Triumph Through Tenacity: Shankar Nath's Finance Journey

"Triumph Through Tenacity"

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Episode 2

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Exclusive Interview with

Shankar Nath

If wealth is lost, nothing is lost; if health is lost, something is lost; and if character is lost, everything is lost.

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Table of Contents

Unveiling the Financial Wizard: An Introduction to Our Conversation with Mr. Shankar Nath.

Section1: From Banking Executive to YouTube Sensation: Mr. Shankar Nath's Exciting Journey.

Section 2: Demystifying the Myth: Nath's Approach to Decoding Capital Markets and Gambling Misconceptions.

Section 3: 80C Deduction Abolition and Debt Funds Tax Reform: Mr. Nath's Insight.

Section 4: Harnessing Asset Allocation for Risk Management and Improved Returns.

Section 5: Redefining the 50:30:20 Rule for Better Wealth Management.

Section 6: Assessing REITs, Debt Investments, and Stock Market for Beginners.

Section 7: Insights on Passive Income Instruments by Mr. Shankar Nath.

Section 8: Forecasting India's Capital Market and Mutual Fund Sector.

Section 9: Tenacity Triumphs in Content Creation.

Section 10: Charting the Path: Valuable Insights for Future Finance Leaders and Entrepreneurs.

Decoding Finance: Key Insights from Shankar Nath.

Finance Decoded: Wrapping Up Our Discussion with Shankar Nath.

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Unveiling the Financial Wizard: An Introduction to Our Conversation with Mr. Shankar Nath

Welcome back to the second edition of our exclusive email interview series, “Triumph Through Tenacity” on SD Zen Zone, where we explore the wisdom of industry mavens and their remarkable journeys. After an enriching conversation with Amazon Bestseller Mr. Pankaj Giri on his writing journey,

we now turn our spotlight to the world of finance with an engaging dialogue with Mr. Shankar Nath.

Known widely for his insightful and educational content on personal finance and investing, Mr. Shankar Nath is a renowned financial advisor and a prolific YouTube content creator. His career spans 20 enriching years during which he has accumulated a wealth of experience and knowledge while working with industry giants including ICICI Bank, GE Money, Chubb Insurance, Bharti AXA General Insurance, HDFC Life Insurance, and ET Money.

Driven by his passion to educate, Shankar's content creation style is rooted in clarity and actionable steps, backed by data-rich research. His YouTube channel has become a go-to resource for anyone keen on building their income and wealth, with comprehensive videos on a range of topics such as stock markets, mutual funds, alternative investment products, and passive income generation. In this installment of our interview series, we delve into an enlightening discussion with Mr. Nath, where he shares his investment strategies, personal finance advice, and experiences from his journey in content creation. From his predictions for India's capital market to his triumphant journey in content creation, and his words of advice for budding entrepreneurs and finance enthusiasts, we bring you an exclusive window into his world of financial wisdom.

Stay with us as we unravel Shankar's fascinating insights and experiences in the field of finance. We promise you a wealth of knowledge that will equip you with strategies and tools to grow your wealth and achieve financial success. Let's embark on this insightful journey together.

You can view the full conversation with Shankar Nath at the end of the article.

Section1: From Banking Executive to YouTube Sensation: Mr. Shankar Nath's Exciting Journey

Passion for investing, teaching, and creativity that beckoned him towards a different path

In a world where the route to success is often seen as a straight line, Mr. Shankar Nath's story stands as a testament to the power of passion and creativity. With an illustrious career spanning over two decades in the finance sector, Mr. Nath's journey has been nothing short of inspiring.

Mr. Nath plunged into the financial domain soon after his postgraduate studies, working across diverse roles in banking, lending, insurance, and fintech sectors. His tenure in renowned companies like ICICI Bank, GE Money, Chubb Thailand, Bharti AXA, HDFC Life Insurance, and ET Money shaped him into an industry expert and a mentor for future leaders.

