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Old 21st August 2018, 11:41   #91
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I think the term "Early Retirement" differs in meaning from person to person. I was able to glean what it means for different people by just reading this thread.

I think the whole "sitting at home and helping out" will definitely bite you back big time. You have to find something to do outside the house, be it social work or a part time gig.

It will be great to continue to hear what people intend to do after switching out from their current job.
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Old 24th August 2018, 22:23   #92
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Hello ,
This is a very interesting topic as have myself been in this situation - “to do or not to do “ untill below incident happened .

A year back , I met this janitor house keeping the rest room and conversation struck up as “what’s the plan after the day’s early closing “. It was a day prior black Friday . I mentioned, since have been working under pressure with meetings and P and L pressures wouldn’t mind catching up with some good sleep to ease the mind . Now , this janitor is highly obese , walks a few steps and gets breathless , has tons of medical issues, mentioned “one should never sleep” . He said ,his dad had told him once “ one should sleep when he dies “ .
This was the turning point for me and even is till date . The Janitor who himself his disease ridden ,has more optimism than me . I wondered , rather than making hay while the sun shines , I am actively thinking of retiring at the age of 40 .

Later , I tried to make a worksheet with activities I wished to do after resigning and when put pen to paper ,it’s difficult to see how deligently and well you would be spending your time .
And the financial pressure is always going to be looming due to extra expenses .


And as someone earlier posted “. Change of work is relaxation “ is also what I have been told .

To retire with 5 cr which is almost 1 million may not be possible for many people .

All in all , would prefer to work as much as I can . Take sufficient vacation . We see many of our colleagues spend quality time , time enough to rejuvenate , take long trips viz go out sailing to Greece or to Chile to chase jelly fish . Some have joined clubs to fulfill their hobbies and they do strictly stick to 9 to 5 schedule . And if one checks closely , he/she does have a lot of time to pursue his / her passions even when in employment .

And why we feel stressed is due to over work . Ref this incident - And not stereotyping, but Indians do tend to work extra hours . One day our boss casually mentioned , “ If you guys cannot complete your work by 5 pm , you need to be better organized . There is something wrong with you guys . “

Thanks - just my two cents .
Naj

Last edited by naj : 24th August 2018 at 22:28. Reason: Missed a verb
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Old 26th August 2018, 20:44   #93
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I can think of four different formulas.

1. The most common answer is 50 times the current annual expense. But its very generic and doesn't mention how the net worth is invested.

2. An absolute number like 6.7 crore. ( 1 million USD) . This again doesn't tell how its invested.

3. Split the net worth into debt and equity. Debt should be able to generate just about the current annual expense. As for the size of the equity portfolio, multiply the consolidated TTM EPS by the number of shares of each company. This should be decent enough. ( At least 50% of the annual expense). Give importance to business quality, management quality, positive operating cash flow, earning visibility and High ROE/ROCE/ROIC. ( So that that probability of permanent loss of capital is low). Please note that EPS*No of shares gives only a rough idea of earnings. What you get is about 20% of it ( dividend payout ratio). The assumption is that management will make efficient use of retained earnings and create value.

4. Imagine you put your entire net worth in a low risk tax efficient debt instrument like liquid fund. ( I say tax efficient because the tax is almost zero if you hold for > 3 years). The retained earnings should be at least 70% of the annual expense. (By retained earnings, I mean net worth * liquid fund returns - annual expense. Of course you will not redeem the entire portfolio every year. a) for getting tax benefits, b) for compounding faster)

Last edited by Eddy : 28th August 2018 at 09:53. Reason: Spacing for better readability
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Old 27th August 2018, 14:09   #94
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Default re: The Retirement Planning Thread

I am actively learning from this thread and will be watching this over the years. It is indeed a good lesson for all of us to see where we end up in the years to come. Will we be working or will we retire, is the question we'll have an answer in the years to come.

6.7 crore may not be possible for all. I am thinking, we'll perhaps move to a smaller town with access to just good health care (tier 2 city like lets say Jamnagar or Nashik/Nagpur). Living isnt that expensive as compared to a metropolis and quality of life is decent.
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Old 27th August 2018, 17:08   #95
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Default re: The Retirement Planning Thread

I don't think it is about having a pile of money saved up; say 5 to 7 crores. If you want to have something else to do lots of people have abruptly dropped doing what they were doing and went on a different path. Our own Team BHPian "the road, my home for ever" is a very good example. He signed off from the conventional life with Rs 10,000 and a Bullet and has been active on social work in Arunachal Pradesh.

One thing is sure; we will not starve, but we definitely need to innovate. Lifestyles will not be the same; it will probably be better with more fulfilling activities.
How much does it take to take local transport, trek and stay in homes and travel Spiti and Kinnaur for three months? There are a lot of persons doing just that. What you may miss out if you delay too long is youth and good health.

