There is only one way to put a great fortune to use: giving while you are alive to causes you think are important.
Gautam Chikermane
Poot kapoot to kyon dhan sanchay/ Poot sapoot to kyon dhan sanchay Why bequeath wealth to an unworthy son/ Why bequeath wealth to a worthy son
-–Sant Kabirdas (1398-1448)
One of the flimsiest and commonest excuses for not parting with the wealth one accumulates in one’s lifetime is that the wealth is being created for one’s children–their education, their security, their financial freedom. One has chosen to be an entrepreneur, struggled and created wealth against all odds so that one’s children can go ahead and become poets, if they should be so inclined. There should be nothing they want and not be able to get simply for lack of money. After all, society didn’t help me when I was in need; so, what moral grounds does the same community, government, nation have to expect this philanthropy from me, these people ask.
Ironically, the answer is: for the very same children on whose tiny shoulders they put the gun and shoot off this excuse. In June 1889, millionaire businessman Andrew Carnegie–whose millions could finance the US economy for much more than a month, unlike Bill Gates’ billions, which may be able to finance it for two days–wrote a beautiful article that extolled the rational virtues of charity and broke all the myths associated with the subject. His aim was to explore the options one had in respect of what to do with one’s wealth after one passes on. According to him, there were three modes in which surplus wealth can be disposed of: "It can be left to the families of the decedents; or it can be bequeathed for public purposes; or, finally, it can be administered during their lives by its possessors."
Opinion in Outlook Money
Wednesday, February 28, 2001
Friday, February 16, 2001
Opportunities abound
The wealth creator suddenly has greater access to the one missing factor of production: money.
Gautam Chikermane
As you read these lines, there’s an exciting career being born in this country, a career that could also generate remarkable wealth. If you venture into it, you will get a monthly salary that will range from above average to lavish. This is aside from a heavy pot of gold waiting at the end of the rainbow–if you get to the end, that is. I’m talking about entrepreneurship. With the changing nature of the big picture, smaller opportunities are coming at us at warp speed. Yes, the Internet and its slew of accompanying technologies is the one major driver of this career, but even outside of the bits and bytes, our country is changing–for the better. Indians are sitting at the cutting edge of the digital revolution, new prosperity is forcing markets to mature, corruption is down, licences are virtually over, and most important, the face of capital markets is changing.
India has been, is, and hopefully will remain, a nation of entrepreneurs. The one change that the financial markets are driving today is putting resources in the hands of the prime driver. The entrepreneur suddenly has greater access to the one factor of production that has been missing in her quest to create wealth: money. For four decades after freedom, India Inc remained chained and enterprise was sacrificed at the altar of greater good, or socialism. Hence the licences, the inspectors, the harassment, the corruption, the babus, the politicians–a mixture potent enough to shoo away the most dynamic among men. And yet Indian enterprise survived. But only just. It could not, for instance, ensure economies of scale that have helped China advance so much so fast–go to any shop today and you’ll know what I’m talking about: for virtually every Indian product there is a cheaper and better Chinese product available.
Opinion in Outlook Money
Gautam Chikermane
As you read these lines, there’s an exciting career being born in this country, a career that could also generate remarkable wealth. If you venture into it, you will get a monthly salary that will range from above average to lavish. This is aside from a heavy pot of gold waiting at the end of the rainbow–if you get to the end, that is. I’m talking about entrepreneurship. With the changing nature of the big picture, smaller opportunities are coming at us at warp speed. Yes, the Internet and its slew of accompanying technologies is the one major driver of this career, but even outside of the bits and bytes, our country is changing–for the better. Indians are sitting at the cutting edge of the digital revolution, new prosperity is forcing markets to mature, corruption is down, licences are virtually over, and most important, the face of capital markets is changing.
