Dreams and Budgets

Our dreams in life do not always fit the budgets that we can make out, right?

Of course, all of us have dreams in life. We wish to achieve a lot, to say the least (!). We know that our time is limited on this planet, so not only we wish to make a lasting mark and leave an unforgettable legacy, we also wish to live out our lives well.

Which means in a “rich” fashion. Above the milling average? Or, way beyond from where we came at the start of our life or career?

Very few of us have big inheritances right from the day we were born in this world. Most, almost all of us, had to work hard to build our lives – some of us even from scratch. I know a few friends in that category. I also fall into that category.

So, it is not surprising that when we do achieve a reasonable sense of well-being in life, we tend to want more of the same. None of us want to become monks in the Himalayas, right?

I recently finished Chapter 2 of The Bhagwad Gita (I have undertaken a weekly Sunday Zoom Class conducted by an able spiritual leader coming from the corporate world, actually a practicing corporate lawyer!). While I personally thought that this Chapter 2 was meandering on repetitive issues, the final takeaway was clear – try to abandon meaningless desires in life, and do not get attached to the outcomes of your efforts. I think it is a very difficult proposition (at least for me), and I am not fully signed up for that kind of teaching. But, it set me thinking.

If we wish to achieve riches and lead a rich life, driving around in an exotic sports car, living in a bungalow, and flying first class on flights, does all of that mean we have achieved the impossible? At least, what we thought was not possible in our life?

No.

It is absolutely clear that a bus ride is good enough to get around. Or, an apartment is good enough to live. Or an economy class flight is just fine. And, so on. Luxuries in life which you might enjoy should be shunned if you are not able to even spend just 10% of that extra money on charities. Or, just think of innocent people dying in wars, for example in Ukraine, Yemen, etc.,

There is always a contrarian school of thought which despises the above line of thinking. It goes like this……..what is that one is going to gain or lose by foregoing what otherwise one would have normally enjoyed? What is indeed the point of refusing luxuries in life which is running out fast on a time clock?

The fallacy here is rather stark. If you are able to lead a life of utmost luxury, without ever a thought of the deprived, oppressed and harassed folks just around the corner in your own city, then there must be something implicitly wrong in your mental make-up. You might even go to the extent of saying “those impoverished people better work hard for their living – they are not doing so. They are always looking for external helping hand”. That statement is not surprising at all – that is what Capitalists say about the Socialists, who the Capitalists think are on dole (!). Capitalists create wealth. Socialists destroy wealth. So the thinking goes.

Let me now come to the issue of budgets. Many of us try to stretch our budget taking on debt, in order to achieve a specific luxury item in life which appeared difficult or impossible to get in our past. What is a better status symbol to onlookers (which might include some of your own family members, relatives and friends – and don’t forget business colleagues) than display your latest luxury German car? Or, invite some of these same folks to your palatial new home?

Stretching our budget and taking on debt is the most unwise thing that one can do in life. Even if you are in a position to repay the debt. Operating within your means is simply the way to go. It might mean making some unpalatable compromises. So be it.

I have constantly resisted the temptation to splurge, and have mostly remained within my budget on all things. Making a budget within your means is the most critical life learning that one should learn. Avoiding debt is another parallel life learning.

All this does not mean that you dream small. No. On the contrary, dream big to achieve huge milestones in your career. Dream big to influence your children and friends in the most substantive manner, using your knowledge and life know-how. Dream big to influence the society around you, even in a limited way. All these big dreams do not require that you drive a Lamborghini.

Recently, I put my car out on the second hand car market in Singapore, hoping to get a reasonable price. I could not, so I am still having the car. The reason for selling the car is simple: I do not have a need. My daily use of the car is rather limited, most days it is in the parking lot in my apartment. And, I could get around easily by using public transportation, which is efficient and quite fast. On the other hand, an unused car costs a lot in Singapore in terms of various levies and sunk costs.

The point is this – reducing your desires becomes easy if you really consider the “utility” value of that desire in an economic sense, rather than in a spiritual manner. So, kick out the unwanted desires in your life, and tell me if you have seen a marked improvement.

Our “economic” dreams do not always fit our budgets. Either you reduce the size of those dreams or your budgets. I think you can still have big dreams with a budget with which you are comfortable.

Sounds impossible?

It is definitely possible. You can consult me (!!!).

Have a good weekend folks,

Cheers,

Vijay Srinivasan

16th September 2023

Ignorance is…….

Bliss, isn’t it?

Ignorance is the new normal around the world – why, I would daresay that ignorance is the new excellence. Saying “I really don’t know” is considered pretty normal nowadays, though people around know that it is not true in most situations. One is just trying to escape from taking an inconvenient philosophical stand on a specific matter of public importance, that’s all.

Not only that, an average person is blissful in his or her own true ignorance – he or she really does not know, and worse, does not care. The principle followed is rather simple – “what you don’t see you don’t know”. Out of sight, out of mind. Focus truly on oneself, do not waste time on others. Ignorance is really a blissful state of existence, right?

Slowly, but surely, other people start to accept and respect your ignorance on any matter or issue, because they themselves are often ignorant. The state of general ignorance is then considered to be the new normal, and will slowly evolve into a state of benchmarked excellence.

Why is this the pathetic state of affairs in any society?

There are a multitude of reasons, the most important being the lack of hunger to learn and know about new things amongst the commoners who constitute more than 95% of any society. Most societies are not “driven” towards a knowledge economy, a few are pushed sub-consciously. I do not believe a society adopts digital practices in their daily livelihood without a financial incentive, for example. If there is no motive, then there can be no action.

