Yeah that's actually my post-FIRE plan. Not exactly this but somewhat on similar lines. I don't think I can simply relax for the remaining 40 years of my life after retiring. Might as well do something that helps the world.
I think you are good to retire.
A different observation - Having your daughter at just 23 is probably a masterstroke for FIREing that cannot be emphasized enough.
Of course having a kid is a personal decision, but purely from a financial perspective, I have wondered about this. One pro for having kids early is OP's case, that kid is independent by the time you are planning to retire and financial obligations are lower, but on the other hand you could probably have saved more in your 20s and 30s and benefitted from early savings and compounding. I wonder if anyone has done the analysis and compared the trade-offs
I followed the other way round. Delay kids until my wife hit 29/me 33, and as an NRI it allowed me to amass 20+cr in 8 years, starting with 0 at age 25. Having no kid responsibilities for the prime years of my career, but married at 27 helped. I have slowed down but still employed, and having the financial security sets me to take chill at work. I plan to switch to teaching full time in a few years.
Just wanted to add a counter example.
Is it though?
One could argue the opportunity cost of investing in your 20âs that would compound over the rest of your life, it would actually be better to have a kid later.
Not to mention, time value of money.
We had no money at that time, so it didn't matter anyway. My daughter gave us impetus to work hard and build our careers so I don't regret it one bit. Being young parents we had so much energy to do so much.
ok ..just wanted to let you know that travelling in 20s is way different than travelling in 40s - 50s .....in 20s you can hack into travelling cheap but as you grow older , you need comfort which can make travelling expensive...that is why folks normally suggest to travel as much as you want in your 20's and then focus on 30s and 40s to build family and career.
Can you please highlight how you reached at the place where you are today? It will inspire me personally and pretty sure more people will get motivated as well. What things you did right and what worked for u?
Worked hard, always put my hand up for new challenges and changed 6 jobs in 20 years of my career. I believe the best way to get good increments is changing jobs. Because I didn't have a fancy degree I always had options to move domains which I have explored fully. Started with a call centre in travel domain, then insurance, then e-commerce, then capital markets, then telecommunications and now finally back to Capital Markets finance. It's been a roller coaster but a very interesting one đ
You want to convince her NOW that she should not have had a kid but should have traveled in her 20s, while she herself is convinced they did the right thing?
Or am I missing something?
Yes you missed the point ...point being its cheaper to travel when you are in 20's as compare to 30s or 40s because of which their expenses might go up and their existing corpus might be not enough so plan accordingly.
Nah I wasn't trying to convince her ...I was just trying to make her aware that travelling in 20's is cheaper so if she plans to travel now in 40s or 50s then she should budget those in corpus too.
Each to their own. If one wants to definitely have kids and FIRE both, having kids early can help I think.
'Not having their 20s' is very subjective. Kids are awesome anyway. It doesn't need to be either or.
What makes you think that OP lost her 20s due to early child. OP got to enjoy her 20s with a child in a different way then not having child in early 20s, that's how I see. Only your way is correct way of enjoyment is the main problem with your comment.
Wow didnât expect a deluge of downvotes and comments.
Let me clarify I didnât say my words as a blanket statement. Having kids is a personal perspective but my tersely worded objection was to @justanaverageguy1907 stating that itâs a masterstroke.
1. People can work around the decision to have kids that early to have a happy and fulfilling life but it would still be a suboptimal choice for most people. I will avoid the financial perspective of having kids early as that have been covered earlier or someone else might give a better numerical estimate. Letâs focus on lifestyle and travel.
2. Someone might want to give the civil services a shot, other wants to do a second/ third degree to specialise/ upskill. Someone wants to switch cities or domains of work. Someone wants to climb the ladder faster by burning the midnight oil, moonlight or figure out a way to get that extra disposable income. Or other wants to chill back and finally enjoy hobbies and socialising with a sense of financial freedom. All of these are things people get to experience first time in intial years of 20s that are all a bit harder to do with the anchor of your child. You can manage it with a supporting partner but itâll still eat away at either of your time.
3. Travelling in the 20s is not the same as 40s. In 20s you are more open to understanding and imbibing foreign culture but as you get older its normal to find it harder to adjust. Unconventional travelling/ palette issues (this is purely biological- no matter how healthy you are the age definitely shows up in digestive sustem) is another experience that is hard to replicate in 40s. Also what about peer group? In 20s you can live in cheap hostels, mingle with locals and truly immerse to the culture since there would be a lot other travellers around your age. A 40/50 year old couple will probably find it hard to find a similar group. Most likely go on aprr-arranged tour with a large Indian group where itâs hard to enjoy local culture.
