Frugality made me powerful: Thyrocare founder Dr. Velumani

In an interview at the Mint Money Festival, Velumani, 66, spoke about the principles that made him successful, and offered money lessons for the younger generation.

How did growing up with limited money shape your values and views on wealth?

I was fortunate to be born poor and in a village. My father was neither an employee nor an employer. At age 11, I used to pluck cotton for ₹1 a day during the hot month of May. My mother was the only earning member, and as the eldest son, I wanted to support her.

I was lucky to start my life with nothing. When you start with zero, there is no downside because there can’t be one below zero. Lucky are those who are born poor, because we have nothing to lose. In the village, most people are poor and think of themselves as unfortunate. I believe the main reason I was successful was that I was born poor.

You quit a government job to start Thyrocare (in 1996). At that time, you had something to lose. How did you manage it?

There are five decisions I made that enabled me to add many zeros to my net worth.

1. In 1982, I left home without telling my parents.

2. In 1986, I married a Bombay girl without discussing it with my parents. I wanted stability at home, and she was working in a bank. I made the decision and then informed my family.

3. In 1995, I left my government job without discussing it with my wife because I thought she would get scared and stop me.

4. In 2016, I did an IPO for my company without discussing it with my family.

5. In 2021, I exited my company without telling my children.

In life, you can either discuss or decide; you can’t do both. Leaving a government job wasn’t a big risk. The salary was not high, and many CEOs earn more than the president of India. The real risk was losing comfort and security, but I wasn’t scared. There are two words. One is security, another is prosperity. There is no such thing as secured prosperity. So I made a decision.

There’s a saying: “Plan to lose and you will never lose. If you are scared of losing, you will never make it."

I am a thrill-seeker, and if everything had failed, I would have gone back to my hometown, Coimbatore. Anyways, I made only a ₹2 lakh investment in the business.

What does being rich mean to you, apart from having a fat bank balance?

The money may be in your bank account, but it should not come to your mind. What made me powerful was the word frugality.

When I was in government service, I saved 75% of my income and spent only 25%. I supported my parents, children, and my siblings’ marriages. We were able to manage it because my wife and I were extremely frugal. We have never paid an EMI in our lives. I never took a salary from my company, and the company also never borrowed money.

Sounds like fantasy, right? But frugality was the answer. Nowadays, people talk about FIRE (financial independence, retire early) while being knee-deep in debt. People say the closing balance in your bank account when you die is wasted effort, and that it’s foolish to leave money behind. But in reality, you don’t know when you will die. So keep enjoying your work and keep working.

At 62, I retired thinking I had too much money in the bank. Now, at 66, I feel too young to retire and have started working again.

Did you have a number in mind when you decided to sell your company?

When you neither want nor need to sell you can negotiate better. I didn’t want to sell, so I quoted a price 20% higher and the investors agreed. I got everything I asked for. I was fortunate to sell at the peak of covid. I was expecting ₹3,000 crore but got ₹4,500 crore.

What did you do with the ₹4,500 crore?

Currently, one-third is in mutual funds, one-third is in ETFs (exchange traded funds), and the remaining one-third is in real estate.

Earlier, I invested ₹1,500 crore in a startup and lost all of it. As someone said at an event, you should always keep some money aside just in case you lose. I still hope to recover my principal after 10 years, even without returns.

The problem with startup investing is that there’s a lot of makeup. The fancy PowerPoint presentations are often the only real investment they make. I’m not trying to scare anyone, but you must invest carefully, wisely, and spread your eggs across many baskets.

If I had spread that ₹1,500 crore across multiple startups, some would have given decent returns. Now, I take the opinions of four family members before making new investments so I don’t make emotional decisions.

The earlier logic of ‘don’t take opinions before deciding’ no longer works. Only when you are poor you can take decisions [independently]. When you are rich, you just can’t.

Any message to the younger generation on financial discipline?

Keep money safe, keep it secure, and spend it frugally. Once you have money, invest it wisely. Frugality is the most powerful way to keep peace of mind. Unfortunately, not many people believe in frugality anymore.

I have never taken an EMI, and my company has never had a loan. My philosophy may not work for a 20-year-old with seven EMIs.

Save and invest until you’re 40. You will likely have plenty of money by then but also conserve it. If you once had money and then you lose it, life becomes miserable.

Life has two innings. Till your 40s, save as much as possible. After 40, family obligations multiply and saving becomes difficult. Create as much as possible, consume as little as possible. Health or wealth, you lose them only because you can’t control temptations.