What made me write this is an incident that took place around 3 weeks back. I had to deliver my bike to a service station and once I did that I had to hire an auto to head back home. This is where the interesting part begins. I was busy reading some sms when the autowalla asked me, “Bhaiyya aap kya karte ho ?" and I replied that I was a student. He threw another question at me, “Graduation ?” and I replied “Nahi, MBA – Post Graduation”. He replied “Accha hain bhaiyya, khoob mehnat karna". It didn’t end there, after a gap of around 3 minutes he started to tell me about himself (maybe he was expecting me to ask a similar question i.e. about him). This person, who was taking me home in his auto was a graduate aged about 27 years, who had completed his B.Com from a reputed college in the city (I do not wish to name the college here). Unfortunately he could not continue his education because his father was poor and old and could not afford it and no bank was ready to give them a loan. That was when he had to don the role of an auto walla, to earn some bread for his family and for himself.
He did not give me a chance to interrupt and neither could I. He continued his story, this auto that I was travelling in was used by this man on a rental basis 2 years ago and today he owns 3 autos which are used by his brothers. How did he do it? I never asked him, he told it himself. Two years back when he took the auto on a rental basis, he had to give away a part of the earnings he had made during the day to his owner and he also had to ensure that there had to be atleast a litre of petrol in the vehicle. So his daily earnings were his share of profits less the amount for 1 liter petrol. So he used to calculate an approximate amount and set that as his target every week and the target would increase every month. In six months time he had saved enough money to purchase the same auto. He would then give this to his younger brother and tell him to use the same strategy that this guy was using. To cut the entire story short, this guy was increasing his daily earnings by 10% every week. Come what may they had to reach that target. Another interesting point that he told me was that they even visited a dealer and asked what the price of this second hand auto would be after 3 months (in a condition as it was now ) because he wanted to sell it and buy a brand new auto. On the basis of the amount that the dealer told him, he considered that it would be appropriate if he does not sell it.
Now, how did he decide that? He calculated how much he would earn in that time of 3 months and the amount was 300% more than the price that the dealer said. In his words – “Bhaiyaa aaj iska daam itna tha toh kal aur bhi gir sakta hain na, toh maine ise rakhna sahi samjha” . In the dictionary of an MBA this would mean that he calculated the future value of that auto and he was considering only the profits that he was earning. “Agar petrol ka daam badta hain toh humara nuksaan hoga aur ek mahine me kamayi 1000 rupiye kam ho sakti hain to main har mahine ke hisaab se 1000 rupiye alag kar deta hun" That for him is the risk that we call “Beta” in Corporate Finance. On the basis of all these factors and immense hard work, this guy had managed to purchase 3 autos in 2 years. Once he gave up on the rental auto, his share of profits increased because he did not have to give away a share to his boss. So much happened in a journey of 30 minutes and the best part was the way he had planned and made targets every week and month and his means to achieve them.
So what is the bottom line? The bottom line is that this person who had started his journey as an auto walla, did not get the opportunity in life to study further like the most of us. But whatever knowledge he had with him, he used it and if he continues to work with the same passion and determination, I am sure that this guy would run an auto agency of his own by renting autos. I gave him the fare and before I entered my house I smiled and said to myself – “I am done with my revision of Corporate Finance”.
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