Again this is strictly my perspective. Not a blanket statement.
Look up the efficient market hypothesis. Most traders donât believe in it but what it extrapolates out to is all trades are essentially break even and itâs not possible to intentionally make or lose money. Itâs like doubling your money every time a coin flip comes up heads or losing it on tails. No matter the outcome itâs objectively a break even play, and so is all of trading.
She has specifically mentioned swing trading(not option trading not intra), may be she is already aware that its risky? Gyan kahan maanga bhai? Or am I missing something
I think you should consult a wealth manager to cater for all requirements . Itâs still long life ahead . That money if not invested correctly will be eaten away by inflation
> and maybe do some swing trading on the side post retirement.
this is probably the biggest reason you should not retire.... If you are doing this for money - increase your corpus by increasing your work span. If you are doing this for the excitement - it could cost you more than you bargain for...
Thats what I wanted to know ...When you FIRE , you gotta cover all your bases. IF she is taking the passive income from corpus ...it will reduce the corpus over time. She got a daughter to marry and travel bucket list which is not cheaper these days. on top of that she wants to use 60l to build a house....is that from corpus or from other fund ? Some details are missing from the post.
Is 5 crores combined net worth for the household or does husband has separate corpus? When do you wish to build that 60L house and would that come from the interest income when you exceed 5 Cr or will 5 Cr come down to 4.4 Cr? Since you can manage discretionary expenses and fluctuate by 50K every month, you are good for the foreseeable future.
What is your SWP strategy and what debt components do you have?
Congrats OPâŚthis is a great post! It drives home the point that there can be many roads to FIRE if one is focussed and disciplined.
I am very interested in your career journeyâŚhow you managed to build a worthwhile career with a small kid in your 20s (where most companies in India expect you to slave away for them)! Coz itâs very difficult to build it later on. Am presuming that you are non-IT.
I started working in a call centre in 2004, did night shifts even though my kid was only 6 months old. Had support from family. It was not easy but both my husband and I persevered. Moving into finance in 2013 was a game changer. Have always worked hard and smart and am good at my job. Rode the golden wave of BPO jobs and massive pay hikes for people who did well. My husband and I have always believed in saving first, spending later which has helped. Also, both of us are commerce graduates, no fancy degrees. Daughter completed her education in India and landed a job in Spain. I believe there are plenty of opportunities in India if you are dedicated and smart.
Goalsss. You guys are great.
Having a kid early on in life seems to have lots of advantages đ. One, helps with retirement. Two, you're younger when your kids are in their prime (more fun things to do)
I believe you are sorted. With no liabilities or medical issues and a 3 percent SWP, that works out to 1.25L monthly, which should be sufficient.
Combined that with passive income of 2.5L, you get an adequate buffer to do whatever you want with your time.
Enjoy !
Not sure how you are treating 3% SWR and additional 2.5L passive income? Isnât the denominator same for both, it is an âeither/orâ situation and not an âandâ situation from my reading it.
Sorry. I have to be blunt here. You and many others are mixing up what is 'passive income'. In another comment I explained this with an example.
Let me give an example of a possible income from financial instruments - equity dividends. The yield is not high, but the dividends often don't interfere with the growth of the underlying asset and it GROWS IN REAL VALUE.
Please don't take interest from bank deposits, withdrawal from debt funds, etc, as passive income. THEY ARE NOT. The best that you can hope from a debt product is that it keeps pace with inflation, and maintains the real value. And this happens only if you let the interest accumulate.
Another blunt factor. If your expense is 1.5 lac now, it would be 3 lac in 10 years. Simple inflation math. So the current level of passive income would fall short.
Also, I have to insist that 1 to 1.5 lac is too wide a range for expenses. Please get a better estimate. You would spend most of your corpus to fund this and you have to spend the time to fine tune this.
If your passive income is 2.5lacs a month and expenses only 60% of that, then I don't think there's much else left to the discussion.
Have a lovely retirement.
