My take on Mumbai expenses and living in India in general

[Gollimari]

A couple of clarifications for those who aren't familiar with the numbering conventions in India:
Rs. 1 lac = 1 lakh = 100,000 = 1,00,000 = 2400 USD = 1200 British pounds
Rs. 1 crore = 100 lacs = 100 lakhs = 10 million = 10,000,000 = 100,00,000 = 240,000 USD = 120,000 British pounds
The range of 60 - 80 lakhs derived at the very end is then 144,000 USD - 192,000 USD

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Inspired by a long thread on the Bangalore forms, I thought I'd share my observations and contribute to this incredible board. As an NRI, who left India at an early age, doing a 6 month stint in Mumbai, I have several observations to share (in no real order):

- In 2 words, if I can describe India, it is the land of the "definite maybe". Say what? It's the essence of the sidways headshake, it's behind every "it will be done in 5 minutes only", and it is behind all the arbitrary rules and even more arbitrary enforcement of said rules. Cryptic enough? Ask an expat who has a lived a few months in India and they will know what I'm talking about

- More so than in the West, there is a wide dichotomy between the haves and have-nots in Mumbai. There literally are 2 Mumbais available if you are in the upper middle class bracket. One need not look any further than food prices. At my place of servitude, lunch is in the company cafeteria where a full meal, and I mean a LOT of food, is available at Rs. 40-60. You eat Rs. 60 worth of food, you will have had 3 (yes three) big masala dosas, for example or a very rich paneer dish with 2 tandoori rotis or, well you get the message. PLUS add a fresh glass of fruit juice in that total as well. But when I go out, I like to goto the nice places. For example, dinner yesterday night was at Olive in Bandra West. Total tab was Rs. 3500 per person That's more than I would spend on all my lunches for 2 months...lol.

- It is very tough to meet new people and you do get quite lonely. I'm a young 30-something male but the only people I have ever gone out with is my colleagues, all of whom are also expats. It's hard to even socialize with the local Indian colleagues because for them going out for a night and spending 5000 a night on food, drinks, clubbing is completely unfathomable. It's hard to meet any new people because of the way you dress, you carry yourself, and you present yourself will be different. Please do not interpret that to mean anything negative but just different. It's hard to bridge the gap to put the local person at ease, try as you might and I have the advantage of speaking perfect Hindi (in fact as good or better than any of the local colleagues).

- Little gestures go a long way. Whenever I ask my driver to take me out shopping on a weekend or to help run some errands, I make it a point of pick up something for them to eat. Costs nothing to me and it really means a lot to them. Doesn't have to be ready to eat food either. Today I picked up the biggest thing of butter I could find and gave that to the driver on the pretext that I "forgot that I don't have any utensils to cook with"...lol.

- Work starts at 9:30 to 10 am and ends around 5:30 - 6 pm for the local population. For the expats, it usually starts around 9:30 but doesn't usually end till 8-9 pm and then another 2-3 hours after dinner. Companies aren't stupid. They know you are making more and the expectations are sky high.

- Indian movie theaters rock! They have such nice seats that recline like luxury airplane seats. Yesterday I saw the Dark Knight (new Batman movie which incidentally was shot next to my place of servitude in US and I saw several scenes that I saw being shot in the movie) and it was a great experience. Cheap as hell too...$4 for a ticket.

- Property is ridiculously expensive in decent locations. A crappy apartment with 2 bedrooms in a decent location like Bandra West is roughly 2.5 crores. Or I can rent it for about 1 lac a month. Get out of Bandra West, Juhu, Breach Candy, Colaba (read all desirable locations) to something lesser and the cost goes down significantly but I have not been able to check them out yet.

- Driver are ridiculously cheap. Well, in my case, the driver/car is part of my package so I don't pay anything but if I wanted to get a f/t driver, it would be roughly Rs. 10k per month.

- Good schools are ridiculoulsy expensive. Anecdotally, a good international level school will set you back Rs. 3-4 lakhs per year per child. Maybe someone with actual figures can back this up?

