This Bangalore Couple Became Crorepati in 5 years

[00:00:00]45-50K of our income as passive income. My savings after marriage were almost zero. That's the benefit of, you know, being a CA couple, right? If I were to buy a two crore house today, I should have 1.5 crores with me.

[00:00:12]>> He doesn't have an iPhone yet.

[00:00:14]>> When you have kids, you take care of the kids, right? But when they grow up, kids take care of you, right? So, that is how with investments. So, after a crore, your investment starts taking care of you. Even though I personally love kids, but after having one, like, you know, >> [laughter] >> So, good morning, Raj Mohit. Thanks for taking the time to share your story.

[00:00:37]Tell me about how the secondary income or a passive income was a conscious thinking in your mind of when you're building the portfolio and how are you using that proceeds of interest income coming from those bonds for your day-to-day management?

[00:00:51]>> You know, 60 lakhs of our investments is in bonds, right? And even if we take like 11 11 and 1/2% return on that, we get around approximately 50K 45-50K of our income as passive income. And that straight away goes into managing our household expenses. You know, if you leave rent aside, right? Most of it gets covered with those, you know, the passive income takes care of all of that, right?

[00:01:16]>> Uh so, what is your portfolio size today if you were to liquidate how much it would be?

[00:01:19]>> We have around 1.4 1.5 is the, you know, the the net allocation that we have right now. So, like I said, you know, my savings after marriage were almost zero.

[00:01:29]Like, maybe I had some three four lakhs of mutual funds, but nothing beyond that. She had more savings than me, you know, and she had more money deployed in FDs and, you know, maybe mutual funds.

[00:01:39]Maybe a little bit more, maybe around 10 12, right? But it was more like a clean slate we started. You know, we have around 60 lakhs that we have invested in bonds.

[00:01:47]>> Mhm.

[00:01:47]>> Uh and I think some 20 lakhs would be maybe in savings and FDs, right?

[00:01:52]>> FDs.

[00:01:53]>> Uh and apart from that, I I some 60 lakhs in equities.

[00:01:56]>> Equities.

[00:01:57]Uh so, do you I mean nothing we talked about how your investment style is, but do you have investment framework? At least that's because you are CAs. How the taxation, how do you set up accounts? Is there any thought process of how you have the investment framework? What accounts do you >> I think that's a benefit of, you know, being a CA couple, right? So you know a little bit more about finance, you know, when compared to other couples, right?

[00:02:18]>> Sure.

[00:02:18]>> So right now, you know, we have set up an HUF that now that we have a kid, right? So we have set up an HUF.

[00:02:25]Uh and we try to park most of our not not most, but some of our fixed income securities or maybe bonds through HUF, right?

[00:02:33]>> Okay.

[00:02:33]>> So that we could take benefit of the taxation. You know, we have a the HUF has its own slab, right? So as you might be aware, like you know, like in individual taxation, we have slabs, right? Similarly, HUF also has a slab.

[00:02:46]It doesn't have rebates, but it has the same slabs that like you know, that of an individual, right? So you know, income up to maybe like you know, 6 lakhs that >> tax on >> So the passive income that we get, right? So if that 6 lakhs was supposed to come to me, I would have paid 30 35% tax HUF on an average maybe pays 10 12% on that, right? Because of the slabs. So easily we save a lakh one and a half lakhs in, you know, in the HUF. We are not changing our asset allocation. We are not changing the assets that we are investing in. It's just smart allocation between the, you know, plans that we have, right? The HUF and the individual accounts that we have, right? The goal is maybe when we want to retire or when we don't want to work per se, right? So then we would shift, you know, most of our bonds income or maybe most of our bonds to individual accounts, right?

[00:03:39]Where we get 12 12 lakhs as slab benefits, you know, where we don't have to pay tax. So maybe the two crores get divided one crore for her, one crore for me. We don't pay tax because we don't have any other income per se, right? And all our equities get transferred to the HUF.

[00:03:53]>> HUF account. Yeah, so that that is how we would we know build that framework eventually. Right now, bonds is where the HUF money goes.

[00:04:02]>> Little bit of Talk to me about yourself.