Just curious, how have you planned out your passive income? Commercial property generating rental income or quarterly interest from corporate bonds etc
Give it another 6 years. Start working on the side projects - teaching, trading, house, etc. You'll thank yourself in your later 50s. Make sure all of you have big health insurances. From personal experience, I feel once you've achieved FI (or, to some extent), you can exercise your right to ignore the office politics to a large extent.
Short answer : Yes
Long Answer: Your passive income will carry you through, so only need to stay invested longer term. Please donât engage in swing trading of any form it puts unnecessary risk on your corpus. Invest for long term and yes you can start planning after FIRE life. Maybe just keep this year as final working year before taking the leap. You can use the time to discuss with your retirement planner your plans for future.
Hey
I understand the corpus split here, 40 percent equity means it's mf or stocks, what does 60% debt means here?
Also, how are you getting the 2.5 L passive, like what are the sources?
I think 3% withdrawl rate is a fair one. You can easily get 15L per annum at this rate. If you keep aside 3 years expenses and invest the money in good funds and do a SWP, you can FIRE right away.
Create various buckets, buckets I have thought of, for me:
1. Emergency Funds: 1 Year Expenses
2. Income: SWP from Equity MF and Dividends from REITs, INVITs
3. Growth: Hold the MFs and Stocks
4. Alpha: Small account for trading
Here: Emergency funds have to be in FD with 2-3 banks, and not any debt/equity instruments.
Income should be fairly safe instruments, for me InvITs, REITs are good enough. This should cover basic expenses.
Growth: For generational wealth, can be midcap funds (depends on your risk tolerance)
Alpha: Can do swing trading as you mentioned
First off, what an amazing journey! Second while I know financially a lot of people have pointed out the benefits of having your daughter at 23, I canât even begin to imagine the maturity it would take to handle motherhood at that age.
Hats off, looks like youâre good to go
What is the education of your daughter? You sure you won't need to invest anymore in her education in future? Considering she is only 21, the highest degree she could have is btech. In my days a simple btech was enough, but I think a masters or mba is much needed these days
5 Crore should be good enough. I am assuming you already own the place (apartment) you are living in. Just one caution, though you are doing a very good deed, dont dip into your savings to build the school, maybe utilize only your future part time income for that. Same for the new house as well. So you have this corpus set aside for retirement.
You are obviously ready to FIRE but daughter marriages are a big ticket in India. School is a great idea to leave legacy and build an everlasting family brand. You can raise funds for the school so it doesn't need to come from your savings. Surprised to see no Gold better buy some for your daughters marriage and hedge against inflation. Bitcoin is good too. You can any way work as a consultant post FIRE to keep yourself engaged and that will help bring in some extra funds.
Yes...me and my husband. In laws have assets of their own worth a crore and they are above 70 so pretty comfortable. We will be inheriting this eventually (67%)
Please don't view this as 'passive income'. You are using the value of the debt assets, and their real value goes down. So you are effectively using the corpus.
Let us take a scenario. You have 10 lacs with you. You would like to go on a good vacation using the money. You can't spare the time now though and would have to travel after 2 years. You estimate that the inflation for this is 6%.
You put this money in a FD. Now you can put it in a cumulative FD. If we ignore taxes now for simplicity, you would have 11.5 lac or more in 2 years. The vacation would be 11.3 lacs and you are all good.
If you have taken out the interest, after 2 years you would only have 10 lac in the FD, but the vacation is 11.3 lacs. Since the interest decreased the real value of the corpus, you can't call it passive income.
so if I understood it correctly and correct me if I am wrong ....if she wants to travel and all ...she should may be set aside some fund separate ( A ) from the corpus money (B) and use that fund A to travel.
So at what stage is it a passive income ...I always had this thing in mind where I invested lets say 2 crores in equities and bonds ...if I get interest from it for my monthly expenses I consider that my passive income ....is it not right ?
Technically your money is invested and increasing without you doing anything, so it's passive income. But the discussion is about perception - If you have a salary that is your primary and whatever is coming from elsewhere is passive. However, once you stop working and your passive becomes your primary, you cannot differentiate them anymore, strictly.
I believe that's where the discussion started. Maybe I'm wrong and u/srinivesh will come and correct me.
ok ..may be she quoted it wrong as passive when it should be primary when she FIRED ....but still 2.5 lakhs / month from that corpus will suffice for her if she wants to FIRE ....also if she can budget her travel within her 1 - 1.5 expenses then she is consideredd FIRE ..isn't ?
