Investment Expert Talks About Why 30-40 Crores Is Required For Decent Retirement

Summary

In this insightful financial discussion, a celebrity fund manager shares his investment philosophy, emphasizing the importance of learning from the market's best practices. He discusses his journey from mechanical engineering to financial success, highlighting key strategies such as investing in undervalued stocks and avoiding the common pitfalls of chasing past winners. The conversation delves into market valuation, the significance of profit growth, and the manager's personal financial independence. He also addresses misconceptions about gold as an investment and provides guidance for young investors aiming for financial freedom by the age of 50.

Takeaways

• 💡 Investing in gold may not always be the best strategy as it can be as volatile as the stock market and historically has not provided returns as high as the Nifty index in rupee terms.
• 📈 The speaker emphasizes the importance of investing in undervalued stocks with a strong history of good governance, clean accounting, and a dominant franchise, especially if their profits grow faster than their share prices.
• 📚 The impact of reading and learning from successful investors like the speaker can be transformative for one's financial journey, as it was for the person who started as a mechanical engineer.
• 📊 The speaker's book 'Coffee Can Investing' has sold around 100,000 copies, indicating its influence and popularity in the field of personal finance.
• 🏆 A significant investment success story is highlighted with GMM Foder, a company that saw a 4X return in 12 months due to increased demand for pharmaceuticals during the pandemic.
• 💰 The concept of a 'fire number' is introduced, which represents the amount of money one needs to achieve financial independence and not work for money anymore.
• 🏠 The speaker's experience with property investment in India is shared, noting that rental yield versus home loan rates can indicate overvaluation in the property market.
• 📉 The interviewee discusses the difficulty of timing the market, suggesting that investing in fundamentally strong companies with consistent profit growth is a safer approach.
• 🌐 The importance of global diversification is underscored, with the speaker allocating a portion of investments to the US market to hedge against domestic economic uncertainties.
• 🔢 The interviewee provides a formula for calculating financial independence, taking into account expected retirement age, life expectancy, and inflation-adjusted living expenses.
• 🚀 For those starting late, the concept of 'coffee can investing' is introduced, which involves investing in companies with strong compounding potential in the final years of one's career.

Q & A

What was the return on investment in gold last year according to the discussion?

The transcript mentions that gold gave upwards of 20% returns last year.

What is the speaker's financial independence number, and what does it signify?

The speaker's financial independence number is close to 50 crores, which signifies the amount of money needed to retire comfortably without having to work for money anymore.

What is the speaker's view on investing in gold as a long-term strategy?

The speaker does not favor investing in gold for the long term, citing that it lacks a real-world use or earnings to anchor its valuation and has shown to be as volatile as the stock market with lower returns.

How did the speaker's investment in GMM Foder perform over time?

The speaker's investment in GMM Foder initially did well, with a 20-30% return, and then quadrupled in value within 12 months due to increased demand for pharmaceuticals and their products.

What is the significance of the 'coffee can' investing approach mentioned in the script?

The 'coffee can' investing approach, as described in the speaker's book, is a long-term, buy-and-hold strategy that emphasizes investing in companies with strong fundamentals and a history of good governance.

What was the speaker's first significant investment in the stock market?

The speaker's first significant investment in the stock market was in 2012, when they invested in Templeton Small and Midcap Fund, which doubled their investment in the next couple of years.

How did the speaker identify an opportunity with Bajaj Finance during the COVID-19 pandemic?

The speaker identified an opportunity with Bajaj Finance when the stock dropped 65% due to negative narratives around the company during the COVID-19 pandemic. They believed in the company's financial backing and client base, leading them to triple their position in the stock, which later tripled in value.

What is the speaker's perspective on the correlation between gold and the Indian stock market?

The speaker believes that contrary to popular belief, gold is positively correlated with the Indian stock market and can be more volatile, making it a less attractive investment option for diversification.

What advice does the speaker give for a disciplined approach to saving and investing?

The speaker advises saving one-third of one's take-home pay consistently over a 30-year career and investing in companies that are expected to compound strongly, emphasizing the importance of starting early and playing the long game.

How did the speaker perform during the market downturn in 2020?

The speaker's portfolio was up 55-56% in the large cap portfolio for the year ending March 2021, recognizing the market panic as an opportunity to invest and load up on stocks.

