I normally do not like to write ‘negative’ articles, so as soon as I write one I thought I should write another one to remove the toxic effect of the previous one!!

http://www.subramoney.com/2016/04/portfolio-review-of-a-32-year-old/

So ‘why this couple will not get rich’ had to be followed up with this one..now read on.

This is another couple in their 30s. In fact it may not have even sunk in that they are in their 30s, it is that fresh. They are school sweethearts and know each other for almost 2 decades, and they have been married for 3 years. Here are the factors which work in their favor:

  1. Both come from business families: Both these kids come from business families and their parents understood the power of compounding, perhaps. Not sure but both these kids started off their school with a pancard, a ppf account, a savings account – so the awesome benefits of starting almost in the womb helped them with a head start.
  2. Both are very mobile and willing to look at the world as a playground: the boy went to Dubai for an interview and the girl went to Singapore for an interview. It did not click at the salary level at which they were looking for a break is a different matter, but they are not restricted to Mumbai.
  3. Brilliant qualifications: the boy is the proverbial Indian top class qualification – IIT, IIM (his father is from IIT too) – the girl is a commerce graduate who went to a top business school but not IIM. The awesome combo ensured that by the time they are 30 years of age they are earning more than 2 million each. Well almost 3 million each.
  4.  Their standard of living is not too high, they use Mumbai trains a lot, Uber and Ola are of course their mainstay of travel. Auto, taxi, bus, train, – they are equally at ease with all modes of transport. They do have a hand me down car (from his father) and it is now a 9 year old car. They are not planning to replace it – thanks to Uber and Ola.
  5. They have both bought flats for themselves in the far away suburbs but are staying in the boy’s father’s house – as his parents spend a lot of time outside of Mumbai.
  6. The EMI that they are paying is well within what they can afford and now the flats have been given out on rent. The rent has become a SIP too, and I am expecting the rent to catch up with the EMI in 7 years time. They may flip assets at that time, but that is a far way off.
  7. They did go to Switzerland for their honeymoon, but all their vacations after that have been in India.
  8.  Their hobbies are cycling, running, swimming and cooking. They do listen to music and have one expensive camera – so not too much of expense on hobbies.
  9. They have some amazingly expensive attire, but their clothes budget is not a killer, neither is their shoe portfolio too big.
  10. They are hugely into equity – some direct equity with the help of a cousin who is a portfolio manager – and thanks to me some seriously good SIP. Yes they have created wealth – and have a corpus in 8 digits already.
  11. They are both in their 3rd jobs and her boss from the second job tried really hard to stop her. However, she wanted to break out of the comfort zone, and hence the switch. She has an offer on hand – and she is asking for a 40% jump. Sounds atrocious, but she is keen to jump ONLY at a price.
  12. At some stage they will both take the entreprenurial route – no clue when.
  13. Rarely seen them spend money to impress others.
  14. Both very realistic about their earning ability – and keep saying ‘our current income is good for our age does not mean it will continue for life’ at some stage we have to know how to create the cash flow while increasing the net worth.
  15. Do take heavy punts in equity, but mostly money gets invested in SIP mode.
  16. No borrowings other than the house that they have bought – amount outstanding now is about 4 years ctc..each.

this couple has all the signs of being a ‘rich couple’ – I mean from an attitude point of view. I can introduce them to other younger couples, but the ‘confidence’ of wealth is not likely to be replaced so easily. Not everybody is that comfortable with money.

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  1. Excellent article, key take away for me as first generation to earn 5digits salary would be to have this setup for my kids. So the next generation can definitely emulate this potential rich couple. Self note : stick to plan if not you, next gen will definitely get there. Wealth is build over generations and never forget that wealth doesn’t last more than 3+ generations.

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