I recently attended a webinar on the Financialisation of India’s Savings with Monika Halan moderated by Marcellus Investment Managers. Drawing from the evolution of Bollywood, at the webinar Ms Halan spoke eloquently on how our (specifically the Indian Investor’s) relationship with money and wealth has evolved over the decades. During the moderated webinar, Ms Halan answered multiple questions about investing in India and the conundrum of planning for retirement in the Indian context. In the webinar we were also introduced to her book Lets Talk Money. Intrigued, I purchased a copy for myself. Ms Halan has a talent for simplifying investing concepts without making them simplistic. Mr. Nandan Nilekani in the foreword to the book aptly puts it – “Ms Halan tries hard to make herself unnecessary after you’ve read the book. She doesn’t just give academic reasons for her advice, but also helpful analogies and relatable stories to explain why you should manage your finances in the way she prescribes” . Using  relatable anecdotes in an Indian context, Ms Halan strikes a chord with the Indian reader.

A practical concept the book discusses is to create separate accounts for income, investments and savings. Creating compartments such as these greatly simplifies the cash flow issues investors are perpetually dealing with. The book gives a ring side view of the gamut of protection and  investing options available to the Indian investor. As with any good doctor who will first emphasise the importance of preventive health care,  she first touches upon how to build an emergency fund and take pre-emptive action to protect oneself financially in medical emergencies or loss of life. The chapter on health insurance was particularly illuminating. It ferreted out details of medical policies that all  purchasers of medical insurance ought to pay attention to. In the chapter on life cover, Ms Halan has poignantly depicted how the many amongst us have been trapped into at-least one dud insurance product. The chapter “What if you die?” is a must read for all Indian investors. It explains how much life cover we need and when. It also lays bare the disservice Indian investors are doing to their savings by clubbing protection (insurance) and investing.

On the chapters on investing Ms Halan spends considerable time explaining the basic mechanics of each of the investment options available to the typical Indian investor including Real Estate, Gold, Equity and Debt. The lay investor is well served reading these chapters to get a handle on the  basic  characteristics  that define each of these options. Ms Halan talks about the idea of a Money Box, which we can compartmentalise into different goals  – say children’s education, a car, a house, retirement etc. She then goes on to explain how each goal can be served by an appropriate investment product which suits the time horizon over which that goal is to be achieved. It is here that I tend to have a nuanced difference with Ms Halan. No doubt financial goals must be funded with the appropriate financial instruments. In keeping different compartments Ms Halan is asking us to give the appropriate time horizon for each investment product. Nevertheless, Ms Halan’s book does not address issues about catastrophic loss and maximum downside. Investor irrationality is attempted to be addressed by creating the compartments. However it is not explicitly taken into account on an overall portfolio level. The ability of an investor to stay the course of her investment is a large component of the success of the investment and it achieving the intended financial goal. At an overall portfolio level, the maximum downside must be understood. The Money Box must also be checked for the investors ability to stay the course even in light of catastrophic events that can rock the box.

Let’s Talk Money is an excellent read for the lay Indian Investor perplexed by  the confusing Indian financial landscape. Ms Halan’s book de-clutters all the jargon  and presents the broad contours one’s investment plan must have. Do get yourself a copy…it will serve you well.