What is the speaker's strategy for allocating investments between different types of companies and geographies?

The speaker suggests allocating 30-40% of investments outside India (such as in the S&P 500), 35-40% in large cap, 20-30% in small cap, and the remaining in mid cap or as a safe harbor like FDs, emphasizing diversification and the importance of not being overly reliant on one type of investment.

Outlines

00:00

📈 Stock Market Insights and Personal Investment Philosophy

The speaker discusses their skepticism about investing in gold, citing its lack of intrinsic value and volatility similar to the stock market. They share their experience as a celebrity fund manager, managing nearly a billion dollars, and their journey from reading about finance to becoming a successful investor. The speaker emphasizes the importance of investing in undervalued companies with strong fundamentals, using the example of GMM Foder, a company that saw a 4X return in a year due to increased demand during the pandemic. They also touch on the psychological aspects of investing, such as the tendency to chase past winners and ignore companies with stagnant stock prices despite growing profits.

05:01

🏠 Real Estate Valuation and Early Stock Market Investments

The speaker recounts their experience with real estate investment, noting the high rental yields and subsequent property price corrections in Mumbai. They describe their initial skepticism about the Indian property market in 2008 and how they capitalized on the market downturn. The speaker also shares their first foray into the stock market in 2012, driven by bonuses from their employer. They discuss the importance of investing during market downturns and the significant returns they achieved by investing in Templeton's small and midcap fund during India's economic slowdown.

10:02

🤑 Achieving Financial Independence Through Diversified Investments

The speaker outlines their approach to achieving financial independence, which includes a diversified portfolio with investments both within and outside India. They explain the rationale behind investing in the S&P 500 for diversification and the importance of investing in both large and small-cap stocks. The speaker also emphasizes the value of investing during market panics, as they did in March 2020, and the importance of knowing when to increase investments. They provide a breakdown of their personal investment allocation, suggesting a balanced approach to investing in different market segments.

15:03

💼 The Journey to Financial Independence and FIRE Number Calculation

The speaker discusses the concept of financial independence, defining it as not being reliant on a single source of income or employer. They share their personal journey to financial independence, which took approximately 20 years. The speaker also explains how they calculated their 'FIRE number,' which is the amount of money needed to retire comfortably without working for money. They consider factors such as living expenses, healthcare costs, and inflation to estimate a figure of 50 crores for a modest retirement lifestyle.

20:06

🚀 Strategies for Accumulating Wealth and Achieving FIRE Goals

The speaker provides advice for individuals looking to accumulate wealth and achieve financial independence. They suggest starting early, saving a significant portion of one's income, and investing in a disciplined manner. The speaker emphasizes the power of compounding, using the example of saving a small amount annually and watching it grow to a substantial sum over 30 years. They also address the challenges of starting late and offer strategies for making up for lost time, including increasing savings rates and focusing on high-growth investment opportunities in the latter part of one's career.

📚 Accessing Investment Wisdom Through Literature and Personal Finance

The speaker concludes the discussion by highlighting the importance of sharing investment knowledge through books and other mediums. They mention their own books, which are available online, as a resource for those who wish to learn more about investing. The speaker expresses hope that the audience has gained a deeper understanding of finance and investing through the conversation and encourages continued learning and application of these principles in personal finance.

Keywords

💡Gold Investment

Gold investment refers to the act of buying gold as a store of value or as a hedge against inflation and economic instability. In the script, it is mentioned that gold has given upwards of 20% returns in the past year, but the speaker argues against investing in gold due to its lack of a real-world use or earnings to anchor its valuation, and its volatility compared to the stock market.

💡Returns

Returns in the context of the script refer to the profit or gain generated from an investment. The speaker discusses how gold has provided significant returns, but also emphasizes that the stock market, particularly through compounding, can offer higher returns over the long term.

💡Fire Number

Fire number, in the script, is used to denote the amount of money one needs to achieve financial independence, meaning the point at which one no longer needs to work for money. The speaker mentions that their fire number is close to 50 crores, indicating the financial goal they have set for themselves to retire comfortably.

💡Stock Market

The stock market is a platform where shares of publicly traded companies are bought and sold. The script discusses the stock market's performance and the speaker's experience in investing in it, highlighting the importance of identifying undervalued and overvalued stocks for potential investment.