[00:04:04]>> So, I'm a chartered accountant by profession. It's been almost a decade you know that I have cleared my examination. You know, I'm from a business family background, right? So, money and business was always in the discussions like in the family. So, I was always keen on you know do to do something with finance or business, right? That's why and that's what got me interested into you know chartered accountancy, right? I started with Deloitte 2 years auditing, consulting, right? Post which I you know Bangalore was booming at that time with startups, right? So, that's where I thought you know we should explore startups, right? That's where the opportunity to join CRED came and then across 8 years all my experience has been across fintech. That's what excites me. That's what you know money is what brought me to CA, right? So, you know I thought you know I should continue there and by God's grace you know it's been going well.

[00:04:52]>> I I am also a chartered accountant. So, my story is totally different. I come from a salary background. My father was an engineer, mother a teacher. It's been almost 8 years since I have done my CA and my major part of work experience was across big four consulting firms PwC, EY. Basically, I was on the other side of the table.

[00:05:11]>> So, you know like you know we work as a team from that aspect, right? So, Mohi brings the stability, you know, she has been in MNCs, big fours, right? So, she has a stable job you know stable career, right? So, that gives me leeway to you know try out new things, right? That's why I was able to take that spur from you know moving from a stable corporate job to a startup, right? At CRED.

[00:05:31]And that has been you know over the years I've been able to take that risk only because I know at the back that Mohi has a stable job. So, we don't have to worry on that.

[00:05:41]>> So, I think I think when you started the initial time when you had started working alone during initial time then you would have thought about getting married. So when did you guys meet up?

[00:05:51]>> Basically it was a proper arranged marriage setup. So it's a very interesting thing in our community.

[00:05:56]There's a book magazine kind of thing that is published which has the you know details of prospective bride and grooms basically.

[00:06:04]That's yeah interesting or funny whatever. So that's like a catalog.

[00:06:09]From that book his mother realized that I could be a good match for him and then she called and then we exchanged numbers and then you know we spoke and then >> But this is after studying working?

[00:06:20]>> Yes yes yes yes yes yes. We both were working.

[00:06:23]>> Okay that's fine.

[00:06:24]So we got married by 27 when we both were 27. So all our savings basically went into you know marriage expenses maybe honeymoon and all of that right. So our real savings and investment journey started post wedding yeah.

[00:06:38]>> So I think the other question which I want to ask you would be is when you started as a couple working how much was your income at that point in time related to your expenses and how that has grown over the years?

[00:06:50]>> When we got married I think our combined take home would be around two to two and a half lakhs that we were making. This was I think in 2000 you know 2022 like >> [clears throat] >> so and yeah so the expenses when we moved to Bangalore so you know we we had a lot of fixed expenses maybe you know with respect to setup setting up the house and all of that right. But beyond that I think from from day one we were able to save 40 50% of our income >> At that point in time about 40 50% of expenses >> Yeah remaining we were able to save. Yes yes. So our rent because we shifted in covid the rent was also cheaper. You know it was hardly like 25k for a 2BHK.

[00:07:36]And we >> That's very very great. I mean actually to start off making income and able to save up to 50% of the income.

[00:07:43]>> So we were able to save good amount of money, right? And uh it grew eventually, you know, we I think uh uh year-on-year, uh I think from 2 lakhs it went to 3, mhm, right? Uh then it went to I think uh 3 and 1/2, right? So and then it went to 4. So that's where we are right now, yeah.

[00:08:02]>> So uh we ensured that the you know, increase in expenses is not uh comparatively similar to what the increase in income was. Basically, that helped us save quite a good amount of money. Uh for example, he doesn't have an iPhone yet.

[00:08:20]>> Yeah.

[00:08:20]>> Like uh so you know, so because >> on expenses >> Yes, yes, we are yes, it's not that our income has increased, so you know, we'll just uh keep on I bought an iPhone like uh a year back. Uh I'm just giving an example so that we have not uh you know, uh spent money uh as compared to what we were earning.

[00:08:38]>> I think uh you start talk talk about talking about finances before getting married and then you're planning finances. I think when I think when you have a dependent that comes in, I think did you talk about finances after having a kid and what that would add to the bottom line?

[00:08:51]>> Ours is a 1 and 1/2 year old kid and uh basically how we have divided is we uh send him to daycare for half a day and another half a day he uh we have a nanny. So I mean, 14,000 goes to the daycare, 8,000 the nanny takes and then there are other expenses, the transportation and then uh other his uh other uh things that he require basically.

[00:09:16]>> and all of the other expenses also >> Yes, yes, so it come comes to around 30,000 then uh on a monthly basis.

