Meet Monika Halan. With 3 decades of experience in finance under her belt, she’s part of the leadership and editorial team at Mint, the author of 7 Steps To Financial Freedom and has a forthcoming book with Harper Collins. Want to know why you should love her? She’s dedicated to making finance simple and protecting the interests of ordinary people as they start investing. MissManage caught up with her to chat about her work and beliefs.
MM: You’ve got experience in so many things, from financial services to public policy. What made you focus on finance journalism?
MH: The focus from the beginning was business and financial journalism. The rest happened along the way. Although I am qualified to be an adviser, I do not practice commercially because my first love remains journalism. In fact, I find that a deeper dive into policy, regulation, and advisory help make the journalistic offering deeper and more robust.
MM: Do you think men and women consume financial news differently?
MH: Stats show that the readership is mostly male. Women do consume, but they consume less financial news. This arises from an overall environment that makes women believe that they are not good at math or finance. Newsrooms can de-jargon and simplify financial content and make it relatable to everybody (even men).
MM: So your simple tone and language is deliberate…
MH: Yes. It is by design that I write for my reader. The simpler you want to make something, the better you need to know it. It is lazy writing that rests on the use of jargon. There is a backstory to my writing… I had just completed my Masters in Economics from Delhi School of Economics and joined a yet-to-be-launched magazine called Business Today. The editor asked me to write about science and technology in business and I protested. Here I am, armed to my teeth with an Econ postgraduate degree from India’s premier school and you want me to write on science? He said: Your D School degree tells me that you are reasonably smart. So if you try to learn about these new topics and write on it, the reader will understand it much better than somebody who is a science expert. My writing for my reader began from then on.
MM: You’ve been on various regulatory boards in India. What was that like?
MH: Regulatory and policy change is really tough in a democracy. It usually takes a big accident to prod the government and the regulator to bring about a change. There are also vested interests and the overall ennui of a bureaucracy who wants to retain this status quo. Change is like trying to walk in a bog. But if you have a good argument backed by facts and you are relentless, change begins to happen. That’s my learning.
MM: You’ve said, “finance must serve households”. Do you believe that finance is not doing that at the moment?
MH: Finance is serving itself rather than households. For example, investors have lost over Rs 1.5 trillion due to mis-sold Unit Linked Insurance Plans across a 7-year period ending 2012. Yet such policies continue to be mis-sold. Mutual funds have a better track record, yet cases of sharp sales and mis-selling are plenty. Banks are always in a hurry to raise lending rates but hesitate to do so when overall interest rates decline (see box below). The purpose of a financial product is to solve a financial problem a household has, not add to its woes.
MM: Is this why you’re concerned about finance ads that are misleading or ones that come with complex disclosures?
MH: Big finance will always cheat. It is true globally and it is true in India. A good investment product will solve a problem or fulfill a need. When people buy a product just because it is being sold or because they are greedy, that’s when they make mistakes and get cheated. One way to stay smart is to figure out what problem you want to solve and then go looking for a product. There are a few questions you can ask about what you are buying:
Ask the seller to write the answers down and sign it. If he refuses, find somebody else who will sign off on what he sells. Even the fruitwallah shouts guarantee ka meetha! So a sophisticated financial product seller should sign off on what he sells.
MM: Your columns draw inspiration from the books you read. Any books you’d like to recommend to our readers?
MH: Read ‘Own It’ by Aparna Jain and ‘Who me, poor?’ by Gayatri Jayaraman, they are good for women and millennials. These books are more about attitudes towards money than a “self-help book” on money management, but they’re great to start with.
MM: You’ve authored a book our audience would love to know about: Seven Steps to Financial Freedom. What are these 7 steps?
MH: These are these basic steps for a person setting out on the financial empowerment journey:
MM: Any advice for women when it comes to money matters?
MH: Stop saying “I have no head for numbers and money”! It is not cute. You are harming yourself when you hand over financial control and decisions to others. If you can run a washing machine, drive a car, work as a doctor, lawyer, teacher, professional or are a housewife running a home – you are fully able to make money decisions. Ask simple questions – how much do we spend each month? How much income flows in? Where do the savings go? In whose names is this invested? Where are the papers? Am I a joint owner of these assets? In whose name is the house? This is the first cut. Once you have a better understanding of where you are and if your partner is sharing financial information with you, can you begin to take control. The next step would be to bring up your children without gender stereotypes.
MM: Should first-time investors go with the 2018 trends (cryptocurrencies) or opt for safer investments?
MH: First-time investors should not even have heard about cryptomoney! Cryptos are not investments. It is a lottery that may or may not work out. An investment is something that has some rules around time and returns. Can crypto money answer this question: what is the ideal time period to hold this currency for return? Can it answer this question: what will be the average return over a 10 year period if you invest today? If you can’t answer this, the product is not an investment.
MM: Any other advice for first-time investors?
MH: Start by putting in place a cash flow system. Separate out your monthly spending and saving in two bank accounts. Call one the ‘Spend It’ account and the other the ‘Invest It’ account. You will find yourself not dipping into the ‘Invest It’ account for spending on holidays/gadgets/other spends. Set up an emergency fund that will last you 6 months of not getting an income. Buy medical and life covers. This is already a lot of work.
Monika Halan is the Consulting Editor with Mint. She holds a Master’s degree in Economics from Delhi School of Economics, and another in Journalism from the University of Wales. Her news media career spans Outlook Money, Indian Express, Economic Times & Business Today, NDTV, Zee and Bloomberg India. She has been a part of special committees for SEBI, the Ministry of Finance and the Government of India, and is the former Director of Financial Planning Standards Board of India. Read her blog, here.