💡Compounding

Compounding is the process by which an investment's earnings are reinvested to generate additional earnings. The speaker emphasizes the power of compounding in growing wealth over time, especially in the context of stock market investments.

💡Rental Yield

Rental yield is the income generated from a property investment, expressed as a percentage of the property's value. In the script, the speaker uses rental yield as a method to evaluate property valuations, comparing it with home loan rates to predict market corrections.

💡Undervalued/Overvalued

Undervalued and overvalued are terms used to describe the relative worth of an investment compared to its market price. The speaker discusses the importance of identifying whether markets or specific stocks are undervalued or overvalued to make informed investment decisions.

💡Profit Compounding

Profit compounding is the growth of a company's profits over time, which can lead to an increase in the company's value if not immediately reflected in its share price. The script mentions a company where profits have continued to grow while the share price has remained stagnant, indicating an undervalued stock.

💡Behavioral Finance

Behavioral finance is the study of how psychological factors influence financial decisions. The speaker touches on common behavioral pitfalls such as chasing yesterday's winners and ignoring companies with stagnant share prices despite rising profits.

💡Financial Independence

Financial independence is the state of having enough wealth to live without the need for a regular job or salary. The speaker discusses achieving financial independence through a combination of savings, investments, and diversification of income sources.

💡Small Cap/Large Cap

Small cap and large cap refer to the market capitalization of companies, with small cap companies being smaller in size and large cap companies being more established. The script discusses the speaker's investment strategy, which includes a distribution of investments across small cap, large cap, and international markets.

Highlights

The speaker does not invest in gold and explains the reasoning behind it, including the lack of a fundamental barometer for valuation and the asset's volatility.

A discussion on the impressive returns of a stock that tripled in two years, demonstrating the potential of market investments.

The importance of investing in undervalued markets, as illustrated by the example of GMM Foder, which saw significant growth due to increased demand for pharmaceuticals.

The speaker's journey from being a mechanical engineer to a successful investor, emphasizing the value of continuous learning.

The impact of the book 'Coffee Can Investing' on the speaker's financial education and the influence it had on their investment philosophy.

The speaker's strategy for identifying profitable investment opportunities, focusing on companies with strong profit growth relative to their share price.

A detailed account of the speaker's first significant investment in the stock market, which led to substantial returns.

The concept of 'financial independence' and the speaker's personal journey to achieve it without reliance on a single source of income.

The speaker's perspective on the 'FIRE' (Financial Independence, Retire Early) movement and their calculation of the financial number needed for retirement.

An analysis of market behaviors, such as the tendency of investors to chase past winners and ignore companies with consistent profit growth but stagnant share prices.

The speaker's experience with property investment in India, highlighting the importance of rental yield in property valuation.

A strategy for portfolio allocation, including the division between large-cap, small-cap, and international investments.

The speaker's advice for young investors on how to save and invest to achieve a financial goal of 10 crores by the age of 50.

The challenges of the speaker's toughest year in investing, which involved a significant market downturn and the importance of staying invested during such times.

The speaker's views on the role of narratives in the stock market and how they can lead to overvaluation or undervaluation of stocks.

A discussion on the importance of diversification in a portfolio, including the allocation to precious metals and their correlation with the stock market.

The speaker's experience with the COVID-19 market crash and the opportunities it presented for savvy investors to increase their positions.

The minimum investment requirement for the speaker's Portfolio Management Services (PMS) and advice for those who cannot meet this threshold.

