Zerodha Co-Founder Nikhil Kamath Calls Bengaluru's Wealth 'Paper Rich', Citing Tech Company Influence

Nikhil Kamath, co-founder of Zerodha, expressed his views on Bengaluru's economic landscape and his preference for renting over buying real estate.

Kamath in a recent interview with The Print highlighted a phenomenon he refers to as "paper wealth" prevalent in Bengaluru. He asserted that the city flaunts a façade of prosperity primarily stemming from individuals' affiliations with tech companies. According to Kamath, this wealth is not tangible but rather illusory, attributing it to the stock-based compensation prevalent in the tech industry. He emphasised that such wealth lacks liquidity, thereby offering only the appearance of affluence.

Reflecting on his own journey, Kamath shared insights from his early career, recalling his stint at a call centre in Bengaluru where he earned ₹8,000 per month selling accidental health insurance at the age of 17. He described the sense of accomplishment derived from this modest income, juxtaposing it with the pressure felt as peers embarked on traditional career paths post-college graduation.

Addressing the real estate market, Kamath expressed scepticism towards current property valuations, deeming them "ridiculous and retarded."

He cited prevailing interest rates and the disparity between rental yields and capital investment as factors influencing his decision to eschew property ownership. Despite his financial success, Kamath revealed his ongoing preference for renting, emphasizing emotional ties to his parent's home as his sole property ownership.

He stated, “Yeah, I don't foresee that changing. The only one home that I have is where my parents live and that is more for emotional reasons, it will never make sense for me to buy a home because the rental yield I am dishing out is significantly lower than the capital deployed, the returns they give me.”