21 May, 2009

Passion begets Wealth

Passion & Wealth may seem like things where the twain can seldom meet. Passion is an intense emotion like love, hatred etc. This is something we have felt at some point in our lives and could relate to. Wealth by contrast is an amorphous concept. You could accumulate wealth – but never know how much wealth makes you wealthy. One may feel wealthy with whatever one has. Someone else with millions in the bank may feel poor. Also, passion is an emotion and wealth is the result of some actions and is tangible. So wealth and passion are like chalk & cheese, right?

Yes, they are. Yet, passion in the right direction can lead you to wealth – serious wealth. Really.

Let us turn to passion. Some are passionately in love with their special someone… some are passionate about music, games, nature, travelling etc. They are devoted to their area of interest – with an intensity that will border on ridiculous to others, who don’t share their passion. Try taking the wheel from a car-enthusiast or try separating the musical instrument from the passionate musician. All hell will break loose, if you try! There is an intensity in their pursuit.

That, by the way, works quite well in a wealth accumulation pursuit, as well. I had written in an earlier column that one cannot come into money by running after it. Passion works, though. When one is intensely enthusiastic about something, they naturally tend to do that very well. They may almost achieve perfection in their chosen field. They may look like madguys, who are tilting at windmills. But these guys come up trumps, ultimately.

Ever thought one can earn their living teaching dance and doing really well materially & being famous as well. Seems like an idle pipe dream, doesn't it? It would not, if you were Shiamak Davar. He has made it big- really big. He has dance academies in India & abroad, he choreographs for dance sequences in movies, is a celebrity in his own right and has raked in his millions – all because he pursued his passion for dance. He is just one example. Not convinced?

Try music. There are quite a few doyens who come to mind – Pandit Ravi Shankar, L Subramanian, M S Subbalakshmi, Bhimsen Joshi etc. But the ones mentioned play a lead instrument like Sitar or Violin or, are lead vocalists, who would automatically get noticed, while they perform. In fact, they perform and all else are accompaniments. Now try drums or percussion. Know any renowned percussionist who has become rich & famous, plying his craft? That’s tough, right? Sivamani found it tough too. But he is recognized for his craft. His passion oozes through his pores… it looks like he almost lives for percussion. What has that given him… fame for sure. He is so well known for his craft that he is sitting in IPL matches around the border, cheerleading in his own, inimitable way – with his drums and his persona. Fancy that! There are few percussionists as well known. To all intents, he is pretty well off, though I cannot confirm that – I am not his Financial Advisor, yet!

I had read about a bridge player who was good in his game. But after every game, he was intent on analyzing the outcomes that, his mates went crazy. Since he liked playing bridge & had a natural flair for analysis, his perceptive girl friend suggested that he should take up writing a book on bridge and how to improve the game, with step by step guidance and explanations. Our guy simply loved it and went headlong into the project. When the book released, it was an explosive success. Wealth was just a by-product for him.

Mark McCormack of “ What they don’t teach you at Harvard Business School” fame, in his book had written that he was passionate about Golf. He wanted a career where he could combine his passion with his profession… and IMG was born. His company was one of the most successful sports / celebrity management outfits. He was trained to be a lawyer – where he might have just plodded along. By pursuing his passion, he became a super-successful businessman in an area, he always enjoyed. Mark passed away in 2004. His family counted between them, US$750 million – not bad for doing what you like to do, isn’t it?!

There is a saying that the waiter who straightens the table cloth to perfection and who rearranges & fusses over the flowers to look their best on the table, will rise up to be the Manager & probably the owner. That’s passion at work, again. Wealth seems to come automatically to people like these.

Passion works… in the bedroom & boardroom! Doing the right thing & doing it right is what makes these people court success. So, forget about that dreary job, if you have passion for something else… be it farming, music, painting or wine making. I know a man who was passionate about wine making. A Stanford graduate and a Finance Manager at Oracle, he quit to pursue his passion. Ofcourse, people thought he was nuts to quit his job, come to India and try his hand at wine making! There was no market for wines. Nor was there suitable grapes for making wine. Yet he planted grapes & started his winery. And is he a success? Judge yourself. He has put India on the wine making map and is recognized as a path breaking entrepreneur. You might have heard about him too. Rajeev Samant – CEO, Sula Vineyards. Passion does work. Cheers!

Published in DNA Money on 16/5/2009

05 May, 2009

What sets the rich apart…

What does a great car on the road provoke you to think? Envy at the guy behind the wheel and the disparaging thought that it must have been bought with illgotten wealth… or, that’s great, but it is far beyond me… or, is it – that’s a great car which he is driving and I will drive one like that, one of these days.