You will be ok staying in youth hostels if you are young; not so comfortable in your sixties. If you have an active life with lots of outdoor activities, no need to worry about health issues.
So go ahead and bite the bullet and do what you want to do!

Last edited by Eddy : 28th August 2018 at 09:54. Reason: Spacing for better readability
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Old 28th August 2018, 07:46   #96
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Quote:
Originally Posted by amtak View Post
I am actively learning from this thread and will be watching this over the years. It is indeed a good lesson for all of us to see where we end up in the years to come. Will we be working or will we retire, is the question we'll have an answer in the years to come.

6.7 crore may not be possible for all. I am thinking, we'll perhaps move to a smaller town with access to just good health care (tier 2 city like lets say Jamnagar or Nashik/Nagpur). Living isnt that expensive as compared to a metropolis and quality of life is decent.

Actually the corpus (for living expenses alone) need not be that high. We are talking about early retirement - so we can assume that the person can still actively manage the corpus. Let us also assume that there is a separate corpus for other goals - childrens' education, etc.


I would say that one can take the plunge even at this level: Available corpus is 30 times the first year annual expenses. You need to use the bucket strategy to ensure that the corpus actually has post-inflation growth even during retirement:
  1. Bucket 1 - Living expenses for first 5 years - FDs, Liquid funds
  2. Bucket 2 - Living expenses for the next 5 years - Ultra short, short duration
  3. Buckets 3 & 4 - Living expenses for the next 10 years - Balanced, Large Cap
  4. Bucket 5 - Rest of the corpus - More aggressive equity
After five years, you need to pull down all the buckets a notch and reshuffle. You can be more active in the first 3 buckets too.

Do take a look at the topic in freefincal.com for easy to use calculator software:I have used the bucket strategy calculations extensively. This has helped me to take the early retirement plunge even earlier than planned. My children are in 11th and 8th now, and God willing I am set for the plunge.


I have also posted the (not so user friendly) calculator that I have used for my situation. Please feel free to ping me if you have questions on using it.
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Old 5th September 2018, 17:38   #97
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Check out https://www.retirementsimulation.com/ , this would help simulations like stock market crash during the retirement time. May be helpful. only drawback is, it uses US market indicators, I couldn't find something similar for India (would have been nice).

Last edited by sknair : 5th September 2018 at 17:40.
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Old 7th September 2018, 17:33   #98
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Default re: The Retirement Planning Thread

Early retirement or not. It is a subjective discussion on what retirement means. I understand that for most people who want an early retirement the definition is of having a sufficiently large enough corpus which can take care of basic expenses and allow the individual with dependents enjoy a certain lifestyle until the end of their lives. This financial condition will allow them to then focus on activities, professions which are then for the passion and satisfaction they derive from it rather than a compulsion of working to make a living. I think that is a fair ask and I too aim for that.

I come from a background of family members being salaried working class citizens. Although I am in a corporate job and being in management understand how businesses work; I have never been able to gain the confidence or find the right idea based on which I could take the jump to start my own venture. My income has solely been based on salary and a small portion through rental yield of an investment property.

For salaried individuals with a fixed monthly income I feel that the most important question is that are we mindful of the maximum amount which we need to save from our incomes. Often times the financial planners suggest that equity gives better returns as compared to bank deposits or debt instruments. This may be indeed true based on statistical data of investment returns, inflation etc…

I however feel that the analysis on investing in equity or debt is secondary. The primary thing for salaried individuals is of having the discipline of leading a life which allows the maximum savings from the income. That is Step number 1 for the goal of Early Retirement!
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Old 19th September 2018, 17:19   #99
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Default re: The Retirement Planning Thread

Yuval Noah Harari, author of Sapiens, wrote this article in May 2017.

Link to article

More interesting than the question of whether to retire early or not, the article mentions:

Quote:
The crucial problem isn’t creating new jobs. The crucial problem is creating new jobs that humans perform better than algorithms. Consequently, by 2050 a new class of people might emerge – the useless class. People who are not just unemployed, but unemployable.
The author equates religion and consumerism to virtual reality games played by people in their quest to find meaning of life when in fact none exists.

Quote:
In all cases, the meaning we ascribe to what we see is generated by our own minds. It is not really “out there”. To the best of our scientific knowledge, human life has no meaning. The meaning of life is always a fictional story created by us humans.
and concludes by saying...
Quote:
In any case, the end of work will not necessarily mean the end of meaning, because meaning is generated by imagining rather than by working. Work is essential for meaning only according to some ideologies and lifestyles. Eighteenth-century English country squires, present-day ultra-orthodox Jews, and children in all cultures and eras have found a lot of interest and meaning in life even without working. People in 2050 will probably be able to play deeper games and to construct more complex virtual worlds than in any previous time in history.
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Old 10th November 2018, 13:13   #100
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Great video right here on the FIRE movement:
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Old 6th December 2018, 17:03   #101
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Quote:
Originally Posted by tejas08 View Post
That's an excellent worksheet you have made. Only one clarification - Please explain the worksheet.