Transcripts

you do not invest in gold right and if

you see last year gold has given upwards

of 20% returns and you mentioned that

your fire number is somewhere close to

50 cror right it's not evident to me

that anything less than 30 40 crores

will allow you to have a decent

retirement B Finance be backed up the

truck the stock uh tripled in the next 2

years right so how do you identify

whether the markets are undervalued

overvalued or do you not really care and

you just invest whenever

um most people know you you're a

celebrity fund manager who is managing

almost a billion dollars I myself began

my financial Journey listening and

learning from people like you I still

remember reading your book coffee can

investing 5 years back and that was a

GameChanger in my entire journey of

learning about Finance because see I was

a mechanical engineer right most people

assume that you know I was a CA or I was

an MBA degree you know and people can't

digest the fact that I just did

mechanical engineering but the secret to

that is listening and learning from

people like you so thank you so much for

pleas my pleasure so how many how many

copies have has your book been sold I

think officially the the publisher tells

us something close to 100,000 but I

100,000 copies yeah but in in Indian

publishing if it's 10,000 10,000 is a

best seller what is the most amount of

money you've made in a single year right

so was stock which quadrupled on us over

the course of basically 12 months right

so 4X in 12 months huh so I read an

annual I started reading a few annual

reports which were on my laptop and I

read about a company called GMM foder

right so I read that they make these

ceramic vessels right much like a giant

version of this coffee cup and in those

vessels uh uh pharmaceutical products

are made so I said this is insane I a

world leader um and you know I looked on

line they've been they've been making

good good return on Capital return on

capital is profits divided by how much

money has been put in the company okay

so I said not only World leading company

highly profitable so so much like nobody

ever got sacked for buying

IBM nobody in the Pharma industry ever

gets sacked for buying foder so we

invested in GMM foder was one of our

first stocks in our small cap portfolio

um over the next 12 months GMM fer did

all right right did all right I think we

were up 20 or

30% and then Co

arrived right and then Co arrived and

demand for pharmaceuticals obviously

went through the roof demand for GMM

fora went through the roof um and you

made 4X on by by Autumn of 2020 by

Autumn of 2020 uh the stock had gone

into the stratosphere and once it went

into the stratosphere we obviously cut

the position back because if share

prices are run up far more than profits

you know it's time to pull the position

back so we pulled the position back we

still shareholders though and profit

compounding has been Stell over the last

3 years guess what the share price

hasn't moved much in the last 3 years

okay so perhaps time to remove no

perhaps time to load up further profit

profits have continued growing over the

last three years but the share price has

not share price hasn't moved because

people people in the most people bought

after the initial frenzy so people chase

yesterday's winners right um so rather

than buying HDFC bank today they will

buy some stock which has gone up

10x in the last two years like Nvidia or

Tesla right absolutely right and that

habit that human Habit to chase

yesterday's winners where the winning

has been out of all proportion with

profit compounding right that habit is

incredibly destructive as is the habit

of ignoring companies where the share

prices have the share prices have stayed

constant or the share prices have indeed

sunk even the profits are through the

roof so at what age did you become a

kodati and how did you do it yeah so we

took our savings from from the UK we

lived in the UK I lived in the UK for 17

years we saved up some money created a

company in London we sold that so we had

a little bit more money we migrated to

India and um and initially when I came

to India this is 2008 May when I came to

India I looked at property prices in

Bombay and said this is just crazy it

makes no sense right there easy way to

figure out property valuation the world

over right it works in New York Works

can you can you elaborate so you

basically take the rental yield of a of

the property so in India most properties

rental yield is two 2 to 3% right and

you look at the home loan rate if the

home loan rate is way above the rental

yield you know there's going to be a

correction a big correction reasonably

quickly so when I came in May 2008 the

rental yield was 2% rental yeld mean the

total annual rent that you pay divided

by the property Val absolutely bang on

and I said this makes no sense so we

waited Leman Brothers happened in

America property prices fell by 40% in

the next 8 n months in Mumbai okay so

middle of was 2008 that's when you

bought so rental Ys of 5% we bought uh

we had some savings from the UK from

selling that company we used that too by

the by the flat so from that point in

fortunately we've never had to pay a a

mortgage so wait you had already a Cora

before you came to in right yeah so but

that went to buying a house no so you're

not considering that yeah because so

anything which goes into a business or a

fixed asset it's not really money you

can do much with right correct so the

proper korti thing was when my uh first

file employers started paying me nice