India has been, is, and hopefully will remain, a nation of entrepreneurs. The one change that the financial markets are driving today is putting resources in the hands of the prime driver. The entrepreneur suddenly has greater access to the one factor of production that has been missing in her quest to create wealth: money. For four decades after freedom, India Inc remained chained and enterprise was sacrificed at the altar of greater good, or socialism. Hence the licences, the inspectors, the harassment, the corruption, the babus, the politicians–a mixture potent enough to shoo away the most dynamic among men. And yet Indian enterprise survived. But only just. It could not, for instance, ensure economies of scale that have helped China advance so much so fast–go to any shop today and you’ll know what I’m talking about: for virtually every Indian product there is a cheaper and better Chinese product available.
Opinion in Outlook Money
Wednesday, January 10, 2001
Why do you want to make money?
There's more to wealth than what it can buy, how it can grow, what it can give you.
Gautam Chikermane
WHY WOULD anyone want money if not to be wealthy? Why would anyone want to be wealthy if not to be happy? Why would anyone want to be happy if it were not an instinct? And yet, the common belief is that the wealthier you get the unhappier you end up. While I don’t think generalisations of this kind can be taken as the gospel truth, it would be equally unwise to let our motivations about money go unresearched, unanalysed, unthought-out, simply because we as part of the ‘instant’ civilisation believe it’s an esoteric and a complex subject, or that it’s better to make money than to think about and understand why we want to make it in the first place, better to create wealth than to think about creation. But unless we tackle, or even attempt to grapple with this so very typical moral-material problem, one of our primary motivations and guiding star, money, will become a thoughtless process.
Neither of these two quests is unique to our society; the pursuit of wealth and the reasons for that pursuit have existed eternally, across time and space. Since time immemorial, men have sought, and fought bitter battles for it, be it in the form of animals for prehistoric man; land, cowries, bronze, silver and gold during early civilisations across Egypt, Mesopotamia and India; coins and notes after that; and now, information. Philosophers have matched this quest with equal enthusiasm. Wealth was an important, if not the primary, chapter in the literature of the Vedic period in India where the canons of life in its entirety—body, mind and spirit - were carved out. The world’s greatest epic, the Mahabharata, has detailed discussions on wealth in many of its pravas (cantos). These discussions are not without apparent contradictions. At one point, the book extols the virtues of material wealth: "A person without wealth is more dead than alive." Or: "The loss of wealth is misery." And at another: "The dross of wealth consists in hoarding it." But read deeper, and the ambiguities disappear.
Opinion in Outlook Money
Gautam Chikermane
WHY WOULD anyone want money if not to be wealthy? Why would anyone want to be wealthy if not to be happy? Why would anyone want to be happy if it were not an instinct? And yet, the common belief is that the wealthier you get the unhappier you end up. While I don’t think generalisations of this kind can be taken as the gospel truth, it would be equally unwise to let our motivations about money go unresearched, unanalysed, unthought-out, simply because we as part of the ‘instant’ civilisation believe it’s an esoteric and a complex subject, or that it’s better to make money than to think about and understand why we want to make it in the first place, better to create wealth than to think about creation. But unless we tackle, or even attempt to grapple with this so very typical moral-material problem, one of our primary motivations and guiding star, money, will become a thoughtless process.
Neither of these two quests is unique to our society; the pursuit of wealth and the reasons for that pursuit have existed eternally, across time and space. Since time immemorial, men have sought, and fought bitter battles for it, be it in the form of animals for prehistoric man; land, cowries, bronze, silver and gold during early civilisations across Egypt, Mesopotamia and India; coins and notes after that; and now, information. Philosophers have matched this quest with equal enthusiasm. Wealth was an important, if not the primary, chapter in the literature of the Vedic period in India where the canons of life in its entirety—body, mind and spirit - were carved out. The world’s greatest epic, the Mahabharata, has detailed discussions on wealth in many of its pravas (cantos). These discussions are not without apparent contradictions. At one point, the book extols the virtues of material wealth: "A person without wealth is more dead than alive." Or: "The loss of wealth is misery." And at another: "The dross of wealth consists in hoarding it." But read deeper, and the ambiguities disappear.
Opinion in Outlook Money
Wednesday, December 27, 2000
The spirit of enterprise
When you get in touch with the spirit, you will be able to take greater risk and turn resources into wealth.
