r2i forum

Today, I had an interesting discussion with my boss, when I told him about my R2I plans. He knew about it but we were discussing about lifestyle and cost of living. During the discussion, he jokingly said that you will become a millionaire in India because of the low cost of living compared to US. So I said, that millionaire in India is not a big thing because 1 million rupees = 10 Lakhs & that amount of money is not equivalent of what a million dollars is in the US. Plus, it cannot be a direct conversion either i.e. 1 million dollars = 5.5 crores, which I think is not that high either. So he asked me what the equivalent of a millionaire would be in India & frankly I said - I don't know. Hard to say as I have not lived in India for that long yet.

What do you guys think? What is a good figure that would be similar to becoming a millionaire in the US? 10 crores maybe?

I think direct conversion would be closer indication, $1m = Rs. 5.5 cr

R2MyOldWorld;465143I think direct conversion would be closer indication, $1m = Rs. 5.5 cr

Thanks for correcting my mistake. But nowadays, people have assets worth 5.5 crores because of the booming real estate. That does not mean they can enjoy the lifestyle of a millionaire either.

Simply "crorepati"

How many crore,does not matter.

But to be in elite class, min 100 crore is required.
Like film stars, cricketer, politicians,businessmen has that kind of money.

Also, even a million in the US is not what it used to be, particularly on the coasts. I would say if you had 10 crores (give or take) in investable assets, you were a comfortable "millionaire" in India (assuming metro areas in India).

To me, someone in India with net worth of 3.5 to 4 cr. would be equivalent of a US millionaire (65 to 70 % of direct conversion rate). In both cases, I would not include value of the primary residence.

I think the equivalency depends on your definition of a millionaire. Is it simply someone who has $1MM in the back account? Then sure, do a direct conversion (Rs. 5.5cr). These days prices of clothes, food and rents in India are comparable (I'm comparing the 2 comparable cities I know - New Delhi and New York).

If you think a millionaire is someone who lives in a million dollar house (a modest 2 bed apartment in NYC in a decent neighborhood), drives a BMW X5, has access to golf clubs, nannies, private schools, then you would have to look at the $10MM range. A direct conversion might not work here because although rents and cars can be assumed to be equivalent, the rest of the stuff in India is cheaper, from private schools to house-help to club memberships. Personally I would use a multiple of 0.5 after conversion, so that would be Rs.25cr (based on Rs.50/$). For smaller cities you can reduce these amounts by a factor of 0.5 to 0.75.

Considering PPP, it would be around 2 Crores: India GDP / US GDP * $1 Million

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29

20-30 crores in cash/fd's etc excluding real estate assets.

A million dollars in the US can throw up $50,000 per year at 5% ROI.
$50K lifestyle in the US would need 15 Lakhs per year in India (assuming paid off home in both places)

A good ROI in India would be 12% but considering gap in inflation rate of 8%, you will only get real returns of 4%.

So basically a million in the US is 4 crores in India.
For 4 crores, you get 48 lakhs as absolute returns, out of that you take out 15 lakhs and put back 33 lakhs back to the kitty.
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Big ticket items cost same in India and the US. Only minor things such as household help, grocery, moderate restaurants and cheap prostitutes cost less in India...which is usually compensated by sending kids to school and attending weddings of cousins.