In today’s episode we are going to look at reading, the books you can read, when should you read, and why should you read.
Hrishi K: Hello and welcome to another episode of NSE Presents: Invest – O- Cast (An exclusive investor podcast) Powered by MoneyControl. My name is Hrishi K and I am your host on the podcast and it is all about getting your money to make better investments for you in the new financial year.
Let’s start off today’s podcast with some interesting numbers: 50. 23. 80 you will ask me what are these. Well, these are the reading habits of the world’s richest people. 50 is the number of books Bill Gates reads in a year. 23 is the number of books Mark Zuckerberg read in 2015, and he considers it to be a low number. 80 is the percent of time that Warren Buffett devotes to reading. Now keeping in mind that most of what you read is financial statements and company prospectuses. It’s still a huge amount of time to devote to reading.
Yes, today’s podcast is going to be about how reading can make you rich. Well, if rich is stretching it a little, we are going to talk about how reading can make you a better investor.
Reading is a lost art-form today, honestly. With so many different media fighting for our attention, we have all but forgotten reading. Well, I was guilty of that too. Till a few years ago I wasn’t reading amongst as much as I should but now I have changed that, now clock in at least 2 books every week and I think I am doing pretty well for myself To become a better investor, read more.
National Stock Exchange (NSE) with the help of Invest – O- Cast (An exclusive investor podcast) Powered by MoneyControl is committed to break the limitations of geographical boundaries and reach investors across the country. In today’s episode we are going to look at reading, the books you can read, when should you read, and why should you read.
Our guest today is financial planner and author Kiran Telang who has been in our show before. Welcome back Kiran how you doing?
Kiran Telang: I am good Hrishi, thanks it is a pleasure being here.
Hrishi K: Needless to say, she is a voracious reader and is quite successful at making money too, to put it mildly. Let’s see if we can get into her head to find out how reading made her a better investor. Kiran itss wonderful to have you in the show like I said. So what is that one book that you look back and really changed the way you look back at investing? What were the major lessons you learnt from that book?
Ms. Kiran Telang: Well there are lots of books which help me become a better investor but one book that really change the way I look at investing is ‘7 stages of money maturity’ but George Kinder. It is not your typical investment book; it is actually more of a psychology book, so it delves deeper into a mind of an investor. Why a person behaves in a certain manner that he does? Now why this is important is because investing is more of a mind game than a number game and probably it is more ‘emotional’ than it is ‘technical’ so to get into the mind of an investor and figure out why he is reacting in a certain manner is absolutely fascinating and this helps me not only as a investor but also as an advisor and what I learned from this book is that most of your biases or most of your reactions to money actually are coming from your childhood. The messages that you picked up from your parents from your community when you were growing up or from the wider environment your school, your college, those are things that keep on subconsciously getting into your mind and subconsciously they impact your decision making as an adult and you don’t realize it most of the time. A lot of times there are these things obstacles when you are taking money decisions and unless you figure out what is that is happening on the subconscious level you will never be able to move forward with making those positive decision regarding money. Hence I feel that is a very important book for me.
Hrishi K: Now that is really wonderful. Lots of people are scared of financial jargon Kiran. And a big reasons why lay people don’t read financial books is because they just won’t understand, could you recommend good books for beginners because they don’t understand the terms. Could you recommend good books for beginners or for people interested in learning about investing which actually simplify stuff?
Ms. Kiran Telang: Hrishi what I would like to say here is nothing comes easy so if you want to learn regarding investing, regarding making money or keeping your money, you do need to have that mindset to get into books which talk about how things have fared in the past. So how you have moved one something which has happened historically and there will be numbers that will come in but there are couple of books which I would recommend which can probably help you create a frame work for investing make you a better investor and create your own investor philosophy. One of the best book written is “Intelligent Investor” which has been written by Benjamin Graham, this book basically talk about creating a frame work for successful investing. So it doesn’t go so much into numbers and you know graphs and things like that and it does define what kind of investor you are, ‘defensive investor’ or ‘enterprising investor’, so basically an ‘aggressive investor’. How do you get around with that kind of mindset and how do you create a frame work for your investment. Now the second book which I would on investment recommend is by Peter Lynch it is known as ‘One up on Wall Street’. Peter Lynch is one of the successful fund managers of our times and he has written this book for average investors to help them understand how to pick up good stocks for their portfolio by looking around their community or their social structure for example if you go to a mall if see what product is being picked up more you can probably delve into that company and that could become part of your portfolio, so it is giving you cues to ho create a good portfolio. These were 2 authors, who were talking specifically about investment. Now with investment I feel a psychology book is also important so I would figure George Kinder would also come again into this recommended reading list to understand your own obstacles in terms of creating a successful investment mindset. Now if you look at some of the Indian authors has also given you some good books on these lines. One I would recommend is “Yogic wealth” by Gaurav Mashruwala which takes you into the ‘why of investing?’, creating wealth in a very positive manner. Another book which I would recommend is “Riding the Roller Coaster" with Amit Trivedi where Amit has spoken about what has happened in the past where there has been bubbles in investment and how it has impacted people. These lessons from history keep repeating and people keep forgetting them and this keep on happening over and over again. So reading through this you will be able to figure out, how to escape these Bubbles and become successful in your investing.