I was wondering about why some societies succeed beyond expectations, while others struggle to get through every day. There must be a rationale for success, right? Yes, there is, but it differs from society to society.

Let me take two countries in which I live almost simultaneously (!).

Singapore is a tightly managed knowledge society, with a sense of paranoia that it can easily be left behind by the bigger countries in the knowledge race. Constant education of the population over many decades has had the desired effect with a literacy rate which is an envy of the world. Of course, this does not mean that the average citizen is fully literate in digital media and practices, but he is surely aware of the need to go digital. Library books are provided free to all citizens and residents. Government gives education credits, and many incentives to keep the population at the edge of the knowledge revolution.

India has been a total surprise. From 2014 to now, there has been nothing short of a major digital revolution, the likes of which has not been experienced even by more developed nations. Everyone on the street is enabled with Google Pay or PhonePe, or PayTM, or UPI – all digital payment apps. Cash transactions have dropped considerably with the result there is hardly any queue at the ATMs – I always got to use the ATM at the first instance. I use cash everywhere in India or my debit card, as I am not permitted to use the above payment apps unless I have a bank account in India that is linked to an Indian mobile number. I am on the way to get that kind of arrangement going to make my life easier without using cash always. I noticed that digital payment mechanisms have been developed in India to an extent that the nation can beat almost all other developed countries, including Singapore. According to some statistics, over 400M Indians use some kind of digital payment app on a daily basis, and India recorded over 72B (yes B as in Billions) digital transactions in 2022 – the highest in the world.

So, while ignorance can be some kind of bliss, it is not adequate to lead your life – either you are part of a knowledge economy or you resign yourself into the clutches of a traditional society forever. May not be a bad thing, but you will be ignored by your own children. Do you want that?

I use a Revolut card (www.revolut.com) while travelling elsewhere, which offers me very competitive exchange rates, and also easy access to public transportation apart from acting as a debit card for store purchases, etc., It is wiser to use such a fintech card rather than a traditional bank’s credit card where you are at the mercy of your bank on credit, exchange rates, etc., I can load money into the Revolut card from a variety of sources. Life is getting convenient by the day.

While Revolut is getting popular in Singapore, it is just one out of the many kinds of fintech solutions available in the market. An average person on the street may not know about Revolut (it is a British company), but I noticed that it is popular amongst young folks. It was introduced to me by my son, who has already been using it for the past over 2 years.

A mental state which facilitates acceptance of new things and features in life is a far better blissful option than the one initiated by the state of ignorance. At some point in time, the banking regulators or the government will withdraw certain traditional facilities that we are accustomed to, and then we would be left at the mercy of the new fintech players anyway.

Why not adopt when we can?

Have a blissful rest of the weekend folks,

Cheers,

Vijay Srinivasan

7th Jan 2023

Risk of Failure

Are we less likely to take action in support of your plans and dreams, if there is an increased risk of failure?

It is apparent that we all would tend to avoid failures, probably because we think the time to make a success out of what intend to do is short. There is not much time available as we happen to be always in a rush chasing goals in life. At least, we think there is not much time available, though it is just a perceived notion on how we look at life.

There are two distinct angles while assessing the repercussions of taking actions proactively. One is the possibility of failure as such – there is always a chance that what we do turns out to be a dud. Nothing unusual about it, though we might be scared of that possibility. The other aspect is the heightened risk in taking any kind of action, which we think could backfire on us. Assessment of risk is a weak element in almost everyone’s life, as we tend to think that risk is assumed always by a third party, such as an insurance company! Nobody likes risk or even risk assessment. Taking the bull by the horns and getting to the depth of the various risks inherent in any action are not generally liked by anyone. These two aspects dominate any decision-making and action-taking in our life.

However, given that most of us are adequately endowed with intelligence, it is not impossible to realise that not taking any action is also equivalent to failure in life. NATO is not a good principle in life – NATO here means No Action, Talk Only. Not taking action translates to assumption of negligible risk, for sure. With such low risk, there cannot be a failure you would think.

Flawed thinking indeed. In effect, the risk of failure surrounds us every day. We need to take action every day, which means we need to plan for every day. If we do not plan, we are surely likely to miss out on action steps to be taken and executed. If there is no plan and no action, where would that lead us to?

NATO and evidently a failure.

This takes us to the core of our thought process, the core of ideation, and the resultant attempt to plan a course of action. The amount of thinking we need to indulge (or we do indulge) in is just incredible. We need to think, think and think, before we reach the stage of planning. It is not a paralysis of thinking and planning only, as if there are no actions taken as outcome of all these processes, it is a sheer waste of time.

I strongly believe that decisions have to be taken on our own. We are already influenced by many external stimuli, including unsolicited advices. There is absolutely no need to seek out advice on every thought, every plan and every action. Just go ahead.

That’s exactly what I did in mid 2019. I was not bold, audacious, or even courageous. I just wanted to do something different in life. I was bored of the same rut that many of us indulge in. I thought why not do something utterly different. More than that, I was prepared to take a risk, which was quite unusual for me in personal life.

So, the combination happened – I thought, I planned and I executed, while understanding the risk of total failure. Was I totally prepared for the failure possibility? Not really. But then I realised that if I do not do something different at that point in my life, I never would. I had to take action, and ultimately I did (after some 5 months of thinking and planning!).

The risk assessment that I carried out before launching on my own played out almost to the fullest extent – I ran out of money, I could not hire people, I did not have an office, I had no idea of the end product, and I did not know if I could survive. After I tackled most of those issues, and completed the first year, could I heave a sigh of relief?

No.

