The Exchanges

Q In action, right? So I'm talking about actions like buying a house. So if, if you could go back in time, so you would have not bought that house.

A No, absolutely. I wouldn't. So, so any other, I would have not also sort of put money into, uh, debt funds, uh, early on. I think I had a portion of debt funds. Uh, I think financial advisors talk about that it should be fifty-fifty or some equity debt. I would not have, I would have gone a hundred percent equity, uh, right from, um, you know, sort of day one. Uh, and, um, I think these two broadly and, uh, never went into things like gold or other, uh, sort of, uh, instruments. And, um, uh, and I think one time I also remember I had made like a foolish mistake of just going out and buying five random stocks. I think I, I was just going by mutual funds. And one time I felt, you know, everyone talks about stocks, let me buy stocks. And my level of research was, That people will always watch movies. So let's buy PVR stock and, uh, you know, people will always have steel. So let's buy Tata steel. I mean, it was really dumb half an hour binge of buying a few stocks. I bought it and I forgot about it. And, uh, I remember after three years, uh, out of five stocks, uh, two had crashed to almost zero and three had, uh, Really increased in value. So net net, I had made some 10% return on five absolutely random choices. So I don't know whether I'll call it a mistake or not, but obviously the level of research I had put in was close to zero. So buying stocks and having that amount of risk…

AI assessment note: “No, absolutely. I wouldn't. So, so any other, I would have not”

Q Right. In inverted passion. So is there a, like a separate reading time that you have like 2:03 hours a day, which you focus on?

A So in the morning, so the way my sort of me, I mean, I don't take meetings before, um, four PM or five PM. So I, I, I think I do follow what you can call as deep work principle, where you have a block of time slaughtered just for yourself. So in the morning when I'm most energetic, I feel most productive. I slot that time to read, think and write. So from, um, say, uh, 10 or 11 AM to three or four PM is my own time. And after that, if they're meeting discussions or email or slack, that's when I go about and check it. So the best time, uh, the best sort of slot of my day is kept to exploring my curiosity.

AI assessment note: “I slot that time to read, think and write.”

Q But that belief that, ah, you're going to die, or your loved ones are not going to be there at some point in time, has it changed the way you live?

A Ah, certainly. I think it's, it's, uh, impacted, um, very strongly by reprioritizing a lot of things. One, it's helped me reprioritize health, because I know if there is a way you could have a longer and healthier life, why not choose that? It has helped me focus increasingly more on friendships, uh, and relationships with my parents, with my family. Uh, it's also made me realize that work is one aspect of life, and it's not be all and end all to it. And strangely, like what we were talking about, it's also, I think, um, um, Puts a big dent in the whole legacy drive, which you have, I mean, which I had in my twenties, where I felt I had something to prove to others. I want to leave a legacy. All those things are completely disappeared. What I want to do is just have happy days one after another, almost until the last moment. And if that happens, it's a fulfilling life for me.

AI assessment note: “Certainly. I think it's, it's, uh, impacted, um, very strongly by reprioritizing a lot of things.”

Q But what are the things that give you anxiety that you fear about? Is that Palla feared about, like, Not having left enough for his kids.

A I think what gives me anxiety is, um, the possibility of my mind not being functional. So, not being able to think, not being able to creative because, um, I mean, I derive a lot of satisfaction of from reading and digesting complex ideas, being creative in my problem solving. So, um, Getting any kind of mental illness, which to a large extent I don't have any control over. I think that is like my biggest fear, um, of just waking up one day and realizing maybe my memory is gone. My thinking ability is gone. I think partly it had happened where I felt growing a company was not intellectually stimulating me, and that's one of the reasons I shifted my role from CEO to chairman, and I dived myself in my sabbatical to reading a lot of Uh, physics, chemistry, because I just wanted to see that I don't want to get just intellectually, uh, blunt. I think that's my biggest fear.

AI assessment note: “what gives me anxiety is, um, the possibility of my mind not being functional.”

Q And did you also dabble like with new asset class like crypto or investing in startups in personal capacity, right? When you had like little amount of that wealth which you want to dabble with?