Thanks for the feedback. After months, I acted on it and posted an article explaining the sheet. It is better than my initial description in this thread. It may need more work though.



I would greatly appreciate any feedback/comments/criticisms.

Somehow the URL did not get into the earlier message. The detailed explanation of the calculator is posted here: https://srinivesh.in/blog/plan/351

Last edited by SDP : 6th December 2018 at 21:24. Reason: Merging back to back posts.
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Old 30th July 2019, 16:35   #102
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Quote:
Originally Posted by srsrini View Post
Thanks for the feedback. After months, I acted on it and posted an article explaining the sheet. It is better than my initial description in this thread. It may need more work though.
=======
Somehow the URL did not get into the earlier message. The detailed explanation of the calculator is posted here: https://srinivesh.in/blog/plan/351

I am providing an update to the calculator. The new URL is: https://srinivesh.in/blog/fire-up-ca...ly-retirement/

Last edited by Jaggu : 30th July 2019 at 19:03.
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Old 30th July 2019, 17:35   #103
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Quote:
Originally Posted by Red Liner View Post
Great video right here on the FIRE movement:
This is a beautiful video, thanks for sharing

What I see around is plenty of calculators to show one needs super high inflated unachievable target of lumpsum that most die trying to achieve!! What most of us forget the latter part is, if you need that lumpsum...invest in here, invest in there, because & most of the time what follows/threatens in the latter part of that sentence is medical expense

It takes a lot of courage, effort & willpower to cut down expense & live at bare minimum expenses
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Old 7th December 2019, 15:34   #104
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Default re: The Retirement Planning Thread

I did not know this thread existed

Few examples from my circle:

Retirement age: 36 (M) Retirement Year: 2015

Was working in IT (finance domain) and faced layoff once during his corporate life. Wife was not working and had tough time during his unemployment phase. Never used to spend money on unwanted things, and never owned a car. Had a flat in Pune (fully paid) which he sold and bought one in Bangalore when he moved. Made a small fortune from stock market during Modi wave in 2014 which was more than enough (I think) for family of 4.
Current Status: Constructed a home in his hometown, owns a Skoda Octavia, and helping his near and dear one to manage their personal finance.

Retirement age: 34 (M) Retirement Year: 2016/17 from corporate job
Was fed up of his manufacturing job. Took few months break and tried to start a business. It failed and went back to manufacturing job, moved to another company, and finally quit in 2017.
Current Status: Running a supermarket/retail store in his hometown. His family helped him to establish the same. Working for 10-12 hours a day 7 days a week, but he is very happy comparing to his corporate career.

Retirement age: ~ 60 (M) Year: 2018 (Country USA)
During a discussion with his personal finance adviser he and his wife realized that they have enough money saved/invested to retire. Took voluntary retirement from corporate life during early 2018. But started worrying when he started withdrawing from retirement fund. He is a very very active employee and could not sit idle at home. He is very comfortable financially but got bored within few months after the retirement. Current Status: Back as a contract employee in the same company, work for 2-3 days a week just keep himself busy.

There are few other people I know (all in IT sector) who are financially comfortable but still continuing their corporate career due to many reasons
examples:
1. Age late 40's - Multi millionaire but very few people knows about it. Only reason he is continuing his corporate job is he has no other passion/interest to keep him busy if he decide to retire. Lives a very low key life.
2. Age late 40's - Financially in very comfortable position, kids education expenses are all taken care. Continuing his corporate job just to keep him busy.
3. Age mid 40's - Financially in very comfortable position, already moved his family to his hometown (tier 2 city). Good at his job but hate office politics. Only reason he is continuing his job is because of the high salary. Decided to continue working till there is a threat (like 2001, 2008 crisis). He keeps shuttling between Bangalore and his hometown.

There are few more people I know are continuing their corporate jobs but are not worried about higher salary, moving abroad, or long term onsite etc. Most of these people are very good at their job.

We at team-bhp are more worried about 3-cyl vs 4-cyl, low end torque, A.S.S, future of auto companies than us etc.

Last edited by Latheesh : 7th December 2019 at 15:45.
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Old 7th December 2019, 21:00   #105
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Is Jeevan Shanti a good pension plan keeping in mind the falling interest in banks etc.. ? Not for investing the entire corpus but at least to generate some amount of monthly expenses so that rest can be invested in MFs etc. expert opinion please.
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