The cycle repeated during the second year as well, especially on the money front. It was still a fight, but my risk appetite only grew. I thought that having weathered the first year, I could manage the second year with new insights.

I did that with the support of some seasoned colleagues. My capability to take thoughtful actions while simultaneously assessing risk parameters improved, though I cannot claim I could apply these skills to every situation. My family was watching my struggles and actions, and occasionally gave some advice.

But I pulled along into the third year!

All the learning I got taught me that it is imperative that we understand risks in business (and in life as well). Understanding risk is not easy as it is not easily quantifiable. Assumption of risk does not automatically lead to failure. A thoughtful risk assumption could, in fact, lead to an outstanding success.

I don’t recall taking risk-oriented MBA courses, but I did take stochastic processes and probability theory in my engineering program. Not that I remembered anything substantive though. But one thing I know from those days was clear: nothing ventured, nothing gained. No theoretical analysis.

Failure is still a possibility though we are gaining strength, but we do not control the external macroeconomic environment, which is completely capable of upending any well conceived plans. So the risk continues to be an inherent part of any business plan.

The experience that I have had these past 3 years obfuscates all the previous experiences and learning from academic programs. Unless one goes through something like this, it is not possible to understand the nature of failure and risk.

I hope I managed to convey something important, and I am not averse to making a lecture deck out of what I have learned that I can deliver to aspiring management graduates! How about that ?

Cheers,

Vijay Srinivasan

16th October 2022

Always seems impossible

……………….until it’s done.

Almost every challenge in life seems impossible to tackle at the beginning. For me, it is the same even today!

If someone says that any kind of challenge is not a problem, it is either a foolish assertion or bravado. Every challenge in life (or business for that matter) is surely a difficult thing, which you may or may not have encountered in the past. Challenges are not to be dismissed with a wave of the hand. Challenges need to be respected, analysed, completely understood (for their potential ramifications and repercussions) and suitably dealt with. Even challenges which appear to be extremely difficult could be handled appropriately if understood and analysed properly.

I had always wanted to establish my own company for a long time, which I could not do for a variety of reasons. The challenge of operating on my own (even with the help of others) was baffling and overwhelming to say the least. Finally, I came around to tackling the “impossible” with a little push from my previous employer. It takes phenomenal courage to streak out on your own, it is not something which can be dismissed as “oh! almost everyone I know has been doing a start up, what is so great about it?”. I had to find that courage.

The biggest problem is our own mindset. I would not accept if you tell me it is just financial insecurity. Yes, to a certain extent, it is – I am not disputing the fact that you might have to get out of a huge comfort zone in the corporate world and navigate a path which you just do not know at all. There will be a financial impact (as you do not have the usual comfort of the big monthly salary anymore). There will be a mental impact (as you get stressed out). There will be a social impact (as you are mostly disappearing from those noisy parties). There will be a family impact as well (as family members may not understand why you are doing something about which you apparently do not know much, and leaving a well-paying job with social recognition).

Our mind will constantly play games with our psyche – and laugh at us for our apparent stupidity. You need to control your mind with a firm hand. It is like avoiding certain pleasures – extravagant overseas trips and shopping with no control. Some of these activities have to be necessarily given up. Exercise control over your mind and direct it for productive feedback on what you are going to do from now on in your life. Rampant distractions should be thrown out of the window of the mind for good. Sometimes could be painful, but there is no alternative. There is no easy life, or easy way to achieve your entrepreneurial dreams.

Your life partner plays an incredible role in your transition from a corporate honcho to an entrepreneur on wheels (!) – you are always running around in the beginning like headless chicken. Your life partner assuages your concerns and worries and provides the much needed encouragement. Such as, “if you are not doing this now, you will never be able to live your dreams ever; better go ahead and launch yourself right away”. Family support is very crucial for entrepreneurial progress and success.

DO IT. That should be the motto for every entrepreneur. Lots of planning required of course, but one cannot blame an average plan for poor execution. Execution is the key and rapid execution will define your success. I discovered that any amount of thinking is not going to get me to the place and position that I want to be in, unless I get out of my chair and move away from my desk. I am increasing my time away from my desk, and the results are encouraging.

Almost everything appears to be impossible at first, unless you set your mind on it and get it DONE. Once you do it, you get encouragement not only from your own mind but from all around you. They recognise that you can indeed achieve things which appeared to be rather difficult or impossible. So, they will trust you more and allow a larger latitude for your to perform even better.

Of course, I will be remiss if I do not recognise the choices I made in selecting my venture partners (I mean co-founders here). Those choices are extremely critical for the success of the venture. There could be differences of opinion on any and every matter, but you have to drive for “conscious concurrence of minds”. And that does not come easy. To control our own mind, it is difficult. But to align multiple minds, it is almost impossible.

But that is the challenge, right? Every time it will flare up while making difficult decisions. But you must struggle to align every mind engaged with you. This is not the corporate world wherein you can ride roughshod over everyone else in the room, if you are the boss. Start ups are not like the corporate meeting or board room. If everyone is not aligned, a start up will just sink.

Well, I have learnt over the past 3 years that life never gets easier by the day (or the year!). Life only gets more and more difficult. But that is the challenge manifesting itself in various ways. At the same time, life also gets more and more interesting. You discover that you have skills which you never thought you had! What were you doing all these years, you might ask yourself!!!

I believe there is just no limit to human ingenuity, perseverance and endurance. You keep meeting challenges and problems, and you keep solving those constantly. Does it ever get to be stale? Definitely not.

