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Personal Finance

Joe Coten proffers financial advice from Pune in India where fascination with local traffic customs makes for an interesting and amusing introduction to the more serious task of advice on where to invest one’s hard-earned savings.

Joe Coten

is a member of the Personal Finance Society.

He may be reached on 0207 588 9626.


nusually my thoughts on financial matters come not from London, nor from the eyrie in Coten Towers that is now my office during

working hours in the Bordelais. Family demands have meant that we have spent the last few months enduring the second half of the monsoon in western India, in Pune to be precise. Being in the foothills of the Western Ghat mountains, means that life is far more bearable for us than in the humidity of Mumbai's coastal climate.

There are other advantages. Whilst Pune (pop 5.5m) is a large city - being one of India's IT and industrial hubs - everything is on a more human, civilised scale. People in general are more pleasant, you can get around easily and most things are cheaper than in Mumbai, where the cost of living now approaches that of London. The downside however is the traffic. In Mumbai road safety seems to be less of a problem, although this may not be the case statistically. In practice there is such a constant state of gridlock traffic for the most part is immobile and therefore speed, the major cause of road accidents, never becomes a factor. In Pune, however, being less congested, speed is indeed a hazard, this in addition to the highly individualistic approach that Puneikers take to road manners.

It is not unusual here to see a car or motorcycle nipping a few hundred yards up a dual carriageway the wrong way if the driver finds this convenient. To be fair drivers with this cavalier approach do tend to give oncoming traffic right of way. Buffalo on a bypass is a commonplace but it is usually dawdling in the right direction. Rickshaw drivers in Pune seem so concerned with global warming they often insist on saving energy by not switching on their headlamp when driving at night. In fact the only apparent qualification needed for being a rickshaw-driver is a belief in one's own immortality.

Motorcycle helmets appear to be illegal and the use of a mobile phone whilst in motion mandatory. As elsewhere in India a motorcycle is used a vehicle for the whole family with wife


on pillion, child number 1 pressed against handlebars and child 2 slotted in whatever space is deemed to remain. More dignity is accorded to grannies. These perch sidesaddle on the pillion, somewhat similarly to her majesty at the trooping of the colour, but in the event of any sort of collision, a less than majestic outcome is likely. The local version of the highway code is refreshingly simple. The rule is that if your fellow road-user is in your judgement able via an emergency stop, if push comes to shove, give right of way, then you have right of way. In other words there is a nerve-jangling game of chicken constantly in progress, which is exacerbated during power cuts, weekends and public holidays when the traffic lights are inactive through either accident or design. The best way we have found of experiencing this free-for-all is slaloming through the horn-blaring traffic in an auto-rickshaw piloted by a bare-footed, khaki-clad elderly racer with only a miniature pink plastic model of Ganesha, the elephant-god for protection. Things get particularly dramatic when the rickshaw-wallahs decide to re-enact the chariot-racing scene from Ben Hur.

Just when you think that you've seen the most ridiculously dangerous piece of road behaviour you'll see something yet dafter that takes the pappadum! The latest example being a blind woman plus white stick tapping her way along the middle of a 4 lane with cars whizzing past to either side. The following day you're likely to witness something even more extraordinary.

But alongside the chaotic traffic, the inescapable Bollywood media bombardment with a Big B and the frustrating bureaucracy, here is a country with a very bright future. India has a massive middle class demographic, which is pregnant with aspiration. Education is highly valued by all generations and standards get ever higher and expectations increasingly sophisticated. If you are able to take a long term view, it is worth considering investing at least a percentage of your portfolio in a good collective scheme specialising in the sub-continent.

As to the less adventurous, finding a suitable home for your savings just gets harder and harder. I did tell anyone who cared to listen that the National Savings index-linked offer needed to be grasped with both hands, and am pleased to say a number of clients did exactly that. The official line was that there were no immediate plans to withdraw the offer but a week or so later one of my clients who did manage to get in under the wire called me to say this was in fact exactly what happened.

It is a deepening problem for savers because getting an interest rate greater than 1% is now not easy (after the initial bonus offer periods expire). If you are receiving just 1% or at best 2% net and inflation is running at 5% then your money is losing its buying power at a dramatic rate. So what to do in times when safe havens no longer exist? A small, judicious amount of investment risk can be very worthwhile in this economic climate. I would recommend a cautious collective fund that is underpinned by the best sovereign debt available. Clearly this means avoiding the euro, which is now going through a dose of kill or cure medication but there are still relatively steady alternatives to cash.

By the time you are reading this I very much hope to be back in the UK. The festive season will be in full throttle and we will have much to celebrate this year. But for us it will also be tinged with a little sadness. After 12 happy years in the Barbican, we will be leaving to move into our flat around the corner from the British Museum. Of course some of the time we will be in France and for Elementary Investments not a great deal will change. I will be working from either France or my office just off Regent Street, when in London. I will also be seeing my Barbican clients in the City Point building in Moorgate. I am happy to say that because of this element of continuity the editor of Barbican Life is allowing me to continue regaling you with my random thoughts on wherever I happen to find myself and related financial matters. So it will be a case of au revoir rather than adieu!

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