Become Your Wealth’s Entrepreneur
While Silicon Valley has been the global innovation hub for many years now, India too has witnessed its own version of the technology & e-commerce success. More than 10,000 multi millionaires have been created over the past five years through the start-up / ESOP route. Newspapers are replete with stories of how the Bansals (Flipkart), Arun Mohan (Jabong) and Pranay (QUIKR) made hundreds of crores by selling stakes to private equity investors.
Quitting your job and creating your own start-up may sound like an exciting way to become a multi millionaire. However, it’s not possible for most of us to do it – One may be happy with ones job, there is a risk of failure, there could be lack of business acumen or lesser than required entrepreneurial zeal. For those of you who are not too excited in taking the start-up route, I would like to share success stories of few ordinary corporate employees.
Nilesh (name changed) joined Nestle as management trainee in 2004 with a CTC of Rs. 5Lacs per annum. Approximately 15% of the CTC was to be received in the form of Nestle’s stock. His CTC increased as per standard FMCG increment and currently stands at Rs. 35Lac per annum. Over the last 10 years, Nilesh has earned a cumulative salary of Rs2.2cr from Nestle of which he received Nestle stocks worth Rs. 32lacs.
Given the appreciation in Nestle’s stock price, the value of this stock holding is Rs. 1.2cr today! In addition to this, Nilesh has savings worth Rs. 50lacs in FDs. The point to note is that Nilesh has been an average performer within Nestle and managed to have savings of Rs. 1.7cr at the age of 35. This is no ordinary feat, most of you would agree. Also note that Nilesh has rented a spacious 3-BHK in DLF Gurgaon and drives a Honda city, implying that he spends his salary liberally.
What worked in Nilesh’s favor? Nilesh could see that Nestle is doing well and decided to keep the Nestle stock for long term. This way, he was able to get the upside from the success of his employer. Most of us don’t appreciate the commercial strength of our employer and avoid taking ESOPs or holding them for long term. Some of you might be working in organizations that have the DNA to be successful. ESOPs can go a long way in creating wealth for you. We know of many more success stories in organizations like HDFC, Axis Bank, HUL, Blue Dart, CIPLA, Sun Pharma, Kotak Bank, etc.
GreenEdge Wealth Services’ View
For those of you, whose organizations are unlisted or do not have business strengths, they should take the stock market route for wealth creation. It’s an indirect way to entrepreneurship where you can invest in companies you believe can become really successful. Some portion of your salaries should be invested in either equity mutual funds or in stocks suggested by your investment advisor. It will go a long way in building your wealth.