Getting rich is not just about luck; happiness is not just a trait we are born with. These aspirations may seem out of reach, but building wealth and being happy are skills we can learn. Mr Babu Krishnamoorthy, Chief Sherpa, Finsherpa Investments Pvt Ltd led the conversation with Mr Chandrashekar Kupperi, Founder – ANOVA Corporate Services Pvt Ltd and Mr Rajesh Devaraj, Co-Founder, Uniform Craft Pvt Ltd.
Babu Krishnamoorthy: Naval Ravikant is an Indian born American, who has made it big in the US Silicon Valley. He is very much a part of the success of Silicon Valley over the last two decades and has made some priced bets on companies like Uber and hundred other companies. Man’s quest in life is to find money, because money provides the security that we all need. The other quest is to find happiness. If somebody has money and happiness, he or she doesn’t need to look for anything else. The book is a distilled wisdom from Naval Ravikant’s tweets, compiled and elaborated by the author. The book is divided into two parts: the pursuit of money and the pursuit of happiness. While we believe that money begets happiness, the author says that both are entirely different. We see a lot of very rich, yet miserable people.
I defined retirement as a period of financial freedom in some form. But the author defines it into three distinct categories and says that you achieve retirement when either of three conditions is achieved. First, you are able to generate a set of passive income without having to go to work. Second, you reduce your needs to a point where you lead a monk like existence and whatever you have is enough for that need. Third, you enjoy the work so much that money becomes very incidental. The pdf version of the book is available as a free download.
Chandrashekar Kupperi: There are three big things in life—wealth, health and happiness. We pursue them in this order. But Naval Ravikant says that the importance is in the reverse order and the most important trick to be happy is to realize that happiness is a choice that we make and a skill that we develop. It means everything comes from us. When we develop skill, we can make it a habit. To my knowledge, when we take an action, there are only three results. The first result is, it can exceed the expectations, which is super exciting. Second, it can just meet the expectations. Third, it can fall short of expectations.
The book says give your maximum attention to the first choice, accept the second and leave the third. Simply put, change the changeable, accept the unchangeable and exit the unacceptable areas which may not be your cup of tea. He also talks about happiness as an emergent property of peace. All of us go through certain helpless situations in our life. We need to learn to be peaceful. I want to quickly share an incident.
Arrange the Mind
I went to Hyderabad to meet my cousin and we had to meet a common friend. On the way, my cousin wanted to drop an uncle, who was just moving into a senior living home. This elderly person got into the car. He was a 70 year old gentleman with tremendous corporate experience and amazing fluency in English. He was sharing his experiences and also spoke about the generation gap. I realized he was so happy. When we went into that senior living home, a lady came and asked him, “Sir, can I show you the room?” The elderly man said, “No, I’m going to simply occupy the room. Just give me the key.”
My cousin hesitated and said, “Uncle. Can we look at the room to see how the furniture is arranged.” But uncle just looked at my cousin and said, “My happiness does not depend on how the furniture is arranged. It depends on how I arrange my mind.” He thanked us and said, “Happiness is not something that I postpone for the future. It is something I design for the present. Happiness is something I decide even before the event happens.” This was so touching and revealing.
Rajesh Devaraj: I have always been fascinated by the interplay of skill and luck. You can take a good decision and have a bad outcome if you were unlucky or you could take a bad decision and still get a good outcome if you are lucky. We must figure out and learn from mistakes and go forward. The book talks about getting rich without getting lucky. It also says that you must start with specific knowledge and be accountable.
Caught in the middle
In 2001, I was part of a delegation which went to Germany for a trade fair. There, all the large stalls of 3000 to 4000 square feet were occupied by companies making premium products and just showcasing one particular product category. They were specialists, so to speak. The smallest stores had ten different categories that were packed into a small area located in alleys. Seeing that, it was very clear to me that I must be a specialist and not a jack of all trades.
When I came back to India, I set up a company called Fineyarns. It was a trading company. I wanted to be part of the supply chain that supplies to specialists in Europe, because I knew they were sourcing from India. We positioned us in a niche area. It was a good starting point. I researched to see who the manufacturers were, find our own talents and buy fine contents. The business took off but in 2007, there was a global event and the dollar crashed substantially against the rupee.
I was in the middle of a trade where I was both a buyer and a seller. As a seller, if I honoured the contract, I would lose 11 lakh rupees. The big buyers generally had more clout in the market and they started to renegotiate the contract. My seller said that that he would stick to the contract terms and I had no choice but to buy.
As an agent, I am morally responsible for the contract, but not financially. But I took the call and bridged that gap. I passed on 5.5 lakhs to my buyer, which was a very big decision at that time. This made me an outlier agent. I gained a lot of trust, both as a seller and a buyer. I became the go-to agent for both of them. My business doubled since then and grew steeply over the next five years.
When the author talks about specific knowledge, he means that you must leverage your strengths in such a way that you can position yourself in the market and differentiate from mass competition. If you stay the course long enough, if you’re patient and build a trusted marketplace, you will get rewarded. The compounding comes at the very end.
For me, for the first five years, it was a very gradual, linear growth. But one event there changed the course of my business. It resulted in my business growing by three times over the next five years. There was no luck factor.
Babu: Easy choices bring a hard life and hard choices bring about an easy life. I am reminded of the marshmallow experiment that Stanford University did way back in the 70s. In that experiment, five or six year old children were left inside a room and a marshmallow, which is a sweet dish, was placed in front of each child. The children were told that the facilitator would step out of the room for a few minutes and they were free to eat the sweet. But when the facilitator returned and the children held up the temptation to eat, they would be given one more sweet.