bonuses and then I invested that in the

stock market that's so 2012 is when I

would say I started investing in the

stock market properly so 2011 12 13 um

we went through India went through an

economic slowdown the RBI hiked rates

some 10 or 11 times the uh the stock

market tanked through 10 11 12 13 right

all the way till uh Prime Minister Modi

being declared the BJP candidate in the

closing months of 13 the stock market

was in a Downs swing so summer of 2012 I

said was this economy to is is going to

revive one day stock market is assuming

that the economy will be tanked for a

long time uh Temple tunel had a very

good small and midcap fund at at that

juncture so so I spoke to my better half

and we put the best part of I think a

couple of crores in Templeton small and

midcap fund uh life being for it is it

doubled in the next couple of years wow

so two cres became four CR four cres in

the space of a couple of years in a

small and midcap fund so how do you how

do you determine that like a lot of

people when they invest in the stock

market they're like you know is this the

right time to invest which stock should

I pick so how do you identify whether

the markets are undervalued overvalued

or do you not really care and you just

invest whenever look at the growth in

the company's profits if the profit

growth is significantly faster than the

share price growth for say 3 4 year

period you know you're not going to go

far wrong especially if it's a company

with a strong history of good governance

clean accounting dominant franchise if

the profit growth is consistently faster

than the share price growth you know

that the stock is available cheap you

load up as much as you can but is that

possible that it's not it's it's so

undiscovered that this company so let's

take a company that everybody knows

about where for four years profits have

been compounding steadily at around 19

20% the share price has done nothing

over four years right what is this this

is India's second largest company by

market cap this is India's largest bank

by market cap cap is called HDFC bank so

on the one side people get OV excited so

for example I would argue there's a good

reason to believe people are over

excited about Nvidia today why are they

over excited because every man and their

grandmother has heard about Ai and they

believe boss AI

NV right so so when people get into a

narrative when they get into a narrative

around a company then the stock loses

all sight of profitability and the stock

zooms into the stratosphere similarly

there can a negative narrative so a lot

of people for whatever reason right have

got into negative narratives on HDFC

bank right we what are the negative

narrative negative narrative is about

HDFC

limited right so various negative

narratives people have built most of the

negative narratives haven't got any

basis in fact similarly if I cast my

mind back to May 2020 right in the early

days of covid we first lockdown Bajaj

finance stock down 65% in the preceding

five months um and the whole world

believing Bajaj Finance is going to get

into a lot of trouble this is May 2020

so we did the math we did the research

and we said you know covid will end one

day we don't know when it ends but given

Bajaj finance's Financial backing given

their the quality of their client base

uh given their strength and underwriting

if Bajaj Finance gets into trouble boss

there's huge Armageddon for the

financial system it's too big to fail

it's too big to fail plus one one day

covid will end we don't know when it

will end this is at that time early May

2020 looked very dark cuz nobody knew

anywhere in the world what on Earth was

going to happen and the Western media

loves uh spinning scare stories around

India um so we said baj Finance down 65%

this company is one of the most

successful businesses across all

Industries in India let's back up the

truck and we tripled our position in baj

finance we backed up the truck the stock

uh tripled in the next two years okay

right so so so this aspect of investing

is the hardest part right the easier

aspect sharan is the start early play

the long game play the play the drait

game right consistent patient long-term

company you do not invest in gold right

and if you see last year gold has given

upwards of 20% Returns what is the

reason for that gold over long periods

of time Selden gives you more than 89%

in rupe terms right the Nifty gives you

13 14% in rupe terms at least with the

stock market you have some barometer

which is earnings correct to figure out

broadly you know what what is which

direction I I should look at gold to you

don't even have that you don't even have

a underlying be uh underlying

fundamental that you can track right you

might say hey it's less volatile but

that's not true gold is just as volatile

as the Indian stock market so that

argument is out of the window as well

and the final reason you could think

about buying gold is maybe you say boss

this can give me diversification correct

because negatively correlated but that

even that's not true really so gold is

positively correlated to the Indian

stock market is more volatile than the

Indian stock market and gives me lower

returns than the Indian stock market so

therefore to my mind it's a fetish

that's interesting because I think the

conventional wisdom is that whenever the

markets are not working well put in the

gold because gold goes up yeah but

you're saying that if you actually look

at the data the correlation is positive

