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Old September 1 2012, 06:23 PM   #11
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I didnt explore reverse mortgage completely but from what I know it should be used only in extreme emergency situation and shouldnt be a part of financial planning itself. It is kind of new product in India but is not viewed very kindly elsewhere.

 
Old September 2 2012, 11:25 AM   #12
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The issue is How much is enough?

Or more specifically how much is enough today?

Will it still be enough for tomorrow?

Problem is, it may be enough for today, but may not be enough for tomorrow. Around 10 years back, my target was 20L to retire. I thought I could easily earn minimally 10% from stock and that will suffice my day to day expenses. Few of my friends are running their normal expenses from daily trading. It is doable.

Today I thank God that I did not had that 20L then ... otherwise, 20L today is not even enough to retire in a village. Then again, there are many people retired as teacher with 5-6L and sustaining their life.

I guess one option to factor in inflation is house only. Buy few rentable houses and rent out. Rent will be adjusted as per inflation and your earning will be maintained as per market price.
FD, etc are slow dying.. you are actually loosing money.
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Old September 2 2012, 12:14 PM   #13
 
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Quote:
Originally Posted by gharondabhai View Post
The issue is How much is enough?

Or more specifically how much is enough today?

Will it still be enough for tomorrow?

Problem is, it may be enough for today, but may not be enough for tomorrow. Around 10 years back, my target was 20L to retire. I thought I could easily earn minimally 10% from stock and that will suffice my day to day expenses. Few of my friends are running their normal expenses from daily trading. It is doable.

Today I thank God that I did not had that 20L then ... otherwise, 20L today is not even enough to retire in a village. Then again, there are many people retired as teacher with 5-6L and sustaining their life.

I guess one option to factor in inflation is house only. Buy few rentable houses and rent out. Rent will be adjusted as per inflation and your earning will be maintained as per market price.
FD, etc are slow dying.. you are actually loosing money.

10 years back u were going to make a wrong decision.
If u buy some houses and try to retire off rent recieved ,again after 10 years you will again say that u made a wrong decision.

Nobody can invest in a very popular investment theme and make money,yes may be he can make in a short run but in a long term like 10 years he can not do well.
 
Old September 2 2012, 12:17 PM   #14
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Friends,

All view points expressed so far are valid in themselves. However, to make a complete plan, a few points may be looked at to see what suits you:

Two major objectives to be achieved: 1. Regular Income; 2. Wealth creation (to beat inflation over 30-40 years)

Answers to above may lie in the following...exact amount and allocation ratio would depend on individual needs, aspirations and circumstances:

1. Regular income, uninterrupted, ...which can sustain inflation for the next 5-10 years...that is to begin with. This may come from investments into

A. Rent from 2nd House Property or floor in the same house
B. Debt Funds - part amount
C. FDs - part amount - they do not beat inflation but are ALWAYS available on regular basis
D. Put in about 25-30 Lacs in a safe commercial bet - say, an ATM space...where the rent to investment ratio is more favourable than others in general.

2. The 2nd and equally important issue is create wealth to be able to beat inflation in the longer run...and to do that:

A. Real Estate - in the long run, a more stable way to enhance your wealth. Does not give you liquidity at short notice...but does multiply your net worth...invariably more than the inflation.

B. To overcome the shortcoming of il-liquidity in above, keep some money in balanced funds - they have typically roughly 50 debt: 50 equity portions in them...the debt part would give stability to the overall exposure...and equity part will give inflation beating growth...

For any emergencies..one can draw from this fund at a notice of, say, 3 days....otherwise, allow this to grow over longer time....draw when the market peaks and put part of this back into Debt and part come back to do SIPs in balanced funds...

Broadly, I would do the planning on above lines...rest, as I said, individual circumstances play an important role in arriving at the exact combination.

One important rider....

Above planning requires some knowledge into these instruments of investment...and both the partners should be well oriented in it...otherwise in the case of untimely demise of the one managing all this...the other should not be left high n dry to handle all the nuances involved.

If both are educated/ well versed...nothing like it...but if not...go for well defined and stable methods...FD / rentals for regular income and RE for wealth creation...at least in later years.

Lastly, reverse mortgage is an option...but should be looked at in later years...as it is this works in India post 60 plus...2ndly, it is not so matured till now as an instrument...3rdly, amounts allowed to be drawn are much lower vis-a-vis the value of the house and would mean a lot of interest liablity in toto...hence, as it stands, should be used as a last resort ...that too in later years.

