An entrepreneur and exuberant visionary, Chenraj Jain is the Founder Chairman of the Jain Group of Institutions, which is not only imparting knowledge but also creating a new wave of young entrepreneurs. He is a person with a strong conviction that much more is possible than people ordinarily think. Starting from scratch, he has built businesses and institutions, and today incubates entrepren-eurs. Synonymous with bringing the professional touch to education, Chenraj Jain is a serial entrepreneur who has done it all in diverse set of industries. His charismatic personality and glowing enthusiasm has inspired a generation of young entrepreneurs. There is a lot to learn from him on investing in a broader sense....In this candid talk, Chenraj traces his background on how he rose from a clueless young businessman to the thought leader of today.

Excerpts :

Trials and troubles

"In business, a typical strategy for an Indian businessman is to begin with a trial and error method. In the early days of liberalisation, when I ventured into business, I did not have much knowledge about investments. I tried my hand in different sectors such stock market, textile trading, real estate without any basic insights. I was of the opinion that you just need to jump into the ocean and learn swimming; but in this trial and error method, 20-25 years went by without realization. We realize the value of things very much later. For instance, whenever someone suggests we should be insured, we would just postpone the decision since our savings in hand is too meagre and we wait for accumulating more money to invest.

I might not the right person to talk about safe investment, since I am man of two extremes. Either I say invest all you have or don't invest at all. When you look at Indian stock market, we have 7000 listed companies with $1200 billion market capitalization, which might be equal to the size of just one big company in the U.S. So India has a long way to go in terms of growth.

American lifestyle

Now that we Indians have adopted the American culture of spending more than what we earn, there is immense growth for the retail banking sector. However, banks are still quite hesitant in offering loans to consumers. People are so eager to spend in wrong places, for instance, we pay exorbitant prices for branded luxury goods, but we would bargain for our daily needs like food and perishable items which do not cost much!

Things have changed drastically now and the market is much more mature. Today people talk about mutual funds and insurance with 30-40% returns, but there was nothing of this sort a few years ago. Commodity trading is taking off in a rapid manner.

My suggestion is if you have one rupee today, you can play around with 10-15 paise in the stock market. You should have a long term outlook in investment. Like Warren Buffett, you should have the patience to find the quality company and invest in it for atleast 20-25 years to get the immense benefit. Do not plead with your parents to support you; rather use your own resources to achieve. People say do not borrow; I would say be very clear about why you have borrowed the money.

Right timing for investment

People are borrowing costly loans for high priced apartments and when the prices collapse, they will suffer. For instance, look at the real estate scenario in Bangalore; nearly 10,000 apartments are lying vacant, while people are homeless. Low cost housing of Rs.3-4 lakh cost is the need of the hour, but there are no providers for such simple concepts. There are a lot of speculators who still think real estate is a good investment even at such exorbitant prices. You need to wait for the right opportunity to invest. Gold is another all time classic investment which can only appreciate.

Intellectual capital

Whether you are a working professional or a businessman, a knowledge oriented entrepreneur mindset is crucial. And for an entrepreneur, guidance and mentoring is essential. Our country has the largest number of young human capital aged below 25 years as compared the average of 44 years in the developed world. Motivated by the teaching of Swami Vivekananda and Dhirubhai Ambani, I dream of building a better India by nurturing this human intellectual capital. Ambani was one businessman who took enormous risk in building the empire that is Reliance today. He did not bother about bank loans; rather he convinced retail investors to invest in his company.

We need to think of breaking out of our normal lives and do something different. Unlike a self made man like me, most of you who are working in the corporate world realize that your company pays you well but it does squeeze the work out of you. So rather than work for someone else and get squeezed, why don't you start on your own and achieve something.

There are so many ideas and opportunities waiting to happen. For instance, health insurance market for rural poor is non-existent today. Someone can just collect Rs.1 per day and can easily give a cover of Rs.100,000.  Planning your future is so crucial and atleast 5% of our earnings should go for health insurance.

Invest in mutual funds and encash on the country's growth. Soon the growth story of India will begin to stagnate and we will not be able to get same returns from the market. While we are all painting the rosy picture, the reality for each of us is going to be quite harsh.

In my own amateurish rugged ways, I have incubated many of my students to become entrepreneurs. My bottomline guidance is take education as an investment; I advice parents and children to invest in education which can help them throughout their career.

He was speaking at a Panel Discussion organized by Businessgyan and TASMAC  on the topic ‘The principles of Investing Right'  

Compiled by Levin Lawrence for Businessgyan

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