that's right and think about it right if

every if everybody knows that

conventional wisdom it ain't going to

work and at the moment China has

destroyed the gold Hedge for everybody

the Chinese because of the troubles in

their own country have loaded up so

heavily on gold that it can't possibly

be a hedge for anything for anyone

is it not possible to know that last

year gold is undervalued so might as

well put in that and then write that's a

rely point right where asset has a real

world use for example this real estate

has a real world use so you can use the

real world cash flows to form some sort

of anchor on the valuation the rental

yield right for this property correct

stock market May the stock earnings or

cash flows can be a real world anchor to

the share price but with gold or with

Platinum for that matter uh or with any

precious metal that real world anchor is

hard to find right like cryptocurrency

so what is the highest cagr that you

have generated in any given year by end

of March when the stock market the

Indian stock market was around I think

25 or 30% by the end of March

2020 uh several stocks in our portfolio

were

down uh down 30 40% that's when we

realize this a huge opportunity to make

money so we organized a conference call

right for the whatever 300 400 people

people we knew then and we told them uh

that this is a great time to invest the

market is overdoing the Panic the year

ending march 21 I think we were up 55 or

56% in the large cap portfolio one year

one year yeah 55% yeah and perhaps a

little bit more in the uh small cap

portfolio wow um uh but then there were

there were there's been the other side

as well right and this is why uh knowing

when to load up further is even more

important than enjoying your successes M

so so our toughest year was the 15

months between Jan

2022 till March 23 right that 15 months

was the toughest year because we were

down 15% almost all our portfolios fell

15% in the space of 15 months and

profits of the companies were going up

okay but we broadly knew that that what

was happening was the Federal Reserve

kept hiking rates I think the hi rates

4% in 15 months and the rupee kept

falling so rupee fell from $ 72 to the

do to $82 to the do in 12 months or so

obviously as the rupee kept falling

foreign investors kept pulling out we

kept telling our clients that look

foreigners are leaving because the rupe

is falling when the rupee stabilizes

this will be fine the client who loads

up at times like that obviously makes

more money compared to the client who

runs away right so this is the piece

which is very hard to train right load

up when everybody else is heading for

the exit but load up rationally now when

it comes to equity which is the stock

market how how do I know how to divide

the money between large companies

mediumsized companies or maybe outside

of India how do I decide that proportion

right so let's do the outside India

versus inside India first so the way

we've done it for ourselves in the

office and we've created something

called Global Compounders because of

this is and we' figured out between 30

to 40% of our expenditure is on imported

items right if you invest in let's take

S&P 500 is to keep it simple right

that's the Nifty of uh the Nifty of

America if you invest in the Nifty of

America there's a diversification

benefit you get out of doing that so

just to use 2020 for an example when we

have elections in India the American

Stock Market is not going to wubble

right when they have elections in

America in November the Trump versus

Biden election our stock market is not

going to wobble so in these two markets

is where the real wealth is getting

created then we come to large cap versus

small cap so 66% is Left Right 66% is

left out of this the majority close to

35 40% is in our large cap product right

okay I have roughly 20 20 rupees out of

my 100 rupees of savings in our small

cap product right so in I in my book

coffee can investing I have said you

should consider between 20 to 30% of

your savings in in small cap in fact

there's a chapter in coffee can

investing called small is beautiful if

you buy too much of this right this is

more volatile than large caps of course

right so so small caps rally more they

correct more and most people will bail

out of small cap Investments at the

worst possible time and they will not

top up their small cap Investments

exactly when they should given those

behavioral deficiencies I suggest keep

your small cap allocation to 30 or below

I have chosen 20 to 30 so 33% goes

outside India which is the US right

another 30% goes into large cap right

another 20% goes into small cap so

another the remaining 10 15% is M cap 10

15% is the is the is the Safe Harbor

right so so right so say remember thatd

FD that are set aside so you didn't

mention a midcap then a large cap

portfol consistent compound is is large

and mid so I'm just using large and mid

as one area because the more bitty you

have one large care fund one mid care

fund one small care fund it ends up

becoming harder and harder to keep track

of it so would you call yourself

financially independent there are two

ways to think about financially

Independence one is the the way you said

right how much money do you need to say

I can walk away from working I can walk

away from working the other is to say

that I can earn that money through a

variety of means and I'm not independent

I'm not dependent on one source of

income one employer yeah right uh if you

ask me it took me roughly 20 years to

