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How to Become Rich: Key Finance Lessons from Asian American Hoteliers

The way to wealth depends on just two words, industry and frugality — Benjamin Franklin

Do you know that Indian-Americans own 43% of all hotels in America? It’s an incredible feat for a tiny population of 2.3 million Indians according to 2005 Census Bureau data.

By any measure, Indian-Americans have done spectacular job to create wealth in the last 40 years in America.

Indian-Americans are not only the most affluent and most educated of the scores of ethnic communities in the United States, they are also rapidly becoming among the most significant investors in the American economy.

Indian-American population is less than 1% (less than 3 million) in America, yet Indian-Americans have $73,575 house hold income — according to 2007 Census Bureau data — due to highly skilled workforce of Engineers, doctors and high-tech entrepreneurs.

Noteworthy facts:


2.3 million: Total population in 2005 a 35% increase from 2000.
$73,575: Median household income.
68.2%: percentage with at least a bachelor’s degree.
68.8%: percentage in labor force.
24.8%: percentage born in the USA.

 Source: U.S. Census Bureau

What makes Indian-Americans so successful financially in such a short span of less than 40 years in this country? Well, you can learn a great deal of lessons on how to become rich by learning how Indian-American hoteliers create wealth for their families.

I know many Indian friends who came to America with nothing, but worked hard to save money due to their frugal habits. They then invested their hard-earned capital to buy their first motel.  With persistence and hard work, many of them purchased several hotels including high-end name brands like Hampton Inn, Sheraton,  and Marriott.

I — among those hotel owners — can attest that hotel business provides plethora of opportunities to live way below your means, and create six figure residual income stream.

The surefire way to create wealth is — to increase revenue and reduce cost of living to bare minimum. Hotel business provides means to achieve these goals.

Live way below means:

Indian-American hoteliers squirrel away every dollar they make into their savings accounts because most of them live on the apartment on the hotel premise. Think about it. It allows them to stash every dollar that can otherwise go towards paying rent or the mortgage payment, utility and other upkeep of the residential property.

Living on the premise allows them to be closer to the business. So, they don’t have to pay for the commute. Essentially they are working from home. That allows them to save a great deal on gas as well.

My wife and I initially lived on the apartment that was built next to the hotel. I used to drive 105 miles both ways to work. I used to drop my daughters at the private school that they attended. It was tough as I used to come back and help my wife to run the business after work. My wife and I worked 18 hours a day for the first seven years.  I don’t remember taking a single day of vacation during those years.

After paying for the food, gas and fees for the private school, we used to stash away every dollar from my salary and business income into our personal saving. We used to save over 60% of our combined income for the future investments.

Deferred Gratification:

Hotel business is highly demanding. It needs owner to be ready to chip in at any moment in case if employee at the front desk calls in sick or the maintenance man decides to stay home. Due to the demanding nature of the business, hoteliers choose to stay near the property. They also learn how to run all aspects of the business including the front desk, laundry and maintenance. All of these chores keep them busy, so they have limited time to think about acquiring material possessions like a nice car, big house or fancy dinners. Instead, they save a great deal of money by running some of the chores themselves. All the while, they squirrel away a great deal of profit in their saving accounts for the future hotel construction or acquisition.

A great way to earn residual income:

There are many benefits of owning a hotel or a motel. First, you can deduct interest, property taxes from your personal return through schedule K-1.  You also can write off depreciation. But, one of the major benefits is the residual income source.  Any well-managed hotel can generate a great deal of residual income for the owner. It is not uncommon to earn six figure residual income with a single, well-managed property run by a management company.

Personal Finance Lessons Learned:

Running a hotel requires lots of dedication for many years initially. If that’s not your cup of tea, you can still learn lessons from these hoteliers to create wealth.

1.  If you are in your early 20’s or 30’s,  buy a duplex and rent one unit. Live way below your means. Keep paying like a mad man or a woman so that you can be debt free while you are still young. Or, buy a bed and breakfast business that you can enjoy running if hospitality business intrigues you.  The goal has to become debt free as quickly as possible.

