What is better than making millions? Billions? Trillions? After a point, it does not matter how many zeroes you add, for it is debatable whether they add up to your happiness in any way.
Pratik Patel understood this conundrum early in life. Instead of running after millions, he decided to chase ordinary people and turn them into millionaires instead.
This enterprising youngster from a small town of Unjha in Gujarat founded NiftyMillionaire in 2013 and is managing a Nifty index fund of more than Rs 200 crore in the stock market. Pratik has a very pragmatic approach as far as money is concerned. “Make your money work for you and not the other way round,” he tells me.
In India, only four per cent of savings is invested in equity related instruments while in developed countries like the US this percentage is 40. “We are here to reduce this gap. At present, the market size of our business is more than Rs 4500 crore and there are more than 15 million traders in India. Since the middle class has access to a lot of liquid cash now, it is estimated to grow 10 times bigger in the next 10 years,” he says.
NiftyMillionaire provides a trading platform through which they claim everyone can achieve the ultimate goal of one's life -- financial freedom. "Our concept addresses all factors critical to trading success like risk management and money management,” adds Pratik. His company is working on financial literacy via webinars, emails, blogs and one-on-one conversations over the phone. He adds,
Our system helps people use their money to make more money and this is the only way through which the middle class can think of achieving financial security. There is a lack of transparency in the finance industry and we are committed to changing the scenario. For that we have put up real trading contract notes on our website.
However, one needs to be cautious as such investments are subject to market risks and it is important that the investor reads all scheme related documents carefully.
“Making money in the stock market is not as important as knowing how it is made,” says Rohan Arinaya, a financial consultant, using a famous quote. "Unless investors research the companies where they are planning to invest and understand their target in great detail, one would always be wary and sceptical about the outcome of their investment," he adds.
Turning gamblers into professional traders
Pratik comes from a prosperous family, and his father, who is his biggest inspiration, and older brother keep pushing him to join the lucrative family business of real estate. “But my goal has always been the financial freedom of every individual. This is what drives me,” he says, adding that he hopes to change the way people see the stock market -- turning gamblers into professional traders.
Pratik’s Mumbai-based firm NiftyMillionaire is serving more than 1500 traders from all over India, and has connected with more than 30,000 traders till now.
But this attitude towards money did not come overnight. When Pratik was 18 years old, he witnessed his father go bankrupt. “We literally had no money to even buy groceries,” he says, recalling the hard days when he could not comprehend where all the money had gone. “My father was running a brokerage firm, and I had just started sitting in his office to understand the work. When he lost everything in the market, there was this sudden curiosity in me to find out where all the money went.”
Pratik entered the market as a trader at the age of 19 but did not receive the beginner’s luck. All he made were losses. “I then did my own research sitting the whole day on my system and reading lots of books on how to become a profitable trader. I also shared some of my observation with a few people in our office. Surprisingly, they made profits. It gave them something to smile about after a long time. One of my relatives, who had made a good profit following my suggestion, shared some percentage of it with me. That was my first earning. It was then that I decided to make my career in the finance market.”
Not enough for greed
Pratik started with a small table, a computer system and one employee in a small portion of his father's office. He would meet every trader personally. He travelled to smaller towns and met many traders at different broking firms.
Around this time, his admission to Computer Engineering course at Ahmedabad Institute of Technology (AIT) came through. “I tried to manage both my business and my study for one year, but I realised I had to choose one -- either continue my study or follow my passion to create a world class financial technology company. It was a tough decision to announce to my family that I was dropping out of engineering college,” he says.
Once the decision was made, Pratik started running his office from the flat where he lived in Ahmedabad. Within four years, he had established one of the best advisory firms in India. “I had a huge office of 8500 sq. feet area and more than 100 employees,” he says.
As the Mahatma once said, “The world has enough for everyone's need, but not enough for everyone's greed.” Things started falling apart when some of his top-level employees could not control their greed. They got involved in underhand dealings and cheating clients. “My struggles of the last five years to help every Indian with the best product in the finance market had come to naught, and by the time I came to know of the extent of the damage, it was too late.”
This was Pratik’s second brush with failure. To make matters worse, the timing was very inappropriate. “My wedding was 15 days away. I was nowhere now. But I decided not to spoil my family’s happiness and did not reveal anything to anybody,” he says.
But Pratik had the crucial conversation with his fiancée. “She was the one who would have suffered the most, so I shared with her that my pockets were empty now and that she should move ahead in her life,” he says. “But she stood by me."
Putting money where the mouth is
After the wedding, the first question on Pratik’s mind was how to handle this hardship. Advisory firms have a very bad reputation in India. “There are thousands of companies and they have conned people to part with their hard earned money. Now our top executives had brought us in the same category. I could have continued running the company and would have made more money, but for me, ethics has always ruled my decisions. My values did not allow me to continue with that unit,” says Pratik.
He finally closed down the firm and was back to where he had started – with nothing. “I was broken, depressed, directionless and in complete darkness. I knew I had to stand up again and do something for the traders who were losing their hard earned money.” According to Pratik, 95 per cent traders are losing money and none of the companies are concerned.
To address this problem, he along with his wife Foram Patel, and his IT support person, a long-time, trusted associate Pravin Desai, came up with a unique concept called the NiftyMillionaire club. “In this concept, traders follow money and risk management along with the power of compounding to create wealth,” he states.
When the business started gathering some pace, they hired a few people from MBA colleges.
While allowing people to get associated with us, we ensured that none of them were from the finance industry so that they should not come with pre-conceived notions. We allowed only passionate and determined people who enjoy helping others join us; people whose values of loyalty and integrity aligned with that of the company. We brought in those who believe in doing more with less; and those who embrace and drive change.
According to Pratik, a shallow understanding of money mechanism and financial immaturity of the middle class are his real teachers as those very things made his early journey tough. “Since I failed to run a few other companies earlier taught me that success is achieved after doing the same thing repeatedly. It also taught me not to run away from hard questions; success lies there.”
Not only for money
Pratik adds that the lessons he learnt from his mistakes were valuable lessons which one can never learn in the best management schools. “I had earlier hired people who only worked for money. I suffered some big blows of my life being with them. I started again and am on my way to follow my passion and finally have a strong team of Niftiens whose thought process will take us to the next level.”
His company soon plans to roll out a ‘Financial Freedom Day’ to create financial literacy in the country. “Delivering the finest trading experiences is going to be our priority. We will focus more on post sales communication, and will ensure a touch-base with every client on a periodic gap.”
Here are Pratik's seven simple steps to harness the power of zeroes:
- Learn to save.
- Put your long-term investments in an index fund.
- Avoid compulsive buying.
- Limit what you borrow.
- Reinvest your profits using the power of compounding. He adds, "No one has can become a millionaire or a billionaire by investing in gold, fixed deposits, PPF or any debt product."
- Invest in yourself.
- Practice living a simple life.