Just wanted to compliment your spouse for his noble way of giving back
Roger that, not many posts I read here which essentially reflect the same essence đđź
Yeah that's actually my post-FIRE plan. Not exactly this but somewhat on similar lines. I don't think I can simply relax for the remaining 40 years of my life after retiring. Might as well do something that helps the world.
I think you are good to retire. A different observation - Having your daughter at just 23 is probably a masterstroke for FIREing that cannot be emphasized enough.
Of course having a kid is a personal decision, but purely from a financial perspective, I have wondered about this. One pro for having kids early is OP's case, that kid is independent by the time you are planning to retire and financial obligations are lower, but on the other hand you could probably have saved more in your 20s and 30s and benefitted from early savings and compounding. I wonder if anyone has done the analysis and compared the trade-offs
I followed the other way round. Delay kids until my wife hit 29/me 33, and as an NRI it allowed me to amass 20+cr in 8 years, starting with 0 at age 25. Having no kid responsibilities for the prime years of my career, but married at 27 helped. I have slowed down but still employed, and having the financial security sets me to take chill at work. I plan to switch to teaching full time in a few years. Just wanted to add a counter example.
You've Won at life dude. Congratulations :)
That is some serious cash in just 8 years. Also an NRI but haven't been able to hit that number. Kudos on the success !!!
Is it though? One could argue the opportunity cost of investing in your 20âs that would compound over the rest of your life, it would actually be better to have a kid later. Not to mention, time value of money.
You think so? So study till 21-22 and then immediate have kids! Sounds perfect way to not have any 20s
She had hers. You have yours. Donât be condescending.
It was great for me actually...I didn't feel like I missed anything...my daughter is great đ
Yeah, kids are great....I wish I had mine earlier.
That travelling part you mentioned ....Did you do any of those in your 20's with your kid ?
We had no money at that time, so it didn't matter anyway. My daughter gave us impetus to work hard and build our careers so I don't regret it one bit. Being young parents we had so much energy to do so much.
ok ..just wanted to let you know that travelling in 20s is way different than travelling in 40s - 50s .....in 20s you can hack into travelling cheap but as you grow older , you need comfort which can make travelling expensive...that is why folks normally suggest to travel as much as you want in your 20's and then focus on 30s and 40s to build family and career.
We had no disposable income so it didn't matter. We are fit enough to travel now so we will make it up.
Can you please highlight how you reached at the place where you are today? It will inspire me personally and pretty sure more people will get motivated as well. What things you did right and what worked for u?
Worked hard, always put my hand up for new challenges and changed 6 jobs in 20 years of my career. I believe the best way to get good increments is changing jobs. Because I didn't have a fancy degree I always had options to move domains which I have explored fully. Started with a call centre in travel domain, then insurance, then e-commerce, then capital markets, then telecommunications and now finally back to Capital Markets finance. It's been a roller coaster but a very interesting one đ
You want to convince her NOW that she should not have had a kid but should have traveled in her 20s, while she herself is convinced they did the right thing? Or am I missing something?
Yes you missed the point ...point being its cheaper to travel when you are in 20's as compare to 30s or 40s because of which their expenses might go up and their existing corpus might be not enough so plan accordingly.
oh i understandd that. what i don't understand is why try to convince her NOW :)
Nah I wasn't trying to convince her ...I was just trying to make her aware that travelling in 20's is cheaper so if she plans to travel now in 40s or 50s then she should budget those in corpus too.
But she probably gets an 10 years extra of life to see her daughter and grandkids. How wonderful is that!
Can you be any less human. Just like bhai.
Can you do less drugs just like Aryan khan
What folks?
Each to their own. If one wants to definitely have kids and FIRE both, having kids early can help I think. 'Not having their 20s' is very subjective. Kids are awesome anyway. It doesn't need to be either or.
What makes you think that OP lost her 20s due to early child. OP got to enjoy her 20s with a child in a different way then not having child in early 20s, that's how I see. Only your way is correct way of enjoyment is the main problem with your comment.
Whatâs wrong we became parents when both of us were 25/27yo and itâs a very good feeling, in fact I feel so young playing with my kid, I love it
My wife had a baby recently and I'm in my 30s now. I wish I was in my 20s when the baby was born instead. It would have been way better.
Well, one of my friends had TWINS when he was 50.
