Ikigai in Wealth Management: Finding Purpose in Financial Success

A webinar titled "Ikigai in Wealth Management" was the focus of the third episode of the Alternates Universe Webinar Series hosted by PMS Bazaar & Sundaram Alternates.

Rajiv Bajaj, Chairman and MD of Bajaj Capital, was the guest of the webinar with Vikaas M Sachdeva, Managing Director, and Hitungshu Debnath, Chief Business Officer of Sundaram Alternates, hosting the discussion. The webinar covered a range of topics including the Union Budget, Prime Minister Modi's vision for India, the concept of Ikigai, and investment trends.

Take on the budget

Bajaj described the Union Budget as visionary and long-term oriented, reflecting the priorities of the newly formed government. He highlighted the budget's focus on women, youth, rural development, infrastructure, and support for specific states, suggesting that these initiatives might lead the market to pause after a period of growth. He identified potential sector preferences such as NBFCs, auto, FMCG, fertilizer, housing, and EPC as possible beneficiaries, while mid-caps might see a slowdown.

Sachdeva linked the budget to Prime Minister Modi's vision for India, focusing on scope, scale, skill, and speed. He explained that the budget's broad scope encompasses various initiatives, including employment and economic growth, while the scale of the government's thinking is global, aiming to align with international standards. A significant focus on skill development aims to train the youth and integrate them into the workforce, and the emphasis on speed underscores the importance of timely implementation.

Ikigai on financial planning

The conversation then shifted to the concept of Ikigai, which Bajaj, inspired by Japanese culture, defined as "the purpose of life." He linked Ikigai to his research on longevity and financial planning, noting that leading a life of purpose is associated with increased lifespan. Bajaj revealed that his personal Ikigai is to help people find their own Ikigai, a realization that took him ten years. He emphasized that Ikigai is about having a passion for serving others. Professionally, Bajaj strives to understand and support the Ikigai of his employees at Bajaj Capital, aiming to align their career aspirations with their life goals.

The discussion transitioned to the impact of the COVID-19 pandemic, a period Bajaj believed provided ample time for introspection. He reflected on his company's founding principles, recalling the slogan "Retire and Prosper" from the company's 1960s brochures, which inspired a renewed focus on retirement planning. Bajaj explained that individuals around the age of 60 prioritise three key aspects: mental health, physical health, and financial health. He elaborated on the concept of "Jinsei 100," or the era of a hundred-year life, prevalent in Japanese culture, which suggests that the period from 50 to 75 years is the most exciting.

Value drive approach

Debnath asked Bajaj about the importance of value-driven approaches in wealth management. For this Bajaj emphasised that the alignment of values between the investor and the firm is crucial. Bajaj addressed the challenge of cultivating the right mindset among investors, stressing the importance of setting a culture within the company that prioritises ethical practices over sales. He highlighted the significance of long-term relationships, sharing a story of visiting a client's home, where he met three generations of investors, all clients of the company.

Personal touch to client servicing

Sachdeva asked Bajaj to share his thoughts on various aspects of client service and investment trends, to which Bajaj emphasised the importance of a personal touch in client service. He discussed the necessity of being available both online and offline, stressing that while information can be accessed online, the real value lies in face-to-face interactions. Bajaj also talked about how each generation is attracted to new trends such as cryptocurrency, robotics, and artificial intelligence. He explained that while many of these trends are just noise, some hold substantial value. He noted the paradox of living in a globalised world but having portfolios that are 100% Indian.

Financial independence

Sachdeva asked Bajaj about the journey toward happiness and financial independence, and Bajaj observed that many young individuals today aspire to achieve financial independence and retire early (FIRE) to pursue their passions. He emphasized that financial freedom is crucial for attaining one’s Ikigai. Bajaj also discussed the idea of mini-retirements, where youngsters consider taking breaks at 30 for a world tour and then returning to work. He shared insights from his visit to Japan, where he learned about the differences between Ikigai (reason for being) and Hataraki-gai (reason to work). He highlighted that while work provides livelihood, true fulfilment comes when one finds a reason to live within one's work.

Bajaj emphasised the importance of knowing one’s customer (KYC) and aligning financial withdrawals with personal goals. He advised against withdrawing funds prematurely unless necessary and advocated for the power of compounding as a wealth-building strategy. He noted a fundamental change in mindset from scarcity to abundance shaping India’s financial landscape.

On the topic of real estate versus stocks, Bajaj stressed the importance of diversification, explaining that having a balanced portfolio of both asset classes reduces risk and enhances returns. He called for more platforms that allow retail investors to participate in diversified real estate portfolios. This blog summarises the webinar, but you can watch the entire webinar session from the link below for in-depth insights.