Wealth management is an art. Especially for politicians. And the techniques to this artistry are revealed during poll season when all candidates are forced to declare their assets and liabilities. A close look at a few of the affidavits gives you insight into their investment patterns.
While it’s easy to spot a winner or loser in an election, doing the same with their financials is not. The answers lie in lengthy affidavits. Has the political candidate diversified well or has he/she stashed their wealth in real estate? Is there a stack of fixed deposits lining their portfolio or is there a good balance of equity and debt? Do they hold a lot of cash and are the liabilities overwhelmingly large? While debt per say is not bad, it is when the debt is unproductive that it becomes a problem.
In this article, we look at the affidavits of few candidates from different political parties — Bharatiya Janata Party (BJP), Indian National Congress (INC) and Dravida Munnetra Kazhagam (DMK) — and analysed their investing skills.
The Prime Minister has assets worth ₹2.5 crore, including a residential plot in Gujarat’s Gandhinagar. He has fixed deposits of ₹1.27 crore and ₹38,750 cash in hand, according to his affidavit. This is an increase of approximately 10% from his assets of ₹1.65 crore in 2014. Modi has gold worth ₹1,38,000.
The Congress President displays a clear skew towards real estate and equity, with 63.4% of his portfolio in property. Of the 33% in equity, nearly 32% (or ₹5.19 crore) is in mutual funds, a financially sound move. In another prudent move, he holds only a minuscule 0.7% in cash and 0.1% in gold and jewellery. Gandhi’s net worth, at ₹15.16 crore, is on the lower side compared to the portfolios of other candidates listed here. Another surprise is that a major portion of debt, of ₹39.8 lakh, is being held in a PPF account. The net worth of ₹15.16 crore takes into account his liabilities of ₹72.01 lakh. Overall, he’s a savvy investor.
The actor has a nightmarish portfolio. With a net worth ₹108.59 crore, she has a humongous 88.4%, or nearly ₹101 crore, invested in real estate. Equity, on the other hand, gets the least exposure at 0.2%. While debt should be higher at her age, it forms a small part of the portfolio (lack of break-up makes it difficult to calculate the exact amount). The liabilities are high at ₹5.75 crore. She has ₹2 crore, the highest of the lot, in gold. The portfolio could easily do with greater diversification.
The Congress candidate’s flair for linguistic is matched by his love for liquidity. 15.8% of the portfolio is held as cash, an overall bad decision. The good news is that 36.8% is in equity, in the form of mutual funds. This is one of the highest equity exposures among the listed candidates. The 2.8% allocation to realty, among the lowest, could be increased, as could the debt exposure, which is in the form of fixed deposits and bonds.
With a penchant for real estate and cash, BJP’s candidate for Rampur, Jaya Prada, has almost 67% of her portfolio in the former. The cash holding of ₹56.24 lakh can earn her better returns if invested in mutual funds. The equity exposure of 3.1% is entirely made up of stocks, while the debt allocation is extremely low at 0.1%. The former actor has huge liabilities of ₹1.7 crore. Word of advice: reduce realty exposure and invest the high cash component.
The daughter of former Tamil Nadu chief minister M Karunanidhi, Kanimozhi displays the worst skew towards debt among the candidates here. As high as 50.8% of her portfolio, or nearly ₹15 crore, is locked up in fixed deposits. She also has one of the highest liabilities at ₹1.92 crore. The remaining portfolio is distributed among real estate at 29.6%, while equity is a low 6.8%, all in the form of stocks. The cash holding of ₹1.18 crore can easily be put to better use by investing in mutual funds and the liabilities can be brought down. The net worth is reasonable at ₹28.15 crore.