In the entrepreneurial world, you also get to see outstanding accomplishments by people all over the world and you understand the direct correlation with what you are trying to achieve in your own startup and for yourself. There is almost a daily sync up with Silicon Valley, with Israel, with India, with Singapore (my backyard) and so on. You keep yourself on your toes every day.

I believe this keeps your mind sharp and constantly on the prowl for new opportunities.

I did not feel that way in my corporate experiences (with some exceptions, of course!).

Have a wonderful weekend, friends,

Cheers,

Vijay Srinivasan

25 June 2022

Definition of Success

How do you define success in life?

Is it growing up in an affluent surrounding, having a great education, getting a rewarding job, and making lots of money over the course of your career? Or, is it carrying the baton of the family business to even greater heights and making pots of money to splurge? Or, is it two powerfully successful business families coming together via a matrimonial alliance (unlike in movies where the rich girl falls for the handsome, chivalrous poor guy) to cement a joint legacy of even more wealth creation and business domination?

Different people have very different definitions of success in life. Most people think that your success is directly proportional to the amount of money that you amass, and then keep amassing. Some people think that your success is directly proportional to the political power and influence you seem to be possessing, exhibiting, and exercising over others. Some people conclude that your life is made when you are pursuing higher education in a prestigious university which will produce a successful graduate out of you with an enviable network, which will then lead you onto an outstanding career.

Well, things are changing in this world, may be for the better, though entrenched business dynasties and huge corporations will still continue to plough their path towards more business success and domination over society. There are significantly crucial signs around the world that the new breed of zillennials are not going to take many existing systems and practices lying down, unlike their parents. There are also many activist investors who want socially responsible investing and who believe that social imperatives have a direct correlation with business bottomlines (latest read: see what happened to Exxon in their board meeting vis-a-vis Engine 1, an activist investor). There are many young activists who are pursuing their vision of climate change, irrespective of what the oldies think or do.

For the new world which is coming onto us, the definition of success in life could be vastly different from what we have come to know in our own lives so far (we belong to the breed of oldies, aren’t we?). Success could be redefined as “the impact you create in society and the lives you end up changing for the better”, while making some decent return on your educational investment. The new youngsters won’t let their parents determine the definition of their success. The money that you make is not going to be a determinant of your acceptance in the zillennial society. In fact, possessing an environmentally “ugly” car will be viewed negatively – why don’t you take a bus instead and reduce carbon emissions. irrespective of any convenience?

During my younger days, I always looked down on the unsuccessful and illiterate folks around me. Since I was no expert on world poverty and the dynamics of economic theory, I tended to toe the line of thinking that the state or government should not indulge in handouts to the poor (similar to the U.S. Republican Party’s long-standing policy of not helping the Blacks via handouts like social assistance – it always said that the Blacks better be working and earning, and not depending on government payouts, which according to the Party led to drug abuse and violence). The problem with my thinking was that it was influenced mostly by business school thinking of capitalism and its model of success. It took me more than three decades of my life, before I arrived at a different conclusion on my own.

The definition of success has always plagued me, as I continued to think (in my old mindset) that I was not successful enough in monetary terms. That can be said of anybody! We always want more money than what we have at any moment of our life. If I compared myself to others that I have known for a long time and even worked with, it was always apparent to me that I was much behind in the “rat race”. This feeling and thinking always disturbed me. Why couldn’t I be more successful? What was wrong with my approach? What mistakes I could have eliminated on the way to more success? Why am I not able to make millions?

It takes considerable time for people to change themselves. It took me a long while, though I am mostly a rational animal. I realised I was not an “open system” while propounding the value of open systems to my IT clients – I was mostly closed and proprietary! If I am not open to new and foreign ideas, what chance do I have to redefine my life and my definition of success? Zilch.

Well, you might say that at this stage of my life, I can afford to say and write abut things like the redefinition of success without taking much of any new kind of risk. Yes, you are right, I am not contesting your view. What I am saying is that it has personally taken a long time and lot of effort to weed myself out of the clutches of a greedy capitalistic kind of thinking in everything I was doing – and I am just stating a fact. I am not against a system which has made profits and created wealth – but that cannot be our life ambition, since a little bit of thinking and observing will show you that the world’s inequities are just frightening and completely out of whack with no solution in sight.

Are we going to take the money we have in the bank with us when we finally depart from this world? No.

I realised one critical thing in all this redefinition of myself and success in my life: unless I change and make changes in my thought processes and life, I will not be able to make any change to this world or impact anyone positively. I would dismiss the notion of folks who say that only because they have amassed money they could turn out to be philanthropists in their lives. To be a philanthropist we do not need millions in our bank accounts.

To make a change in our routine life does take courage and significant effort.

Make that change. Redefine your life and the fundamental notion of success. You will be able to see your life in a different perspective. And in this effort, take your life partner along with you. Nothing actually changes in your life unless you can convince your life partner!

Have a great weekend!

Avoid alcohol during these Covid times (I am sure you would not agree!).

Stay home and Stay safe

Cheers,

Vijay Srinivasan

29th May 2021

The Minimalist “Nonsumer”

I am a perfect definition of a minimalist nonsumer.

So what does that mean?

I rarely buy things to fulfill my material desires, which are mostly non-existent. I buy for the family of course. I can count with one hand the number of times I have stirred out of home to go and buy personal durables – what I mean here are things like clothes (which last for a long time anyway in my case), belts, shoes, pens, phones, laptops, electronic accessories such as wireless earbuds or backup hard drives, watches………the list keeps going on, which for most people in my circle are essential upgrades. For me, no – these are not absolutely necessary to live a life. Of course, once in a while, I go and shop for such items because my current usage has damaged the ones which I use. I try to shop at cheaper stores, or use free credit card vouchers in slightly more expensive stores so that I could offset the cash outflow. My laptop is 7 years old, my belt is 2 years old, my hard drive is almost 3 years old, my iPhone is 2 years old (bought with subscription at a low price), my plastic watch is more than 2 years old, shoes are 3 years old……….and so on and so forth. And some of my T-Shirts are more than 10 years old.

