Retirement Gameplan: The Road to Financial Freedom
Summary
TLDRIn this podcast, Mr. SRA Naran, EVP at Sdfc Life, shares his journey from traditional to savvy investing, influenced by India's economic changes. He discusses the importance of retirement planning, emphasizing the need to accumulate a corpus 6 to 9 times one's annual income depending on age. Naran debunks myths about retirement, stresses the significance of financial discipline, and shares his strategy of regularly reviewing and adjusting his investment portfolio to ensure it aligns with his retirement goals.
Takeaways
- đŒ The concept of FIRE (Financial Independence, Retire Early) varies by age, with a multiplier of 6x to 90x of one's income needed depending on the individual's age.
- đŠ Traditionally, working for an Indian company was frowned upon, and there was a stigma associated with investing in the stock market.
- đ The guest's understanding of the market significantly improved after managing their ESOPs and creating a direct investment portfolio, which now matches their PMS returns.
- đ Infosys and other IT companies were struggling during the Y2K period, but they have since evolved, showing resilience and growth in the tech sector.
- đïž There is a persistent preference for government jobs in India due to the security and pension they offer, which dictates lifestyle choices.
- đĄ The guest emphasizes the importance of financial literacy and planning for retirement, suggesting that individuals should have a clear corpus in mind for their post-retirement needs.
- đ The fear of market volatility and the potential for forced retirement due to irrelevance in the job market is a concern, especially in the tech sector.
- đ± The younger generation, including the guest's daughter, shows a higher level of financial literacy and interest in global markets and investment options.
- đĄ Real estate was the first major investment for the guest, but they later realized the challenges in liquidating such assets, leading to a shift towards equities.
- đ The guest's current investment portfolio is predominantly in equities, either through PMS or direct investments, with a smaller portion in gold instruments.
- đ The importance of discipline in financial planning is highlighted, with the guest following a quarterly review of their financial portfolio and making adjustments accordingly.
Q & A
What is the FIRE concept mentioned in the script?
-The FIRE concept refers to 'Financial Independence, Retire Early,' which is a movement of people who aim to save and invest aggressively to achieve financial independence at an early age, allowing them to retire well before traditional retirement age.
Why was getting a job in an Indian company looked down upon during the time when the speaker was young?
-During the speaker's youth, getting a job in an Indian company was not as prestigious as getting a job in a multinational corporation (MNC). This was due to the perception that MNCs offered better opportunities, higher salaries, and more global exposure, which were highly valued at that time.
What significant event happened in the Indian IT industry around the time of Y2K that affected companies like Infosys?
-The Y2K (Year 2000) problem was a significant event that affected the Indian IT industry. It was a time when there was concern about how computer systems would handle the change from the year 1999 to 2000. Companies like Infosys were struggling with the challenges of Y2K compliance and the uncertainty of what would happen to their business post-Y2K.
What is the 'direct portfolio' the speaker created and how does it compare to their PMS returns?
-The 'direct portfolio' is a collection of individual stocks that the speaker personally manages and invests in. The speaker mentions that this direct portfolio is performing well and is matching the returns of their Portfolio Management Services (PMS), which are managed by professionals.
Why did the speaker initially invest in real estate before other forms of investment?
-The speaker's initial investment in real estate was influenced by traditional investment beliefs prevalent in his family and community, where real estate was seen as a stable and secure form of investment. His father's influence and the general sentiment during the '90s in India made real estate a common first choice for investments.
What is the significance of the 'rule of 72' in retirement planning as mentioned by the speaker?
-The 'rule of 72' is a simple way to estimate the number of years required to double the invested money at a given annual rate of return. The speaker uses this rule to make decisions about his investments, by dividing the desired return rate into 72 to find out how many years it will take for his investment to double.
How often does the speaker review and adjust his investment portfolio?