Gautam Chikermane
Nainam chindanti sastrani; nainam dahati pavakah;
na cainam kledayantyapo; na sosayati marutah
No weapon can pierce the soul; no fire can burn it;
no water can moisten it; nor can any wind wither it.
–Bhagawad Gita, Chapter II, Verse 23
If it’s a comfortable retirement or a home in the hills you’re looking for, you could manage it with your monthly pay cheques. Invest money in diversified financial instruments, ranging from the plain-vanilla, risk-free schemes from the post office like public provident fund (it currently yields 11 per cent) to medium-risk instruments like an index fund (a mutual fund that mirrors a stock market index, like the Sensex or the Nifty, which could give you 18 per cent). You could also look at putting some of your money into high-risk sector funds or directly in stocks (25 to 30 per cent).
But if it’s wealth you want to create, the raw material is risk, the process is entrepreneurship. The highest investment and financial risk is taken by entrepreneurs, a breed of people that is virtually impossible to define (Peter Drucker’s 1993 masterpiece Innovation and Entrepreneurship: Practice and Principles is the best treatise on this subject). As a group, they use and optimise the physical, financial and human resources of a society. When they succeed, they become the leading wealth creators of a country. When they fail, they lose their investment–and that’s their risk: the risk of venturing into new, uncharted territory or looking at old businesses in new ways.
Opinion in Outlook Money
Gautam Chikermane
Nainam chindanti sastrani; nainam dahati pavakah;
na cainam kledayantyapo; na sosayati marutah
No weapon can pierce the soul; no fire can burn it;
no water can moisten it; nor can any wind wither it.
–Bhagawad Gita, Chapter II, Verse 23
If it’s a comfortable retirement or a home in the hills you’re looking for, you could manage it with your monthly pay cheques. Invest money in diversified financial instruments, ranging from the plain-vanilla, risk-free schemes from the post office like public provident fund (it currently yields 11 per cent) to medium-risk instruments like an index fund (a mutual fund that mirrors a stock market index, like the Sensex or the Nifty, which could give you 18 per cent). You could also look at putting some of your money into high-risk sector funds or directly in stocks (25 to 30 per cent).
But if it’s wealth you want to create, the raw material is risk, the process is entrepreneurship. The highest investment and financial risk is taken by entrepreneurs, a breed of people that is virtually impossible to define (Peter Drucker’s 1993 masterpiece Innovation and Entrepreneurship: Practice and Principles is the best treatise on this subject). As a group, they use and optimise the physical, financial and human resources of a society. When they succeed, they become the leading wealth creators of a country. When they fail, they lose their investment–and that’s their risk: the risk of venturing into new, uncharted territory or looking at old businesses in new ways.
Opinion in Outlook Money
Wednesday, December 13, 2000
The race for intangibles
The day accountants calculate intangibles accurately, investors will give them a standing ovation.
Gautam Chikermane
"May I speak to Mr Gautam Chiker...er...er...?"
Yes, this is Gautam.
"I read your article No future in accounts. It was the worst article I’ve ever read! It shows our profession in bad light. Besides, there are many things that are untrue, inaccurate and written with vested interests in mind."
Vested interest? He had my attention. I’m used to angry calls from readers, but never has anyone accused Intelligent Investor of harbouring vested interests. Who’s?
THIS READER, an accountant with one of India’s leading firms, went on like this for some time. Meanwhile, I was bombarded with similar sentiments on e-mail and through letters (To read a representative sample of these responses, follow this link). The article was written to illustrate how accountants, who are best placed to work out the value of intangibles in a business (intellectual capital, brands, franchisees, and so on), are the least concerned about valuing it, and warned them that if they continued their innovation-free practice, they would become redundant. For lack of space I had omitted an important point: that Indian minds are among the best in the world and I have full confidence that if intangibles have to be valued, an Indian has a great chance of doing it. Wake up, my accountant-countrymen, put your minds to this global problem, and help the rest of us calculate wealth more efficiently.
Opinion in Outlook Money
Gautam Chikermane
"May I speak to Mr Gautam Chiker...er...er...?"
Yes, this is Gautam.