It is not that I cannot afford, it is never the case. People often misunderstand, including my family members.

There are several important aspects which are behind my thinking towards what I call “discretionary” spend:

a) I grew up during the time when almost everything in India was scarce, and I was taught to be frugal;
b) As I had to sustain all by myself after the age of 17, I developed a set of life parameters which would see me through what was then a tough time;
c) I always had the fear within myself at every milestone in my life that I could easily lose what I had gained; and,
d) I came to the conclusion that the folks I was working with in my corporate life expected certain standards which did not have to be extravagant.

The “minimalist” wave has now caught on amongst millennials and in countries such as Japan. The personal display of expensive paraphernalia is now considered unnecessary in many situations, and obscene in many other circumstances. You just get by with what you could gather while delivering peak performance in whatever you do. Gone are the days (except in financial circles) when others value you because you have a Mont Blanc pen in your expensive dress shirt, a Louis Vuitton tie, a Mont Blanc belt, and Ecco or Florsheim shoes, and sporting a Loro Piana jacket. Now I find that almost everyone I deal with wears a simple T-shirt, mostly unbranded, and jeans with inexpensive sneakers. There is no tendency to show off.

Has the world changed? Yes it has.

Have I changed? No, I haven’t.

I used to sport a Mont Blanc pen because I got it as gift from my children for one of my birthdays. I used to have another “simpler looking” Mont Blanc earlier because Singapore Airlines gifted it to me during my heydays of flying around. Even now, I do not spend more than S$ 30 or the equivalent of INR 1,500 for a belt, and I do that only when my current belt has really worn off. I try to make do with the current belt as long as I can, and stretch its life beyond what the original designer or manufacturer had intended it for!

I was shocked when my son bought shoes for S$ 300. I have a policy of not spending more than S$ 49.95 for sneakers and S$ 89.95 for dress shoes which has served me well over the years. Often I had spent less than the above amounts when I found incredible deals in the outlet malls in the U.S.

When I bought my first car, friends at the U.S. company I worked for scoffed at it – I asked them why. I was bemused when they said a “manager” like me should not be buying a Nissan. I asked them what then I should be buying, and they said that at the minimum you should look at a Toyata, but BMW is preferable. I asked them “are you guys standing on the roadside and check what cars your seniors are driving, and what kind of apartments they are living in” – they said no, but then the disapproval in their faces scarred me. I thought why are folks that I like and respect, so “level” conscious and so “luxury” conscious. There must be a rationale because they are intelligent guys.

I never found the answer, even till today.

The problem was the timeframe – in the Nineties, Singapore was growing very fast becoming a wealthier country and symbols of consumerism were widely used and constantly reminding everyone that the country has indeed arrived on the world stage.

I had no qualms about wearing a simple plastic watch, but then I found almost everyone was wearing an expensive branded watch at the office. Even if someone was wearing a plastic watch, it was a high-end sports watch which was at least S$ 700 and above. My wife gifted a Breitling watch on one of my birthdays, and that was the first time ever that I wore an expensive watch. Now I am back to a plastic Fitbit watch using which I keep tab on my walking steps. I put the Breitling to sleep!

I look for bargains on eCommerce websites first, when I am in need of something, before I decide to go out to a physical store (which I think is a waste of phenomenal building space). I have been ordering things needed for home use mostly on eCommerce sites such as Amazon in any case. When I chose to dispense with the wired earpiece for my iPhone, I looked for wireless earbuds. The advice from my family members was to go in for Apple, Jabra or Sony. I disregarded their advise due to the expense involved (they had already invested for themselves and using these brands happily), and went for a cheap China-made ZNT wireless earbud for just S$ 14.90! They could not believe that I would be using something like that, but for me it serves a specific purpose (spewing out Spotify songs when I take my early morning walks) and that’s it – I do not use the earbud for the rest of the day. Why spend S$ 279 for Apple earbuds or S$ 239 for Sony earbuds? How am I going to get my ROI (Return on Investment) back?

My “minimalism” is now well understood in my family – they know I no longer appreciate them buying expensive items for me even from their own money. I only spend on inexpensive things at the time of my choosing (the time between two such shopping exercises could vary between 12 to 36 months!). They tried to replace my 29 T-Shirts (the number is just a figure pulled out from my hat) because they thought I had overused them – some of the T-Shirts were over a decade old. But I called them off – don’t bother me on such mundane matters, I do not have the time or inclination to invest on, among all things told, T-Shirts – for God’s sake! Let me live my life frugally in peace!!

For the past one year of running my new start-up, I have not had the opportunity to use my dress shirts, pants or shoes. They appear to be getting rusted, while I get by with T-Shirts (may be the not so old ones!), jeans, cotton pants, and sneakers, like the rest of my team. I am perfectly fine, though I always worry about my tie collection – I had amassed some good, cheap ties from the U.S. outlet malls and now I have no use for them. I don’t think my son will use these ties.

