I am a young Multi Millionaire with my own money…
I am usually a silent lurker on Subra’s blog, but the flurry of negativity on this post http://www.subramoney.com/2016/04/and-why-this-young-couple-will-end-up-very-very-rich/ just made me want to share my experience with Subra’s readers on how this example is a very much realistic scenario for any person earning an income in India.
I am a 33 year old man, married with a non-working spouse, no kids. I have a computer science engineering degree from a non-IIT, non – REC engineering college and I have been employed without a break since the age of 22. I have been working abroad since 2010. I do not have an IIM degree nor have I inherited anything from my parents. My wife did not bring in any dowry in our marriage. I have lived in rented accommodation ever since I started working and intend to do so for the foreseeable future. My standard of living is purely middle class. I do not have expensive tastes except for eating out and vacations. I have an 8 figure portfolio.
How? First, I need to enumerate the advantages I have had till now.
- I earn a decent income and am able to save anywhere from 10-50% of it every single month , depending on my expenses
- By the grace of God , I or my close ones have not suffered any catastrophic health crises or similar issues
- I have been living abroad for the past 6 years which helps me to earn a decent income and save by Indian standards
- I or the spouse have no debt of any kind – home loans, car loans, education loans or personal loans
- I do not give any money to my parents, who, both retired, live off their own savings. I do not support my in-laws in any way
- My sister’s marriage expenses were all borne by my father
- I have had a stable , loving , supportive upbringing , allowing me to think and flourish on my own\
- I have been able to increase my salary at a CAGR of 18% over 11 years with the help of job switches. I have just been an average performer in my career till date
- I am very mobile and willing to relocate anywhere for the sake of a better paying job
- I have a 9 year old used car and do not care about cars much
- I have a decent risk appetite and don’t really care about volatility except try to use it to my advantage
- I do not need to worry about buying a home
How did I have this portfolio? I invested heavily in equity since the beginning of my career. I am mostly self – taught and invest both in direct equities and mutual funds. I have never stopped investing boom or bust, depression or recession.Although I have made every sort of possible mistake that a rookie investor can make ,the early start , time and constant infusion of money ensured that I have gotten a decent CAGR till date. My portfolio’s asset allocation currently looks like this today : Equity – 49% , Real Estate – 38% and Cash/Debt -13%
I realise that a lot of the readers reading Subramoney will be grappling with a variety of financial problems, but I want them to recognize that a 1000 crore portfolio or 100 crore or 10 crore portfolio is not an impossible target to reach for people who are intensely focused , earn a high income , save a decent part , keep their expenses low and have immense discipline. It is by no means easy , but then if it was easy , we would be all crorepatis. Many people have starting advantages and parents who understand compounding and investing. If you don’t have them , you can take action by learning , understanding and investing yourself. No , you might not create as much wealth as those people , but you surely can create a decent life for yourself and you can give a head start for your future generations.
Note from Subra: I published this because he wrote in to me. The couple about whom I wrote have done many of these things + they had a fantastic backing from home. Many readers think that the journey from zero to Rs. 50Lakhs is difficult…however the journey that I have seen includes journeys from 20 cr to 50 crs. ….etc. all journeys are tough.
Neal from abudhabhi
Dear Subra,
The above mentioned case is the exactly my case.same age ,similar education and background ,philosophy And principle and have a Eight figure portfolio,although a diff.industry ( oil and gas).started my finacial and professional journey 8 years agi with -ve networth ( -3 lakhs ) as a educational loan.not much equity exposure (less than 10%)) till now. Planning to increase it upto 65‰.the saving and expenditure profile is same as above. The conclusion is it is not difficult to have a decent finacial life if u r willing flexible enough to take advatages of opportunities around the globe.in my case ,middle east.:).
Subra Sir ,any comments ?
cashCowOfNation
Fantastic job @ whoever you are!
This certainly makes me jealous 😛 [34 year oldie] – but no doubt you have done a fabulous job of building wealth; have fun, enjoy life, stay healthy, best of luck inculcating similar habits/outlook in your kids as well.
senset
I am 49. I live with my parents,wife and 2 kids ( 22 and 16). I seriously started earning and saving from 1999. There has not been been any big illnesses in the family, but since my parents savings are less, i take care of all them. Only in Dec 2015, my portfolio touched 8 figures, because till 2005/6 , it was a hand to mouth existence.
and yes my current portfolio is 90% equity MF and 10% Debt MF.
MRHDK2012
Good article Subra. I have come across such individuals. I have been working in Banking/IT industries and have lived abroad for several years.
