Sam raised the toast and the group of friends said in a chorus, ‘Cheers!’
During the lockdown period forced by the COVID-19 virus spread, the group of friends had planned an online drinking session over Zoom app.
Like Sam, all his friends owned shacks and restaurants in Goa, and until a couple of months ago, the business was thriving. However, since the outbreak of the virus and subsequent lockdown, the restaurant owners, who were still paying rents and salaries to their staff, found themselves in a very difficult situation.
“What to tell you man, with the extension of the lockdown period, I can’t work to reduce my losses,” complained Sohail who owned a shack at a famous beach stretch.
Clinton added, “Exactly! I had thought of launching a food delivery platform to make good my losses, but it all went down the drain now. I can’t run a kitchen all by myself.”
Others also voiced their distress over the matter until Anil addressed the elephant in the room, “Friends, to tell you the truth, the situation can extend till late in the year, and we are bound to lose a lot of money. We have the responsibility to pay our staff even if there is no work. How long will it take for our savings to dry up if we remain out of work for an indefinite period?”
There was an ominous silence, and the tension was palpable. Each of them knew what it meant to keep paying expenses for months without earning a single rupee from their ventures. Most of them reckoned the possibility of an absolute financial drain out, or worse, chronic debt.
“You are the wisest and most experienced among us, Sam. Please suggest what we must do besides keeping up a brave face,” Sohail implored Sam for advice.
Sam took a minute to think, swirling his drink in the expensive cut-glass, as his friends waited patiently for him to start.
“I think we can modify and enhance Clinton’s idea of running a cloud kitchen and setting up a delivery model. Working together, we can easily meet the challenges of sourcing, manpower and door-step delivery. Remember, united we stand, divided we fall. Clinton can help us with his research, I can get together a team of delivery personnel, and also connect with food apps to process a higher number of orders, and the rest of you can work on the menu, purchases and kitchen operations, what say?”
Everyone liked Sam’s advice. They realized that in such tough times, working together, delivering fresh and delicious food to craving customers can be a good opportunity.
For the next ten minutes, the group chalked out a strategy and crunched some numbers. Again, there was a silence as no one seemed to willing to put in the initial capital.
Sam volunteered to pay. “You guys can pitch in your share after a few months,” he said.
It was Sohail who spoke what everyone else in the group was thinking about Sam, “Please don’t mind me asking, but how are you able to manage things so well on the financial front, Sam?”
To this, Clinton added, “I had read about your huge donation to the NGOs doing relief work for the poor and homeless.”
Sam smiled before adding, “My dear friends, I am not under financial stress, even in tough times like these because I have another source of income that takes care of my regular expenses and leaves me with spare money each month.”
“Another source of income? I have known you for so many years and didn’t know that you run another business,” Anil said incredulously.
Sam laughed hard looking at his old friend’s expression, “I don’t have any other business or job. I have a passive source of income where I don’t have to work, yet I still get regular payments.”
“Is it some kind of online money earning scheme?” Clinton professed his doubts.
Sam stifled a burst of laughter, realizing that his friends knew nothing about building a passive income. He explained to them that for a long time, he had been investing a significant amount of money in equities, and a few years ago, his portfolio became self-sustainable.
“I had been saving and investing right after my first job at the cruise liner. I was lucky to get a fat paycheque while my expenses were non-existent. And when I opened my restaurant a decade ago, I continued to invest. As a result, my portfolio reached to a point where it kept growing at a phenomenal rate without the need of further investments. My earnings from the restaurant were enough for me to get by, so, I kept accumulating my passive income, which I am now using for a good purpose,” explained Sam with a content smile.
“So, your passive income, does it come to your account each month?” asked a curious Clinton.
“Yes, once I built a large portfolio that kept growing on its own, I opted for a plan where I got a fixed income each month, while my portfolio remained invested,” answered Sam.
Sam urged his friends that although the longer one invests in the equity market, the more s/he earns, there still was time for them to begin their journey to building a passive income.
The virtual meeting was coming to an end with a promise of regular touch base to shape up their joint project. Each of Sam’s friends took a pledge to commit to the food delivery project, and also to start investing in mutual funds through monthly SIPs (Sam had explained to them how SIPs or Systematic Investment Plans were an easy and effective way to create massive wealth over time).
Though the times are grim, we also have the opportunity to plan for a better future. Sam and his friends had shown us how to cook a success story in adverse times.
Dr. Celso Fernandes is the torchbearer for financial literacy in Goa. Along with his team at Nave Marg Foundation, he continually educates, motivates and guides people of Goa, especially youngster, on their road to financial independence and wealth creation. Dr. Celso can be reached at +91-9422058741.
Nave Marg 