This is how a conversation with a prospect went …

Hi Rohit, Subra here, wanted to talk to you about your Retirement investments, may I ?

Rohit: Hi Subra, thanks my IFA Mr. Roland told me about you calling on me.

Subra: yup, here I am.

Subra:  hi Rohit, you were telling Roland that you do not wish to start saving for retirement because you thought it was too early to start, I was wondering what made you think so?

R: I am just 31 YEARS of age and my father at 59 is not yet retired!

S: Well Rohit, it is never too early or too late to start investing for retirement. If your parents had started a PPF account for you when you were 2 years of age, that account would have been 30+ years of age. Look what you missed!

Also, your need to invest has gone up from Rs. 450 per day to Rs. 620 per day! This is not so small after all.

Also Rohit the advantage of starting at 22 would have been that your knowledge too would have compounded by now. If you had invested in 2011, instead of asking me this question now, you would have accumulated a decent sum of money – remember retirement could come anytime. You have a good job and a decent monthly cash flow. You have said that you will need about US $ 1 M at the age of 60. Remember most journeys are easier if you have a clear road map and the time frame in which to reach the goal.

Another important learning for you would have been you would have compounded your LEARNING over this period and that too would have helped. I have seen many research reports and met and discussed retirement with many people. Equity investing requires compounding of understanding also – your ability to see how your portfolio has moved is also as important as the compounding of the money.

Also when you are young, your biggest asset is the Present Value of your future earnings – which means taking risk on your equity portfolio is easier. So if you had invested at age 22 – remember your portfolio may have been hit hard in this pandemic, but still your retirement corpus would have been higher than it is currently!

Just to give you one example, a man who was earning Rs. 9000 per annum in 1968 would not have believed that he would be spending Rs. 45000 a month. He was 28 in 1968, and now he is 78 years old. Do you realize that if you are earning Rs. 500,000 per annum in 2020 you could be spending Rs. 25L a month by the time you are 80. This is a chilling figure, is it not?

Do you realize that you are lucky that many people are here to help you in your investing. There are books, blogs, calculators, YouTube videos – just go through them and see what you will be staring at next year when you will be looking for school education for your first born. Life is not going to get worse or better – it is what you make of it, and how you handle it that matters.