I think I have communicated what I meant by “minimalist nonsumer” using the above real-life examples. Disclosure: On cars, I was tempted to try out other brands; the Singapore car auction system in any case, forces all car owners to sell off their old cars once they reach their 10th anniversary (or even earlier), and so I moved from a Nissan Sunny straight to a old clunky BMW 520i which had only 2 years left in its auction life. But after seeing the first maintenance bill, I decided to buy a new Toyota Camry, not through the official distributor but via a parallel import channel bringing in cars direct from Japan – I guess I saved S$ 10,000 in that process. Now I am back to Nissan – the Teana model, which is frugal on petrol consumption in an expensive country like Singapore where petrol costs more than in India.

Again, I wish to reiterate, it is not about saving per se………..it is about that frugal mindset coming from a country of scarcity which does not change even while living in a country of plenty with ostentatious life symbols of wealth. In essence, one does not truly change – you remain who you are, how you were built initially, and how you developed yourself. You tweak yourself for better performance all the time, that’s all. I will write a blog post about that interesting topic soon.

Have a good weekend folks,

Cheers,

Vijay Srinivasan

17th October 2020

Sensex amongst Asian indices

At a nominal GDP size of almost USD 3T, India has reached the elite group of the top 5 economies of the world. In terms of purchasing power parity, India ranks #3 in the world. Despite the steep slow down in its GDP growth rate in the last couple of quarters, India is still among the world’s fastest growing economies.

Coming to Asia, India is #3 in GDP size after China and Japan, and its economy far exceeds the combined total GDP of the 10 ASEAN countries which is around USD 2.4T. India is expected to exceed the GDP of Japan and the U.K. in the next few years and become the #3 economy in the world.

Given all this data (and much more available to economic and equity analysts), it has always been a puzzle to me why the BSE SENSEX index does not receive appropriate mention and coverage in the financial media. When I see the morning coverage on CNBC and Bloomberg on the TV, there is hardly any mention on how well the Indian markets performed the day before and what is the outlook for today. I know that India is behind Singapore / Hong Kong by 2.5 hours, so I thought the afternoon coverage would mention SENSEX. Nope. There is of course, some mention of India, but that pales in significance to what is being covered on other Asian stock markets and Asian companies, though their sizes are smaller in many cases.

So, I wonder – what could be the reason for such a poor coverage by global media of what is probably one of the hottest markets in the world?

Agreed that just a decade ago India was not an investor story, and couple of decades ago it was not on any investor’s radar. Agreed that it is not a completely free market even today, with capital controls, tariffs of all kinds, taxes of all kinds, restrictive trade and customs practices, and so on and so forth. Agreed that India is a confusing country with multiple states with their own rules and regulations. There has always been many negatives about India.

However, the number of positives has started to outweigh the negatives, though some of the negatives continue their impact on the economy.

Over the last few years, the BSE market capitalization has grown significantly to approach almost the size of India’s GDP, though it is still not there. For large economies such as the U.S., and China, the market cap of their respective stock exchanges far exceeds the size of their GDP. For instance, the U.S. stock exchange market cap of approximately USD 31T far exceeds its GDP size of USD 19T.

Similarly, the Indian stock market capitalization is well on its way towards comfortably exceeding its GDP size in the next few years.

Given the above situation, I can only hope that CNBC, Bloomberg, BBC Business and CNN Business will cover the India growth story more aggressively and the SENSEX stock ticker figures more prominantly in the floating tickers of CNBC – it is there but you will easily miss it. The Hong Kong index of Hang Seng gets huge coverage – probably the most extensive in my opinion. May be it provides a view into the larger China market. Thats fine, but how come very small indices of Malaysia, Singapore, Indonesia, and the Philippines get much more coverage than that of India?

I think there is no special preference that can be expected, the only thing that will attract the serious attention of the financial media is the GDP growth rate. When India’s GDP growth exceeded that of China for the past 6 quarters or so, it was big news, because it involved China. The big focus has always been on China and Hong Kong in Asia.

I believe India needs a stronger mention and more extensive coverage, given its new image and visibility. Hard numbers to rival past performance will take another couple of years or so, but the market can grow via better transparency and more accountability afforded by a better coverage in the financial media.

BSE SENSEX needs a better treatment – it has come a long way and is the index to watch in Asia.

Cheers,

Vijay Srinivasan

20th October 2019

The 65” Opportunity

Once in a long while, one gets the opportunity to replace……….yes, one’s TV! A TV is such a fixture in any home that we hardly ever want to tinker with it. The dominance of social media and news apps on the iPhone (for me!) means that TV time had already dropped significantly over the past several years. The past experiences of the entire family getting around the TV to watch a soap opera have long since vanished – it exists in rural villages of India for sure, because of the lack of other forms of entertainment, slow speed of the internet, and availability of the whole family at the same time, either before or after dinner. In urban societies, we miss that period of family togetherness, simply because of the irrefutable fact that interests have vastly diverged between the older generation and the millennial generation who seem to be totally immersed in social media and their phone world.

So, when there arises an opportunity to replace your old and tired TV, you do not exactly jump with joy about the technological possibilities embedded in advanced TV sets and the ultra high definition resolution that you have only dreamt of or seen while browsing through shopping malls. You do not start fantasizing on the huge technical advances made possible via OLED vs QLED. And so on and so forth.

On the other hand, one applies mathematical principles to the TV buying process. Yes, simple maths. It simply becomes an economic maths decision based on the minimum acceptable benchmarks for the key parameters. If adequate preparation is not done before your trip to couple of electronic superstores, you are sure to return home with some technologically sophisticated equipment which will not provide you with an ability to recover the huge investment and leave you confused with the nuances of claiming that you have got the best TV out there in the market today. Differences will be hard to establish unless you have the technical sophistication garnered from the entertainment industry.

