Money & Me: 'I am a CA & CEO today, but growing up in a very financially challenged family, money for me was the scarcest commodity'
The Finance Story 'Money & Me series' features finance professionals who share their journey with Money. This is an initiative to learn from each other.
- Hi, I am Robin Banerjee, a Chartered Accountant, Company Secretary, and Cost Accountant, who studied hard to survive.
- I started my career as a Management Trainee at Hindustan Unilever. After a longish stint there, I moved abroad and progressed to several leadership positions: from CFO & CEO at Arcelor Mittal Steel in Germany, to Executive Director in major Indian entities, and now Managing Director in a listed manufacturing company.
- Belonging to a very financially challenged family, money was the scarcest commodity...hence, as one went along, striding on the steps of life, ‘value-for-money’ got fairly ingrained in my mind.
- I have authored several books, with two of them being business non-fiction books. My latest business book meant for everyone concerned with any business is – "Who Blunders and How, The Dumb Side of the Corporate World". A book that should help the readers to avoid (hopefully) making business mistakes.
Why Chartered Accountancy?
When it was time to decide on further studies, I had to settle for the cheapest and most recognised professional course – Chartered Accountancy from the prestigious 'Institute of Chartered Accountants of India' (ICAI).
Though tough to qualify, having heard the gory stories of people making multiple attempts to qualify, I had no other option but to delve into this course.
With the grace of God, not only did I succeed in the exam, but it also helped to change my life forever. Such is the power of a CA qualification!
Why did you study further and pursue Company Secretary & CMA?
While studying CA, I somehow realized that 'one qualification or degree' may not be good enough in the long run.
Against my father’s wishes, I enrolled for both the CMA and CS courses (my dad perhaps felt bad to see me burning the midnight oil). There are quite a few common stuff amongst the three professional courses. It is true even today.
With exam days not overlapping, I could somehow manage to complete the other courses almost simultaneously.
How did your upbringing shape your attitude towards money?
The biggest shortage in my childhood was – money! That was one thing, which I did not see until I got my first job after qualifying my professional studies like CA.
Automatically, the inner self has tremendous respect for this substance called ‘money’.
The philosophy about 'money' that got entrenched in my mind was - it is useful but not to be hoarded! Perhaps because I saw my fairly wealthy family members not sharing their extra affluence with us when even two meals in a day became challenging in my young days.
How much did you earn in your first job?
As a young CA, I got perhaps the most sought-after job in those days – Management Trainee in Hindustan Lever (Hindustan Unilever is the new name).
Without thinking of the package it offered, I came to Mumbai from Kolkata in an 'unreserved train compartment' taking the famous Gitanjali Express.
My over-enthusiastic self did not do the maths of the remuneration. Soon I realized that the Management Trainee stipend was a paltry Rs 750 per month approx $12. Of this, Rs 300 had to go for a bed in a Prabhadevi apartment.
Tough days lasted the first 18 months of the traineeship and once confirmed as a 'Manager', things changed almost overnight...and the rest, as they say, is history
How did you finance your studies?
Funding for my studies was a major struggle. With little money for food and clothing, obviously, my parents did not have an available surplus for books. And that too, for two siblings.
My favorite method of studies was to borrow books from my friends. As I progressed with my studies, I started coaching privately students of a few batches junior to me. That gave me useful bucks to buy a few more books.
Libraries I never liked, as being loud and boring. There were of course no Google-aunty to help. Hence, fallback always was on borrowed books, as I found the study materials fairly unhelpful.
How old were you when you started investing/saving?
Having joined my alma mater employer – HLL, a share broker used to visit every cabin to sell his wares – with dopes on good shares to buy.
He was also the broker for some of our Company Directors. I took advantage of knowing what my super bosses were buying. If some of them would have bought 1000 shares, for me 10 numbers were good enough.
Slowly, the portfolio started growing. It was almost like a SIP (Systematic Investment Plan) with investment in shares happening at regular intervals.
What was your greatest financial challenge/mistake?
When I came to Mumbai (Bombay those days) several decades back, my employer-provided accommodation, fully maintained. Under the cover of the employer’s comfort, I missed investing in a Bombay house at that time.
I always thought that the city homes were too expensive; I shall buy on the next dip! The price correction did happen – except it kept leaping skywards. Should I have bought a home at that time, my wealth could have been significantly more today.
Do I regret the decision? No. I still feel that it’s good to stay at rented premises (company home in my case) at the early stage of one’s career. Jobs could change. A new employer could be anywhere. An invested home could tie you down. Look for your own home when you have crossed 40-45 years of age. That’s when normally we start settling down in our jobs.