- Traffic is ridiculous. I asked my driver to switch with me today so I actually drove a little today but it is nerve-racking to be sure. Oh, and it takes forever to go small distances most times of the day. Rule of thumb is that on average, you will only manage 20-25 km per hour, so budget time accordingly

- Monsoons are awesome. Love when it rains non-stop for a while. Everything gets so green and it is so peaceful, even in Mumbai. If I had my wish, I wish it would rain every day for 6-8 hours while I'm here. There is a difference in the rain in India vs. West. Someone more poetic than I can take a stab at describing the difference but, at its most basic, rain in India feels warm, like taking a lukewarm shower vs cold water in the West. I love the feeling of rain in India.

- So, let me now take a stab at the final tally of monthly expenses for a family of 3 (mom, dad, and 1 small child) to live an expat life in Mumbai:

Renting a 2 BHK in a decent location (read above for examples of decent locales in Mumbai): Rs. 1 lakh

Good meals eaten out, assuming eating out in a nice restaurant twice every week for a total of 8 nice meals per month: (Rs. 1500/pp * 2 people + Rs. 500/pp * 1 (for the child) ) * 8 = Rs. 28,000

Other meals: Assume 3 meals a day for 30 days for 3 people = 270 meals. 24 meals (8 meals for 3 people) were accounted for above. The remaining meals cost Rs. 55 pp. So (270 - 24) * 55 = Rs. 13,500

Car: Assume 1 car. Driver is Rs. 10,000. Not including the cost of the car as I am assuming its cheap enough to be a one-time cost. Assume monthly cost of fuel + insurance + maintenance to be Rs. 5,000. Total cost = Rs. 15,000

Schooling: Assume international quality school @ 4 lacs or about Rs. 35,000 per month per child. Total cost = Rs. 35,000

Clothing/entertainment (other than meals): Assume 3% of gross salary annually, so will have to append it at the end when I have a final tally of everything else. Total cost = ?

Cell phones: Plans are dirt cheap. Assume Rs. 500 a month * 2 phones = Rs. 1000

Internet: Rs. 1000

Laundry, dry cleaning, pressing: Rs. 1000

Newspapers, books, etc: Rs. 1000

Twice yearly vacations to not too distant places: Rs. 50,000 * 2 = Rs. 1 lac yearly or Rs. 8000 per month

Other misc. expenses: Assume 5% of gross annual salary. Total cost = ?

Savings: 15% of gross salary. Total = ?

Taxes: 25% of gross salary. Total = ?

Medical/dental: 5% of gross salary. Total = ?

If I put all of the above into Excel and let it figure a salary that will be the exact match for all of the above expenses, then a salary of Rs. 51.9 lakhs will be exactly what is needed to satisfy everything listed above. Let us be more conservative to account for life's little curve balls and and round it up to Rs. 60 lakhs gross. Keep in mind that this salary level will not allow you to buy property in decent locales, so if possible both spouses should work to bring home Rs. 70 - 80 lakhs per year, which I think should be enough.

So, net-net, a range of 60 - 80 lakhs per year (5 to 7 lakhs per month) in Mumbai is what a family of 3 wanting to live an upper middle class life will need. Any lower, then adjust your lifestyle accordingly. I welcome any feedback to my assumptions.

[txh1b]

Which Bangalore thread are you referring to in your post and why do you have such crappy ads in your signature?

[wildeyes]

Wow! Thats a lot of money! most indian familys dont make anywhere close. you have to be at the top of your for to earn that kind of dough and I imagine only mbas / investment bankers can actually earn that much. I spent three years in Bombay after college and spent everything I earned living a great life. I roughly made about 1 lac at that time-about 75k in hand and that was more than enough to live fabulously well. Including living in bandra and eating out at pure, olive, zenzi etc.

the rest of the stuff I completely agree with-not the rain bit. its disgusting-lil rats floating in the water and the infrastructure sucks.

I live and work in delhi and much prefer the life-cheaper, better quality of living space, wider roads. not too safe though.

[jain_pk]

So you according to you .....

Great insight, but I beg to differ. Please take it just as a healthy debate rather than a rebuttal.

So according to you, to live good / upper class lifestyle in mumbai would cost around 70 lakh Rs a year.

Just FYI... 70 lakh a year converted to $ would be roughly $150 a year. I do not know a lot of people that can make that kind of money in US, forget India. Most of the people I know belong to the upper echlon of the society. They are doctors, lawyes, dentists, bankers and IT folks. Excluding a handful, most of them ( household ) make between $80K to $140K.