However, it was his passion for investing, teaching, and creativity that beckoned him towards a different path. He soon realized that YouTube was the perfect platform to bring these interests together. After getting a green signal from his superior at ET Money, Mr. Nath transitioned from a business head to steering the company's nascent YouTube channel.

After creating 200+ videos on ET Money's YouTube channel, Mr. Nath decided to take a leap of faith. In August 2022, he embraced the role of an independent content creator, and as they say, there's been no looking back.

You can explore Mr. Shankar Nath's YouTube videos here.

Section 2: Demystifying the Myth: Nath's Approach to Decoding Capital Markets and Gambling Misconceptions

Learning through real-life examples offers a more enriching experience than just theory

Mr. Shankar Nath's unique approach to simplifying intricate financial topics is a testament to his vast experience and understanding of his audience's needs. Knowing what questions people ask and their apprehensions helps him shape the outline of his content, preparing him to research every section independently and script his presentations.

Mr. Nath's method to demystify finance is not merely academic. His preference is to use real-life examples, case studies, and his experiences, which make financial education more relatable and memorable for his audience. A standout instance is his take on the common myth equating investing in capital markets to gambling.

To debunk this, Nath uses an analogy of predicting cricket scores. Speculating if a player will score a century in one game, he explains, is like gambling - unpredictable and uncertain. However, calculating the likelihood of a player scoring a century over multiple games is akin to investing. It is a calculated risk based on statistical probability, similar to how investments in stocks, real estate, or mutual funds are chosen.

In essence, Nath's content creation revolves around a straightforward belief: learning through real-life examples offers a more enriching experience than just theory. His honesty and relatable content continue to make financial literacy a less daunting journey for his followers.

Section 3: 80C Deduction Abolition and Debt Funds Tax Reform: Mr. Nath's Insight

The move lessens the incentive to invest in financial products like ELSS, insurance, and PPF, which weakens society's retirement safety net-Shankar Nath

In the wake of the recent tax reforms, Mr. Shankar Nath shares his insights into how the abolition of 80C deductions and the alteration of capital gains taxation on debt funds may influence the decisions of everyday investors.

Mr. Nath first addressed the changes to capital gain tax on debt-oriented funds, stating that the new tax structure could reduce their appeal due to the increase in post-tax returns. In the previous system, a 20% tax with indexation benefits was imposed, which could reduce to a 10% tax over a five-year holding period. However, the new regime imposes a 30% tax for those in the highest tax bracket. This effectively equates the taxation of debt mutual funds with that of fixed deposits. Mr. Nath predicts a likely shift in investments from debt funds to high interest fixed deposits, traditional LIC policies, and even equity instruments. Yet, he expresses concern that this might inadvertently push conservative investors toward equity to save on taxation, thus inadvertently increasing their risk profile.

Turning to the subject of the abolition of Section 80C, Nath expressed concern about the far-reaching implications this will have. The move lessens the incentive to invest in financial products like ELSS, insurance, and PPF, which weakens society's retirement safety net. If people aren't saving, they're spending, which may be the government's goal at this stage, but Nath suggests this is a myopic view. He proposes a progressive withdrawal system where those earning over, say, 20 lakhs cannot avail of Section 80C benefits, while others still can.

Section 4: Harnessing Asset Allocation for Risk Management and Improved Returns

"Equities move together, gold doesn't. Adjusting equities, debt, gold based on economy enhances risk-adjusted returns."

Asset allocation serves as a foundation for successful investing, according to Mr. Nath. This strategy, by incorporating diversified asset classes, has the power not only to amplify portfolio returns but also to mitigate portfolio volatility.

For instance, while equities (be it large cap, midcap, or smallcap indices) often move in synchrony, gold exhibits weak correlation with equities, making it an excellent diversifier. Moreover, the mix of equities, debt, and gold can be tactically adjusted in response to prevailing economic conditions and stock market valuations. This proactive approach further enhances a portfolio's risk-adjusted returns.

