"purely legal thing" and "own sweet time" got me thinking. Quick thread. So the idea that if you're rich, you must have made your money illegally is widely accepted in India and with valid reason. But I think things have changed post 2008.
First, let's take the Nifty as a proxy. In market cap, the HDFC and Bajaj Group have moved past the Tata Group (ex TCS) and the Birlas. Have HDFC and Bajaj Group also made all their wealth illegally? I don't think so because...
..I think the market now knows "chor promoter" very well. This is 2020 not 2000. Clean portfolios are now very popular and have got hundreds of crores in AUMs. (There's also ESG globally but leave that be). But...
..then you will say what about Seth? Reliance is still #1. This is tricky because investing US$40bn+ in a screwed sector takes some risk appetite (and like the Beatles sang with a little help from friends). Not every promoter has it in him. Also...
...the FBs, General Atlantics and Googles of the world have now invested in Reliance so I think things have changed for RIL from the heydays of 1990s. Ok so this was family business...
Second, let's move to non-family businesses or call them merit-based. Now merit itself is a myth because there are elite education clubs in India and - more importantly - there's also caste. Caste alone is a massive entry barrier. But that's a different topic.
So merit-based wealth is the story of the past decades. Infy, Wipro, etc started it with ESOPs and that alone made multiple crorepatis. The listed BFSI sector continued it with ESOPs that have similarly created crorepatis. IT and BFSI sectors have created a lot of wealth. Legit.
Then you have salaries. My guess is average white collar senior level salaries have grown a bit faster than inflation for the past few decades mainly because of lack of talent in India. Again a separate topic.
And finally, startups. Startups have created enormous wealth for an entire generation of founders and employees post 2010 and will continue to do so. Are all these founders also illegal? I hope not.
So then why this hatred towards the rich? I think some bit of this is global (hate the rich is a popular theme thanks to inequality) and but the problem in India is two fold. First...
...is that if you're rich you have to hide your LEGIT wealth else the Government will tax you. This hasn't changed much, has it? A founder has to pony up some 20%+ (or is it more?) of his capital gains. C Suite pays pretty high income tax.
Second, and this is #anecdata so forgive me, the new generation doesn't see being rich as a priority. The pursuit of wealth isn't as important as work-life balance. Well, this I think is misguided because...
....some of the wealthy were very poor to begin with. "I've seen poverty and I never want to be poor in my life" is a recurring theme. It takes a crazy level of burning ambition to build a business and become rich. See, that's the thing...
Becoming rich is a side-show, it's an effect, not a cause. At the centre, is your own talent and a burning desire to build something. Almost all rich people share that one thing in common. Fin.
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Markets are at all-time highs. I think this is why. Thread.
Three things are getting 'factored in' (fancy word for assumed) by investors: a) Modi 350+ in May 2024 b) India GDP at 7%+ for foreseeable future and c) US Fed rate cuts (and RBI) start next year. These are big assumptions.
What can go wrong? If any of the previous three assumptions do not happen. But talking of what can go wrong, take a few steps and look at the past 4 years..
Myth 1 'jobs suck': People survive and grow out of bad jobs, usually learning something good. And usually? it's the people (around you) who suck, not the job. Which brings me to..
Myth 2 'politics suck': Politics are an unfortunate reality. Deal with them at work and you'll grow as a person. If you're good at what you do, eventually you'll get better offers... (1/2)
Income - expenses = savings (and investment). Simple tips for all three.
Income: salaried job? check your appointment letter, CTC in detail. Max out tax savings using PPF, NPS, etc. keep track of perks, benefits, etc (medical, HRA, leave allowance).
Income: consultant? Maintain records well. Check your TDS rate versus slab rate. Keep depositing advance tax in time. Pay your GST on time (I do it when I get client fees).