Cheers!!!
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Old September 2 2012, 08:25 PM   #15
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I am looking in that direction too. Buying properties for rental yield and not capital appreciation. It is difficult to come up with a number(20L or 3C), especially if you are targeting to retire early in 40s and 50s.

But I think it is very traditional and somewhat oversimplistic way. What could be other sources of these kind of passive income ?

I am in early 30s and have a 15 years horizon

Quote:
Originally Posted by gharondabhai View Post
The issue is How much is enough?

Or more specifically how much is enough today?

Will it still be enough for tomorrow?

Problem is, it may be enough for today, but may not be enough for tomorrow. Around 10 years back, my target was 20L to retire. I thought I could easily earn minimally 10% from stock and that will suffice my day to day expenses. Few of my friends are running their normal expenses from daily trading. It is doable.

Today I thank God that I did not had that 20L then ... otherwise, 20L today is not even enough to retire in a village. Then again, there are many people retired as teacher with 5-6L and sustaining their life.

I guess one option to factor in inflation is house only. Buy few rentable houses and rent out. Rent will be adjusted as per inflation and your earning will be maintained as per market price.
FD, etc are slow dying.. you are actually loosing money.
 
Old September 2 2012, 08:38 PM   #16
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What to do after early retirement.... why we do not want to work and want to retire... is overload of work is asking us to retire early...

I'm happy to see many person want to retire.. atleast with security.. this will bring some good work out of them which they do not want to do for money....

NRI plz return back asap els u need to struggle again for Green card of India..
 
Old September 2 2012, 09:45 PM   #17
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Quote:
Originally Posted by tilak85 View Post
For a DINK for next 2-3 years...may be.

Otherwise imagine following expense (per month)
TAX -> 5K
2 Kids going to school -> 10K
CAR -> 6K
Electricity/Water/LPG/etc -> 10K
Food -> 10K
Other expenses (movies/outings) -> 10K
Inflation ??
----------------------
net savings ->15K (assuming no loans)
----------------------
Expenses may vary depending on individual preferences, locality, but 66K per month is just decent. Not good enough.

May be 90K per month with 30K going to savings is good enough for next 10 years.

as i m talking in todays retirment--not after 30 years--

there are some factors to retire--

if u parked some in fd-gold buiscuits-property and some in recurring deposit --

as of calculation of recurring deposit in sbi gives 8 % per annum-

if u depsit 5,000 for 59 months than pricipal amount is 2,95,000
and maturity gives you around 3,85,000 (just confirm from your source-)
this is just and example for recuriing --this fd and recurring is safest to give you per annum not on inflation.

rest to give better returns in terms of inflation is gold and property.
 
Old September 2 2012, 10:11 PM   #18
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It wont be retirement in the strictest sense but I would like to have change in career where I dont need to necessarily work for money.

Quote:
Originally Posted by Stots2708 View Post
What to do after early retirement.... why we do not want to work and want to retire... is overload of work is asking us to retire early...

I'm happy to see many person want to retire.. atleast with security.. this will bring some good work out of them which they do not want to do for money....

NRI plz return back asap els u need to struggle again for Green card of India..
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Old September 3 2012, 09:06 AM   #19
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Quote:
Originally Posted by Stots2708 View Post
What to do after early retirement.... why we do not want to work and want to retire... is overload of work is asking us to retire early...

I'm happy to see many person want to retire.. atleast with security.. this will bring some good work out of them which they do not want to do for money....

NRI plz return back asap els u need to struggle again for Green card of India..
You have just one life. Your life has an fixed expiry date.

There are much more meaningful things to do in life than running behind money!!

After 50, you may have the money but not the energy or ability to do many things. Depending on your own personal taste, define those 'many things' yourself!!

For starter, do you know how many puranas are there? do you know how Gaumukh looks like? Have you ever experienced the kind of achievement when a marginalised village girl scores 1st class due to your support?

To many, the above things are much more important than to have a BMW!!
 
Old September 3 2012, 01:36 PM   #20
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Quote:
Originally Posted by gharondabhai View Post
You have just one life. Your life has an fixed expiry date.

There are much more meaningful things to do in life than running behind money!!

After 50, you may have the money but not the energy or ability to do many things. Depending on your own personal taste, define those 'many things' yourself!!

For starter, do you know how many puranas are there? do you know how Gaumukh looks like? Have you ever experienced the kind of achievement when a marginalised village girl scores 1st class due to your support?

To many, the above things are much more important than to have a BMW!!
faduu type baat karte ho g,bhai aap to
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