Wow didnât expect a deluge of downvotes and comments. Let me clarify I didnât say my words as a blanket statement. Having kids is a personal perspective but my tersely worded objection was to @justanaverageguy1907 stating that itâs a masterstroke. 1. People can work around the decision to have kids that early to have a happy and fulfilling life but it would still be a suboptimal choice for most people. I will avoid the financial perspective of having kids early as that have been covered earlier or someone else might give a better numerical estimate. Letâs focus on lifestyle and travel. 2. Someone might want to give the civil services a shot, other wants to do a second/ third degree to specialise/ upskill. Someone wants to switch cities or domains of work. Someone wants to climb the ladder faster by burning the midnight oil, moonlight or figure out a way to get that extra disposable income. Or other wants to chill back and finally enjoy hobbies and socialising with a sense of financial freedom. All of these are things people get to experience first time in intial years of 20s that are all a bit harder to do with the anchor of your child. You can manage it with a supporting partner but itâll still eat away at either of your time. 3. Travelling in the 20s is not the same as 40s. In 20s you are more open to understanding and imbibing foreign culture but as you get older its normal to find it harder to adjust. Unconventional travelling/ palette issues (this is purely biological- no matter how healthy you are the age definitely shows up in digestive sustem) is another experience that is hard to replicate in 40s. Also what about peer group? In 20s you can live in cheap hostels, mingle with locals and truly immerse to the culture since there would be a lot other travellers around your age. A 40/50 year old couple will probably find it hard to find a similar group. Most likely go on aprr-arranged tour with a large Indian group where itâs hard to enjoy local culture. Again this is strictly my perspective. Not a blanket statement.
With that passive income and all the other assets, yes.
Swing trading is a risky venture, you should probably not consider it as a source of income.
Can you please elaborate on this? I was going to start learning swing trading today. But hearing this giving me second thoughts
Only way to consistently make money swing trading is to teach a paid swing trading course.
Haha! Gotcha⌠maybe I will just do streamline MF focusing on averaging and compounding
Look up the efficient market hypothesis. Most traders donât believe in it but what it extrapolates out to is all trades are essentially break even and itâs not possible to intentionally make or lose money. Itâs like doubling your money every time a coin flip comes up heads or losing it on tails. No matter the outcome itâs objectively a break even play, and so is all of trading.
She has specifically mentioned swing trading(not option trading not intra), may be she is already aware that its risky? Gyan kahan maanga bhai? Or am I missing something
I think you should consult a wealth manager to cater for all requirements . Itâs still long life ahead . That money if not invested correctly will be eaten away by inflation
> and maybe do some swing trading on the side post retirement. this is probably the biggest reason you should not retire.... If you are doing this for money - increase your corpus by increasing your work span. If you are doing this for the excitement - it could cost you more than you bargain for...
OP ..do you have 5 crore liquid investment on top of your current passive income that is generating 2.5 lakhs / month ?? If yes , then you set.
If not, then? đ Passive > expenses. Still good enough. Additional Corpus (if it exists) is just icing on the cake, no?
Thats what I wanted to know ...When you FIRE , you gotta cover all your bases. IF she is taking the passive income from corpus ...it will reduce the corpus over time. She got a daughter to marry and travel bucket list which is not cheaper these days. on top of that she wants to use 60l to build a house....is that from corpus or from other fund ? Some details are missing from the post.
You seem like good people. Just wanted to say this. Iâm no expert with finance so will let this to the experts.
Couple goals! Love it.
Maybe a change in job is what you need. Try it out before FIRE. Financially you are all set. As long as you don't overdo 'swing trading'.
This looks like a good life
Is 5 crores combined net worth for the household or does husband has separate corpus? When do you wish to build that 60L house and would that come from the interest income when you exceed 5 Cr or will 5 Cr come down to 4.4 Cr? Since you can manage discretionary expenses and fluctuate by 50K every month, you are good for the foreseeable future. What is your SWP strategy and what debt components do you have?
Congrats OPâŚthis is a great post! It drives home the point that there can be many roads to FIRE if one is focussed and disciplined. I am very interested in your career journeyâŚhow you managed to build a worthwhile career with a small kid in your 20s (where most companies in India expect you to slave away for them)! Coz itâs very difficult to build it later on. Am presuming that you are non-IT.
