How much money is enough? | Startup | Sarthak Ahuja

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How much annual income is enough?... I have a benchmark to share.

For the sake of simplifying this, let’s set some context.

I’m speaking about people living in Mumbai, Gurgaon, Bangalore in tier 1 jobs with a solid education.

Now, let’s divide folks across those earning salaries and those who run a business.

👉🏼 For people earning salaries, to try and breach the threshold of anything above Rs 60 lakh per annum is possible, fairly common for folks with top IIM / ISB degrees... but may not always be advisable.

👉🏼 For business owners, freelancers, and agency owners, any positive net cash flow from operations or simplistically, profit, of Rs 3 crores per annum is fabulous.

Now, here comes the kicker.

To draw a salary of over Rs 60 lakh per annum, most people would have to make compromises in terms of trading off personal free time, health, relationships, living away from family or some such.

So not to say it doesn’t happen, but the the trade off distorts the balance you’d want in life.

For business owners, making more than Rs 3 crores in profit is possible and common... assuming an 5-8% PAT margin... that’s a top line of Rs 40-60 crores.

But if it requires taking extra risk, it may be possible, but maybe not necessary.

👉🏼 Because the focus beyond these numbers should not be to grow these numbers, but to sustain or grow these numbers per unit of time.

👉🏼 Essentially, how can you get to this number working fewer days, so that you create a more balanced life where you use that extra time across improving your health, knowledge and relationships.

I’ve given you a number based on my context and the cities I live in, but your context and number can be completely different.

What’s a number beyond which, your metric of success would not be the income, but the income per unit of time worked?

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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.

Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of '17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.