2.   Make a goal to save up to 50% of your net salary for the first 10 years. Invest every dollar saved wisely. Make goal to invest to create residual source of income. You want your money to work for you once you work for your money for the first 10 years or so.

3.  Make commitment not to indulge in any gratification until you achieve first two steps. Once you have money working for you, there is nothing wrong in buying a few years old Mercedes if that’s what makes you happy.

Are you having plan for your prosperity? It’s never too late to start now.

The way to become rich is to put all your eggs in one basket and then watch that basket.  — Andrew Carnegie

(Photo courtesy: Caveman Chuck Coker)


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Comments (58)

Shilpan, this is an amazing, inspiring story. Congratulations. I notice in many hotels the owner will run the front desk from open to close. Did you do that when you first started out?

My wife used to work at the front desk from the morning till around 2PM. Then she used to go to the school to pick up kids. My daughters played tennis, so she used to take them for the tennis lessons. Because of that gap in the afternoon, we hired employees to run 2-10PM shift. We were managing desk for the rest of the time(16 hours).

I came across your page and find that you have a very interesting topic. Your tips and lessons are very helpful as well, not only to Asians but also to non-Asians.

Thank you! You have a nice hotel.

beautiful place!

interesting story too, I’d guess.

You’ve hinted at being a hotel owner a couple of times and I was waiting for a post to find out more!

It’s great to hear about your success – congrats! The majority of millionaires in this country attribute frugality and hard work as the main reasons they became millionaires – it appears you are no different my friend. If only all people realized this, understood it, and did something about it.

Jason, anyone with commitment to work hard and save money can do financially well in this great nation. I’m not a big proponent of 4 hour work week. I don’t think success comes to most of us with that ease. There is no substitute for the passion, hard work and relentless dedication to your dream. Thank you for the kind words. Most millionaires do not wear million dollar watch on their wrist. That’s the recipe of their financial well-being.

thanks Shilpan….

you’ve touched on three areas of interest to me:

successful immigrants

hotels. (I love hotels and have stayed in a lot of them over the years. In fact, if I were rich enough I could envision slowly roaming the world living out of a suitcase and in quality hotels)

simple paths to wealth

You’ve described how American-Indians are successful. My question is why. What is it about their culture, beliefs, attitudes, ect that fosters this success?

Jim, most of us come to American with dream. It’s to create wealth for our families. Our culture is fostering a great deal of competitiveness from an early age. I had to compete with thousands of bright kids to get admission to an Engineering school. My father was a businessman. But, he never allowed me to take things for granted. He made me work to buy my first scooter(two wheeler), even though he owned dealership. And most other Indian kids go through similar fostering.

Great story, thanks for sharing!

I had some indian american friends in my high school, and they are extremely smart. I am asian myself, but compared to my indian friends, they put in a lot less studying than me, yet scored much higher on tests, etc! They must be naturally smart :)

Also when I used to work in sales, a lot of indian americans would negotiate and negotiate until they were happy with their price. They did not accept no for an answer and they were very thorough!

You’ve succinctly described Indian Americans — smart and extremely frugal. I am not that smart. I had polio when I was five years old. But my mother always told me that I can achieve anything by working hard. Those words still remind me that I have to work hard to succeed. That’s why I don’t know if I will ever retire. Thanks for stopping by, and thanks for the kind words.

While I don’t want to work 18+ hours a day for many many years without vacation, this post does provide some food for thought about ways to live more frugally (ie live close to work!). I had no idea how many indian americans owned hotels — I wonder why they chose that industry instead of something else.

TB, now you know the rest of the story my friend. :)

Your story is a testament to increasingly scarce commodities: Hard work, commitment, perseverance, and vision. Congratulations on your success, you’ve set a fantastic example for your kids.

Kurt, thank you for the kind words. My daughters have so far done well. I am proud of their success. And, I will do everything a father has to do to ensure their success.

i work with a large number of Indians and have long been impressed with their humble nature and their work ethic.. I think most of them are like you, just looking for the best possible life for them and their families.

the hotel owning business certainly sounds like a good one to be a part of.

