We all dream of retiring soon But this young entrepreneur has made his parents retire Rajat has worked very hard and changed the fortune of his entire family So watch this video till the end And we are also working very hard to bring such videos to you So subscribe to our channel before the video starts Today I have with me 18 year old Rajat Who was born in 2004 And he is an app developer Rajat, welcome to the show Thank you And you must be in your first year of college So when did app development start?
And why? I started when I was 13 It was just that I had an interest in it Initially it was interest And also the money motive was there So what motivated you to think about money at the age of 13-14? So the thing is, let's assume my age group have a certain amount of money And why not be 10 times of them And I like coding and stuff So what do you do right now? It's a business, we basically make apps We code apps, we take the market There is a competitor So there is one app who is dominating in one category So we build the same app usually And we make some changes We can play a price game Give some better features In this financial year, how much did you make? There was about 34 lakhs of revenue And the profit was about 28-30 lakhs So 90% you are saying is the profit Yeah Okay And after that how much tax did you pay? Tax, basically like mom and dad are there So split the income like partners So tax we paid about 3 lakhs So you must have made around 25 lakhs in the last one year Yeah, of course Congratulations Even after all the tax deductions On average you are making around ₹2.
lakhs You also shared that your parents do not work anymore Yeah, they retired in the last November Before that they used to work I come from a pretty low background household Where my mom and dad, both of them used to make about ₹25,000 something And did you retire them? Yeah, of course Respect, respect bro So now you are taking care of your entire family Yes Do you have any siblings? No So you are the sole bread earner of a three member family at the age of 18 Yes You are killing it in life You have won the game of life already So you said that your collective household income Yeah A few years back was ₹20K-₹25K Yes What was the rent back then? We didn't have any rent because where my dad used to work We were given a place to stay over there What about right now? Right now we are paying ₹22K including maintenance Next is food, groceries, how much do you spend? So food and groceries including everything would be somewhere between ₹15K-₹20K ₹15K-₹20K Okay, do you go out? Do you order food? We order but because mom is a cook so she cooks But just once or twice, maybe very less So that would be about ₹2K-₹3K per month Okay What do you do in your weekends?
Weekends, I usually work because usually I have college on the weekdays Do you guys travel? Do you visit places outside Bangalore? Not for now, we are originally from Nepal so we visit Nepal probably once or twice Because there is a lot of places to visit in Nepal Of course How do you travel to your college everyday? I have a bike You have a bike? Yeah Did you buy it recently? I just bought it a month ago How much did you pay for it? It was about ₹1.65L ₹1.65L very nice How much fuel do you need every month? I need about ₹4K- ₹5K because I have to travel to the gym the same distance as college So overall in a month, how much do you end up spending? Probably max to max ₹30,000, ₹25,000- ₹30,000 Plus rent? Oh yeah, plus rent So around ₹50,000- ₹55,000 is the max? Max Okay I want to understand if the basics of your family's personal finances are set or not So first thing first, do you have a health insurance?
No, none of us This year we have to take First thing, there is no point in whatever amount you are earning How many lakhs you have in your savings account If you don't have a health insurance Reason being, if you go to the hospital for any reason It might set you back Your entire savings can go First of all, in your case because you are very young Get a cover of ₹5 lakhs And get your parents get ₹8-10 lakhs cover each Okay Just look at a few things Firstly, the company that you are purchasing on The claim settlement ratio of the company that you are purchasing on Should be very high Secondly, read the clauses Okay, so one option is copay What the insurance company says in copay is That you can pay your premium less So in your case, if the cover of 5 lakhs Is 4,000 per year They will say that you can only pay ₹3,000 But, if you get hospitalized in the future Then you will have to pay 20-30% or 1% of that Never opt for that Never opt for that You can see the other clauses That there is no limit in the beds And what is the hospital network for that You can see all these things But, get yourself and your family insured ASAP Second important thing is Do you have an emergency fund?
Right now, after paying taxes I have about 3 lakhs ₹3 lakhs, okay ₹3 lakhs means 6 months of your personal expenses Yeah, easily With ₹3 lakhs how many months of business expenses can be covered? So right now the business expenses are ₹40K-₹50,000 Sometimes business expenses can increase So ideally you need to separate these 2 divisions of your life One is your business, other is your family Because now you are the sole breadwinner You have taken the responsibility So you need around 6-8 months of emergency fund For your family expenses And you also need at least 6-12 months of runway for your business So this is the second thing Emergency fund for both the divisions of your life So you said that you have ₹3 L in your bank account But according to your income and all the fixed and business personal expenses You should have more So where did the money go? So first of all, whatever the savings were In December we bought a plot in Nepal Very nice How much did you spend on that plot? Plot was ₹18 lakhs And ₹2 lakhs was travelling expenses Did you spend that money as an investment or as a future place to stay?