This nuanced investment strategy, he states, is a recurring theme in his YouTube videos, where he elucidates these concepts with relevant examples.

Section 5: Redefining the 50:30:20 Rule for Better Wealth Management

'Income minus Savings equals Expenditure.'-Shankar Nath

Renowned Financial Analytics Guru, Mr. Nath, offers an alternative perspective on the classic 50:30:20 rule for financial management. This rule broadly outlines how one should budget their income: 50% on basic needs, 30% on wants, and the remaining 20% on savings. Mr. Nath underlines the rule's importance as it dictates the portion of income that goes into wealth creation.

Nonetheless, he urges for a strategic shift in this approach, particularly for those in their 20s. He observes that many young individuals, after covering all expenses, find scant money left for future investments. For instance, if they earn 50,000 rupees a month and spend 45,000, it leaves them with a meager 5,000 to invest each month. This is a classic scenario of 'Income minus Expenditure equals Savings.'

Mr. Nath recommends altering this equation slightly to 'Income minus Savings equals Expenditure.' In essence, prioritize setting aside investment money for a better future. Then, use the remaining amount for needs and wants. This conscious shift ensures that investments aren't compromised due to expenditures and fosters healthier wealth management habits.

Section 6: Assessing REITs, Debt Investments, and Stock Market for Beginners

"Beginners should add 15-20% defensive debt instruments/REITs to portfolios. They cushion against market shocks."-Shankar Nath

Investment vehicles are evolving, and for beginners, it can be a challenging terrain to navigate. Mr. Nath, the Financial Analytics Guru, provides some enlightening insights on current trends in the market.

He begins with equities and shares a compelling example. Titan, a renowned jewellery and watch company, was valued at just 300 crores in 2004. Fast forward to today, and the company generates profits matching that figure every single month. This exemplifies how a significant growth in company profits can lead to exponential returns on investments.

Looking at the broader market, Mr. Nath believes that India is poised for an earnings growth of 12-14% over the next 10-15 years. Consequently, he anticipates that the stock market will follow this trajectory, providing returns of about 12-14% in the same timeframe.

Discussing defensive instruments like debt instruments and REITs, Mr. Nath suggests that beginners should incorporate a proportion of these in their portfolios. He recommends a proportion of around 15-20%, in addition to their EPF. This strategy, he opines, can offer a good cushion against stock market shocks and volatility.

Investment trends evolve, but sound advice from experienced financial gurus like Mr. Nath can guide beginners on the path to successful investment.

Section 7: Insights on Passive Income Instruments by Mr. Shankar Nath.

"Passive income is about doing the work once, which itself doesn't require too much capital, and then continuing to earn income from it."-Shankar Nath

Passive income is a much-desired financial goal for many, and Mr. Nath, our Financial Analytics Guru, provides a fresh perspective on this. "Passive income is about doing the work once, which itself doesn't require too much capital, and then continuing to earn income from it," he explains. His own YouTube channel serves as an example, where older videos still generate revenue daily.

According to Mr. Nath, passive income instruments aren't limited to traditional dividend stocks or rental properties. They can also include creating e-books, building software, designing WordPress themes, or setting up an automated ecommerce business. The viability of these opportunities lies in aligning them with one's interests.

Mr. Nath recommends sidehustlenation.com to those looking for more ideas and guidance on setting up passive income sources. There's no one-size-fits-all approach in this domain. Exploring various options and finding what works best for one's individual circumstances can yield fruitful results.

Section 8: Forecasting India's Capital Market and Mutual Fund Sector

"Projected at 7%, India's economy could double stock market growth, translating to ~14% increase."-Shankar Nath

In our interview, Mr. Nath laid out his predictions for India's capital market, particularly focusing on the future of the mutual fund sector. Reflecting on the correlation between stock market growth and corporate earnings, Mr. Nath believes that India's best years in the stock market are yet to come. His confidence is rooted in three principal factors:

First, he highlighted India's robust economic growth trajectory, with projections set at around 7% for the next decade. Historically, countries at a similar stage of development to India have seen their stock markets grow at double the rate of their GDP growth, which translates into an approximate 14% growth in the stock market.

