In an interview with Yogita Khatri of myiris.com, Ravindran Padmanabhan, independent wealth coach and founder at Chennai Investors Club says, ``Discipline and patience are the two magic mantras which are very important in the money world. If you have these two essential qualities then it will work wonders for your portfolio.``
Tell us about your background and what led you to enter into wealth management and training profession?
I was very keen on investing right from my college days. During college life itself, I used to invest money (savings from part time job). I started my career in banking; I was working in a leading MNC bank in early 2000s. At that time there was a big change with rapid growth in salary levels across India. I found that there was this `young working class population` with surplus money and were keen to explore investments other than the conservative fixed deposits. They had little knowledge on managing money and had no options to even outsource this as many wealth management services only looked at high net-worth clients. I found this as a perfect calling to start my own idea of wealth coaching for individuals.
SEBI has introduced a transaction charge of Rs 150 for new investors and Rs 100 for existing investors for mutual funds to incentivize retail distributors. Do you think it is a step in the right direction for industry as a whole? Why/why not?
In my view, this is not the solution in the long run. The transaction fee is too low compared to the services which the distributors are giving. I feel the industry must shift to the advisory fee based model. In future, there will also be a lot of competition from the online channels which will gain market share.
You are the organizer of workshop - `Invest 2 Win`. How this idea did get invented? Tell us something about it.
During my initial years of investing, I found there was a huge lack of resources - there were few books related to investing in Indian markets, absolutely no workshops or training programs which were focusing on it. I found that there was a huge demand for it and I had found lot of people wanted to attend such programs but could not find them. This was the course which I had modeled based on what is essential for any investor when it comes to Investing. We spend two decades in our lifetime in developing skills related to our profession and sadly we do not invest enough time, in `learning to manage` money. Many of those who lose money make fundamental mistakes when it comes to investing. One needs to be strong in basics, if he/she needs to be wealthy. It is said, ``Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime.`` And I sincerely believe that one must invest some time in learning the basics before doing it ourselves or even handing it to over to professionals. In the `Invest 2 Win`, workshop we teach people the basics of investing and help them make their own choices when it comes to investing. We keep it simple so that even housewives can even follow it. The success of our program lies in its practical application in real life situations.
What does money mean to you? How has your idea of money changed with time?
I have deep gratitude to my parents as they were the first to teach me about money. Coming from a middle class family I knew the value of savings right from a very young age. This made me to realize the value of each rupee which comes in my life. I feel that money is important and if one follows one`s passion then money flows effortlessly.
With interest rates rising, what opportunities does the debt market offer to investors?
The rising interest rate scenario may be good for those who look at debt instruments. However one needs to take these returns adjusted for inflation. With inflation still not in control, I feel that rise in interest rates is not benefitting overall.
In the current market environment, what should be the ideal portfolio for a person with high, medium and low risk appetite?
A good portfolio could be diversified across various asset classes like cash, debt, equities, gold and real estate. The percentages could vary based on the risk appetite.
In current market scenario -
> A high risk appetite investor can have around 50%-60% in equities and 20%-25% in cash to invest further into equities when markets decline.
> A medium risk appetite investor can have around 30%-40% in equities and 15%-20% in cash to invest further into equities when markets decline.
> A low risk appetite investor can have around 15%-20% in equities and 10%-15% in cash to invest further into equities when markets decline.
What are your business plans for over next few years? Where do you see yourself 3 years from now?
We focus a lot on investor education which we feel is the best way to ensure equity penetration across India. We have an investors club called Chennai Investors Club which is our training division which currently caters to the city of Chennai and other towns in Tamil Nadu. We plan to expand this across South India by 2012. We are also exploring the possibility of offering online learning programs in areas of investing which we feel have a good potential. We would like to be the leading educational organization in the area of financial services which we think will see a huge growth in this decade.
Is there anything else you would like to share with our readers?
I want to share three things which I feel are very important to investors:
> Spend at least a minimum one hour every month to keep yourself updated on what is happening to your investments.
> Be very careful in selecting your financial planners, advisors and brokers as there as important decision makers in your hard earned money.
> `Discipline` and `patience` are the two magic mantras which are very important in the money world. If you have these two essential qualities then it will work wonders for your portfolio.