So, I decided to apply maths and economics to the selection process. First however I had to establish the technical benchmarks. In this assignment, I was quite conservative – I decided that for viewing pleasure, I would need to fulfill just two parameters – size and resolution. After running through the specs of global TV manufacturers such as Samsung, LG, Philips, Sony and Panasonic, I decided the following: size should be 65″ (as against the 55″ that we had) and 4K UHD resolution on a LED TV. Thats it! No need for the most advanced specs. I also studied the customer reviews for such TVs on the Amazon U.S. website, which helped me to make a shortlist of brands and models (though the U.S. model numbers are different from the Asian models). I was surprised with the detailed feedbacks provided by U.S. home customers for almost every brand and model, such reviews are rarely available from Asian households.

Coming back to cost dynamics, I decided not to spend more than SGD 2,000 (INR 1,00,000) for a global brand which (a) meets my benchmark specs; (b) has good reviews with minimum 4 stars on Amazon; (c) possesses energy-saving rating of minimum 4 stars; and (d) has a good in-country support infrastructure with ability to extend service coverage up to 5 years (of course, for an additional fee). The more advanced models demonstrated that they are superior when viewed side-by-side with a normal LED 4K UHD TV, no doubt about that, but then the prices were double and sometimes more than double for a device on which my family spends something like 30 minutes a day.

After detailed investigation, I could shortlist only two brands and corresponding models that met my technical selection criteria. I am not revealing which ones are these, but I managed to buy a top-notch global brand with a 5-year service coverage for less than my budget! I was told by the service provider that in case they are not able to repair the TV on-site after couple of years, they will replace the same with a TV of comparable specs available at that time, and for that facility, I paid less than SGD 300 which covered an additional three years service on top of the first two years warranty coverage.

My maths analysis worked out. The economics of viewing even an hour of TV every day for the next 5 years worked out to approximately a dollar per day, and I am sure the TV will continue to work past the 5 year service milestone so the cost per day should drop even further. Of course, the electronics industry is such that every two years there is a technological revolution! And, for sure, there will always be a better range of TVs for the consumers!! But then I cannot chase technology for technology’s sake!!!

I enjoyed this process of selection – of dreaming, realizing, benchmarking, shortlisting, studying, investigating, learning, and then finally selecting and buying. It is exciting and always provides a strong dose of adrenalin rush in my brain – or whatever is left of it!

I can now claim that I am a temporary home consulting expert on TV selection. Of course, for a higher budget, I am going to recommend a totally different kind of TV. May be you wish to spend two or three dollars a day over the next 5 years via your TV investment. I will help in that selection, too.

Cheers,

Vijay Srinivasan

14th September 2019

Far removed from Reality

The World Economic Forum (WEF) concluded yesterday at the Swiss Alpine resort of Davos.

This time around it was a low-key affair since several powerful countries and leaders did not attend. For instance, President Trump and Prime Minister May did not come due to serious problems that they are currently faced with in the U.S. and the U.K. respectively.

However, many billionaires and world leaders did attend, as participation at the Davos WEF has become an annual pilgrimage for movers and shakers from around the world. The WEF conducts forums in other major countries, but none beats the depth and comprehensiveness of the Davos forum.

There were many key issues affecting humanity that were discussed at this year’s event, such as the alarming negative impact of Climate Change. This is nothing unusual. The point is that most attendees come from elite or political or business backgrounds and are, in general, rich. It would be interesting to measure and report the average net worth of all the invited participants at Davos forum. That should prove that this crowd is far removed from the daily mundane reality of an average (not even a poor) citizen’s life, anywhere in the world.

How can a rather small collection of rich and powerful folks make a critical analysis of problems facing this planet and humanity? How can they “feel” the problems, pains, challenges and issues that a common man or woman needs to tackle in his or her life? Are these people really addressing the “real” issues and coming up with practical solutions to world’s rather intractable problems? Or, are they just networking socially and having fun, either at corporate or government expense? Let us not forget that these elite folks already know each other (mostly and generally) from previous interactions. One obvious objective is to learn from each other – what are the current views of the “elite” and “learned” folks from around the world, have lunches / dinners / cocktails and learn more of each others’ perspectives, etc., There are, of course, multiple panel discussions from which our elite participants will learn even more.

But, what is the concrete action plan to better the life of the average citizen coming out of this most expensive jamboree at an exclusive Swiss resort? Is there something coming out of this event that will affect the life of the common man, is there something that he can even understand?

Such events, are in general, a waste of money, which could be deployed in social projects and alleviate poverty. But that is not the concern of the rich folks who schmooze over caviar and wine. This is the obvious disconnect which exists between such powerful gatherings and life’s realities.

I studied the agenda and the events of WEF held last week. There were many useful and relevant topics covered in the agenda, no doubt. There was significant coverage of environment, climate change and the impact of technology – Artificial Intelligence, Machine Learning, etc., – these are all very relevant, I should say.

The key question, however, is how will WEF deliberations change the world for the better from a socio-economic point of view. What is the success rate of WEF influencing socio-economic policies of governments around the world which choose to attend the WEF event and actively engage other attendees. My theory is that economics at a theoretical level is of no practical use, unless the main users of economic principles (viz., governments) apply the same in consultation with WEF (not the IMF or the World Bank both of which apply tortuous conditions on countries seeking their financial support). How can some of the useful deliberations at the WEF be successfully applied in large countries such as India, China or Indonesia? What are the resources available to the governments which want to reform their economies? What technologies can be leveraged? What are the practical methods that we can adopt for sustaining the deteriorating environment? And so on, and so forth.

May be these things are already being executed. However, in my research on WEF’s practical applications, I could not find clear cut evidence. I could not put my finger on the specific outcomes which are being followed up by WEF around the world.