Jefferson, thank you. Most work hard to create wealth that they can pass on to the next generation.

there’s a topic I’d like to see you address, Shilpan:

passing on wealth to future generations without distorting their own valuing of money.

I’ve learned a great deal from my father in that regards Jim. I will certainly write about that in the future.

Great post, Shilpan. Really, this is one of the most powerful posts that I’ve come across in a long time.

As an African-American (oh, the pain of political correctness!), I’ve always been amazed with Indian-Americans. They are the some of the most industrious, mild-mannered, and friendliest group of people that I’ve ever met. As you pointed out, many of them are highly educated in fields like engineering, math, medicine, and hi-tech. And, a good number of them are entrepreneurs. I’ve struck up friendships with many of them, and always felt embarrassment knowing that they came to the US with nothing, yet manage to work a million times harder than many native-born Americans, and as a result, amass such huge fortunes.

You and your wife serve as some of the best examples of what people should always strive to become. God bless you and Indian-Americans in general.

Anthony, thank you for the kind words my friend. I really like your spirit and thoughts about life in general. I have a great deal of respect for you and what you stand for. I am hoping to meet with you someday to have a coffee my friend as we both are in Atlanta.


It seems many imigrants come here with little or nothing, yet in fairly short order, manage to begin successful businesses and amass significant wealth.

It is because they, unlike many Americans, recognize the great opportunity they’re presented with, and make the sacrifices necessary to take ful advantage of it.

Too many Americans however, fall back to an entitlement, immediate gratification mentality, and fail to do what’s necessary to truly succeed.

A sad commentary, really.

America — despite the current economic problems — still is the shiny beacon for the rest of the world. It provides opportunities that are rare to find anywhere else in the world for sure.

Wow, this is a really interesting story! I’d never thought of owning hotels as a way to build residual income, but it totally makes sense. I agree with and love the Benjamin Franklin quote. The man was a genius. I’m not so sure I agree with Carnegie’s, though. Obviously, it worked for him. But I think diversifying is important.

Congrats to you and your family for seeing all the hard-work you’ve done pay off! 105 miles a day! Each way! Holy moly. I did 60 for a couple of years and thought that was rough.

Thank you. We all live in the greatest nation God has given to man. It’s up to us to work hard and succeed. I know countless Indian-American friends who have done lot better than me financially. I am still humble that I’ve lived a great life, and raised two wonderful daughters in this great nation of ours.

Congratulations on all you have accomplished Shilpan. I love hearing stories about how hard work and calculated risks can pay off. It is true success stories like these that motivate me to do what I think would make me happy and successful.

It is just great to hear the story of someone who has made it good for himself. There are just so many naysayers out there who say things like this cannot be done and you are proof that they can be!

Thank you for the kind words Katie. Indeed, hard work and focus are the secret ingredients to the recipe of financial success. If I can do it, anyone can!

This is so true. I saw it as well in South Africa where there is a large Indian community. They work so hard. Families live together to save money for investment purposes. The kids top of the class! And warm welcoming people too.

Anja, You are right. There is a big Indian community in South Africa from those days when British ruled India. Mahatma Gandhi lived in South Africa. And I hear that Indians own large number of small businesses in South Africa.

Interesting stats on the Indian-Americans. I’m not sure I’ve ever met any in my community who weren’t frugal and very money conscious. The key of delayed gratification is very important. If you can hold out knowing your money will protect you when you’re older rather than spending it now, I think you’ll be on your way.

Absolutely. The key is to live way below your means, and prioritize what’s important in your life. For us, it was important to invest in the business and in our children’s education. We focused on those two goals initially, and delayed everything for a long while.

Another great post!

All things being equal, more in + less out = more money to invest. Many successful people do one thing that the less successful do not: they purchase appreciating assets, while the less succssful buy possessions, which tend to depreciate.

Decision: Go out to dinner and dancing, or buy a share of Apple? Hundreds of thousands make the wrong choice every day, then at the end of the day, wonder why all the “lucky” people got wealthy.

Amen! Well said Steve. It’s not that hard to become financially free if you are prudent at handling your money, and invest it wisely.