Are you a saver or a spender? And tell us why?
I spend and save; it’s not the other way round – save and spend!
I do not give away any spending opportunity should it tickle my innate desire to enhance my experience. For instance, if I hear of a good restaurant in town, I will definitely venture into it.
Work hard; party harder! It will give you the better of today, and the best of tomorrow.
Have you ever had a month where you feared you could not pay bills?
God has been especially kind. Till now, and with the grace of the Almighty, I have never had a situation where I needed to think about paying my bills!
But I do know how it feels if you can’t...I have experienced it while a kid. God forbid; no one should ever experience this awful eventuality.
What’s been your financial milestone?
Honestly, I never had a financial milestone. Whatever was spent on a 'reasonable lifestyle', the balance automatically got saved.
As almost half of my savings are parked in stocks and shares, the historical growth has been ahead of inflation. Hence, I could protect my meager wealth, with inflation proofing.
What financial advice would you offer your younger self?
If I had to start again, I would follow some quick mantras:
- First, take two high-value life policies early in life. One, a term policy, and the other a good health plan.
- Second, put in about half of your savings in equity and debt instruments, split fifty-fifty. Spread it over 10 to 15 well-known companies.
- Third, about one-tenth in gold-like savings - in the long run, it should be ahead of inflation.
- Lastly, keep about fifteen percent away for holidays and spending in good times. We cannot sacrifice the present for the future.
- ‘Jio jii bharke’ will be my advice!
(Please note, these are my personal advice based on experiences earned so far)
Do you prefer to pay by credit card or debit card?
A 'debit card' is the best way to use the power of your wallet.
Credit cards are a strict no-no unless it’s being done to keep a tab of your expenses like spending on an international newspaper, or an expensive holiday.
Even when you are using your credit card, put a reasonable upper limit, beyond which automatically spends will get disallowed - in any case your banker would do it for you.
Now that you are doing well in life – do you just randomly buy something expensive?
Conducting life is a matter of habit, ethos, and background.
I still remember I had to struggle for food for a long number of years so my spending habits now are usually necessity driven with occasional spending on a few fancy kinds of stuff like an exotic home theatre system or an upmarket vehicle.
Since you’re a finance professional how do you manage your own finances?
My broad advice to all about savings is a bit out of the box perhaps:
- Live your life. Don’t think what your savings can do tomorrow, to spoil your today;
- Your earnings will keep growing and you would eventually lead a life of sufficient wealth (I expect this from each one of us, as we are all professionally qualified);
- Our money is always getting saved as the earnings are usually going into a bank account. Whatever is left after your expenses, will be earning a minimum savings bank interest rate (assuming it’s not swept into a dud current account);
- Convert the savings bank into some sort of a “Flexi-fixed deposit” account. This would mean you would earn your FD interest rate, and yet have the flexibility of a savings bank;
- Start SIP early. You cannot time the market; hence small and regular bit of investments every month, would work wonders;
- Your SIP should be both in equity and debt, with equal weightage to both;
- Keep aside your next six months (post-pandemic suggestion) expenses in contingency cash. This could be kept in your bank account though;
- About one-tenth of your monthly earnings should normally go to pay your home EMI. It is good to have a roof above your head, once you are a mid-level manager. It provides a great sense of safety and security.
- Take out a medical plan for yourself and your family. Earlier you enter, better off you are, due to low premium rates. No point in doing life insurance, except a ‘term’ policy. Life insurance products usually provide a very low return.
- Every drop makes an ocean. Savings is no different. Keep setting aside surpluses and see it growing, but don’t give up a good holiday experience with your family and friends, just because you may not be able to save a few more dimes that month.
Robin Banerjee is a senior professional executive with over 35 years of experience in several large multinational corporations in more than 20 countries. Robin has won several business accolades, with the latest being the Rotary International award for Ethical Businessman of the Year 2018-19.
Robin has written three books on indirect taxation, one of which, Modvat, had gone into 10 editions.
He has since written 2 best-selling business non-fiction books. The first one is titled: “WHO CHEATS AND HOW – FRAUD, SCAMS AND DARK SIDE OF THE BUSINESS WORLD”. This is available in 3 languages including English, Hindi and Marathi, and has gone into 3 reprints. His latest business book is– “Who Blunders and How, The Dumb Side of the Corporate World” – a unique book on business failures and how to avoid it.