Six things that the Bollywood blockbuster teaches you about managing money - By Hiral Thanawala

Sequels hardly ever work in India. However, Tanu Weds Manu Returns (TWMR), a fairly low budget film and sans big name stars has broken several box office records with collections exceeding Rs 150 crore according to some estimates.

In Short, the film is about the disintegrating marriage of the UK-based physician Manu (R Madhavan) and Tanu (Kangana Ranaut), his fluttering-butterfly wife. Like several marriages, this too begins to suffer the consequences of the two partners failing to ‘reinvest’ in the relationship from time to time. The boredom arising out of the ‘sameness’ of everyday marital life is too much be bear for the footloose Tanu. She dumps her husband and returns her hometown Kanpur only to shock her small town relatives with her new-found libertine ways. Not just that, Tanu flirts with many of her old flames, rekindling the hopes of Awasthi ji (Jimmy Shergill) in particular. This, while the pining and emotionally wrecked husband returns to Delhi and falls in love with a derring-do, rustic Jat, buck- toothed national level athlete Kusum (also played by Kangana Ranaut). The basis of his attractions is that Kusum is a spitting image of his wife Tanu.

After many adventures, Manu and Kusum are on the verge of getting married. However, a twist in the tale ensures Tanu and Manu get back together, and presumably live happily ever after etcetera.

The opinion about the film differed sharply in our newsroom. I loved the gags. And apparently so did millions of others helping the producers to laugh their way to the bank. My editor claimed to have slept through the second half. ‘There are more holes in the script than a block of Emmental cheese,’ he argued, adding pretentiously that the ending was clichéd.

The film’s success seems in large part thanks to the audience relating personally and deeply to the story of a marriage suffering from stasis. I found there were many similarities, and lessons when it comes to a marriage and our relationship with finances. Considering my editor was perhaps in a minority one in his dislike for the film, I thought it would make sense to look at the personal finance lessons this hilarious film offered. Here we go.

Lesson 1: ‘Apni haalat dekho before consulting a Doctor’

After four years of being married, Tanu and Manu were growing further apart. They both had a baggage of problems with each other. The movie begins with the couple meeting with a team of psychiatrists in London. The differences were so rancorous that they started arguing bitterly in the presence of doctors without giving each other a fair chance to resolve their differences with equanimity.

Financial Planning Perspective:

In the current environment where lifestyle and stress related issues constantly chip away at marital relationships, it would help greatly if finances were not one an additional pain point. It’s useful to have commonality to financial goals, transparency and honesty in money matters. Consult a financial advisor.

Appoint a Chief Finance Officer (CFO) between the two of you to execute the financial decisions you jointly make.

  • While commonality of goals is good, retain a reasonable level of individual financial sovereignty. Relationships where the couple, mostly in the callow days of a marriage, share email and Facebook passwords, things soon approach disaster point sooner than later. Never completely give up financial decision making to your partner, or become entirely reliant on them.
  • Share the burden of debt equally and create a plan to clear outstanding debt as early as possible.
  • Create a cash flow with sources of income and maintain a budget of expenses while keeping track of it on regular basis.
  • Appoint your spouse as nominee / joint holder in investments and insurance policies.
  • Discuss financial goals with timeframe which are realistic and seems achievable. (Refer table Financial...)

Financial Planning Goals

Priority of Goal Financial Goal Current Value Years to Achieve the Goal Inflation (assumed)
1 Children’s Education Rs 25 lakh 15 10%
2 Retirement Corpus Rs 5 crore 30 7%
3 New Home Rs 1 Crore 5 7%
3 Car Rs 10 lakh 3 7%

 

Lesson 2: Don’t lust after supernormal returns. Retain a sense of realism when investing

One of the perks for Tanu of getting married to Manu, an NRI settled in London was the freedom of West, and a flamboyant lifestyle. But in reality, their life was one of unremarkable middle classness in Southall, for all purposes an Indian ghetto in London. Tanu’s aspirations of a swish lifestyle in London fell way short of the reality of her husband’s financial status. That disappointment contributes significantly to her desire to break away.