Hrishi K: That’s wonderful. Thanks a lot for these recommendations. I am going to pick up at least a couple of them on the way back. Now they say don’t judge a book by its cover. But what I want to understand from you is how does one select the right book on finance or investing? How do you know what’s right for you?
Kiran Telang: So this becomes a very personalized decision, each person has a different level of understanding, a different way of learning so if I broadly would say for example you are walking into a book store, so you just go to the aisle where you see the books of your interest not only finance maybe other books also. Pick up the one that takes your fancy from the name, glance through what the book is about usually there is a brief given on the back cover or inside flaps, look at the chapters, look at the language, sometimes what happens is even though the chapters are interesting the topics are something that you want to learn about but the language is something which is not suited to your reading style. So you look at those things and if you figure that there are things that you can pick up from this book that is the book that you should read. Other ways to select a book is probably you know looking at this reading list with lot of bloggers offer, financial bloggers they offer good list for your reading so that you can pick of certain books which interest you for that. From online digital world maybe you can look at the reviews which appearsin various magazines or various bloggers also do book reviews, so you can look at those and see if it is something that you want to learn and pick up that particular book to read.
Hrishi K: Wonderful! You are listening to National Stock Exchange (NSE) presents Invest – O- Cast (An exclusive investor podcast) Powered by MoneyControl. Where committed to break the limitations of geographical boundaries and reach investors across the country. Now a lot of us don’t have the time to read today. Some people also turn around Kiran and say I have got a financial advisor. I already pay him he make some neat commissions so why do I have to read? Can you explain to our listeners why it is important to read up on finance, despite having investment advisor?
Kiran Telang: So having a financial advisor is not something that should take you away from reading. In fact when you have a financial advisor who is probably going to coach you on how he is managing your money or why he is giving you certain recommendations it is in your interest to understand what he is saying, while many financial advisors try to simplify things dejargonize things in finance there are some basic things which have to come in the conversation and you need to understand that. Say if we talk about ‘Asset allocation’ so what are the asset classes this is basic information and you need to know that. So in spite of having a financial advisor I think reading about finance is necessary you might not get into technicalities, you might not understand all the jargon behind it but yes the basics and the overview you need to know.
Hrishi K: I want to be honest here. Reading is something I didn’t find much time for I change that by conscious decision making and then I thought to myself my god I am a Radio Host! A podcast host and I should be listening to more audio and being a good listener always helps even in these conversations so I have got into audio books. What do you think about audio books are there some interesting ones they are there on the online space you know people can look at listening to?
Kiran Telang: Frankly Hrishi I am from the old school. I still love reading physical books I have not even moved to ‘Kindle’ or eBooks I still love the smell of new books when you open one and the you know excitement of opening something new in those pages so I probably I wouldn't be the right person to recommend any audio books but yes every person has a different style of learning some people learn better through audio, some are more visual and some people are more comfortable reading technical stuff so to each his own, whoever loves audio books they are the way to go probably few years down the line I might be into it I am not sure.
Hrishi K: And make sure you go and check out George Kinder, Benjamin Graham, and Peter Lynch all these wonderful peoples that she has mentioned may be they all have audio books who knows? Any good Indian authors you would recommend Kiran and what makes these Indian authors so special?
Kiran Telang: Oh! This is a very interesting question Hrishi. I think in personal finance in India there is a big revolution under wave, we have many good authors who have written Books which are simple which are interesting, the topics are very diverse and it is very easy to read I would like to name of few of them. I have already mentioned” Yogic Wealth” by Gaurav Mashruwala and “Riding The Roller Coaster” by Amit Triverdi. Couple of the other ones I would like to say are Kalpesh Ashar he has written a very interesting book called “Yours financially” which is basically a fiction which carries principles of financial planning, so I think every newlywed should definitely read this book. There is a P. V. Subramanyam who have lovely books on investing and he focuses more on retirement, so that book is also very good book to pick up. Hemant Beniwal, Manish Chauhan, Nandish Desai, these people have written many books on investing and how do you go about creating your own financial plan. If you are a person who loves to learn from pictures Yogin Sabnis has a very good book on financial planning through mind maps so you can just look at one picture of mind map and understand what is good for you at a particular life stage. There are others who specialize in certain fields like Jitendra Solanki who has written on ‘financial planning for special need children’, so many many good authors have come into the Indian space and you can find them all online.
