Celebrating Financial Independence With Sumit Maniyar, CEO of Rupeek – What is Financial Freedom for Him?

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Throughout this week, we have spoken to some of the finest entrepreneurs of India, who have give  us their take on financial independence and how they think Indians can make a better financial portfolio.


In the last issue of, ‘Celebrating Financial Independence with Wint Wealth’, we speak to Sumit Maniyar, the CEO of Rupeek and learn about his take on financial independence.


In this conversation, Sumit got candid with us about his financial philosophies and his successful investment journey.


Let’s begin.


1. What was that one financial problem you aspired to solve when you founded Rupeek?


Well I think, getting credit access for people who are in the middle and bottom tiers of the pyramid, in a fair, transparent way was our objective.


2. People in India either think of FDs and RDs when they think of debt, or they invest in equity, which are high risk – high return. Where is the middle ground? Why are Indians so unaware?


I think it is a reflection of the maturity of the eco-system.


Our eco-system is not fully matured. And the reason is because there have been various political shocks, scams, scandals.


People somehow believe in un-organised markets more than organised markets at times. And you need a certain amount of history and credibility through trusted agencies, who they have worked with or dealt with, to get that surrogate trust going.


For example, RBI has shown that kind of trust in bank deposits. But given that there is no big way in which banks have lost a depositor’s money, people believe that this is the safest instrument out there.


And if you look at private sector banking companies, have done well in the industry, they had started off with a different type of relationship and it took a very long period where they could build that kind of investment.


Like, Anand Rathi or Motilal Oswal. Now, that journey will be shortened because technology will help people, wherein people can do consumer research, consume different types of content or ask people.


So, probably what happened to them in 30 years, can happen in 6-7 years now.


3. When we talk about debt instruments, how important do you think it is for an investor’s portfolio, keeping in mind market fluctuations.


Some people think debt is not important. I don’t think that’s true.


A good chunk of a moderate risk investor’s portfolio should constitute debt.


Also, do you know how power is generated?


So when power is generated, there is a base supply of nuclear or coal power plants, that give the base current. Debt provides that base to your portfolio.


The analogy I’m trying to address is that debt continues to give you higher than risk-free rate, which paves the foundation for the base return.


If you were to earn 14% returns and break it down, 60% of that or more can come from debt instruments if you plan your portfolio properly.


And they are not even very risky. And now, with some equity exposure, you can shoot your portfolio.


Ofcourse, if you put everything in equities, your risk is higher and returns is higher. And if you put everything in debt, that may not work either.


However, given how most investors are not looking to beat sensex or nifty, they can invest in superior debt instruments and they can beat returns given by FDs.


Although this might not be true for institutional investors, it still holds value for retail investors.


4. A lot of people are scared to invest in non-traditional investment platforms, what is your view on them? Why do you think people are so sceptical?


It is typically because financial literacy is very poor, even for the educated folks.


Financial literacy also has two components. One is the awareness part and the second is the understanding and appreciation part. And because there is limited awareness and information asymmetry, people act on Chacha ji’s advice.


You will always have someone in the family who does not have a data driven proof, but an anecdotal proof of where to invest. Ofcourse, if you do such investments, you will make mistakes.


People don’t make systematic plans and when they end up in this mess, the blame goes to the instrument. And the popular notion becomes, “Yaar, I am better off keeping my money in an FD”. And ofcourse, there are political shockers as well. So both, macro and micro factors come at play here .


5. Since we are talking about financial freedom, what do you think has been your smartest investment (You can include your own start-up)?


I think Wint Wealth has been one of my smartest investments (chuckles). Super proud to be an investor here.


Rupeek for me is not an invetsment. It is bread and butter.


A few investments for me, which have given good risk adjusted returns are bluechip stocks, which I had bought during the 2008 crash and it gave very good returns.


I had bought a few RBL Bank stocks before their IPO, that gave good returns as well. So the framework would be to invest in very good corporate governance companies in their early stages and which operate in a large sector.


6. What is that one financial concept that you think Indians need to be free from to make more wealth


I think the portfolio approach.


And this is not an India related, problem this is just human psychology. They tend to over index on losses and look at it in a very singular way, rather than taking the portfolio approach.


This is human tendency. Even if you go to US, you will see this happening. We manifest in buying real estate or gold, because there is always a belief that you cannot get negative return from it. But they would not compare this with an NSC return.

Example: Electronic city (real estate) in Bangalore has given negative returns. Even a few projects in Gurgaon have given negative returns.


7. What is financial freedom to you?


Oh wow!


Well I think, now that I have a family and kids, having enough money to fulfil your duty towards your parents, your family, covering them, giving them good healthcare, good education, that for me is financial freedom.


Thank you!


Read interviews from Deepak Abbot, Founder of Indiagold, Vivekananda Hallekere, CEO of Bounce and Ajinkya Kulkarni, CEO of Wint Wealth.



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