Financial Planning Perspective:

While investing in stocks, real estate or any other asset, don’t have unrealistic return expectations. There are many who in the heady years of 2007-08, just before the almighty economic crash, took personal loans at the rate of 20% in order to invest in the stock markets which they believed would double the investment in a few months. It was not unusual in those days for stocks to run up nearly 50% a month or so after listing on the bourses. Irrational exuberance doesn’t last long. If you are in the game for 100% returns year after year, try something else. While some fundamentally good stocks turn out to be multibaggers, they are few and far between. Consider 15-20% annualized returns over the medium term decent.

Lesson 3: Multiple love interests can be disastrous. Be stable

After returning home to Kanpur, Tanu meets her ex-boyfriends and tries to relive the past in all its glory, with her trademark coquettishness, raising the their hopes that a re-union was somehow possible. She indulges herself while not legally separated from her husband. The husband meanwhile is hoping she’d call. This messes up not just her life but her former boyfriend Awasthi ji’s as well.

Financial Planning Perspective:

Just as Tanu carried on with her merry flirtatious ways, investors too keep on jumping from one stock to other in search of quick gains. Financial experts advise against constant portfolio churn. When you purchase good quality stocks, don’t be swayed by short-term ups and downs in the counter.

The portfolio requires stability over the long term to grow and generate healthy returns. Trading on news flow will not take you closer to your corpus required for goals. The problem most people have when looking at the news seems to be that they take it too seriously. For example, if a big company misses earnings should everyone really sell out? Long-term investors should hold positions based on an outlook of many years, not weeks or months.

In case understanding fundamentals of stocks is too taxing, opt for mutual fund SIPs. Develop the practice of aligning your investments with particular life-cycle goals and re-align portfolio when those goals are in sight. Such discipline will bring stability and get you closer to the goals.

Lesson 4: ‘Reebok nahi toh Ribook sahi’-- Don’t invest in a stock because it’s cheap imitation of a blue chip

While Kangana’s two avatars Tanu and Kusum look somewhat similar, their personalities are as different as chalk and cheese. One is a high-life loving rebel, the other earthy and tenacious. When Tanu finds that her husband has fallen for an ‘unrefined’ version of herself, she taunts Manu by saying: ‘Reebok nahi toh Ribook sahi”.

Financial Planning Perspective:

Many investors thinking blue chip stocks in a sector too expensive, go for small or mid cap stocks in the same business hoping that those would miraculously offer the same returns the blue chips historically did. It’s not necessary that when government infrastructure spending perks up, every engineering and construction firm would benefit to the same levels of L&T. The performance of a firm is determined not merely by favourable business climate but by the quality of the management, execution capabilities and soundness of business strategy. Many investors take a punt on the small caps because it trades at Rs 50 compared to L&T’s Rs 1500. Don’t fall for superficial resemblance of stocks.

Lesson 5: Don’t take the relationship for granted. Irrigate it with attention

The drifting apart of Tanu and Manu happens because trapped in their individual predilections, they stop paying attention to the other’s desires and aspirations. It occurs when partners start taking each other for granted. Everyday struggles suck the romance out. They stop making the extra effort to see what their partner is seeking.

Financial Planning Perspective:

Similarly with financial planning, many people lose interest or the complexities overwhelm them. Financial planning needs close attention. Procrastination leads to missed opportunities, additional costs, penalties and in many cases huge losses.

Lesson 6: Move on. Don’t cling to bad investments and ideas

The reality of life is that there may be a time when partners become wholly incompatible. Their pursuit of happiness and contentment may take them in completely opposite directions. Often they resist separation or moving on for the wrong reasons such as societal pressures. One of the weaknesses of TWMR is that there seems to be very little in common with Tanu and Manu, and no signs of any deep underlying attachment to the other even when they decide to get together again. Given their differences, its hard to see them living happily ever after. May be that’s the idea of the makers of the film—to be able to make a trilogy perhaps!

Financial Planning Perspective:

Don’t cling on to loss making investments. Cut your losses and move on. Don’t get emotionally attached to stocks or other assets. Gold may have given you good returns in the past.

But if there’s no great upside in the horizon now, just sell and invest in something else.

Written By: Hiral Thanawala

Posted by Admin Thursday, July 02, 2015 2:49:00 PM

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