With focus and determination, it is possible to achieve what this young man has achieved.
lakshminarasimman
thanks for sharing
wish you all the happiness in the world
JK
Almost exactly my story except that i am slightly older and support parents. Everything else is same. It is quite possible to arrive here without being born with a silver spoon.
param
reading this reminds me of a quote by nrn: ‘humility accentuates performance’. 3 cheers to this guy & his supporting family.
many underestimate the role of a supporting spouse (working or non-working) on the journey to financial freedom. looking back, i really appreciate that my wife, though uninterested in financial knowledge, asked me the basic question – how can we afford this – and made me rethink to convince myself. that middle class fear of debt in itself is a major ally in your favor…
Subodh
Hi,
With all due respect to the author and many others who are reaping benefits of such disciplined investment. I see a analytical flaw in the case presented above.
To stay abroad and save in rupees is easier. The factor of luck is extremely amplified in such cases. The metric is compromised at the currency level, so investor has no role in it. With such advantage the risk capacity is way higher when investing in lower currency market. Unfortunately, it is this kind of examples that force young professionals to put visas highest on their career option list instead of core skills (like marketing,finance, engineering etc..).
I would be more inspired if people staying abroad mastered the market of their onsite location, retired rich (there) as per those standards and sent kids to private universities there with their own funds. Again, the only inspiration from that story will be the extra effort made to learn something new with a purpose to grow wealth.
Jitu
Thank you very much for posting your views….
Surya
I can relate to this which is much more realistic than subra’s imaginary ideal couple . The only difference is that my equity investment is low . It does not really matter whether you invest in equity or not – what matters is the number of years you consistently invest for reasonable returns . My portfolio is combination of PPF , FD , RE , Gold and equity and I rebalance it based on my own thinking .
Arhant
Well done sir, congratulations on leading a disciplined life.
Discipline is really the key here to compounding.
Ofcourse, everyone will have different stories, backgrounds and disposable incomes but if you want to go from A to B or to Z in creating a corpus or wealth for yourself Discipline is central. Boom or bust keep up the SIPs.
7 figures, 8 or 9 figures, each to his own but rest assured if you invest in a disciplined manner over next 3-4 decades you will be significantly wealthier in life!
Santhosh
An insipration for all to follow. Lots of points in his favour but the most important ones like investing, income, life choices etc seem to be self made.
MM
@ Subodh – You are exactly right . I am the person who wrote the article above and I agree with your remarks about creating a above average portfolio in the country mentioned above. Even with my current 8 – figure Indian portfolio converted into a stronger currency of the country which I currently reside in , I have an above average portfolio for my age , educational level and other factors.
I didnt make the above point to boast , but I agree with you on your statement and Im building a portfolio in my resident country , both as a diversification method as well as a challenge to myself so that I grow professionally and allow my kids the freedom of choices without the constraints of money 🙂 Thanks for the comments , one and all 🙂
subra
Subodh – don’t get into the Jealousy / Envy trap. Read your post again..and I have heard this:
– his father sent him to a good school, he married rich, he went abroad, he did CA while I did BE, – come on gimme a break. One guy has done it. He did it with his father’s effort too..but so what?
Subodh
Dear MM and Subra sir,
I am not at all jealous. @MM has worked hard and hence deserves the rewards.
My mere intent was to highlight the missing factors in the analysis. The facts need to analyzed as a complete set and numbers should be treated as numbers.
For me, this story is another validation of Hard Work, Discipline and adaptation creating value (as heard from all trusted sources of inspiration and knowledge). By luck, I am referring to economic condition of country of birth.
P.S (Since my background has unintentionally become part of context, I felt some clarification was necessary, hence the following.)
I have got educated in my field of interest, work in a field which I love and still keep searching for challenging areas to hone my skills.
I have no regrets about my choices and respect others who want to follow their passions.
Sorry to disappoint, but complaining isn’t one of my skills. It just takes too much time and effort to practice the art of whining.
Finance on other hand happens to be necessity as well as an opportunity for tons of learning, hence will keep following the blog actively. 🙂
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My case is a little different,34 year old married with a kid.
My parents are dependent on me and I sent them a definite amount
every month for the past 10.5 years since I got a Job. I funded fully for my Sisters marriage, my marriage and constructed a house/bungalow in my hometown for my parents. Started with a package of 2L and now earning around 12L.
Only worked in India.I think this may resonate with most middle class/lower middle class Indians.
Currently I am having a portfolio around 15-20 lakh all in FD, RD, PF, PPF etc and no equity.
Am I doing good?