-The speaker reviews and adjusts his investment portfolio on a quarterly basis. He sits down every quarter to evaluate his financial situation, considering factors like excess cash or requirements, and makes necessary adjustments to his investments.
What is the speaker's perspective on the future of retirement in India, especially considering the aging population?
-The speaker expresses concern about the future of retirement in India due to the aging population and the potential social and economic implications. He foresees that the elections around 2050 might focus on elder issues as the elderly population grows significantly. He also highlights the challenges of urbanization and the potential loneliness and fear among the elderly.
Why does the speaker believe that retirement planning is all about discipline?
-The speaker believes that retirement planning is about discipline because it requires consistent saving, investing, and reviewing one's financial goals and progress. It involves sticking to a plan, regularly adjusting investments, and maintaining a clear separation between investment and expense funds to ensure financial security in retirement.
What are some common myths about retirement planning that the speaker mentions?
-Some common myths about retirement planning mentioned by the speaker include the belief that one will forever be young, the expectation that children will always provide support, the outdated notion that the government will take care of individuals in their old age, and the myth that one will receive sound financial advice from others who have retired.
Outlines
đŒ Early Career and Traditional Investing Views
The speaker begins by discussing the financial expectations at different ages, emphasizing the importance of having a corpus for retirement. They reflect on their early career in India during the '90s when working for an Indian company was frowned upon, and there was a strong preference for multinational corporations. The speaker admits to having misconceptions about the stock market, considering investing in stocks taboo. Their views evolved after creating a direct portfolio that surprisingly matched the returns of their traditional mutual funds. The conversation transitions into a discussion with Mr. SRA Naran, EVP at sdfc life, who shares his background as a traditional investor influenced by his father's conservative financial strategies. He talks about the stigma attached to not working for an MNC and the general skepticism towards the stock market during that era.
đĄ Real Estate and Equity Investments
The speaker shares his investment journey, starting with real estate as his first major investment, influenced by his older generation's advice. He and his wife made significant real estate investments but later realized the difficulty in managing and liquidating them, especially after moving cities. This led to a shift towards equity investments, particularly after experiencing the challenges of wealth accumulation. The speaker's portfolio now consists of 70-75% equities, with real estate still a significant portion. He also mentions his lack of interest in gold investments but acknowledges having some gold instruments. The COVID-19 pandemic allowed him to work from home, providing the time to analyze the stock market and create a direct equity portfolio that has performed well against his PMS returns.
đ Global Market Insights and Retirement Planning
The speaker expresses concern about the future of retirement planning, noting a general fear among seniors about not having enough corpus for retirement. He discusses the changing job market, where people may be forced into retirement earlier than anticipated, and the importance of being relevant in one's field. He anticipates that by 2050, India will have a significant elderly population, which will have political implications. The speaker highlights the loneliness and fear among the elderly, suggesting that this could become a societal issue. He debunks common myths about retirement planning, such as relying on one's children or the government, and emphasizes the need for individuals to take charge of their financial planning.
đ Retirement Planning and Market Realities
The speaker delves into the realities of retirement planning, discussing the financial implications of an aging population and the formalization of employment in India. He anticipates that the increasing number of retirees will lead to political changes, as this demographic gains a voice. The speaker addresses common myths about retirement, such as the expectation of eternal youth or relying on children for support. He stresses the importance of planning and discipline in financial management, advocating for regular reviews of one's investment portfolio. The speaker shares his personal benchmarks for retirement corpus and the use of the rule of 72 to estimate the growth of investments. He concludes by emphasizing the need for discipline and regular evaluation of financial plans.
đ Investment Strategies and Discipline
In the final paragraph, the speaker focuses on investment strategies, emphasizing the importance of returns, effort, and trust when choosing investment instruments. He discusses the appeal of fixed deposits and recurring deposits due to their low effort and high trust factors. The speaker also touches on the psychological aspect of investing, where the fear of effort and potential loss influences investment decisions. He shares his personal approach to reviewing his financial portfolio quarterly, making adjustments as necessary to align with his financial goals. The speaker concludes by reiterating the importance of discipline in financial planning and the need to separate investment funds from everyday expenses to avoid mismanagement.