[…] How to Become Rich: Key Finance Lessons from Asian American Hoteliers – Street Smart Finances […]

I didn’t know that you were in the hotel business. I learned so much from post.

I completely agree with buying a rental unit when you’re still young. There is nothing like the feeling having someone help with living expenses.

Yes, I am hotelier by entrepreneurial passion, and technologist by heart. I work for a large company in IT field and also own businesses. :)

Love this post! Very interesting. I always love hearing about different cultures’ money values.

Michelle, thank you for stopping by. I really appreciate your kind words.

This is great, and an absolutely common-sense way of building wealth, BUT I would say impossible for the typical Westerner to achieve.

Why do I say impossible? Because we’re spoilt!! From the baby-boomer generation to today, we have this horrible sense of entitlement. Something most people who acquire wealth do not have.

The immigrant-mentality (no matter where the immigrant is from) typically have this hard-working attitude from the start. When you come from poverty and desire a better life, nothing can stop you. The immigrant has already surmounted many obstacles to get into the country, it’s no stretch to keep going on a venture like this. And even if you are going to work 24/7 with no vacations, it’s still a life of luxury, compared to where they came from.

Can you imagine the typical middle-class generation-Y working this strategy? Didn’t think so!

Sorry for all the horrible generalizations in my comment, but it seems to me to be the general rule. I think if/when there is another great depression, a LOT of people are going to be in for a massive shock, and hard-working people like the hotelier will be in good shape.

Excellent article. Thanks Shilpan :-)

Jim, you have succinctly conveyed gist of the article. Immigrants come from tough environments, so they are used to living tough life. Not having a vacation is not an obstacle for them to focus on one and only one goal — to become wealthy!

Good that you pointed it out and I see you referred to my post as well. Great you published this story.

Thank you for stopping by SB.

Indians are excellent in hospitality and I think that’s one of the reasons why they are so much successful in this industry.

Absolutely. ‘Atithi devo bhava’ is the Sanskrit for ‘Guest is a God’.

[…] How to become rich by buying a hotel […]

Very interesting! I have noticed that many of my hotel stays (especially at the littler hotels) were run by Indian Americans, but I didn’t know there were THAT many!

That figure is from 2005. I’ve heard that Indian Americans now own over 50% of all the hotels (mid-scale) in America. Thank you for stopping by.

[…] the original post: How to Become Rich: Key Finance Lessons from Asian American …Published on April 27, 2012 · Filed under: Uncategorized; Tagged as: a-great-deal, africa, […]

Yikes, I don’t know if I could put in 18 hour days for 7 years. I know that’s always how the real successful folks do it, but as I get older, I think I’ve made the conscious decision to spend the same amount of time working, just over a longer period of time, which then leaves some time to enjoy life too. :) You’ve got some great dedication there.

Thank you for the kind words.

the hard working nature of Indians creates a competitive advantage. how do you compete unless a hotel operator works as hard. most owners would not have put that much time and effort into their hotel ownership. kudos to you and your family.

do you still own any of the hotels?

Yes, I do own hotels. Thanks for the kind words.

One thing I’ve been noticing the past few years is a new kind of hotel being opened by second-generation Indian-Americans. Kids in their twenties (I assume with help from the parents) buy up divey old downtown hotels, clean them up, make the decor a little funky, get wi-fi, play some club music in the lobby… but still keep the prices low. I’ve really enjoyed the ones I’ve stayed at. They appeal to my hip-on-a-budget aspirations. And, they show that a new generation can take the knowledge and experience of their parents and use it to make something new and useful!

Hi Gerard….

how do you find these gems?

[…] rewards for you in the future. Long term strategy can include interest-bearing savings accounts, investments in property and investing in the stock market, depending on where your interests […]

Mos rich people are business owners. A business that does thirty thousand dollars a year in sales will grow to 15 million dollars in sales in fortyfive years if it grows just 15% per year. Feel free to check it out because its true.

[…] How to Become Rich: Key Finance Lessons from Asian American Hoteliers […]

[…] a small business owner, you want to keep overhead expenses low to see the biggest profit margin. Of course, some expenses […]