Our Income Sources In Retirement
While I mentioned my retirement income sources many times before in my blog, I still get questions about that. So I thought I will revisit our income sources after our early retirement in 2018. It has been more than 4 years since we retired and nothing has changed in terms of income sources. I think most people are skeptical when I say I retired early and wonder if I am getting income from multiple sources. Actually that would be a good, probably correct way to retire early. But like many things in my life, I have taken huge risks with very little recourse if things fail. Having a plan B means I don’t have enough trust in Plan A. So plan B really is to make plan A work (you heard that one before didn’t you?). So in this post I will list out all our income sources again.
When I say we retired early, we are truly retired without any one in the family working. For example, if my wife is still working and I retired, that does not really count as retired. It just means that I am financially independent as long as my wife works. Likewise, if my parents or children are working and sending me money, it is still not really financial independence (according to me) while it may seem like that. Since my kid is too young to earn, there is no income from her yet :).
Income from parents
So having established that notion about F.I.R.E (financial independence and retired early), you probably already figured out that none of us in the immediately family is working :). Parents from both our sides have retired and they do not send us any money. Likewise, they are not dependent on us for their livlihood. All four parents survive on their own investments with a mix of senior citizen saving schemes, FDs, rental income and some mutual funds. We pay for some of their travels, but otherwise they are completely independent. We don’t plan to use any of their investments incase our plan A fails.
Income from parents: zero.
Income from spouse
Likewise, my wife is also not working or earning any income (not entirely true, but I will get to it in a minute). She used to work way back when, but quit in 2012 before having our kid. Any income she earned while working was all kept aside for some other project that she wants to pursue. It is not considered as part our retirement portfolio and we don’t use her investment for any of our expenses. More importantly we definitely don’t intend to use that money as a plan B or safety net or a cushion in case plan A fails.
Income from spouse: zero.
I have worked on projects for some friends, or coworkers or acquaintances, but never for any money. If something was of interest I worked on it.
Income from freelancing: zero.
Financial planning advice income
I give financial advice mostly for free, but on some occasions I had to charge someone because it took a lot of my time, or they themselves insisted that I accept a token of appreciation (Amazon gift card etc). In the last 4 years in retirement, I earned a grand total of Rs. 8,000. I don’t like to spend my time doing financial planning for others. Not that I don’t enjoy doing it. Actually I love doing financial planning, but I rather use the time with my kid or on my own projects. Once in a while some one would ask me to do their financial planning and ask about my fees. I intentionally quote very high number and also tell them that I charge high because I don’t actually want them to hire me :). Here is an example email I sent when some one asked me to do financial planning for them.
Hi X, nice to hear from you! I don’t officially have a consultancy service, but a few people ask me about it from time to time, so I have the below canned response. My charges may be a bit high mainly because I want to avoid doing it :). You may be better served going for a certified financial planner that you can find online, although I don’t know how good they are. If you have any friends or relatives who used a financial planner and are happy with them, then I suggest just going with that person. In any case, here is my canned response
1. i charge by the hour which is rs. 2,000/hr
2. if you want to do your own financial planning and picking of mutual funds, i have an 8 hour class on youtube which costs rs. 5,000
3. if you want to hire me as a financial planner to build your profile and just give names of mutual funds it will cost rs. 10,000 (one time fees). after that you have to manage your investments as per the plan i give
4. if you want to hire me as a financial planner to manage your portfolio on a daily basis it will be rs. 20,000/year
I feel sorry that I am unable to help them, but being able to say no is part of living a good life. Can’t be a people pleaser and still have a carefree life now can you?
Income from financial planning: Rs. 8K
In the past both mrs. reynd and myself conducted some workshops not because we wanted the money, but because many asked us for some classes. My wife has done quite a bit of research on sustainable living and practices it. You might have read a couple of posts by mrs. reynd on my blog. She was supposed to write more, but did not like writing so she stopped :). I don’t enjoy writing much too, so don’t know when my turn will come.
Anyway, going back to the topic, she was good at sustainable living which includes making home made products such as cleaning liquids (floor cleaners, dish washing liquids etc), soaps (clothes, hair and body), toothpaste etc. Word spread and friends and acquaintances asked her to conduct classes which she did and earned a bit of income. Later the same students learning about our early retirement asked me to teach some classes on personal finance which I did and you already know about it. We earned some income that covered our living expenses costs for about 4 months.
But after doing 3 workshops each, we felt that it was not worth our time. We both enjoyed sharing our knowledge and especially the questions that the participants had. Unfortunately we felt it was taking too much of our time and moreover we finished teaching all the people that my wife knew, so unless we start advertising and expanding our network, we can’t continue on. Neither mrs. reynd nor me, and especially me are interested in networking. We are not that kind of people. So we decided to wrap it up.
Don’t know if we will ever do it again. But more importantly, this cannot be our plan B. There is very little income unless we have a big network or make the courses more expensive or make a class which they have to take repeatedly. Neither of which we are interested in. Instead, if plan A fails, we might as well just find a job which will be easier to find and pays way more per hour of work :). It seems as if our passions are not the ones that make us money, but just the things that keep us happy – sustainable living, organic gardening for my wife and electronics and computer projects for me :).
Income from workshops: 4 months worth of living expenses earned in 2 years
Income from our projects
We don’t earn any income from our projects such as our organic garden or my solar panel project etc. We eat what we grow and use solar power as a way to reduce electricity bill and not to sell back to the grid to earn money. All our other projects such as drip irrigation, home automation, homemade soaps etc are just for self consumption and not to sell the ideas or products to earn income. I earn less than $1 a month from the ads on my blog, but my hosting expenses are way more than that, so there is no point counting it in.
Income from projects: zero
Income from real estate
This falls in the grey area. I have exactly zero income from real estate. My wife does get a small rental income from her house in home town. That income is never considered in our retirement corpus. As I mentioned before, mrs. reynd has some plans of her own and she is planning to use the income for her projects. So we cannot consider that as a safety net, and moreover it is way too small considering our expenses. The only plan B will be to start working again.
Income from real estate: zero
I would like to remind you that I have no other active or passive income which I have not covered thus far. Really our only sources of income are debt and equity mutual funds. Those and those alone. Hope that gives some clarity on our income as of October 2022.