Smart ways to invest and attain early financial freedom

Meeting two such people in the same day is not normal – but I guess I was lucky to have had these meetings on the same day.

Let me start with the story of the person with 98 flats – let us call him Ravi (that is not his real name). He is a simple soft spoken guy. Met him at a friend’s place. His father had bought four acres of agricultural land in the outskirts of Bangalore in 1991 at a cost of Rs 35,000 per acre (this was around my annual salary after my MBA in 1989 – so this investment was equivalent of my four year’s income then and I was in Bangalore in that period – so I could have also done the same if I had the foresight then). This land was bought purely for agricultural purposes and the family did farming in the land.

Around 1995, the area where this land was situated became Electronic city. The govt acquired neighboring lands and allotted it to companies wanting to establish factories in that area- a few software companies too bought land and amongst them was a small struggling firm called Infosys. Over the next 15 years, Bangalore became the hub of IT services industry and Electronic city became the epicentre for software services industry.

Ravi shared that this period, from 1995 till 2010, was a very difficult period for them financially. Due to the massive urbanization around, they had to pay almost 1.1 crores as bribes to various officials to hold the land in their name. Being farmers, it was not easy to manage this kind of money (they still are farmers with focus on floriculture business).

Sometime in 2013, he decided to go for a joint venture with a cash rich but small builder and got a 42% share of the built-up area. The builder is now building an apartment complex with appx 240 apartments. The construction is halfway through and will be ready for occupation sometime in 2017. Of these 240 flats, the land owner’s share is 98 flats.

Basic calculation shows that these are around 1500 sq ft built up area each and would cost appx 1 crore per flat. So Ravi has converted his 4 acres land to appx 100 crores. What does he plan to do? He plans to sell a few and keep the remaining for rent.

What I liked about him was his simplicity - he is still a farmer at heart and is actively involved in floriculture. His family is small – wife and one daughter doing senior school.

If you met him, you would not know that this person has assets worth 100 crores - he has been able to secure his family’s financial future for at least the next 50 years.

The second meeting was through another friend. His name is Shivaji (that is his real name). He is a car driver by profession and his wife used to work in a BPO in Bangalore. As they could not have kids, they decided to adopt one and, in 2010, adopted a girl who was then studying in 7th class. As they went through the adoption process and met many orphans looking for a home - they decided to open their house for more. Between 2010 and 2016, they have adopted 23 kids. The eldest is in first year college and the youngest is 3 years old. His wife left her job as she had to manage the kids. Last year, Shivaji also left his job and both manage the home full time. Here are the kids (though not all of them)

With a view to help, I asked him, how much money he needed per month. He shared that their rented house was once a small school and their landlord has been generous and only charges a rent Rs 8,000 per month. For running the house, he needed only Rs. 25,000 per month for the food needs of the 23 children and themselves. A school in north Bangalore has been generous and they have admitted all the children there with an annual fees of Rs 5000 per child. Another donor has donated a mini bus which Shivaji drives and takes the kids to the school every day. He said that their main problem was that they do not have visibility of the future donations as there is no single big donor and they are practically living hand to mouth each month. As of October, they were behind in rent payment by five months. If I were in his financial situation - I am sure I would be a worried man. But he seemed very happy, full of positive energy and always smiling.

Meeting both these people gave me a lot to think about. Ravi had extreme financial security and the Shivaji was extremely financially insecure. But Shivaji seemed happier. Not sure if I must share my thoughts beyond these facts. You, my readers are sure to have your own thoughts as you read this.

In case you want to meet Shivaji and want to help him - you can call him at +91 90711 40201 (he can manage with English – but is fluent in Tamil and Kannada). He is based in Bangalore.

Meeting such people surely helps me keep myself grounded – tells me that I need to be grateful too, to GOD each day for having bestowed me with a good family, good health and peace and happiness – and that I must do GOD’s work of helping people around me each day (just the way Shivaji does).

Author Description

S. G. Raja Sekharan

S. G. Raja Sekharan is a visiting MBA faculty, a mentor to budding entreprenuers, a wealth management consultant, an author of a book on Investing in India and the author of this blog.

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