How to Build Wealth: Lessons from Dr. Naresh Trehan’s Success

Introduction

Dr. Naresh Trehan, a renowned cardiologist in India, recently became a billionaire. While he has achieved success in his career, it is interesting to note that the majority of his wealth comes from owning a stock in Medanta, a hospital chain that he started. This raises an important question about the source of wealth – is it hard work or equity ownership? In this demotivational video, we will explore the hard truths about making money and learn practical insights from Dr. Trehan’s journey.

The Wealth Equation

In order to understand wealth creation, it is crucial to grasp the concept of the “money equation.” This equation states that the total money you make in a year is a combination of price and quantity. For example, if you are a consultant charging $100 per hour and working 40 hours per week for 52 weeks, your annual income would be $208,000.

The key takeaway from this equation is that relying solely on renting out your time will not lead to becoming ultra-rich. Dr. Trehan’s story illustrates this point. He transitioned from renting out his time as a cardiologist to owning equity in Medanta, which ultimately resulted in his billionaire status. To accumulate wealth, it is essential to shift from renting out your time to owning equity.

The Challenges of Making Money

While the idea of becoming a millionaire or billionaire through hard work is commonly believed, the reality is different. The job market is highly competitive, and finding a high-paying job that can lead to wealth accumulation is challenging. Even in high-income sectors like finance and consulting, reaching a level of earning one crore (10 million rupees) per year is rare, especially for individuals in their 20s, 30s, or early 40s.

Moreover, taxation in India further reduces the actual salary one needs to make in order to achieve one crore after taxes. The situation becomes even more complex when considering the current state of the job market and the trend of top-tier VC funds exiting India.

Investing for Wealth Creation

Investing can be a viable path to wealth creation, but it requires a significant capital base to generate substantial returns. The average return on investments is around 12-15%, with index investing offering a straightforward way to achieve a 12% return. However, expecting consistently high returns from stock picking in a rising market is unlikely.

To make one crore per year from investments alone, you would need a substantial corpus of around 8.5 crore rupees. This highlights the importance of having a significant capital base to generate substantial investment income. Investing should be seen as a means to protect and grow your wealth, rather than a quick path to becoming a millionaire.

Building a Successful Business

Starting a business can offer opportunities for wealth creation, but it requires careful consideration and planning. There are various business models to choose from, such as low volume-high price or high volume-low price products. The key is to find a balance between effort and value, ensuring that your business offers high value while requiring minimal effort.

Identifying your first hundred customers and understanding the risks associated with your business are crucial steps in building a successful venture. Additionally, it is important to recognize and address any gaps in skills or resources to increase your chances of success.

Conclusion

Dr. Naresh Trehan’s journey to becoming a billionaire highlights the importance of owning equity and creating multiple income streams. While hard work is essential, wealth creation often requires a combination of effort, financial resources, and strategic decision-making. Whether through a job, investing, or starting a business, the path to wealth is challenging but attainable with the right mindset and approach.

Disclaimer: The information is only for information purpose only. It is always recommended to consult with certified financial experts before making any investment decisions. Follow busymoneyfreak.com