

“We were expecting that this matter would be referred to a larger bench for multiple reasons. There are so many seminal issues which are involved in this particular matter, there are so many conflicting provisions at play, and all these things will be addressed by a larger bench,” he added.

ALSO READ: Sabarimala verdict: Supreme Court refers decision on women’s entry to a larger bench

Tara Krishnaswamy, an activist said, “Clearly this is a contentious issue and that is why you do not see an outright majority in the decision making if you will. However, that said, there is a famous saying ‘your right ends where mine begins’. When people say women have the right to pray and then there is an article of freedom of religion, how do you balance the two?”

Speaking about whether women should be allowed entry until interim orders, Syed Zafar Islam the spokesperson of BJP said, “We must understand that the matter is sub judice. There are certain reservations the people who have faith in the religion, there are certain restrictions and there are certain reservations they have and that is why they had to approach the honorable Supreme Court. The honorable Supreme Court felt that it has something to do with faith and something to do with devotees and that it should be referred to the 7-judge bench who can deliberate discuss and understand the context every possible way before delivering a judgment.”