If my audience can clarify, I will be happy to post an update to this post. If WEF disagrees with what I have stated, all that is required is a response to this blog post, and I will post the same as a correction to what I have written.

In a nutshell, I would like WEF to understand two things –

1. The utility value of the annual WEF meeting is not grasped by the proletariat, and I have seen no evidence that WEF is making an attempt to communicate as such;

and,

2. The obvious disconnect between the abject reality of peoples’ lives and the economic deliberations at WEF conducted at the apex levels of governments and corporates surely exists, whether acknowledged by WEF or not.

Socialism is emerging even in that most Capitalistic country in the world – I mean the U.S. and its potential ramifications over the next few years have not been understood by the key economic players – whether in governments or corporates. This is also something that WEF needs to address. How about inviting Bernie Sanders and Alexandria Ocasio-Cortez to the WEF 2020 as key note speakers?

Cheers, have a good weekend folks,

Vijay Srinivasan

26th January 2018

Falling Markets

We saw that the major equity markets around the world suffered steep losses during the week which just ended.

There are always multiple reasons why the equity investors fret at times and start a major selling operation of their holdings. Mostly it is sentiment, sometimes emotions, but almost always there is a reason or many reasons why the market sell-off happens.

In the current scenario, the negative sentiment is driven by multiple factors afflicting the U.S. economy, aggravated by bad government policies which appear to keep shifting all the time under the wise administration of President Trump. To start with, there has been a series of exits of experienced people from the administration – the latest being General McMaster who was the National Seecurity Advisor to the President. He has been replaced by the rather hawkish hothead – John Bolton, who is likely to plunge the U.S. into another back-breaking war, either with Iran or North Korea.

So, you have a combination of the following factors:

• a huge deficit budget of USD 1.3T which has just been signed off by the President, necessary to keep the government running till end of September 2018, which has a massive allocation for the military (not all of that is necessary);
• a possible credit squeeze, with the Federal Reserve planning to raise the interest rates at least twice if not more times during this calendar year;
• a high dependency on China which buys most of the U.S. Treasury Bills;
• a looming trade war primarily with China, with the President planning to impose tariffs worth USD 50/60B on imports from China, and the already planned retaliation by China;
• a strong noose tightening around the President’s neck – the Russia investigation of Special Counsel Robert Mueller – Trump cannot fire Mueller as that would lead to unforeseen consequences, but he might still do it, plunging the U.S. into uncertainty;
• more potential exits from the Trump administration – Jeff Sessions is one clear possibility;
• sex scandals threatening Trump from a series of women – the courts are admitting the cases against the wishes of Trump and his lawyers;
• the clear possibility that Kim Jong Un might refuse to enter into talks with the U.S. if John Bolton is involved; North Korea termed Bolton as a “scum” and a “blood sucker” in 2003/04 and is unlikely to talk to him if Trump deputes him or brings him along to threaten Kim Jong Un, which will very likely happen;
• the Iran nuclear deal imbroglio; Trump might refuse to certify the continuance of the deal when it comes for his quarterly certification signature as required by the U.S. Congress, in which case Iran will be free to walk away from the deal, and that might lead to Bolton arguing his case to bomb all of Iran’s nuclear facilities;
• the continuing loss of elections to the Democratic Party as just happened in Pennsylvania – the potential loss of both the House and the Senate majority, which is not likely, but appears possible now;
• and, so on and so forth…………there are many such factors

So, the equity markets falling was expected by all and sundry. If I recollect, the U.S. market ran up by more than 6,500 points (DOW) in about 14 months from the time Trump took office, allowing him to tout the market gain as one of his signature achievements. Now out of this increase, 3,000 points are gone, and it is likely that the sell off will continue into next week.

A government that is so critical for world peace and stability cannot be tottering every day. One has to just see CNN News and the U.S. Talk Shows by major news organizations, to get the full import of what is going on in Washington D.C. The Trump administration has become a laughing stock, even within the U.S.

The only silver lining is that Trump is the first U.S. President who has succeeded in pushing North Korea to the negotiating table (mostly by harsh tweets from Trump!), though both Koreas claim that they decided to play the Olympic game together and cool off the rhetoric. The other achievement of Trump is that he is the first U.S. President to stand up to China without any fear of repercussions and challenge them to a trade war.

While these are great to see and hear about, we have to recognize that Trump has still not won any battle with either one of these countries. He could not even win the Border Wall case against Mexico, which refused to foot the bill. It is going to be very tough for the U.S. to negotiate when Trump has surrounded himself with foreign policy and military hawks such as Mike Pompeo (the new Secretary of State, yet to be confirmed by the Congress), John Bolton (the new National Security Advisor who does not need Congress confirmation), Gina Haspel (the new CIA Director nominee who needs to be confirmed by the Congress), and the perennial lady hawk Nikki Haley who is the U.S. Ambassador to the U.N. A war is surely looming with such hot heads around the President, who himself is a strong hot head who will not take a slight from anyone, or advice from anyone. All the major departures have happened apparently due to the fact that the concerned person begged to differ from the views of the President.

So, here we are, with markets having fallen all around the world, including India’s SENSEX. We are entering an uncertain phase in world history and diplomatic relationships. Everything can come off unhinged. No relationship is going to remain sacred. Continuous drama at the White House is going to rock the markets on a daily basis. The markets can no longer afford to do their own business disconnected from political and economic realities.

So, we are all in for a rocky ride, folks.

Enjoy the ride however.

Cheers,

Vijay Srinivasan

24th March 2018