Retirement: Means be MONEY-EARNING FREE!
When I say ‘Retire’ just too many people think it means old age. Sorry wrong understanding. Retirement, let us redefine.
Retirement is when you can do what you WANT, not what you MUST. You do not HAVE to earn to pay off the EMI. Or for paying for the kid’s education or marriage. Thus retirement means FINANCIAL FREEDOM.
There are various reasons why a person wants / cherishes being ‘MONEY-EARNING NEED FREE’. They may continue to earn money (Azim Premji, Ratan Tata, prime examples). One person who retired a couple of years before he turned 60 (official retirement age) said “I do not want to say ‘nice meeting you’ and meet people whom I do not like meeting’ so he gave up about Rs. 40 lakhs of cash flow!!
Sure, one way (and a very imp way) is to simplify your life. If you can live on less, you dramatically reduce the MONEY-STRESS. This happens when you start living for yourself instead of living for ‘what he/she will say/think’ kinda fears.
Most stress free people I know lead a simple life – I am not advocating this for everybody, but many of the people I know have done it successfully. But quite often, people are afraid of freedom because with freedom comes risk! Imagine the guts one requires to do things which NORMAL people in society do not do. When you choose freedom, you make choices for yourself. Nobody else makes them for you. And when you make choices for yourself, the responsibility — or the blame — for the outcome rests with you.
Can you imagine going off to Himachal Pradesh in winter, stay as a paying guest, do some mountain climbing and write a book? Even if he / she has an accident everybody around you will say ‘Why the hell did he have to go to H P?’.
To be able to shrug is a very important trait if you want to be RETIRED. Alas. Time to tell the world….
Mrhdk
Subra,
Going back to your comment, are you suggesting one should have networth of annual expenses multiplied by remaining years of life? E.g. If my annual expenses are Rs. 5 lacs and expect to live for another 40 years, I should have networth of Rs. 2 crores. Here I am not including primary residence in it. Also, the primary residence should be paid up.
Also, regarding your other comment that it is impossible to be financially free in 30s. I agree with you. However, I know several people on their early 40s in corporate jobs whose networth is 15-20 times their annual salary. In my mind they have achieved that level. For such people, whether they work or not, their networth will keep growing.
I looked at portfolio of one such person. Bulk of his networth growth was coming from stock/MF investments. His annual salary savings were less than 3% of his networth.
What’s your view of such people? Does it make sense for them to work for money?
bharat shah
”i was in LB Road, and had a look at property. Saw the new building @ 14k and an old building at 8k.”
sir, i don’t comment on the topic. but like to know your views between such a huge difference of value of new property and old building on the same road, when the construction cost ongoing rate in tier ii indian city is not more than 1500 sq.ft.(for metros , it could be maximum double.).
Banyan Financial Advisors
Fully agree with you Mr. Subra ! If there is a money churning cow, one can become financial independent to meet their expenses out of their investment income. Hence it is important to start building a retirement pot at the earliest to become financial independent at the earliest. Once a retirement pot has been built, a healthy post retirement income can be achieved
Regards
BanyanFA
amol
I enjoyed and learned from comments of subra and muthu!