There are people who graduate engineering college, maybe an IIT and they instantly get placed with packages of over 1 crore Rupees. You heard that right…an actual crore!
But it isn’t too good to be true though. It is real because their jobs and their locations demand that salary. That is because these packages are always for positions abroad.
There is a great hype in India about these amazing job packages that make you filthy rich.
These packages have got parents, students and everyone else counting imaginary green notes waiting for the day they themselves or their loved ones land that special job.
There is so much stress put on the packages that people lose sight of their vision for their careers. It becomes more about the money rather than building a career that is fulfilling or impactful. But the truth is, even if you’re chasing that money, the picture isn’t as rosy as it seems.
People sometimes forget to keep in mind the fact that living costs in India and abroad (example: USA) are poles apart.
In the US, the average cost for a meal at a restaurant is $12.75 (Rs 825) as opposed to Rs 200 in India. That means the costs of the same food in India vs the USA is 4 times greater! According to Numbeo, rent in India is 82.56% lower than in the United States.
The same statistics state that the average cost for a one-way ticket on local transport in India is Rs 16, in comparison to the US average of $2.25 (Rs 145). The disparity only gets greater as we look into more aspects of living.
When we take that into context, the sky-high salaries now seem all too real. Not that they’re bad or low, rather they are just right. On top of all of that, you don’t even get everything in hand.
Let’s take an example of Raul.
Raul (imaginary character) has just graduated from a top IIT and so, applied for placements with Company X. He gets the job and the CTC is whopping $182,250 or 1.2 Cr.
From that CTC, the breakdown is that Raul gets $110,000 (approx 71 LPA) as fixed pay, bonus average of $40,000 (approx 25 LPA as well as $31,250 (approx 20 Lakhs) invested in stocks and are given over a 4 year period. That means that the money he actually gets in hand per annum is about $160,000 (approx 1 Cr). Then, he has to pay 30-35% tax. So he actually gets approximately $112,000 (71 LPA).
That is still pretty amazing and but it doesn’t give him a millionaire lifestyle. What Raul gets is a good standard of living working in a first world country. We have to keep in mind, $100,000 per annum is a common salary in the Silicon Valley. Taking this into account, 70L in the US essentially is 15-20L in India. This is because the cost of living there is much higher as we’ve already discussed.
We can easily conclude that while the packages are great, they’re not insane either. No company will pay more you deserve or should get. There are no too good to be true or direct millionaire making packages, especially straight out of college. Everything is aligned with needs and standards of living.
So, if you are looking for a placement straight out of college, don’t just eye the 1Cr plus packages, take the job that you are most competent at and also, most interested in.
In the words of Tony Hsieh, “Chase the vision, not the money. The money will end up following.”