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What Will People Think?
Every time you intend to do something out of the ordinary, your first instinct is usually to stop and think "what will people say or think about what I am about to do". This stigma limits us from doing anything that does not fit in the societal norms. While nobody made any rules about how things should be, as a group we are all guilty of following some unwritten rules. The good thing about these unwritten rules it that we are able to move together in one general direction and solve problems that no one person alone can solve, a bit like autonomous multi-agent systems. The problem occurs when you diverge too far from the crowd. You will be all alone. But in a social setting, that is not all you have to worry about. There is also the issue of people saying things about you behind your back and sometimes even straight to your face. But the advantage of straying away from the crowd is to build something entirely new, great and immensely useful. That is how evolution made us so superior to the rest of the living things.
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Practice Minimalism
After watching my talk on early retirement, one of my friends tells me that while the audience asked a lot of questions, no one asked me "How do I practice the art of minimalism without compromising much on what your heart wishes for?". Well in this case, I am not really sure if minimalism is a personal trait or if it is something that can be acquired. You already know how I started, which was basically after reading about Stoicism.
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My Early Investment Journey
While I am sitting comfortably today, writing about my journey to early retirement, the initial days of my investment years were not without their share of issues. Let me explain in a bit more detail. When I first started out, I had planned to do a SIP of a certain amount every month and planned on increasing it every year. The increase in SIP I planned at that time was to match up with the inflation rate. The thought process was that if I was just average at work then my salary increments will match up with the inflation for the previous year. At the time of planning my early retirement in 2011, the inflation stood at around 8%, and consequently my projections were to increase SIP by 8% every year.
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My Talk On Early Retirement
I gave a talk on Financial Planning for Early Retirement a few weeks ago at my previous work place. It was well received with more than 100 attendees. I was actually not planning to give a talk. I casually wanted to visit the old office and visit some folks over lunch. But they wanted a talk, so I had to quickly make some slides. Fortunately, most of what I wanted to say was already available on my blog. Made some slides based on my experience and blog and gave a talk on June 14, 2019. I enjoyed giving the talk and hope my colleagues enjoyed it as much. There was a sharp spike in the number of visitors to my blog and LinkedIn page a day or two after the talk.
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How Much Should I Invest?
While having a conversation with one of my friends, it occurred to me that the current calculators are not sufficient to figure out how much to invest per month while increasing the SIP every year to meet your retirement goal. Lets say, you have an age in mind at which point you want to retire. And you want to know how much you should invest every month of every year until you reach your goal. Throw in a twist, which is that you want to increase your investment every year by some fixed percent. There is no calculator on this blog that will tell you how much you should invest every month. Naturally I thought there should be one, and here is that calculator. Hope it helps you reach your goal. Here are some instructions on how to use it.
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Tax Deductions
As I am doing taxes for the recently concluded financial year, I am realizing how much of tax saving one would be forgoing once you retire :). Without income there is no more section 80C deductions, no more savings from interest paid towards home loan via section 24, no exemptions for HRA under section 80GG. These things only hit you once you retire. Of course I went into retirement knowing that, so nothing to worry, but you don't realize these until you do your taxes. During your earning phase, every paycheck is a reminder for saving taxes and claiming as much deductions as possible.
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One Year Into Retirement
It is now exactly one year since I retired on June 29, 2018. Incidentally, this also happens to be my 50th post on this blog! It was a fun journey so far. While I cannot say if this will continue into the future, there are some exciting times ahead. Everything is going almost exactly the way I planned. Still, since I haven't yet gone through a bad market cycle, I don't yet know if my financial planning will stand the test of time. One thing I realized is that no matter how much free time you create, it will get filled with something and you always feel like you are busy (at least that is how it is for me). I did not have a single boring day in the past year in retirement. Most days are uneventful, so it is not like there is something crazy happening everyday. Yet, I haven't felt like there is any free time. So what happened in this one year in retirement?
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Motivation Towards a Goal
Early retirement is possible. It is certainly not easy, but it is simple. Of course, it needs a lot of sacrifices today, for a better tomorrow. You need to save a lot which means your expenses have to be very less to have any meaningful contribution to your retirement kitty. Heck, retiring at 60 with enough corpus to last your whole life is in itself a difficult task. How can you even save for your early retirement. It all comes down to how deeply you want to retire early. It does not just apply for retirement, but anything in life. If you want something very desperately, it automatically tunes not just your conscious, but your subconscious self to work towards it. At that point, none of what you are giving up, or all the hard work you are putting in will feel burdensome. It just feels like a flow and before you realize, you have hit your goal. So ask yourself, is your desire to retire early really strong? Make it a goal only if you have the strongest urge. A goal without enough motivation is hard to realize.
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Updating OS in Google Compute Engine
A few days ago, I decided to update my Google Compute Engine instance which was running an older Debian version. This was the same instance that is hosting this WordPress blog, so I had to be careful not to break anything lest I lose all the data and/or the service can be down. This post is a recount of my journey through the update process because I found some interesting things about Google Compute Engine (GCE) and how things can break if you are not careful and how things can go very smoothly if you plan properly.
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Am I Financially Ready To Retire?
Here is an alternative take on whether you are financially ready to retire. In this post, I want to help you determine if you are ready to quit with nothing but a simple calculator and just one formula. You don't need to predict expenses, inflation, rate of return etc, and as such, this method is not as comprehensive as the How Soon Can I Retire calculator. So take it with a pinch of salt and use it more as an indicator of whether you are ready to retire or not. Also note that this is only to check if you are financially fit to retire and has nothing to do with your emotional state of mind. Some may have a lot of money and yet cannot retire due to various other reasons (including not knowing what to do post retirement, fear of boredom, peer pressure, family disapproval, social status etc).
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