When Parag Parikh's wife stepped up to help him become a broker
5 min read . Updated: 09 Mar 2023, 07:08 AM IST
Premium- Neil Parikh, CEO of PPFAS, says his mother offered to sell her jewellery when his father needed a BSE card
Neil Parikh, chief executive officer of Parag Parikh Financial Advisory Services (PPFAS), learnt the art of saying ‘no’ from his parents. As a child, when he asked them for something, they often would question if he really needed it. As parents, that's what Neil and his wife are consciously doing now with their five-year-old daughter too.
When Neil’s father, late Parag Parikh - a well-known value investor and the founder of PPFAS - wanted to become a broker in 1983, his wife Geeta Parikh offered to sell her jewellery to support him financially. Parag considered Geeta, who is fondly called bhabhi by the staff at PPFAS, as a sounding board, pillar of strength and an advisor.
Neil recalled the above incidents on International Women’s Day, when Mint reached out to people from the investment management industry to understand what money lessons they picked up from their mothers and what advice they would want to pass on to the next generation. Edited excerpts:
Tell us a few words about your mother.
She has a very vibrant personality. When my father started the brokerage business in the early 1980s, there was no HR (human resources) department in our office. My mother filled that gap. She used to walk around, talk to people and motivate them. She was very friendly that everyone was comfortable with her. My father had a bit of a temper in the early days, and if anyone wanted to get through to him, they would probably route it through my mother.
Was she involved in family finances?
I would not say she was involved in the finances in terms of investments. But she used to encourage my dad to take risks. In 1983, when my father decided he wanted to become a broker, there was a money hurdle as the Bombay Stock Exchange trading card costed lakhs of rupees. My mother offered to sell her jewellery to fund it. All my mother asked in return was a vacation every year if the business does well as she was very fond of traveling. My father kept his promise.
So, that's how the whole journey of PPFAS started. My father also used to tell us that this business wouldn’t have begun if not for her help.
How was it financially at home when your father just started the business?
When my father started off, there wasn’t much money. He couldn't employ people to do the administrative work. So, my mother doubled up as a typist, typing all the communication, reports, stock analysis etc, which were further shared with the financial institutions. Until we could hire other people to do such work, it was my mother and my dad, who worked as a two-man team to make the business successful.
What have you learnt from your parents about finances?
My parents were great savers. They were pretty consistent on teaching us the value of money and saving it from the very young age. When I asked my parents to buy something in my childhood, they used to question me if I really required it and explained to us why we could or couldn’t afford it. I think that has helped me today in saying ‘no’ for certain things as the CEO of PPFAS.
Besides, I have ingrained a lot of things on investing since a very young age. About concepts such as the fundamentals of stock market investments and not using leverage. I have never seen my parents taking debt. Leverage was kind of a bad word in the home. We got a car way later in life and my father bought it with his own money.
Over time, I have also learnt from my father about how investments are doing, the volatility in the stock market and how it provides opportunity when markets come down. Further, since my father was very passionate about behavioural finance, I also got a few insights on how behaviour affects the way we look at things in finance.
Do you have conversations with your partner about major financial decisions?
My wife takes her own decisions in terms of investing. She is working in the banking industry and is independent in her money decisions. It’s not that we work in silos. We talk about money and our financial goals at home. I like equity and I would want to put most of my money in equities. She wants to invest a little bit in gold or real estate and other assets.
She has her own asset allocation and I have mine. As a family, we also get our combined asset allocation done. It’s a good thing that our philosophies match when it comes to money.
In the case of my mother, I help her out whenever she needs help.
I see that women are becoming more independent. They want to know what is happening with their money. A lot of women come to us asking about the different products that are available. Clearly, their interest is rising. As long as they are interested, they will start knowing and eventually start to take their own decisions.
What are you passing on to the next generation?
My daughter is five years old now. My wife and I are very particular that we are inculcating good habits in her. We are still learning on the job on how to go about it.
We are clear that we want her to have a good foundation about three important things - saving every penny matters, not to compare herself with others and being comfortable in her own skin.
In money matters, the ability to delay gratification will help children in the long run. We live in a world where everything comes at the click of a button. We consciously say ‘no’ to our daughter sometimes. It is not as easy as it sounds because kids cry, get angry etc.
We also make her play the ‘marshmallow test’. In this game, the child is given one marshmallow as an immediate reward. But if the kid waits for a certain period of time without eating it, two marshmallows will be given. The game goes something on these lines about delaying gratification, which we found very interesting.