"I read your article No future in accounts. It was the worst article I’ve ever read! It shows our profession in bad light. Besides, there are many things that are untrue, inaccurate and written with vested interests in mind."
Vested interest? He had my attention. I’m used to angry calls from readers, but never has anyone accused Intelligent Investor of harbouring vested interests. Who’s?
THIS READER, an accountant with one of India’s leading firms, went on like this for some time. Meanwhile, I was bombarded with similar sentiments on e-mail and through letters (To read a representative sample of these responses, follow this link). The article was written to illustrate how accountants, who are best placed to work out the value of intangibles in a business (intellectual capital, brands, franchisees, and so on), are the least concerned about valuing it, and warned them that if they continued their innovation-free practice, they would become redundant. For lack of space I had omitted an important point: that Indian minds are among the best in the world and I have full confidence that if intangibles have to be valued, an Indian has a great chance of doing it. Wake up, my accountant-countrymen, put your minds to this global problem, and help the rest of us calculate wealth more efficiently.
Opinion in Outlook Money
Wednesday, November 29, 2000
Time to turn the tables
Corruption affects our affluence adversely. And only we can change that. All we need is the strength to say: "No!"
Gautam Chikermane
I’M NOT absolutely certain, but news reports tell me that one source of easy money for a large section of Indians is under threat. There seems to be more pressure on government servants to live within the salaries they are given, out of taxes paid by the rest of us. It shocks me to see a junior engineer in the Municipal Council of Delhi have crores of rupees stashed away. To them, corruption is not the monster we think it; rather, it’s a conduit for amassing great wealth. Being in a position of power -- the power to delay endlessly or even stall our day-to-day business, from the innocuous birth certificate that gives us our first identity in India, through the innumerable government departments we have to deal with day in and day out, right till we get our death certificate–these rogues in the garb of ‘servants’ abuse that power. Systematically, mercilessly.
Opinion in Outlook Money
Gautam Chikermane
I’M NOT absolutely certain, but news reports tell me that one source of easy money for a large section of Indians is under threat. There seems to be more pressure on government servants to live within the salaries they are given, out of taxes paid by the rest of us. It shocks me to see a junior engineer in the Municipal Council of Delhi have crores of rupees stashed away. To them, corruption is not the monster we think it; rather, it’s a conduit for amassing great wealth. Being in a position of power -- the power to delay endlessly or even stall our day-to-day business, from the innocuous birth certificate that gives us our first identity in India, through the innumerable government departments we have to deal with day in and day out, right till we get our death certificate–these rogues in the garb of ‘servants’ abuse that power. Systematically, mercilessly.
Opinion in Outlook Money
Wednesday, November 15, 2000
No future in accounts
Accountants must realise that their 500-year-old system is irrelevant in the new knowledge-based economy.
Gautam Chikermane
THAT WE'RE living in the Information Age is a cliche. We, as consumers, investors, workers, citizens, are all becoming part of a new knowledge-based world. But the one profession that doesn’t seem to understand this, and is, in fact, obscuring assessment of the true wealth created by companies and, therefore, investors, is that of accountants. It’s a profession that’s living in an information autarchy, unaware of, unconcerned about, and untouched by its customers -- investors, governments, and companies. As an industry that has often been accused of concealing rather than revealing the workings of its paymaster, the company, accountants are today standing at a crossroads. Their sole link to the new world: computing prowess that allows them to run the same numbers faster.
Column in Outlook Money
Gautam Chikermane
THAT WE'RE living in the Information Age is a cliche. We, as consumers, investors, workers, citizens, are all becoming part of a new knowledge-based world. But the one profession that doesn’t seem to understand this, and is, in fact, obscuring assessment of the true wealth created by companies and, therefore, investors, is that of accountants. It’s a profession that’s living in an information autarchy, unaware of, unconcerned about, and untouched by its customers -- investors, governments, and companies. As an industry that has often been accused of concealing rather than revealing the workings of its paymaster, the company, accountants are today standing at a crossroads. Their sole link to the new world: computing prowess that allows them to run the same numbers faster.
Column in Outlook Money
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