Posts tagged with "early-retirement"
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Review Of A Reader's Retirement Portfolio
Every once in a while I receive emails from some of my readers asking for advice on financial planning or unschooling or other things. I have posted a couple (A Reader’s Dilemma, Should I Retire Early?) of emails along with my replies in this blog. Today I wanted to post one more such conversation I had with another reader. As usual, I took permission from the person. Most of the conversation is published as is and I tried to make minimal edits. Hope you might learn something from it or perhaps have better advice. Feel free to comment at the end of this post if you want to post your advice. Lets get started.
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The Most Important Thing In Life...
The title was not meant to be a click bait. I did not want the title to be too long, so had to truncate there. Aristotle supposedly said that the most important thing in life is figuring out how you spend your leisure time. I am not sure if those were the exact words, but he does write about difference between work and leisure. In today’s world, we spend too much time on work and have very little time in leisure. And any free time we have, we spend on entertainment. Leisure, unlike mere amusement, involves pleasure, happiness and living blessedly – Aristotle.
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Withdrawal Plan In Retirement
After my post on lumpsum vs SIP investment, a reader asked – “Wanted to understand the other side - how to redeem from our funds after we retire? Say we have calculated the number and we have enough. But, the challenge is how to get to a withdrawal mode from accumulation mode. You have showcased how you do it in some articles but can you do it with some numbers for a fictitious person? Ex: Age 40. Amount 6Cr spread across multiple equity and debt funds and US Stocks. Now, how to withdraw to last till their age of 85 for an expense of 1L per month (corpus is 50 times)?”. I thought it is an interesting question that needs answering. I will go with the numbers given by the reader and work out an example in this post.
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Why I Prefer Not Having A Backup Plan
Life is full of surprises. Many things are not really in our control, yet we live life like we have control. Take driving for example. We do our best to practice defensive driving to avoid accidents. Yet we have absolutely no control over the others and how in spite of being most defensive, we could end up in an accident. There is no backup plan here. If an accident happens, we have to deal with it as it comes. Most times a plan B helps, but in some cases, there is no plan B. Strangely, I have taken some decisions in life intentionally without a backup plan. These are no small decisions. They are some of the most difficult and riskiest ones.
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Retiring Early During A Recession
A reader asks “Can you write a post on how early retirement works in a bear market (potential recession) scenario going for say 1-2 more years earning less than 10% or even say 6%. Meaning a real return of 0% as per your assumption. What kind of planning should folks who have already retired and folks who are planning can take. Keeping a good buffer is definitely one option but any other thoughts to discuss there (fixed income vs equity balance or others) will be great to see”. So lets see what it takes to be retired in this situation and if there is something we can do to reduce the impact of an unexpected long recessionary climate.
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My Thoughts On Early Retirement
This is a continuation of my previous post regarding email conversations I had with a reader of my blog. The reader wanted to know if they can retire early given that they have already achieved financial independence. I am republishing our conversation in the hopes that it will help some of you. It is not about my replies which are probably not as useful, but more about the reader’s dilemma and may be others have better advice which you can leave in the comments below. So without much ado, here is the conversation with some information redacted to protect the privacy of the reader.
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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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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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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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