[00:09:23]>> Even though I personally love kids, but after having one, like you know, >> [laughter] >> I I I have no I don't think of having another kid. Because you know, it's not just about the you know, the monetary point of view, right? You have to invest your time, right? With them. You cannot just you know, you know, you just cannot say that you know, I'm working, you know, I've come from office. I cannot look after them. You have to be personally present for them, right?

[00:09:48]So, I I was not that much you know, privy to the fact that it would cost us that much. But yeah, but we had like you know, that's why we waited for good 3 years before you know, deciding on that, right? Because by those 3 years you know, our salaries also grew. So, we were able to take care of these expenses and simultaneously maintaining our 50-60% you know, of saving rate, right? So, that's what you know, we >> And I think that's very interesting to think about it. I think real estate you do you own a house today?

[00:10:16]>> No, no, no.

[00:10:17]>> No, okay. I think that's one of the goals you had of how you want to kind of thing.

[00:10:20]>> Yes. My my view of buying houses if I were to buy a 2 crore house today, I should have 1.5 crores with me.

[00:10:28]>> Oh, interesting.

[00:10:28]>> Even though I'll take a home loan, you know, to finance it 90% of it, right?

[00:10:32]But I should be in a place tomorrow I don't have a job. I should be in a position to repay of that loan, right?

[00:10:38]So, that's my thought process. I don't want to have a burden per se of you know, of buying a house which I cannot afford.

[00:10:46]You know, when my son is around 10 years, that time I would like to buy so that at least till 35 years of age he doesn't have to worry on buying a house or something.

[00:10:56]>> So, the primary reason or logic with what we live is we both live is the peace of mind is the most important thing in the family life. Okay, it's okay to have one asset less, but you can't you know, just lose your peace of mind over one asset or one house. So, that is the primary thing that we think about before taking any you know, decisions.

[00:11:20]>> But the question I have big time is your investment decision making is it all you two doing decision making or actually you're getting help from outside or is it like how are you making decisions?

[00:11:29]>> That's an interesting point you touched.

[00:11:31]So, you know, even though you know we both are chartered accountants and I have fair experience in fintech investments, right? But I leave it to the expert, so all my equity portfolio is being you know, it's been taken care by an RI.

[00:11:44]>> Okay.

[00:11:44]>> Even I have an RI license, but still there's an RI who looks after my portfolio, right?

[00:11:48]>> Yeah.

[00:11:49]>> So that's how the equity portfolio gets allocated and worked upon. Bonds is something that I take care of because >> Once you select the bonds.

[00:11:57]>> Because I have fair idea I've worked with, you know, organizations, right?

[00:12:00]>> As a couple what kind of advice you would probably give it to now we both are CAs which is very very useful for other couples in similar like any thoughts you can share?

[00:12:10]>> Everyone thinks of them as more smart than they are actually are, right?

[00:12:14]Specifically with respect to investing in finances. So my major focus like I told was to you know, exponentially grow your salary, right? That would be your main focus and not on you know, in maximizing your return, right? Because you know, in your earlier careers you have the you are able to work hard and you are able to then you know, command that salary also, right? Uh so that becomes important and then I think maybe if your salary or maybe your if your net worth is maybe like 20 to 25 lakhs, right? Even if you are making like 30% return, how much would that be? Maybe 6 lakhs, right? But if you are able to grow your salary from 20 to 30, right?

[00:12:52]That creates real value, right? And that incremented salary would eventually contribute to your net worth and then you'll be able to earn more, right? And maybe once you you have crossed a crore, right? So after a crore your investment starts taking care of you. It's like growing old, right?

[00:13:09]You know, when you are you when you have kids, you take care of the kid, right?

[00:13:14]But when you grow up, kids take care of you, right? So that is how with investments. Below 1 crore you basically take care of you know, your net worth. After that the net worth starts taking >> responsibility slowly slowly and when you grow to 1 crore, 2 crore, 3 crore, then you eventually the salary is what, you know, it's it's more for, you know, your you know, how you love enjoying your work, right? It's not about contributing to your expense.

[00:13:40]>> Thanks.

[00:13:42]You're sharing your views, Raj, Mohit. I think it was a pleasure talking to you and learning more from you. So, thank you again for being here.

[00:13:48]>> Fixed returns do not constitute guaranteed or assured returns.

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