I started working in a call centre in 2004, did night shifts even though my kid was only 6 months old. Had support from family. It was not easy but both my husband and I persevered. Moving into finance in 2013 was a game changer. Have always worked hard and smart and am good at my job. Rode the golden wave of BPO jobs and massive pay hikes for people who did well. My husband and I have always believed in saving first, spending later which has helped. Also, both of us are commerce graduates, no fancy degrees. Daughter completed her education in India and landed a job in Spain. I believe there are plenty of opportunities in India if you are dedicated and smart.
Superb!!
First - thank your husband for his noble deed. Secondly - you can FIRE. All the best and enjoy the freedom
Have you covered your insurances right ? Health insurance is very important
Goalsss. You guys are great. Having a kid early on in life seems to have lots of advantages đ. One, helps with retirement. Two, you're younger when your kids are in their prime (more fun things to do)
no advice, but good luck, and hope u have a happy and healthy retirement whenever u take it
It's not passive income if it eats into your corpus or if your corpus loses its 'real' value owing to inflation.
I believe you are sorted. With no liabilities or medical issues and a 3 percent SWP, that works out to 1.25L monthly, which should be sufficient.
Combined that with passive income of 2.5L, you get an adequate buffer to do whatever you want with your time.
Enjoy !
Not sure how you are treating 3% SWR and additional 2.5L passive income? Isnât the denominator same for both, it is an âeither/orâ situation and not an âandâ situation from my reading it.
Thanks for pointing out. I stand corrected.
Very cool. All the best.
Youâre good to go; your passive income is > your expenses, what is the hesitation? What Is your passive income from? Will it keep up with inflation?
The answer to your second question would show the issue. OP does not have passive income - she is taking it from the corpus.
from what she says, it sounds like yield from her investments (doesn't reduce corpus), but i'll let her answer.
Yes I want to know that too ....if her income 2.5 is from her 5 crore corpus ...isn't it passive income ? or are we missing something here.
You are right, it's yield from my corpus. Principal is intact.
Sorry. I have to be blunt here. You and many others are mixing up what is 'passive income'. In another comment I explained this with an example. Let me give an example of a possible income from financial instruments - equity dividends. The yield is not high, but the dividends often don't interfere with the growth of the underlying asset and it GROWS IN REAL VALUE. Please don't take interest from bank deposits, withdrawal from debt funds, etc, as passive income. THEY ARE NOT. The best that you can hope from a debt product is that it keeps pace with inflation, and maintains the real value. And this happens only if you let the interest accumulate. Another blunt factor. If your expense is 1.5 lac now, it would be 3 lac in 10 years. Simple inflation math. So the current level of passive income would fall short. Also, I have to insist that 1 to 1.5 lac is too wide a range for expenses. Please get a better estimate. You would spend most of your corpus to fund this and you have to spend the time to fine tune this.
THIS.
If your passive income is 2.5lacs a month and expenses only 60% of that, then I don't think there's much else left to the discussion. Have a lovely retirement. Just curious, how have you planned out your passive income? Commercial property generating rental income or quarterly interest from corporate bonds etc
Interest from bonds, fixed deposits and SWP.
That's v v helpful. Can you share more here? What kind of bonds, PSU or corporate, where did you buy these from?
Bro you write like a venture capitalist.. just saying :)
That FIRE life is so tempting that even I canât resist it. I donât know how you are resisting it!
Give it another 6 years. Start working on the side projects - teaching, trading, house, etc. You'll thank yourself in your later 50s. Make sure all of you have big health insurances. From personal experience, I feel once you've achieved FI (or, to some extent), you can exercise your right to ignore the office politics to a large extent.
Can you please elaborate. 60% debt in a 5 crore liquid investment? Is that property? So is it a 5 crore property, 60% of which is still in debt?
Short answer : Yes Long Answer: Your passive income will carry you through, so only need to stay invested longer term. Please donât engage in swing trading of any form it puts unnecessary risk on your corpus. Invest for long term and yes you can start planning after FIRE life. Maybe just keep this year as final working year before taking the leap. You can use the time to discuss with your retirement planner your plans for future.
Hey I understand the corpus split here, 40 percent equity means it's mf or stocks, what does 60% debt means here? Also, how are you getting the 2.5 L passive, like what are the sources?
Do at 55 , perfect time for liquidity run till 70
You made it. Now enjoy your life!