Hrishi K: Is there a specific time, I am just curious a specific time we should read certain things? Like some people say you get up in the morning read a business newspaper you know and then you allocate some time later in the day before you go to sleep or while coming back riding home on reading books? Is there something different that one can do on a weekend as far as reading is concerned? So this allocation on time thing how much do you follow as far as that is concerned?
Kiran Telang: So see I feel each person has a different way and different time and different routine that they are comfortable with regarding their reading so you have to pick it up as per what suits your requirement. Many people who want to develop a reading habit actually try to start reading in the morning when the mind is fresh so that may be keeping a target of something like 20 pages a day and grow from there. Over the weekend it will be a good idea if you could read as a family, so in this way like kids also inculcate the reading habit and you have more good bonding over discussing books on what you have read. Now one interesting thing I read somewhere in the internet regarding developing a good reading habit is that you should read many books at the same time, what happens usually is you pick up a book and you are somewhere stuck and you don’t move ahead from that book so probably your mind is somewhere not ready to accept that kind of content at that point of time, so you should have another book which you are reading simultaneously maybe you can move to that and you know keep switching between books and eventually you will end up reading various kinds of books over a short period of time. I think that is a very interesting thing that I read about and I am trying to follow it and it seems to work.
Hrishi K: And you did say off the mike to me Kiran that it is important to read all kinds of books. I mean just because we are doing a podcast on finance books and books on investing doesn’t means that you limit your horizon to only those kinds of books and you have picked up stuffs from other books.
Kiran Telang: Right, see what I feel is that when you are developing your, even your investment mindset or a philosophy there are lot of things which come from other genres or you know other areas of knowledge for example there is a concept called ’Margin of safety’ so that concept somewhere comes from physics, so if you are designing a bridge, a bridge can with hold you know 200 tons of weight and you have actually designed it for 400 tons so that 200 tons is actually a margin of safety. So when you are doing your investments you do have to keep that margin of safety. So sometimes you may not be able to understand concept directly in finance but you might relate to something else from some other area of knowledge. So I think a wider reading habit can make you a better investor.
Hrishi K: Well that was a fascinating podcast today. Kiran has answered a lot of questions that I am sure have given more clarity to not just you but me too. Whoever would have thought that reading held the power to becoming a better investor!It’s now time for ‘Wisdom in the Bank’, the segment on this show that does a quick recap of all the points that our guest has spoken about. Key pointers today.
- Try and read George Kinder’s “The Seven Stages of Money Maturity” it talks about how people behave in a certain way as regards as money, look for subconscious reactions and go beyond behavioral science also at times into the psyche of a person.
- Another interesting book is Benjamin Graham’s “Intelligent Investor” it is a book for beginners. So is Peter Lynch’s “One Up on Wall Street” and “Yogic Wealth” by Gaurav Mashruwala. Essentially all these books talk about you knowing the kind of investor that you are, also what has happened in the past which might have an effect in the present. As enunciated by Amit Trivedi in his book “Riding in the Rollercoaster”.
- Even if you have a financial advisor its good to read because then you have your basics right and you can question your financial advisor.
- Lots of times people buy products and realize it is not of value to them, it is not something that should have been bought all these books help in the psyche of buying and selling.
- Read other books, not just books on finance and investing. For example in physics there is a theory about the margin or safety which could be applied to your financial life. In Indian authors Kalpesh Ashar’s “Your Financially” is a fictional book on finance and P V Subhramanyam’s “How To Save And Plan Your Retirement” are interesting options. Yogin Sabnis’s “Mind Map” as far as finance is another interesting reads.
- Read whenever you can, in the weekends read as a family, make the kids read with you as suppose to spending time on your mobile phone.
- As far as what to read and what kind of books to pick out, read financial bloggers reading list. Also go through the reviews in many online book stores. Browse through book stores, walk through the aisle, pick up and read the synopsis as well as the language.
Kiran it’s been a pleasure having you on the show today Kiran. I think the knowledge and tips that you have given our listeners is going to come of great use. It’s great that we have guests like you coming on the show to give us new insights on how to become better investors by doing something as regular as reading. Thank you.
Kiran Telang: It’s an absolute pleasure Hrishi, thank you so much.
Hrishi K: It’s amazing on how just making time in your daily routine can increase your bank balance all of you listen. Thank you once again.
And that is a wrap on our show NSE presents Invest-o-cast! I am your host Hrishi K for the NSE Presents: Invest – O- Cast (An exclusive investor podcast) Powered by MoneyControl. To know more about our podcast, log on to moneycontrol.com and visit the podcast section. In case you would like us to address any of your investment queries on our show do write into us at: email@example.com firstname.lastname@example.org. You can also reach out to us on Twitter @moneycontrolcom, Twitter @moneycontrolcom or Facebook @moneycontrol.com, do remember to use #nseinvestocast #nseinvestocast.
Thank you for listening!Disclaimer: The material on this show is for informational purposes only. Please consult a financial advisor before taking any financial decision