No, it was just for investment I won't be staying over there Just an investment Okay, so you bought a plot for ₹20 lakhs And you put the majority of the savings you saved for the whole year in that Yes How do you plan to invest or manage your money in the future? I had a plan of buying a flat We are thinking about it I will need your opinion obviously And buy a car So these are the two which I am seeing upcoming expenses These are not investments Do you plan to stay in that house? Yes So then in that case it's not an investment Car also is not an investment You are just 18 right now What's the hurry of purchasing a house? What's the hurry? More like the emotional angle that you have Most of the Indians Most of the Indians purchase a house in their 30s or 40s Their first house You are 18 right now There is no hurry The reason why I am saying not to buy a house Is you have just started earning
You don't know how stable the income is If you take the liability in that And if something goes wrong in the future Then there is no one else to pay for you Correct Right Second thing Right now you have a business Because you are expecting that the growth of my income Will be faster than the traditional route But if you take a house on loan Cars on loan Then your freedom You will have a lot of restrictions Your freedom will decrease You know that whatever happens now Your EMI of ₹1 lakh or ₹1.5 lakh will keep on going But you also know, I also know There must have been a lot of months in your career In your experience In which you are not earning anything consciously Just so that you can learn And you can think about the next big steps Yes So house and car in your case Is a purchase It's not an investment Okay So don't look at it as an investment And try to delay it At this point you don't need it In your case The biggest advantage that you have Is time In any month Okay let's say you make ₹2.
L on an average After all the expenses In a bad month also Can we assume that you will make around ₹1.5 L Yeah definitely Okay So after your personal expenses In a bad month You will at least be left with ₹1 L And in a good month it will be ₹2 L Assuming ₹50,000 of household expenses So I would recommend Start investing ₹1 lakh every month In the stock market Via index funds To explain the impact of time In your case Let's take two examples One is you You start investing ₹1 L every month At the age of 18 Okay You decide to stop your investments At the age of 25
Meaning you invested for 7 years Then you stopped But the money that you have That money continues to stay In that same fund Till the age of 50 Okay You stayed in that till 50 10% on an average You are earning returns The second example is Let's say Anshuman I am 25 years old right now I start investing ₹1 L every month And I continue to do it Till the age of 50 So you invested for 7 years And I invested for 25 years In the end You will have ₹13.21 CR And I will have ₹13.38 CR Meaning I have invested 18 years more than you And the difference I have Is less than ₹20 L Do you understand the impact? The reason why it's happening Is because you gave your money More time to compound So you should start as early as possible If you think ₹1 L from day 1 is a stretch
Start with ₹50K I think you can easily start with ₹50K Yeah ₹50K is very easy Just pick two funds Pick one Nifty index fund Another Nifty next 50 fund Yeah definitely So this is the rapid fire round You have to give answers as soon as possible Question number 1 I hope this never happens But let's say 1 year later AI replaces your business That AI can develop apps What will be your first step? I would probably learn AI and how it works And then start with something in AI Because I have technology Okay okay If you have to give an advice to a 16 year old About making money What would you give? Probably just start something Let it be anything Just start it off Okay One financial behavior That you want to inculcate In the next 1 or 2 years Probably tracking expenses Properly I don't track much Because there is so much of money I mean not so much like Settle flex What do you mean?
I mean like If I go to a restaurant I get some bill And the last and the most important question What are the steps that you will take To improve your family's Financial condition in the next 4 or 5 years? You know Be more mature in terms of handling money And investing it in right places like business And stuff I will make it easy for you Number 1 Get your entire family insured Okay Second Build your runway For your business Make sure that you can survive For the next 12 months It should be in bank Third thing It is an important thing Start SIP The house that you are talking about If you just wait it out Start the SIP By the time you are 28 easily able to buy a house with 50% down payment.
If you have 50% down payment, you will have to take 50% loan. And if you want, you can even give 100% down payment. Fourth thing is, if you think that you will need education to grow this business, then take the necessary steps. Don't think that whatever is going on now will go on forever. Assume the worst case and then analyze, do I need education? If yes, complete your education. I think this is one of those episodes where I got inspired a lot because of the impact that you created for your family. You changed your family's fortunes at such a young age. I am really proud and I hope you continue doing that. Thank you so much. That's all for today guys. If you like this video, please hit the like button.
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