A Yeah. So crypto is not something, uh, I, uh, I'm very interested in. I mean, I'm interested in from like a cultural phenomena and, uh, the technical details point of view, but I don't understand it as an investment point of view. I mean, it to me is a speculative instrument, which is fine if people want to speculate, but, um, I, I don't necessarily derive my joy from tracking what's happening to speculative assets. I mean, To me, you know, life, uh, which is obsessed around portfolio number is, is a waste. I mean, portfolio number should be in service of leading a good life, but I do see if you have a substantial portion of crypto. I mean, in my friend's group and others, they may or may not have it, but a lot of discussion does around happen around it. And, uh, if a substantial portion is invested in crypto that goes up 50 or 60%, Uh, on, you know, easily some weeks, uh, it's, it's not something, uh, as a way of like a peaceful, good, tranquil life. So I, I, I avoided completely. Uh, I have invested in a few startups and I've started investing in it more actively. Uh, but again, it's not been very speculative. I've been very, very choosy and, um, I'm more interested in investing in startups where, you know, I really believe in the technology. Or the story rather than from a purely financial point of view. So it's sort of a way for me to understand what interesting problems peo…

AI assessment note: “I avoided completely. Uh, I have invested in a few startups”

Q uh, getting financially independent is like hitting a jackpot because we have been brought up in an environment where lotteries are there. So people think of investing as picking, picking up lotteries or investing as fair weather investing. When cryptos are going up, invest in crypto. When stocks are going up, What's your thought on that? Do you really hit jackpot or is it just a consistent journey to financial?

A I mean, it's been, I think investing should be the most boring thing that you should be doing. If you're trying to derive joy from investing, I think, uh, that is speculation and we should call it speculation and it's okay to speculate, but, uh, don't call it investing. Um, and, uh, I mean, one invest not for, you know, tomorrow or not for the next year or not even for this decade. I think one invests for, say, your 30, 4050 years, uh, where if, if, um, I mean, if you need to sort of tap into that portfolio ever, uh, that is when it's useful. So in that sense, whenever you're investing, looking for what's hot today, Uh, I don't think that sort of makes sense. If investing for, with a timeline of decades, then going with what has worked for decades is a much better bet than what's working, you know, yesterday or what's working this year. So, um, I, I keep, um, I keep following some very dumb principles like index funds, uh, blindly and consistently. And, uh, so far they've served me well and I don't, I don't sort of get engulfed in the hot stock or the crypto or whatever else that's going on. It's just not me.

AI assessment note: “I think investing should be the most boring thing that you should be doing.”

Q So for you, it's mostly Indian funds or US funds?

A It's both a mix of both. Uh, I do think one has to, I mean, diversification is the only free lunch in finance. And if you're not diversifying, uh, you are taking more volatility, more risk than it's necessary. And having everything tied to India, um, is fine. India is a fast growing country. So majority is India, but if there is ever a case where there's India has, uh, some sort of an hyperinflation or a faster inflation or some other issue, I think it would pay to have this diversification, uh, in us markets or international markets. And I think there are funds in India that allow you to take a us exposure. So you don't have to, again, even open any bank account. You can just Google, um, I think U S mutual funds are U S stock mutual funds and they are available in India.

AI assessment note: “It's both a mix of both.”

Q year on year is that is the right instrument for you because they, they don't, they're, they're not something they're passive, right? As you said, there's no joy of investing. In index funds, it's just that you are playing X percentage of money every month into the same instrument, right? What was it that if you write it over a long period of time, uh, is this going to work?

