Why NRIs Net worth is not inline with Savings?

Why we leave home and stay far from our parents and relatives? For a better opportunities which pays you significantly higher than India. Right?

After working there for 15-20 years, Are you confidently come back to India with financial freedom?

Major observations from the financial insights of our NRI clients:

1. First and foremost: Running behind the assets which has done well in recent past(Real Estate, Gold, Silver, Stocks, Derivatives, Crypto).

2. Invested in foreign real estate (majorly house) with FOMO(Fear of missing out) as feeling of price rise in absolute terms forced them to buy($6,00,000 house has grown to $8,00,000 in 5 years is merely a 6% annual rise where as mortgage interest rate is also 6%) . Interestingly majority are on contract jobs, probability of staying in same city for long-term is very less, Owning a house adds $6000 to $8000 burden of property tax annually, Selling requires to pay 3-6% agent commission.

3. Majority of the clients we spoke with have good savings ratio of 50 to 60% of their income (Around $3,000 to $5,000 in some cases it is up to $7,000 if both are working), But their net worth is not inline. (Family of 20Years experience guy has net worth of only 10-15crores,means investments have grown merely 6% annually)

4. Due to pressure from relatives or friends, many have invested in Indian real estate. Initially, it seemed like a good investment for the first few years, but later it failed to show growth and became difficult to liquidate. NRI real estate investments benefit the agent. The client is unaware of the actual prices when buying and selling. Developers continuously raise prices each month to create artificial demand, prompting new buyers to act quickly and encouraging existing investors to purchase additional units as they perceive price appreciation. Everything appears favorable: the buyer is pleased with the increased price, the developer is satisfied as inventory sells at a profit, and the agent is gained a substantial commission (3-10%) without any capital investment. Many invested with the expectation of doubling their investment in three years, based on recent trends However, when the buyer wants to sell, finding buyers at the expected price is very challenging. They realized they are caught in a manipulated market. Additionally, it is difficult for NRIs to repatriate real estate investments. Real estate is also misleadingly marketed using celebrity success stories, if you dig deeper, these celebrities held their investments for decades, benefiting from city expansion.

   Always remember physical assets require physical presence

5. Some are locked in insurance cum investment plans which looks fantastic on absolute terms (Like you have to pay 1 lakh/month for 15 years and policy pays you back 1Lakh/month for remaining life term) If you do math, It simply returns you bank interest(5-6%). These plans are very bad for client and good for both Agent and Insurance company.

   
   

   From all the above observations it is clearly evident that investments are scattered without proper understanding.

   

Why we feel NRIs have higher chances of making 100 crores

Just do a simple math, Most of the democratic countries market growth is inline with GDP growth.

India GDP growing at 6-8% annually with an Inflation of ~5%. So nominal GDP growth is 11-13%

Corporates grow their earning slightly above the nominal GDP growth, that is the reason Indian market has given 15% compounded returns over last 45 years

Let's do a simple math.

• Monthly Investment: $3,000 (approx. ₹2,70,000)

• Exchange Rate: 1 USD = ₹90

Projected Corpus Value (in INR)

Time Horizon	Conservative Estimate (12%)	Market Average (15%)
20 Years	₹26.71 Crores	₹40.43 Crores
25 Years	₹50.73 Crores	₹87.58 Crores
30 Years	₹94.36 Crores	₹186.93 Crores

So, based on the above data there are higher chances of reaching 100 crores target for NRI with $3000 savings in 30 years, also these investments are completely repatriable in case if you want to take back to residing country. However the most difficult part is, market doesn't give 12% returns every year inline with GDP growth. It may grow 100% in one year and drop 30% in another year due to various events happening around the globe, that is where a certified advisor plays crucial role in growing your wealth.

Schedule a call with us to plan your finances for generating decent wealth!