Sonam Kapoor is a movie star, fashionista, entrepreneur, celebrity brand ambassador and producer. But behind the designer labels and the girl-next-door roles she often plays in films, is a sharp businesswoman. She entered the film industry as an assistant director. In 2008, she debuted as an actor with Saawariya. Since then she has worked in films such as Raanjhanaa, Neerja and Prem Ratan Dhan Payo. She shares a few interesting money lessons from her 11-year-old film career.
Be financially independent
Kapoor has been financially independent from a very early age. “I have not taken any money from my father since I was 17," Kapoor says. “My parents made it very clear that now you are an adult and you have to take care of yourself." Financial independence makes you feel secure, she says , but to gain real freedom you need to build confidence about your investments and financial goals. Her advice: To begin with, set aside a fixed sum every month and work towards a financial goal.
Invest in instruments you understand
Kapoor's investments include art, silver, fixed deposits, real estate and the film business. “I have grown up with art around me. I started investing in art since I understand it and I love it," says Kapoor. She believes you should not invest in any instrument you don't understand. “For instance, don’t make movies if you don’t get it. It is as simple as that." Kapoor and her sister Rhea started producing movies early in life with the production house they inherited. Coming from a family that has been in showbiz and movie production for decades, Kapoor understands the business side too. As an investor, you should always understand the details of the product and the purpose it will serve, she says. Also, whether it is mutual funds, fixed-income products or small savings instruments, focus on specific details rather than just the returns.
Seek professional help
Whether it is movies or money, Kapoor believes in taking advice, but the final call is hers. “For instance, if I am signing a film, I take advice from everyone, but eventually I do what I want to do. My parents have always told me that I should not turn around and say, ‘You told me to do this.’ Eventually, it is my decision."
The same logic applies to her finances. She has a manager who handles her financial portfolio, but she keeps track. She also depends on her mother—whom she considers her role model in money matters. If you don’t understand or don’t have the time to manage your money, says Kapoor, seek professional help. And do your research before choosing a financial planner.
Keep track of your money
Despite her busy schedule, Kapoor makes it a point to track her money. “I write down all my expenses because it is my money and I have been working very hard for it. Sometimes, it is okay to indulge, but make a budget. I like beautiful things and I like spending money. And when it comes to fashion, it can be considered an investment. But sometimes what happens is that you invest in something, (but) it doesn’t appreciate. But I am passionate about it so it is okay."
Similarly, make sure you keep track of your money. It will give the right picture about expenses, and help cut unnecessary spending.
The right budget
Kapoor and her sister Rhea inherited their father’s production house. When it comes to the economics of film business, she says, “I always say that films don’t fail, budgets do. Always assign an appropriate budget"— whether it is movie business or your own personal finances.
Avoid overspending on credit cards
“You should understand how much is going out. I make sure I know how much I am spending." Before using a credit card, you should know the costs and charges associated with one, she says. Remember that irresponsible use of a credit card can damage your current as well as future financial health. It is important to have the discipline to use the card within the credit limit, and pay back the dues in time. First understand how credit cards work and know the terms on which the credit card was issued to you, says the actor. Credit cards can be a smart tool if used the right way.
Name: Sonam Kapoor
Invests in: Art, silver, fixed deposits, real estate and the film business
Money mantra: “I take advice...(but) eventually, it is my decision"
Money habit: “I write down all my expenses because it is my money and I have been working very hard for it."
(As told to Mint for the Mint Rich Star series)