10 things you didn't know about how Baniyas handle their money

Manish Kothari
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Manish Kothari

How Baniyas Handle Their Money

Baniyas have been known for their extremely prudent skills with money. They are are also known for creating money from opportunities that no one thought possible.

Traditionally this community has its roots in Gujrat and Rajasthan, but now it has spread to a community of rich businessmen and investors across the world. So what is their secret to the baniye ka dimag ? 

(lets keep miyan bhai ki daring for another time)

They are not emotional about their money, contrary to popular belief 

Baniyas and Marwaris are known to be Frugal or Kanjoos. This gives them the image of being angry about overspending and people who keep their money close to themselves. However, they are unemotional about their money and invest big sums of their wealth in opportunities that most will consider risky. They can ride out the highs and lows of a business like a pro without getting cold feet.

They have very low bank balance

What? Yes sounds totally counter intuitive to what we hear. Yes they don’t overspend, and yes the save major portions of their money. But they hate the bank. Money in the bank means its not getting them any returns. Most Baniyas, will invest their savings as soon as possible. They also prefer to keep their money in Liquid Funds (low risk mutual funds) till they find a better opportunity to invest it (or spend it). 

Baniyas do spend on luxuries

If you ever decide to take an international trip, at the priciest locations in Europe or the most expensive Islands in the Pacific, you will a baniya family eating papad.

 Most Jaguars and Rolls Royces are sold to baniyas in India. This just goes to prove that they enjoy their riches even if they like to keep their day to day living simple.


They seldom take loans

They live with the simple ideology — Earnings come before spending

Buying an item on loan means that you have to pay more that the MRP of the product. For example, if you see an ad that a car costs 5 lacs when you take in on an EMI for 3 years you end up paying close to 6 lacs for it ! This is a big no no for Baniyas.


They Invest for long term

Finally to the biggest baniya magic trick — they understand compounding.

Power of compounding is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.

Albert Einstein

The truth is the Baniyas knew it before Einstein and practice it thoroughly. The same same formula you used in your 10th Boards to calculate compound interest on loans works for investments too. It doesn’t matter if you start small, at 5000 per month for 10 years with a return of 12% you invest 6 lacs and earn a profit of 5.6 lacs. What could be better?

They make it a habit to see the risk and profit in even the smallest purchase

They evaluate, I mean really evaluate if they should be buying a new product. Everything is seen from the lens of profit and risk. For example while buying a refrigerator, they will carefully evaluate their requirements and what cost is suitable for a refrigerator purchase. If it doesn’t justify the cost, no salesperson on earth can convince them to buy it.

They plan most of their Expenses

All huge expenses like children’s education, buying a house and even going on a vacation is a planned expenditure. 

They invest small amounts, creating wealth to fulfill their dreams rather than taking a loan.

They have multiple sources of Income

They don’t rely only on their job to make them rich someday. They diversify their income by setting up small supplementary sources. Some have traditional sources like returns from the stock market or rent, other have more millennial ways like being a part time running coach or a food blogger.

They take tax planning very seriously

Tax takes a huge bite of your wealth. Planning for it can help reduce the size of that bite. You will never find a baniya who doesn’t religiously invest in tax saving funds.

Not all of them play around in the stock market

Although most of them have an interest in the stock market, not all of them are interested in putting their wealth behind stocks. Some opt for safer options like mutual funds or FDs.

The secret of the Ambani’s and Bansal’s is yours now.

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