The Retirement Planning Thread I was surprised I couldn't find a thread for this. This is a hot topic among many IT and other professionals from early 2000s as well as mid-life professionals around the world.
This is the age of the Internet, which means more exposure than ever before, for everyone, to lifestyle choices available. Hobbies, sports, passion for business, passion for helping others and other interests have become important to people now, thanks to the Internet I think, than to our forefathers who had to struggle a lot to make their ends meet.
A facet of this change is the fairly new idea of retiring early - very early. Some in their 40s, some at 40, some in even early 30s.
The high level idea is - accumulate a certain corpus, invest it in places that give returns that beat inflation in the long run, and the difference between this return rate and inflation is for consumption. Identify how much you need today for basic needs, add some buffer and a lumpsum for one-time life events, then work backwards by figuring out how big a corpus minus those buffers would yield a return that , minus inflation, would equal this annual need.
All the data is there. Historical growth rates, historical inflation, current lifestyle needs, tax rates, everything is available knowledge online, making it easy for anyone to plan their numbers.
Per my calculation, a 5 crore corpus + a house to stay in (in 2018 values) gives a fairly decent middle-class lifestyle. Not upper-middle-class, but strictly middle-class.
You may ask - Why would someone aim for this? Being middle-class out of no choice is different, but aiming for middle-class is mediocrity, isn't it?
A valid question, but the truth is the aspiration doesn't stem from mediocrity, it stems from a desire to focus on non-financial aspects of life.
This life, this existence, is a mystery. No one knows what's the nature of consciousness, or the mysterious reasons behind this life-and-death cycle we find ourselves in. As curious beings, we have this instinct to explore and experience as much of it as we can, and in the process if we can, improve a thing or two along the way. That, is our natural urge in life, as has been all our animal ancestors' that have evolved into us. In the midst of this quest, this need for money is a hindrance. It is needed to survive, and we find ourselves caught in this helpless pursuit for money very young. So over generations, out of necessity, most of our species has forgotten this desire to explore and experience, and instead has been taken over this quest to make money. This, I believe, is cause for a lot of human unhappiness on this planet.
We find this dearth of money, this curse, everywhere. Around us, our families, with people we know, people we care about. Everyone is caught in it. We start our lives free, then the moment we start LKG it is all a chase. A continuous chase to keep up, the pressure of exams, a pressure to prove ourselves and self-validate, all the way until we exit school and college with some kind of certificate to show for it. Whew. Then when we thought it is over, we realize it has just began. The rat race. Morning after morning, night after night, week after week, team after team, the same tiring, challenging, life-sucking life that has taken our lives. For decade after decade until 60 or 65, when we just decide to be done with that and our health issues begin to worry us.
So really, we live worry-free only for the first three years of our lives, most of us.
The idea of Financial Independence to Retire Early (FIRE as it is known on the Internets) is a thought behind breaking out of this. To get freedom, to get time back in our lives. Time that should have been ours in the first place. To live worry-free and make the world our canvas.
So as you can see, it is not mediocrity. To the contrary, it is an extreme ideal and an extreme desire. It comes from the stance that "free" time is so valuable, it is worth giving up a lot of potential money for, once the bare minimum needed is reached. Even if that "free" time is wasted away in so-called unproductive means, it is still a better quality of life than time spent employed at an uninteresting workplace. And time spent helping others beats both, it is the best quality in life. This is the idea behind the extremely early retirement passion, not "settling" for a middle class life.
The steps are broadly
- Calculate how much you need and set goals with timeframe with a feasible plan
- Follow the plan and achieve the goal amount
- Find your passion and spend your time there
Now the last part is the tough part, finding your passion. Now that early retirement is achieved, what next?
- If you don't go to work, who is the peer-group now? Without a peer-group, whom do you relate to? Whom do you spend time with, learn from, have fun with, share banter with, spend challenging as well as fun times with?
- What would you do with your time?
- What really IS your passion? Music? Photography? Writing apps? Running a restaurant? I can think of just way too many ways to spend my time, that don't involve being in a multi-storied glass building listening to corporate-speak.
(but I will admit though, I do enjoy my job - just not the corporate-speak part of it - so I may still continue to work)
Thoughts welcome! If anyone has gone through this, or is thinking about this, curious about your thoughts and experiences.
Last edited by SDP : 17th August 2018 at 18:33.
Reason: Typos
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