Maximizing Wealth Beyond Business Dive deeper into the portfolios of some couplepreneurs and find out where they are investing to maximise their wealth beyond business
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Vineeta Singh and Kaushik Mukherjee, Varun and Ghazal Alagh,Arjun and Rati Shetty, Swati and Rohan Bhargava. Do these names ring a bell? These are the founders behind SUGAR Cosmetics, Mamaearth, BankBazaar and CashKaro and EarnKaro. Needless to say, these couplepreneurs have built great businesses and taken the entrepreneurship world by storm. But when it comes to maximizing their personal wealth, where do they invest? While they hold on to a greater sum of money, at the end of the day it's all about investing right and diverse. According to finance experts, there are many more options today than ever before for such high networth individuals. They are being serenaded with offers for exotic products all the time by informing them that they need notinvest in the regular products like MFs, PMS etc. But that is a mistake.
"Many of the exotic products have potentially attractive returns but have drawbacks like lack of liquidity, transparency, regulatory oversight and very high level of risk. Hence, they need to evaluate whether the so-called products meant for UHNIs is really something they should invest in and if so how much. The portfolio that we put together should be in line with their risk propensity, goals they may have including philanthropy, gifting, succession as well as proper diversification. Most times, UHNIs are advised primarily from the point of view of maximising returns by taking risks, which is not really needed considering they already have enough wealth. The focus should be on what they want to do with the wealth and aligning with what intentions they have in their life going forward," says Suresh Sadagopan, Managing Director & Principal Officer, Ladder7 Wealth Planners Pvt. Ltd.
Entrepreneur India dived deeper into the portfolios of some couplepreneurs and found out where they are investing to maximise their wealth beyond business.
REAL ESTATE: One asset that has time and again proven an effective hedge against inflation is real estate. As inflation rises, so do property values and rental incomes. For the co-founders of BankBazaar, property has been their main investment vehicle. "Most of this, however, has been done keeping in mind our retirement plans. We've invested in the house that we reside in and intend to retire at." says Arjun and Rati Shetty. Ditto for Ghazal and Varun Alagh, Co-founders, Hosanna. While keeping their investments separate, both have 25 percent invested in real estate.
Shetty's emphasis on reading the fine print carefully before investing. "Say you are buying a villa plot. If there are FSI restrictions on the amount of built-up area you can have, you may end up with a much smaller house than you imagined. We make sure we understand what we are signing up for before we ink any agreement."
STARTUPS: Since their first investment in a startup-Josh Talks, Vineeta Singh and Kaushik Mukherjee, the co-founders of SUGAR Cosmetics, have been investing in startups, for financial returns. "Most savvy investors have a very diversified portfolio across different asset classes. Strangely, the same isn't true for us. We have not invested in any real estate, gold or niche assets like crypto, painting, etc. to date. A large part of that is driven by the philosophy that nothing can possibly give us more growth than our company. We are shaping something with a view towards a high-growth future and hence are subconsciously reluctant to take money away from there to park it in other instruments. The only few exceptions are investments via Shark Tank deals and other angel investments because that helps us give back to the startup ecosystem," says Vineeta.
"It took us 5 years to raise our Series A funding when we started and by making our capital and our bandwidth available for early-stage entrepreneurs, we hope to help others build exciting companies that will shape the future," she adds.
While investing, Vineeta looks for entrepreneurs who are resilient in the face of adversity, ones who think long-term and are not fazed by short-term setbacks. "Someone who won't give up when faced with minor and major failure. Additionally, I also look at the market size for the product and the problem statement that they are solving through their business. While I don't necessarily have a favorite category, I always tend to lean towards companies that are in the consumer business space with women as their primary customers," says Vineeta.
EQUITY & EQUITY MF: The couplepreneurs, Ghazal and Varun hold more than 60% in equity followed by other asset classes and believe in investing for long term wealth creation. Swati and Rohan Bhargava, Co-founders of Cashkaro and EarnKaro, too invest every month in Equity through SIPs. "In the short term markets are unpredictable, In the long run, fundamentals will always hold. So a core principle which is Warren Buffet principle is to think long term and invest in fundamentals," says Rohan. Their portfolio is largely equity with some portion of debt and some real estate. Being financial professionals hold them in good stead. Vineeta and Kaushik too have invested in direct equities of listed entities. "We have equity in the form of direct stock market holding in public companies like ITC, Nykaa - more from a perspective of understanding how consumer companies perform across different business cycles," says Vineeta.
ADEQUATELY COVERED: Entrepreneurs realize this important nugget- that as it is important to invest, it is equally important to get a cover on one's life and health so that the wealth created is not wiped out. "I met with an accident a few years ago while we were on a holiday. While we had medical cover, it didn't entirely cover everything and since then we've made sure that we're adequately medically covered, both specific and comprehensive, no matter where we are, at home or on a holiday,' says Arjun Shetty.
The SUGAR co-founders have been covered by both life and health insurance for about 5 years now. "The cover is comprehensive today but we started with something basic initially. The secret to insurance really is to start early because the plans are far more affordable. Secondly, for life insurance I think clarity on whether this is being done for investment, tax-benefits or core insurance is important," says Kaushik.
The Bhargavas took comprehensive medical insurance cover 20 years ago. "Health is an unpredictable expense, it can be large and unavoidable and therefore important to have cover, depending on how many people depend on you for sustenance and survival," says Rohan.
KEEPING PROFESSIONAL HELP AT HAND: While most of the couples pool their incomes and make joint financial decisions, they don't hesitate to reach out for professional help if required. "The team at Kotak has been especially helpful and patient to us in this regard as a lot of the advice also needs to be explained to us as people who are thinking through these things for the first-time," says Vineeta. "At times, we reach out to close family or trusted friends in the field for their opinion. We believe that all decision-making has to be informed, so we do our own research. In cases where there is fine print involved and we think it is too complex, we reach out to our legal experts for help."