A Yeah. So I think if you read recent reward and buffets, uh, annual letters, he says, even he has a hard time beating SNP index and, uh, all, so I've, I've done like reading. And, uh, this just doesn't come from an ideal belief. Um, almost all academic research says that, uh, uh, you know, actively managed funds return, uh, uh, uh, even worse than index funds. And even if, when it comes to, uh, VC funds, I think the median VC funds returns worse than index funds. That's what research has showed. So, Um, I think after I digested why it's hard to beat the market. Um, it's not that, you know, that if, if there was like a good logic to why an opportunity is mispriced, uh, then it makes sense. But with more and more, I mean, as the time goes on, there's less and less opportunities that are mispriced where you have an edge over others. Uh, so if, if we assume that markets are more or less semi efficient, uh, Then I think this makes sense to me. I mean, and I prefer just having that money thrown into a bin and, you know, forgetting about it and opening that bin after 30 years and seeing it grow and compound. I'm not the kind of person who wants to really see whether that stock, uh, uh, went up in the next seven days or so. It's, I don't feel it's a good investment of my time.

AI assessment note: “almost all academic research says that, actively managed funds return even worse than index funds”

Q But that thing you followed with Bitcoin. Uh, so you're not worried whether it's going up 50% or down 50%, right? Any other internal metric while, uh, which you focus while managing money?

A It has to, it doesn't, it shouldn't require me to work. Uh, that's again, like real estate is, uh, off the list because it requires me to work. So I want it as passive as possible, requiring as less work, uh, for me. And, uh, second, like you said, you know, I, I don't like to speculate unless, uh, or until I have some special knowledge or an insight, um, and, or an edge. Otherwise it's just idle speculation. And I, I don't see how that can work in my favor except for luck. So I don't want to rely on anything working out for me, uh, being lucky in something. Uh, I want, uh, the logic, uh, of an investment. To make sense. And, um, and I don't have like an IRR target per se. I think that's something beyond anyone's, uh, handle. Uh, it really depends on a large level, how economies are growing, how innovation is happening and so on and so forth. But as long as I think my portfolio is growing faster than inflation, uh, I, you can call that as the base level metric that I'm tracking, whether my money is growing faster than inflation, because if it's not, Then it's truly declining in purchasing power.

AI assessment note: “whether my money is growing faster than inflation”

Q And now you, when you are financially independent, What's your daily routine that you follow? Now, uh, you are also like, uh, not, uh, the chairman of Engify. Uh, earlier you were active CEO, right? And you took a step back and, uh, did that. What was the reason for that? Not what's the routine you follow in your day?

A So reason for that was, uh, um, I think both portion, I want to play by a strengths and I, I realized over a period of time, my strengths are in figuring out and building something new. So that zero to one phase is something AI really enjoy. And B, I think I'm good at that. Having done that a couple of times within Wingify with different products, uh, and, uh, and that's the whole point. And that's what I focus on right now. Um, so I'm constantly focused on, you know, the innovation part and, uh, where Wingify could enter into say new businesses or what new products can Wingify create. So I really enjoy Seeing that, you know, uh, blank slate and thinking what, if I could sort of fill in, in that blank set, and that's how my days go where I'm reading and researching and thinking, um, uh, partly from a curiosity point of view, but partly from an action point of view also. Uh, and, um, uh, that's mostly about it. So focusing on what new to do and, uh, reading and researching. So you can really think of sort of like, uh, An internal entrepreneur in residence at Wingify, which I really am.

AI assessment note: “So reason for that was, uh, um, I think both portion, I want to play by a strengths”

Q And then, then let's come to the part where, you know, You are able to draw good money from the company and now you were able to make mistakes. If you can share, what were those mistakes? What were your learnings on investment?

A Yeah, I think the number one, number one mistake, uh, was, uh, real estate investing in that. Um, and I think that comes from, uh, our parents generations. Uh, I mean, they have seen such a rapid rise of appreciation. In real estate. So, I mean, there's lots of myths associated with it, where it's safe. It always grows and it's, uh, I know what, but I do feel, you know, and it wasn't like a major, uh, sort of, uh, part of like my portfolio, but I still regretted not because, um, not because the money is sort of like, you know, stuck there, but because there is this aspect of maintenance with it. You know, if it's empty, you have to find a tenant. And, uh, if not, you know, you have to just keep paying maintenance bills and so on and so forth. I think I, I like to see my sort of financial assets, uh, work for me, even when I'm sleeping, I think that should be the whole point of having financial assets. But if you have to work for your financial assets, I think it's the reverse way. So I don't like to sort of be in constant, um, It's not even worry. It's just that, uh, you know, you, for, for example, if you're investing in mutual fund, everything is just so transparent. You can see, um, they cut taxes automatically. Everything is sort of done for you. But if you own like an office or a home as an investment, then, uh, Good amount of your time could go into, you know, maintaining…