Second, Mr. Nath sees immense potential in India's transition from a contracting, processing, and outsourcing economy to a producer of advanced technologies. With the rising demand for drones, clean energy, artificial intelligence, advanced weaponry, and healthcare innovations, he expects the emergence of more companies that will dominate the Indian stock markets.

Lastly, Mr. Nath points to India's unorganized sector, which currently employs 94% of the workers and contributes to 45% of the output. He perceives that even a slight shift in this distribution would channel a considerable amount of capital and value into companies, thus favorably impacting the capital markets.

When asked about the future of the mutual fund sector, Mr. Nath predicts that it will continue to grow but may shift towards passively managed funds and ETFs. He expects that 'factor investing' will rise within the mutual fund industry, eventually dominating the passive space. From an investor's perspective, he advises maintaining a mix of active and passively managed funds in one's mutual fund portfolio. This nuanced approach to investment seems to be the way forward for everyday investors in India.

Section 9: Tenacity Triumphs in Content Creation

"3.2M views, 130K likes, and 180K watch-hours. My dedication, measured in people watching every hour, every day."- Shankar Nath

In a classic story of perseverance and passion, Mr. Nath shares his foray into content creation. A mantra of 'triumph through tenacity' best encapsulates his journey. The first video he ever recorded for the ET Money channel was shot using a mobile phone, with a 6-feet office wall as the backdrop. It was recorded amidst the challenging circumstances of the Covid-19 lockdown, without air-conditioning, and had to be redone when they discovered the microphone battery had died.

Despite these initial hurdles, the video reached over 50,000 views in a week, and the positive feedback received, including congratulatory messages from contacts in the mutual fund industry, fueled his determination to create something unique for the viewers. This journey from adversity to success exemplifies the triumph through tenacity in his content creation endeavor.

Statistically speaking, Mr. Nath started in September 2020 with a subscriber base of 47,000 on the ET Money channel. Two years later, he had grown it to 350,000 subscribers. He launched his own channel in November 2022, and it garnered 10,000 subscribers in just 12 days, and 50,000 subscribers in five months. The channel currently boasts 72,000 subscribers.

However, what Mr. Nath values most is the number of views and watch-time. His videos have amassed 3.2 million views and have been liked 130,000 times. The channel has accumulated 180,000 hours of watch-time, equivalent to 20 people watching his videos every hour of every day for a whole year. These milestones stand as a testament to his passion and dedication in the world of content creation.

Section 10: Charting the Path: Valuable Insights for Future Finance Leaders and Entrepreneurs

"Start small, iterate, and then validate."-Shankar Nath

We concluded the interview with Mr. Shankar Nath's valuable advice for those budding entrepreneurs and finance enthusiasts who are filled with dreams and aspirations. His words were powerful and rooted in his personal experiences.

"Treat every experience as a future-business opportunity," Mr. Shankar Nath suggested as his first piece of advice. If you're working, consider every project as a potential business, every customer you interact with as a future client, and every colleague as a potential co-founder. Giving your best in every interaction can eventually become a habit and a gateway to significant opportunities.

Mr. Shankar Nath's second advice was to "start small, iterate, and then validate." He firmly believes in the importance of not rushing into anything. Start by making a prototype to assess your skills. Mr. Shankar Nath did this with his first few YouTube videos. Make improvements as necessary, and seek real customer feedback. Mr. Shankar Nath continuously improves his content, presentation, and thumbnails, and he makes a point to read and respond to every comment on his channel.