According to your calculations even with a US salary, I cannot live an upper middle class lifestyle in Mumbai. I beg to differ. If I can live an upper middle class lifestyle in cities like NY, San Diego, Boston and Chicago for around $85K, I doubt I woundn't be able to do that in Mumbai. I guess what we would disagree on would be a couple things... 1st .. housing..of 1 lakh a month which is a little more than my earlier rent of a two bedroom one bath in Manhattan and 2nd.. education of kinds, its almost free here for public schooling, but even for private its not equivalent of 4 lakh.

When I think of upper middle class, I think of lawyers, IT guys ( Project Managers, Architects ), Businessmen, Doctors and Dentists. I doubt even they would be able to afford so much.

Any feedback is appreciated.

[immihelp]

If you want the same quality of life and goods in India, it would generally cost you much more over there than in most parts of the U.S.

A very modest hotel in Mumbai may cost $200/night. You can get much better room in most of the U.S. for around $50/night.

I read in the news recently that 6 acres of land in Mumbai was sold for $845 million USD. I have not heard that kind of land price anywhere in the U.S., even in downtown Manhattan. Even if they build 1000 apartments on that land (which I find hard to build on that much land) , just the land price would be around $1 million per apartment. And if you include the building cost and builder profit, how much would such an apartment cost? You can get much better house even in Bay Area with that kind of money.

A couple going to five star hotel in Mumbai for a dinner could easily spend around Rs. 10,000. Where do you spend that kind of money in the U.S. on dinner, over $200?

Look at the costs of cars. They are also much higher compared to the comparable models in the U.S.
I just went to Honda India web site and looked for Honda Accord V6 price. It says Rs. 2,710, 856 in Mumbai. That is over $60,000. However, in the U.S., Accord is around $20,000. For $60,000, you can get nice Mercedes or BMW in US. I just checked BMW 750 Li price in India. It is around Rs. 1 crore which is more than $200,000 while you can get it in the U.S. for around $90,000.

Look at electronics which is also much higher priced.

Everything goes like that accordingly.

[jain_pk]

Well... not the best examples though

I do agree with every single point you have out there , but the lifestyle of having a BMW and living on Seafront in Bombay is not for upper middle class, but for the elite. These are the CEO's, real estate tycoons, movie stars and IPL owners.

It all comes down to heirarchy of needs. In India, the difference between the cheapest and most expensive thing is huge as compared to US. Let me try to explain with an example.

1. US : Cost of a pair of Denim -- around $20
2. US : Cost of owning a BMW -- around $40,000

Ratio = 40K/20 = 2000

Lets take the same example of India

1. India : Cost of a pair of Denim --- around 600 Rs ( yes, I am sure about this )
2. India : Cost of owning a BMW / Audi -- around 60 lakh

Ratio = 60 lakh / 600 = 10,000


What that means to me is the basic things in India are relatively cheap and the luxury items are super expensive. The middle class does not always go with the most luxurious cars. For me middle class family is someone that owns a Skoda / Camry, maybe eats at Taj a couple times a year and lives a great lifestyle.

You have shown a few things that are really expensive in India, how about the basic things..
Expenses are per Month

India | US
Cost of Health Insurance(2) 3000 Rs ($65) | $ 650
Rent in a outskirts of city (2BHK) 16,000 Rs($360) | $ 1250
Average groceries for household 8,000 Rs ($178) | $ 450
Car Insurance / Maintanence 5,000 Rs ($110) | $ 230
3 day admit to hospital 25,000 Rs ($560) | $ 20,000 (Yes, sure about it )
Trip to Dentist for root canal 4500 Rs ($100) | $ 875
1 hour plumber service 450 Rs ($10)/hour | $ 80/hour
Cost of 4 years at IIT 10 lakh ($45000) | $ 250,000

and the list goes on....

Remember, everyone needs these basic services and these are what make up most of the cost in the long run. I would agree with your examples for the Rich and Elite, but not for upper MIDDLE class.

[Mashallah]

I mean a LOT of food, is available at Rs. 40-60. You eat Rs. 60 worth of food, you will have had 3 (yes three) big masala dosas, for example or a very rich paneer dish with 2 tandoori rotis or,????

[Mashallah]

I mean a LOT of food, is available at Rs. 40-60. You eat Rs. 60 worth of food, you will have had 3 (yes three) big masala dosas, for example or a very rich paneer dish with 2 tandoori rotis or,????




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