AI assessment note: “I think the number one, number one mistake, uh, was, uh, real estate investing”

Q And, but, uh, uh, then the argument of the people is, you know, why am I increasing my earning if I can't change my lifestyle?

A I mean, you're increasing your earning to get to a point where you can, you know, say fuck you to things that you don't want to do. Uh, I mean, that financial independence is nothing but a freedom of thought, freedom of action. And I think that's invaluable. If you have to constantly work, uh, in your life to be able to live, uh, then you'll have all sorts of restrictions on your life. You know, when to wake up, when to sleep, And, and, uh, I think one should aim for financial independence. Everyone should aim for that because that comes with so many benefits in terms of, uh, freedom of thought, freedom of action. Uh, and you can always increase your expenses and make your lifestyle better after you've done it, uh, to a little bit, but I don't know. I mean, some people might be okay to signing off or not being financially independent, working hard their entire life. Uh, it, it doesn't sort of, I, I have a hard time sort of understanding that fact.

AI assessment note: “you're increasing your earning to get to a point where you can”

Q think that investing is that you get a lot of sum of money and then you park it anywhere else. What has your been journey, right? Did you focus on savings rate at all? And, uh, what percentage, let's say if anybody's Earning X a month, right? What person you should say that if one aims to retire at 40, what X percentage a month should one starts parking in?

A Yeah. Yeah. So I don't look at it as a percentage. Uh, I, I think, uh, one should look at their monthly investment target and if possible, and to whatever extent possible, adjust their expenses around it. Uh, I think a lot of people do it the reverse way. They spend whatever they can and invest whatever that's left. But I feel it should be other way out because there's no limit to expenses. Uh, the world is out there to get your money. And if you allow the world to do it, you know, you can be out of your salary each and every single month. So much better is to, I think, use one of these calculators online and see what's your monthly investment target should be. If you want to have an X amount of corpus by year, 40 or 50 or whatever, and keep that target for saving. And if you need to shift to a smaller house, maybe get like a not so fancy car or order less online and cook more. Uh, I think that's a good investment, uh, that you can make. And frankly, I mean, if ultimately it's, uh, if we go to the deepest level in terms of happiness, uh, we all know, you know, happiness doesn't necessarily change. It just comes back to the same fixed point. So would you rather be equally happy and have a more amount in your portfolio versus have less amount of money in your portfolio and just get this intermittent kicks by spending a lot more. So, um, so yeah, I mean, absolutely spending wisely…

AI assessment note: “So I don't look at it as a percentage.”

Q So, so, uh, just want to touch upon this topic, right? Uh, because Pallam would have been a huge impact, right? And, uh, because he was such a dear friend, professionally, personally. So, so why did this then seep into your life for the last 1120 years?

A I think, I mean, for me, um, like learning is a much broader, like, like I said, you know, uh, I'm interested in just a number of things, and very few of those things have to do with commercial concentration, for example. Um, and, and angel investment, I'm sure it gives a lot of learning, but I think it gives learning in a very specific context. Uh, I mean, I would happily pay for someone to teach me quantum physics. Even if it's an investment, not investment. So in that sense, my drives are much, much sort of broader in domains versus being very interested in just what makes money. Um, so, and it's also a lot of effort. It's a lot of time investment. And I, I mean, I believe I, I mean, if someone is doing angel investments for making money, I think it's a much more expensive way to do versus putting something in just the index funds and letting market do the job. But if someone is doing angel investments for learning, I totally understand that. But that learning only happens in a very certain context.

AI assessment note: “in that sense, my drives are much, much sort of broader in domains”