Finally, Mr. Shankar Nath emphasized the importance of self-care. "Learn to take care of yourself," he advised, quoting a powerful maxim that says:

"If wealth is lost, nothing is lost; if health is lost, something is lost; and if character is lost, everything is lost."

With these inspiring words of wisdom, Mr. Shankar Nath not only paints a promising picture for budding entrepreneurs and finance enthusiasts but also encourages them to preserve their health and character above all else. His advice is a testament to the importance of persistence, self-improvement, and personal well-being in the path to success.

Decoding Finance: Key Insights from Shankar Nath

We can present this section in bullet points with brief explanations for each. For instance:

1. Understanding Investment Vehicles: Shankar Nath emphasized the significance of understanding various investment vehicles such as REITs, debt investments, and the stock market. This knowledge can empower individuals to make well-informed investment decisions.

2. Exploring Passive Income: Passive income, according to Mr. Nath, is about creating value that continues to generate income over time. He mentioned several viable opportunities such as YouTube channels, e-books, software, automated e-commerce businesses, and others, highlighting the potential of these platforms to serve as passive income instruments.

3. Predictions for Capital Market: Mr. Nath foresees promising growth for the Indian stock market, given the projected growth of the Indian economy. He predicts significant advancements in the mutual fund sector, especially with the rise of passively run funds and ETFs.

4. Content Creation Journey: Mr. Nath's journey as a content creator exemplifies his 'triumph through tenacity.' From humble beginnings, he built a substantial following on YouTube, proving the value of perseverance and passion.

5. Advice for Entrepreneurs: Shankar Nath advises budding entrepreneurs and finance enthusiasts to treat every experience as a potential business opportunity, start small and gradually expand, and above all, take care of oneself.

Finance Decoded: Wrapping Up Our Discussion with Shankar Nath

For the conclusion, we can summaries the conversation and include a call to action, like so:

We've delved deep into the world of finance with Shankar Nath, gaining insights that are not just profound but also incredibly practical. The discussion emphasized the importance of understanding investment mechanisms, the potential of passive income, the future of India's capital market, and the power of tenacity in content creation. His advice to budding entrepreneurs underscores the essence of his philosophy and approach.

As we conclude this enlightening conversation, we're left with a wealth of knowledge and insights that are bound to benefit anyone interested in finance. To continue learning and growing in your financial journey, we encourage you to subscribe and stay tuned for more interviews with industry leaders like Shankar Nath.

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To read the full interview, click here:

https://drive.google.com/file/d/1bew04ENs0CxemOZhxokS6ifyV4fJsnh1/view?usp=sharing

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Reference List

1) NSE: Real Estate Investment Trusts (REITs)." National Stock Exchange of India, www.nseindia.com/products-services/real-estate-investment-trusts-reits. Accessed 22 July 2023

2) Britannica. (n.d.). What is the 50-30-20 Rule? Retrieved from https://www.britannica.com/money/what-is-the-50-30-20-rule

3) Angel One. (n.d.). The Difference Between Large Cap, Mid Cap, And Small Cap. Retrieved July 22, 2023, from https://www.angelone.in/knowledge-center/share-market/the-difference-between-large-cap-mid-cap-and-small-cap.

4) Business Today. (2023, February 1). Old tax regime to fade, Section 80C and tax-saving investments will soon be a thing of the past, say netizens. https://www.businesstoday.in/union-budget/budget-2023-reactions/story/old-tax-regime-to-fade-section-80c-and-tax-saving-investments-will-soon-be-a-thing-of-the-past-say-netizens-368538-2023-02-01

5) Finance Bill 2023 Passed in Lok Sabha: Capital Gain from Debt Mutual Funds to be Taxed as Per Income Tax Slab." Business Today, 24 Mar. 2023, www.businesstoday.in/personal-finance/news/story/finance-bill-2023-passed-in-lok-sabha-capital-gain-from-debt-mutual-funds-to-be-taxed-as-per-income-tax-slab-374717-2023-03-24