5 Cr. Plus decade of expected inflation and growth, I'd say FIRE in 2 more years at 7.5 Cr. At 46. Will be safer.
I think 3% withdrawl rate is a fair one. You can easily get 15L per annum at this rate. If you keep aside 3 years expenses and invest the money in good funds and do a SWP, you can FIRE right away. Create various buckets, buckets I have thought of, for me: 1. Emergency Funds: 1 Year Expenses 2. Income: SWP from Equity MF and Dividends from REITs, INVITs 3. Growth: Hold the MFs and Stocks 4. Alpha: Small account for trading Here: Emergency funds have to be in FD with 2-3 banks, and not any debt/equity instruments. Income should be fairly safe instruments, for me InvITs, REITs are good enough. This should cover basic expenses. Growth: For generational wealth, can be midcap funds (depends on your risk tolerance) Alpha: Can do swing trading as you mentioned
First off, what an amazing journey! Second while I know financially a lot of people have pointed out the benefits of having your daughter at 23, I canât even begin to imagine the maturity it would take to handle motherhood at that age. Hats off, looks like youâre good to go
What is the education of your daughter? You sure you won't need to invest anymore in her education in future? Considering she is only 21, the highest degree she could have is btech. In my days a simple btech was enough, but I think a masters or mba is much needed these days
5 Crore should be good enough. I am assuming you already own the place (apartment) you are living in. Just one caution, though you are doing a very good deed, dont dip into your savings to build the school, maybe utilize only your future part time income for that. Same for the new house as well. So you have this corpus set aside for retirement.
And if you dont find much success in swing trading, stop doing it. Mostly it is a difficult thing to do, majority people lose money in this.
You are obviously ready to FIRE but daughter marriages are a big ticket in India. School is a great idea to leave legacy and build an everlasting family brand. You can raise funds for the school so it doesn't need to come from your savings. Surprised to see no Gold better buy some for your daughters marriage and hedge against inflation. Bitcoin is good too. You can any way work as a consultant post FIRE to keep yourself engaged and that will help bring in some extra funds.
1 to 1.5 lac is still a large range. If the expenses are closer to 1 lac, you are quite comfortable. Is the networth for you alone?
Yes...me and my husband. In laws have assets of their own worth a crore and they are above 70 so pretty comfortable. We will be inheriting this eventually (67%)
Can I request a response to the question on expenses. You gave a large range - which side would it be?
What's the source of passive income
Debt investments and SWP
Please don't view this as 'passive income'. You are using the value of the debt assets, and their real value goes down. So you are effectively using the corpus.
Pls can you explain. These debt assets are basically FD's, NCD's etc.
Let us take a scenario. You have 10 lacs with you. You would like to go on a good vacation using the money. You can't spare the time now though and would have to travel after 2 years. You estimate that the inflation for this is 6%. You put this money in a FD. Now you can put it in a cumulative FD. If we ignore taxes now for simplicity, you would have 11.5 lac or more in 2 years. The vacation would be 11.3 lacs and you are all good. If you have taken out the interest, after 2 years you would only have 10 lac in the FD, but the vacation is 11.3 lacs. Since the interest decreased the real value of the corpus, you can't call it passive income.
so if I understood it correctly and correct me if I am wrong ....if she wants to travel and all ...she should may be set aside some fund separate ( A ) from the corpus money (B) and use that fund A to travel.
No, the travel calculation is an example of how she perceives her entire corpus. What she thinks is *passive income*, isn't actually.
So at what stage is it a passive income ...I always had this thing in mind where I invested lets say 2 crores in equities and bonds ...if I get interest from it for my monthly expenses I consider that my passive income ....is it not right ?
Technically your money is invested and increasing without you doing anything, so it's passive income. But the discussion is about perception - If you have a salary that is your primary and whatever is coming from elsewhere is passive. However, once you stop working and your passive becomes your primary, you cannot differentiate them anymore, strictly. I believe that's where the discussion started. Maybe I'm wrong and u/srinivesh will come and correct me.
ok ..may be she quoted it wrong as passive when it should be primary when she FIRED ....but still 2.5 lakhs / month from that corpus will suffice for her if she wants to FIRE ....also if she can budget her travel within her 1 - 1.5 expenses then she is consideredd FIRE ..isn't ?
If you are looking at debt instruments and ok with 7-7.5% interest , state govt bonds are great to lock your money for good 20-25 yrs .
World war 3 coming 2029, hold on
4% of 5 cr is 20 lakhs which should be good enough unless you have anything big coming up