Posts in category "early-retirement" - page 3
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Should I Retire Early?
As you probably know, I sometimes get emails from the readers of my blog asking for advice or giving me suggestions. I find some of the emails to be interesting and intriguing and would like to publish my conversation with them as an article in the hopes that it might help others who are in similar situations. In the past I have posted one such article about a reader’s dilemma. A few days ago, another reader reached out to me asking for some advice. Now I don’t know how useful my advice is, but I give them anyway :). I just hope it helps them. I thought our conversation was interesting and wanted to post it so if others have any advice they too could suggest something in the comments. So with the person’s permission I am reproducing most of our email conversation redacting some information to respect their privacy.
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Financial Independence Trend
There has been a sharp rise in the F.I.R.E. trend in the recent past. For those who don’t know, F.I.R.E stands for financial independence and retire early. It is the new fad in town which I am also part of :). In the past, people searching for financial independence used to trend around 20 queries a day on Google search. It has more than tripled if you look at the data from the last one year. I wonder why so many are looking for financial independence. Perhaps COVID-19 and the resulting work from home culture are to blame. Or may be the sudden rise in wealth because of the recent stock market bull run is the cause. I have no idea, but people seem to be more interested in F.I.R.E in the recent past more than before. Or at least that is what Google trends is indicating.
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The Time I Wished I Was Working
In the 4 odd years since I retired, I never felt like I was missing out on my salary, except for during this period. The stock markets are falling and RBI has started hiking interest rates. Which means that NAV of both debt mutual funds and equity mutual funds are falling. That only means one thing – invest more! Unfortunately since I don’t get salary or any other income anymore, I have to sell some mutual funds and buy another. Normally I do this by selling the mutual funds that are gaining and buying the mutual funds that are falling. Here I am not talking about individual funds. I am talking about the type or category of mutual funds.
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How Is Your Portfolio Doing?
When ever the market falls, people are curious about my portfolio. They want to know how my portfolio is handling the crash (according to them). I shrug my shoulders and reply “same old”. Yes, that is pretty much my attitude whether the market is going up or down or under. The portfolio is doing exactly what it is supposed to do. Actually, to tell you the truth, the market is certainly not crashing. It is just a correction, at least so far. May be if it falls a lot more from here, I may call it a crash.
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Changes After Retirement
It is interesting how things change after you have achieved some goals. Take for example my goal of early retirement. When I was still in the journey of accumulating wealth to eventually retire, I was hell bent on learning everything about investments and stocks. At the time I started with the basics like having adequate insurance and emergency funds etc. Then I taught myself about asset classes, asset allocation and rebalancing. Next I moved on to learning about macro economics, market cycles and behavioral economics taking several classes on Coursera, EdX and Udacity. Eventually took a class in accounting and finance as well. The hope was that I will eventually be able to analyze businesses and invest in stocks directly.
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How Much Do You Need To Retire At 45
A few days ago, I read an article where the reader wanted to know how much corpus they need to retire by 45. I thought it was interesting and wanted to use my own calculators to see what numbers I would arrive at. I was surprised at how very close my number was, compared to what the advisor in that article gave. But do remember that for the exact same question different people will give different answers based on their own past experience and their biases. Anytime you take financial advice, do keep that in mind. No one has the perfect right answer. They are just approximations to lead you in the right direction. In the end, you need to figure out what the right advice for you is.
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The Market Scare
There is a lot of talk about how markets are crumbling all over the world. I have no idea what they are talking about. We barely corrected 10% from the peak if you take Sensex into account. That is a normal drop one would expect from the markets in any given year. I don’t understand what the excitement is all about. A 10% drop is peanuts in my opinion. But more importantly why would one look at the drop from the recent peak? Isn’t investing in equity all about the long term view? What happened then? These very same people don’t seem to be too concerned when the markets were moving up by 20-30% in a short duration. All this confuses me quite a bit.
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A Reader's Dilemma
From time to time I get emails from readers of my blog asking me for some advice or suggestions regarding their situation. Most of them are not unusual and a general advice does suffice. So usually they are not worthy of a blog post. But every once in a while you get some really interesting questions and that’s exactly what happened a few days ago. A reader wrote to me asking for some advice and I responded. Then I felt like it may be useful advice if there are others in a similar situation. Also I wrote a lot about my own thoughts about why I am unschooling my daughter and what the repercussions could be. So I thought I should copy-paste my response here in my blog. With the reader’s permission I am reproducing our conversation with some information redacted.
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What Was My Savings Rate
A lot of times while talking to people about my early retirement, I get to the point of someone wanting to know what percent of my income I was saving. Unfortunately I never tracked that metric. So I wanted to find that out myself which is what this post is all about. The information may not be very accurate but it should be a ballpark figure and has sufficient details in it. The reason for inaccuracy is primarily because I don’t want to track down all my investments and income to the minutest detail. That would take too much time. In fact I don’t even remember my salary information and used my ITR (income tax returns) as a guideline. Then I had to go through my CAMS statement to figure out my investments every year. Hope this helps answer the question about my savings rate.
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How Much To Invest To Accumulate 5 Crore By The Age Of 45
I read an interesting article where someone wanted to know how much they need to invest to accumulate Rs. 5 crores by the age of 45. It would be interesting to see how I would answer that question. I was also wondering if there are enough tools on my blog to be able to answer such questions.
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