32 years old and almost there :-)

Here is an example of someone who has earned well, saved well and invested well  – starting from zero, at 32 years, she has appx Rs. 400 lacs worth of assets –  what is amazing is that she has created these  assets without any loans. Among the youngsters that I know of, she is one of the smartest when it comes to focused investing. And she has stayed away from equities and mutual funds – things she does not understand. Her name is Srimathangi Sujatha.  Read on – here is her story. 

After completing her B. Tech from Coimbatore in 2007,  Srimathangi joined Infosys and worked there for about 2 years. She then went to the US to do an MBA from an institute in California. After graduating in 2011, she joined Deloitte Consulting  and was a business consultant for about two years. Post that stint, she worked for the state of Ohio for some time before joining Infosys Public Services, which focuses on federal and state government projects. She came back to India in August 2016. She still works with Infosys in Chennai. She married Surendran, who works for Cognizant, in July 2017.  

Srimathangi has been investing for the past seven years. Early on, she had taken a decision to invest in India even though she was in the US and it is not easy to invest here sitting in the US.

Betting on PG accommodation: Chennai has emerged as a hub for IT start-ups. A lot of youngsters from all over the state, and even from the rest of the country, gravitate to this metropolis to pursue a career in IT or to fulfil their entrepreneurial dreams.

Over time, Srimathangi has purchased one flat on GST Road and two on OMR Road ( valued at 140 lacs totally).  She has put all three on PG rental. A total of thirteen people live in these three flats.

“Today, if you rent out a 3-BHK flat in Chennai to a family, you will not earn more than Rs 16,000-17,000. On the other hand, five-six people live in our flats and pay Rs 25,000-30,000. Thus, the rental yield is much higher when you put a flat on PG rental,” says Srimathangi.

Most young professionals who move in stay for at least a year or two. Usually one of the tenants takes charge of a flat, and if someone moves out, he finds a replacement. As the landlord, she does not have to worry about finding a new tenant.

Srimathangi and her husband have also purchased a flat in the city centre in Chennai for their own use ( value at 65 lacs). 

Investments in Coimbatore: In her hometown Coimbatore, Srimathangi has over time bought land and built two properties (valued at 150 lacs) – both these properties have been rented out to families.

Next, she plans to invest in a commercial building. She is hunting for a suitable property in Coimbatore. Rental yield from commercial property (9-12 per cent) tends to be higher than from a residential property. 

Ran an Ola cab: Srimathangi and her husband also ran an Ola cab for about one year. It gave them a return of about 25-30 per cent over that period. However, they found it difficult to manage along with their work-related responsibilities, and hence have dropped the taxi plan for now. They now use the car for their own personal purposes.

Saving is her forte:  After she finished her MBA and joined Deloitte, Srimathangi began to earn a good salary. A couple of job switches over the years provided further boosts to her salary. One advantage she had as a business consultant was that she travelled a lot, and her employers paid for her travel, lodging, food, etc. All she spent on, while in the US, was on clothing and entertainment. “I am not a lavish spender. I managed to save 60-80 per cent of my salary each month,” she says.                

 Eschewing risk: Another notable aspect of Srimathangi’s wealth-creation voyage is that she did not make any investments which she did not understand. She did not invest in equities or mutual funds. She would put what she saved in her savings account. Once she had accumulated a certain corpus, she would keep 10 per cent aside for personal needs and emergencies, and channel the rest into her planned investment. She even avoided taking loans to fund her investments. “If it is hard-earned money that you have saved from your job, then you should avoid taking too much risk with it,” she says. She invested in real estate so that she could earn a steady rental income every month — to supplement her salary and put her on the road to financial independence.

Srimathangi is well on her way to getting financial independence. I am watching her as to what she will do in the future. Hopefully she will let me share her story then too as a sequel to this story.