Ad guru Prasoon Joshi's investment fundas!

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CNBC-TV18's Informed Investor caught up with one of the best known faces of the Indian ad industry Prasoon Joshi of the McCann Worldgroup. In fact this multi-talented award-winning lyricist, screenplay writer and ad guru is actually quite risk averse and he believes in saving rather than investing. Here is an edited transcript of his comments. Also watch the accompanying video. Q: Whenever you talk about ad men or creativity you can almost never associate it with financing or investing money and in fact most of the ad executives we have spoken to have no clue what to be doing with their money. What would your advice be to them?
A: I think even I don’t have a clue. I am a risk taker as a person when it comes to taking risk about ideas, taking risk about my career, but when it comes to money I would rather play safe. I am not much of a risk taker with money. I feel it’s important to understand your DNA as a person. Financial appetite and all those things I think is inconsequential because it has to comfort you first.
What is money? Money is a digital figure. The money is lying in a bank. It’s in your head there is a digital figure that I have got this much of money. But I don’t believe in the longevity of money. I don’t believe it’s there forever, because things can move. I believe in longevity of skill. I believe your talent, skill, ability, reputation, the respect you earn for yourself and your skill set are more important assets to me and I would rather invest in those. Q: That’s a great thing to work with. But you are of course at a place in your life where you have achieved so much. But there are many young people who just joined this industry. They make a lot of money and so many of them just squander it away. If you have to give someone investment advice, I am not saying equity markets. It could be anywhere it could be gold, real estate. Which would be your best investment avenue now?
A: As I said first you have to understand what makes you comfortable with money. Do you feel safe that you have money in your FD, which I feel at times safe, so I have some of my money in FDs in nationalized banks. Do you feel safe your money is in property? Do you believe in that? I think property is a market which I believe in.
I believe that concrete somehow gives you a sense of there is something substantial out there. That’s your comfort level. There are people who believe in investing and playing in stock market. I would say I would not do it myself, not that I can’t do it. I run a company and understand that how shares and markets move and what you have to study, but you have to study the market. You have to have time for that. You have to really be a informed investor.
Q: You are an icon, both in the music world as well as in the ad world and there are so many of these young people, forget about investing, they don’t even file their tax returns. That’s feedback that we have got. If you have to give advice to the young generation today what would your three important pearls of wisdom be in terms of investing in the market?
A: First of all I think you should pay your taxes for sure. That is very important. Second thing is that roll your sleeves and try and learn it yourself. If you really want to do well with your money I think money has to work hard also. Money should not be sitting somewhere. I don’t like lazy money.
Your money should be working hard for itself. I feel that today’s younger generation is much more responsible with money than my generation was. We had lesser clue, because we were the first generation of people, especially in my case where I came from a service background family. My father was civil servant, so it's a very tight existence. You have good life, but financially you never have a lot of money to invest and in that sense you learn to be very responsible with money and you understand the value of it much earlier age.
When you get it also you are surprised why people are paying so much. My father used to be surprised. Because salaries suddenly in India after the economic boom there is exponential rise and you started feeling conscious telling your salary to your father because you remember how much he used to make. There used to be a transparency in families when you used to know that how much your father makes and when you start sharing your salaries with him… Q: And how that money went into the post office or into the FDs?
A: Exactly. They did not even have to do FDs. Probably they would first fulfill their requirements of having a house or car or those things which they had to provide for and after that if something is left then they will think of investing in FDs and stuff like that and post office as you said. So I think the current generation I feel has much more sense of it. They have much more ambition with money also than my generation. Q: What has your worst investment decision been which you have regretted so far, if you don’t mind sharing it of course?
A: My worst decision has been actually some of the shares I bought because somebody advised me and that was around 10 years back. It was not major chunk of money, but it was quite a lot of money and the kind of picture that was drawn in front of money was so rosy, so beautiful, I couldn’t sort of resist. I lost a lot of money in that and I understood then why did it happen. I tried to study it. I am a very analytical person.
The overall learning was that it happened because you were thinking that somebody else will make life easier for you. That’s the reason it happened. If I was ready to understand, it is not impossible to understand and if you are not ready to do that I think you have no right to expect those kind of exponential returns.