If you are thinking like the last guy, you are bound to come into money - the cribbers club be damned! It’s only this guy who will work towards it – thinks like the rich and will be rich. The focus of others is elsewhere and they are bound to pound the pavements for the rest of their lives, without ever courting success. So, what sets the rich apart?

Also refer Who do you think is rich?

Rich do not get there by short cuts

Get-rich-quick schemes do not make anyone rich. Many are tempted by the “amazing returns” some of these schemes promise. But if the scheme and the returns were indeed true, probably the risks associated would be very high. Many do not understand this basic tenet and wander into the territory that angels would fear to tread. Many pyramid schemes, doubling money in double quick time, extremely high interest for deposits, property investments at much below market prices etc., all belong here.
Rich are careful but not fearful. They also know that, if it is too good to be true, it probably is. They do not need the shortcuts for they have a knack of smelling opportunities and cashing in.

Risk taking ability

Risk & rewards are interrelated. When one looks at cashing in on any opportunity, there is always some risk associated with it. Weighing the risks and assessing potential returns is a process that needs to be done while evaluating any opportunity. Risk is not bad. If there are no risks, there would be no rewards too. Taking calculated risks is important. That is what the rich do all the time. Buying good stocks or property at a time like this would be a calculated risk. There is a risk of erosion of value, in the short term. But there is a great opportunity of getting excellent returns in the medium to long-term.

Has the guts to go against conventional wisdom

Rich do things their own way. They consider the options and may end up choosing a path that may defy conventional wisdom. In that sense, they might be pioneers in their own right. They evaluate the options using the knowledge base they have, check against the touchstone of their experience, consult advisors whose wisdom & counsel they value and finally come to a decision, taking into account their feel & intuition on the matter. Unconventional thinking may work well for them as they evaluate things differently and come to different conclusions.
They may be the ones who want to completely change the upholstery and the furniture now, taking advantage of discounts in this downturn – makes sense to them as it had to be done anyway and it’s better at half the cost, would’nt it? They may be the ones taking their families on long holidays now, buying cars, buying homes… Others have bottled up and are conserving cash.

Playing smart

I had read an anecdote on an Argentine billionaire who wanted to get into oil business. There were several established players and he was a rank outsider. He did his homework first. He was aware of a huge beef surplus in Argentina. He then knew about a shipyard in UK that was on the verge of closure. He went there and struck a deal for a supertanker against a delivery of beef from Argentina, which they gladly agreed. He then went to the third country ( oil producer ) and told them that he’ll buy their oil if they engaged his supertanker to ship it to Argentina. And he was in business. Playing smart is how the billionaires got there in the first place. They are masters of that game.

Sprats to catch a whale

Rich understand that they may not know everything. They do not go by hearsay – they have the right people to do everything. They engage bright minds to work for them – be it running their companies, managing their money, taking care of their properties or advising them on business. They spend money to amplify their chances of success. They do that as they know that their wealth pile will be smaller if they tried to do everything on their own. Throwing a sprat in return for a whale, is something they do all the time.

Rich make their money sweat

Ironically, the rich understand the value of money more than anyone else. They evaluate thoroughly before they commit. They spend on things which need to be done or which will help them leverage. For instance, they commit to invest money on a holiday timeshare, where one gets a weeks holiday in a resort for the next couple of decades. They are saving money here in the long-term, though they are paying upfront.
Their money management otherwise is top drawer too. They don’t allow money to vegetate in SB accounts. On the contrary, they manage their money in such a way that they make it run that bit harder – by having overdraft facility ( so that they can invest their surpluses ), investing in debt funds, diverting to short term deposits etc. The savvy among them may write options using their underlying investment. They may raise money with their longterm stock holdings, their properties etc. to fund money needs. In short, they have quiver full of ideas, to shoot with.

Rich don’t crib.

They make things happen. They change their environment with a single mindedness of purpose. Our software industry is truly the poster boy of business. Though their invincibility has come under a cloud of late, the captains of this industry have steered the industry from nothing to international stature – all with little help from the government. People with the rich mindset, make things happen. Sometimes they complain too – the bad roads and lack of accommodation in Bangalore were sore points, IT industry captains complained about. But then, they learnt to live with monumental apathy of the government. Infosys built hotel rooms, many companies invested in state-of-the-art video conferencing facilities & built campuses in other locations. The rich always find a way.
You find rich and poor in every country. Both exist amidst the same system, same opportunities & problems. It’s just their difference in their mindsets that set them apart. Their background, lack of opportunities, lack of capital, education – do not matter for the rich. The poor complain about these all day, though!

Published in DNA Money on 5th May, 2009