50% of the kids succumbed to the temptation, the moment the facilitator walked out. In a later study by Stanford tracking the same children, they found out that those who were able to resist the temptation when they were five or six years old, were far more successful in life, than those who had succumbed to the temptation. Naval also says that if you take the tougher choices to start with, then life progressively gets easier. At some point, you will have to suffer. We can either choose the pain of discipline or the pain of regret. Going to a gym or dieting is painful. But it is less painful than the pain of regret. You may regret having a health problem when you could have solved it by being healthier. These are choices that are available.
Chandrashekar: Naval says, ‘Be impatient with actions but patient with the results.’ Unfortunately in today’s world, instant gratification is what our youth prefer. I was with Exxon Mobil, moved to KPMG and then joined a midsize business. In the midsize businesses, the shareholders were putting equity into businesses. I never realized there are two beautiful gains from equities. One is a capital gain that happens when you sell it at an opportune time. Second, you receive dividends from standard companies, which do well.
Naval says seek wealth, not money or status. He defines wealth as having assets that earn while you sleep and if you want to create wealth, you need to own equity. Five years back, I became an angel investor and started investing in various startups. Fortunately, I made some profitable exits. That gave me the confidence that I should start my own fund called the Angel Venture Capital Fund.
Naval’s philosophy is that you must earn with your mind, not with your time. Specific knowledge is all about understanding the technical aspects and being creative. It is something that cannot be outsourced or automated. Specific knowledge is found when you pursue your genuine curiosity and passion. Steve Jobs said, ‘Do what you love.’ Also, when we love what we do, it becomes a play. We should be better than what we are good at and become the best in the world at what we do.
Rajesh: While I was into trading, my wife was manufacturing uniforms for the hospital industry and doing customized uniforms for the large hospitals. Over a period of time, we picked up a lot of mid and small sized accounts. Serving them through a customized format was very efficient. That’s the default format in which the market works. At some point, we decided that if we were to mass produce through an assembly line setup and do a stock-and -sell kind of format, we’d probably be a runaway success. We acted on it and rolled it out but to our surprise, there were very few takers.
The small clinics found it easier to ask a tailor to come and provide them with customize uniforms and service, whenever they needed. But during Covid, our business model got validated and our ecommerce became much bigger than the B2B business that we were doing. As Naval says, if you’re in a space long enough, you will find associations with whom you can build trust and you can leverage on that trust.
On the happiness side, I recall reading a book by a psychologist from Harvard, called Susan David. She says that between stimulus and response, there is a space and in that space, you have a choice. In that choice, lies your freedom and growth. For me, the quality of relationships makes a big difference to your baseline happiness index.
Chandrasekhar: Naval focusses on health and says that peace of body will lead to peace of mind. He advises against consuming food which is cooked for a longer time. I believe that when we nourish our health, we flourish. Specific knowledge can’t be acquired in schools or colleges. You can get it through internship and apprenticeship. According to Naval, every desire is a chosen unhappiness. You must focus on the most relevant happiness for you. It’s okay to suffer to achieve that.
Bhagavad Gita says that detachment is not that you own nothing but nothing owns you. The greatest detachment is being closer to everything and not letting anything consume or own you. While we all want money, we should never have lust for money. According to Naval, inspiration is perishable. So once we get the inspiration, we should work on it and get it done.
Q: At what age, should we start financial literacy?
Chandrasekhar: Whenever you’re ready. There is no age to get into financial literacy. Put yourself into continuous education.
Babu: It’s important to know about investment concepts, even while you’re at school. Unfortunately, we didn’t have that education when we were in school but the new national education policy talks about financial literacy at a school level.
Q: How can we overcome societal pressures and expectations regarding wealth accumulation?
Chandrasekhar: Acquiring wealth is a skill and an art. Luck is labour under correct knowledge. To overcome societal pressures, you must acquire wealth ethically and the author says that ethical wealth is possible.
Q: How can we create a sense of purpose and fulfillment beyond financial success?
Babu: Sense of purpose can be interpreted as passion. If you love what you’re doing, then the earning becomes a bonus.
Q: How do wealth and happiness relate to each other?
Chandrasekhar: They are an unbeatable combination. Money in the hands of good people can create a lot more goodness in the society. Unfortunately, the wealth sometimes goes in the hands of wrong people. Therefore, to me, wealth and happiness is one great bundle.
Babu: For our basic needs, we need wealth but happiness is a basic necessity. If you’re happy following the passion in your heart, then wealth will automatically follow at some level. A certain amount of money is important. But happiness is even more important.
Q: As a youngster, we fall into a loop of negative spiral. How can we come out of that spiral?
Chandrasekhar: One of the best ways is to choose and have certain mentors for yourself. Mentors do not necessarily have grey hair. They are somebody who you will look up to. A mentor could be even your classmate who gives you certain pearls of wisdom.
Q: My friend said that richness is not earning more, not spending more, not saving more. One should say, ‘I need no more,’ and that’s what richness is.’ What is your viewpoint?
Chandrasekhar: We live in a practical world. It’s nice to say that you can be beyond all this but if you need to do better things to the outside world, you need money in your hands. Good people need to have the amazing ability of making wealth, because more goodness can happen through them.
Q: You spoke about specific knowledge. But today with the rapidly changing technology, innovation and generative AI, acquiring specific knowledge is a big task. How can we manage this?
Chandrasekhar: Naval recommends perpetual learning. When he speaks about specific knowledge, he uses two words. It has to be technical and it has to be creative. It has to be so creative that it can’t be automated or outsourced. That’s why we must become the best in our field.