JRD Tata 119th Birth Anniversary: 4 money lessons from the legend

As I read and re-read the volume of collected letters from JRD Tata, I realised that the man was not just the father of Indian Aviation, the chairman of Tata Sons, the creator or over 50 companies, an advisor to prime ministers and an inspiration to many when he lived, but through his letters and keynote speeches offers us advice on how to make the best of our investments even today.

Want to pick stocks? Here is some interesting advice.

JRD Tata writes to ID Sethi on 10th December 1978, upon the latter's confirmation by the Government as the Deputy Managing Director, Air India: "If I have learned one thing about leading a team in my long career, it is the supreme importance of morale in any organization, whether an airline, an industry, or for that matter, an army. I would rather have a united team of average ability but of high loyalty and devotion to the company and morale than a group of outstanding prima donnas lacking in esprit de corps and working at cross purposes."

Many of us wonder which stocks would be best for our portfolio and take the easy way out by depending utterly on money managers. But they too need to understand where you are coming from and what your investing philosophy is all about. Would you risk everything in flashy stocks, or choose a long-term plan which means investing in many stocks of an even yield whose long-term prospects will earn you more? Rather than investing in shiny objects that might earn you sudden money, but if you wait to encash that earning, they inevitably end up disappointing you.

The devil is in the details. Observation is key.

In a letter to Mr KC Bakhla (MD, Air India) dated 3rd November 1952 JRD Tata writes about things in the aircraft which bother him (and other passengers too, he says), especially ‘Cups and Saucers’: Although I must have written a dozen times about introducing a rule that no cup should ever be served in a plate but in a saucer, I find that coffee or tea is still being served on some flights with a cup floating about in a small plate in fact I was served that way and as it was extremely bumpy at the time the cup slid to the edge of the plate and spilt on my clothes and on the seat. I saw it happen though, with a less serious result, to another passenger. The hostesses seem to have a rooted objection to serving tea or coffee in the square saucer-cum-biscuit plates which go with the cups.

His observations didn’t stop there! In a letter written in 1972 he observed that Amul butter that was served with breakfast had melted because it came wrapped in the foil with the rest of the meal. He asked for the butter to be stored in the Frigidaire on the aircraft, and was to be served by the hostesses along with the hot food.

Every time you decide to invest your hard earned money in a financial instrument, you must remember that the devil is in the details. What you have to do is read and observe how all these offerings make sense to you as an investor. Sometimes the solutions to problems are very simple, just like this square saucer which has room for biscuits as well as the teacup or butter that could be saved from melting by storing it separately!

Whose interest is being served? Be in the know

In a letter to Sir William Lamond (Chairman of the Imperial Bank of India) dated the second of April 1943, JRD Tata writes: "I made it clear, and I wish to place it on record, that my views on the subject are in no way derogatory to the officers concerned. I have the highest regard for the ability, integrity, and loyalty to the bank of its European personnel, and I have received nothing but the most courteous and friendly treatment from all those with whom I have come in contact. My attitude is based only on the following considerations: if the Imperial Bank, whose shareholders, clients, and employees are predominantly Indian, is, as I believe it, an Indian Bank, it is desirable that the control and management should be in Indian hands. The complete exclusion of Indians in the past from all high positions in the bank and the insistence on reservation in the future of 50% of senior posts for Europeans can only be justified by the assumptions that Indians are inferior in ability to Europeans or that, if they have the ability, they cannot be trusted. As an Indian, I cannot accept either of these assumptions."

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Just as we find out more about the neighborhood we are going to live in, the school we send our children to, the families we give our sons and daughters in marriage, or even the places we go for a holiday, in the same way, we should know all that we can about the stocks or financial institutions we are going to hand out our hard-earned money to. Consider knowing what their business philosophy is, if their promises are worthwhile, and if the business is honorable. You don't want to be the ones who booked rooms at the Bates Motel, now, do you?

Big and bold may not always be beautiful for you

In a letter to the Earl of Kimberly dated 28 April 1976, JRD Tata writes, “As chairman of Air India and its predecessor Tata Airlines, which I founded as far back as 1932, I have been extremely interested in the development of new types of aircraft and have been following the progress of the Concord project. I believe that we can hold our own in the fairly competitive international transport market only if we offer the highest possible standards of service with the most modern aircraft. However, being a relatively small airline, we have considered it both prudent and sound to leave the introduction into service of the first generation of an entirely new type of aircraft to the leaders of the industry who can better absorb the cost and risks involved.”

JRD Tata goes on to say, “The Concord picture has turned out to be very different from what was visualized or hoped for 12 years ago. Not only has the dollar equivalent price of the Concord gone up almost 5 and a half times, but flying overland at supersonic speed has been or is likely to be banned by governments of the countries to be served or overflown.”

If you have done your research, you could also refuse politely but firmly the shiny new object money managers throw in your path. And if you have done your research on the pros and cons of the object in question, you will not be able to say 'no' to pushing your hard-earned money into financial instruments that look too good to be true.

The two books give us a feast for thought. About growth: From flying a Puss Moth to inducting 747s into what became our National airline. About entrepreneurship: From a young man who was caught speeding in a fast foreign car on Marine Drive to creating a company that would create the most affordable car in the world. About ideas: From a man who appreciated music and art to a statesman who could advise Prime Ministers of the country about the population explosion and still take a keen interest in the coffee served on the airline. Read and learn how to create a better world not just for yourself but for generations to come.

Manisha Lakhe is a poet, film critic, traveller, founder of Caferati — an online writer’s forum, hosts Mumbai’s oldest open mic, and teaches advertising, films and communication. She can be reached on Twitter at @manishalakhe.