reach that stage in life you're not

reliant on an employer to cut a salary

bonus check for you yeah and say you

know I am your uh Garden master I did a

little bit of reading uh about your one

of your previous interviews and you

mentioned that your fire number is

somewhere close to 50 cres right right

and fire number for the audience meaning

you don't have to work for money anymore

so how do you you come across how do you

calculate that 50 CR number um so if you

sort of think about middle class Indian

life right middle class I mean sort of

holidays to UTI and Missouri rather than

holidays to Dubai and London middle

class Indian life is roughly 50 lakhs

per anom gross right and net of tax say

30 lakhs perom right you mean like

expenditure expenditure but would you

consider this as middle class like 50

lakhs of earnings in a year if it brings

me 35 lakhs grow you know we we try to

live modestly but I think below 35 lakhs

R is a little tough in a city like

Bombay I agree that is true so so I

think in a city like Bombay 35 lakhs

especially if you have a family and all

of that right now if you retire at 60

and say survived till 85 you know live

for 25 years then the maths is pretty

clear then I need roughly 20 crores in

today's money right how old are you

today so I'm 48 so you have 12 years

yeah so assume I retired at 60 but the

cost of living is going to go up in this

12 years right for example my employer

Mar we provide Health cover of 10 lakhs

to our employees right so when we

initially started providing this four

years ago I thought was 10 lakhs though

you know who will need 10 lakhs

increasingly I'm see seeing every year

out of say our 100 employees at least

two to three hit that number right and

when I talk to recently invested in a

Bangalore based Hospital chain when I

talk to the owners of that they're

saying 10 lakhs is not a big deal you

know if you get some serious illness

today God forbid 10 lakhs is breach just

like that so again keeping all of that

in mind right keeping how quickly the

cost of healthare is rising how quickly

the cost of imported goods are rising um

it's not evident to me that anything

less than um anything less than 30 40

crores will allow you to have a decent

retirement for a comfortable retirement

my number

is 50 crores and I'm again I stress I'm

not talking about some luxurious

retirement I'm talking about a pretty

modest retirement suppose you tell me

sharan that n Boss 35 lakhs I don't need

net of tax I only need 17 lakhs even

then when you retire or when I retire

you need something between 20 to 30

crores now for most people watching the

show are they don't even have one CR in

their bank account right so if I were to

ask you a question from their lens that

let's say I'm a 25 early 30 year old

person making about 1 lakh rupees a

month and I want to achieve 10 crores by

the time I turn let's say 50 how should

I go about investing right so just to

just to keep it simple suppose you earn

6 lakhs a year and assume conservatively

that you can only save one lakh right in

a year one lakh in a year right for some

reason assume you start work at 25 26

right that first year you save a couple

of laks that itself at the by the age of

55 60 that Itself by the age of 55 60

will be close to 30 uh close to 60 lakhs

right two lakhs at the age of 25 become

60 lakhs by the time you're hitting

retirement because you've compounded at

15% kagar 15% compounded over 30 years

right now if a person keeps doing this

in a disciplined fashion right say

onethird of their take-home pay onethird

of their take-home pay they keep saving

through a 30-year career they will hit

the 10 CR number quite comfortably right

and and that's the hard part in savings

right you got to play a long game which

is why Rahul draid is my favorite

cricketer and you got to be you got to

be consistent in your savings

now let's assume you haven't done that

last 10 years you you're saying I'm not

a drait I'm going to be a Dy I'm going

to hit it out of the park in the last 10

years I'm going to finish strong well if

that's the case then in that last 10

years you could have save 30 40% of your

money and you got to do what I call

coffee can investing aim for investing

in companies that are going to compound

for you strongly in that last 10 years

of your life but the sooner you start

the better it is if you start at the age

sharan heg red coffee can investing

perfect interesting but s before we end

this conversation for someone to get the

benefits of your investing skills they

need to have minimum 50 lakhs to invest

in one of your PMS it's se's rule it's

not a marcela's rule SE rule that 50

lakhs has to be the minimum for a PMS so

but if somebody still wants to kind of

uh you know um get the benefits of an

investor like you what can they do like

what can they do to invest look I mean

we've tried to describe everything I

know in the books that we write right so

there are five books all available

online fantastic thank you so much s it

was wonderful wonderful discussing with

thank you so much for inviting I hope um

the audience were able to understand

most of the things we're talking about I

personally enjoyed it and it was quite a

deep Finance discussion usually we don't

go this deep you know because we think

that you know will it be too technical

for the audience I'm sure I'm sure given

that you explained things in a much more

Lucid manner than I did I'm sure it'll

find an audience thank you for much

thank you so much

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