Mindmap
Keywords
đĄFIRE concept
đĄESOPs
đĄPortfolio
đĄWealth accumulation
đĄReal estate
đĄEquities
đĄRetirement planning
đĄCorpus
đĄRule of 72
đĄDiscipline
đĄMyths
Highlights
The concept of FIRE (Financial Independence, Retire Early) is discussed, emphasizing the importance of saving a multiple of one's income based on age.
A personal account of the stigma attached to working in Indian companies and the aversion to stock market investments in the past.
The realization of the importance of understanding the stock market came from the experience of selling ESOPs and dealing with the associated liabilities.
The shift in perspective on government jobs and the allure of pensions, highlighting the change in lifestyle choices based on financial planning.
The evolution of the Indian job market, with a focus on the tech sector and the changing attitudes towards job stability and growth.
The challenges faced by the older generation in terms of retirement planning and the lack of financial literacy.
The fear of retirement and the uncertainty of financial stability, especially in the private sector where job security is less guaranteed.
The importance of having a clear understanding of the financial corpus needed at retirement and the steps taken to plan for it.
The discussion on the changing landscape of employment in India, with the rise of startups and the shift from traditional jobs to more entrepreneurial paths.
The impact of urbanization on retirement planning and the potential social issues arising from an aging population.
Common myths about retirement planning, such as relying on children for support or expecting to receive advice from others.
The significance of discipline in financial planning and the need to regularly review and adjust one's investment portfolio.
The role of NPS (National Pension System) in enforcing financial discipline and its benefits for retirement planning.
Practical advice on calculating the necessary retirement corpus using simple financial rules and the importance of liquidity.
The application of the rule of 72 in investment planning to estimate the doubling of investments and the need for periodic portfolio reviews.
The importance of separating investment funds from expense funds to avoid mixing and ensure a clear financial plan.
The three factors considered for investment decisions: returns, effort required, and trust in the investment instrument or institution.
Transcripts
you know if you are 60 you need kind of
6X of your income yeah and it just keeps
on going right so if you are 30 it's
like 60x okay 25 is like
90x so it's like that because I know
that you know this whole fire concept is
a
verion when when my time getting a job
in an Indian company was like really
looked down upon okay oh you couldn't
get a job outside and not in an MNC
that's why so a lot of people had a lot
of bad ideas about stock market so did I
right and investing in stock was like a
deoo the biggest understanding I got of
the market happened when I actually sold
myops I created my own direct portfolio
and you know that direct portfolio is
pretty much matching my TMs returns okay
so I'm pretty happy about it companies
like infosis with Pro were struggling at
that point of time Y2K had just happened
and India had kind of got a kie kind of
a you know thinking that these are Y2K
Kies right this love for government job
uh doesn't change okay it's the pension
which decid your lifestyle and that's a
general problem with all of us who are
not like Savvy investors we get stuck
with our investments and this whole
volatility of money which is actually is
equal to money kind of goes out of the
equation and do you have a sense of
Corpus that you will need at retirement
yeah I have a sense I have a clear
understanding of how much I
need hi everyone welcome back to candid
money today we have a very interesting
guest Mr SRA Naran EVP at sdfc life hi
SRA welcome to the podcast hi thank you
uh so sura before we jump into the meet
can you talk about how sumitra like who
is sura
investor well you know actually so I'm a
pretty traditional investor in that
regard because uh you see my background
so small town '90s when I pretty much
did my inter and did my graduation so I
always saw my father and my father was
fdrd and that's where the world ended
conventional right conventional uh
that's the time when stock broking scams
happened has MAA happened right so and
then utti mutual fund failed so lot of
people had a lot of bad ideas about
stock market so did I right and
investing in stock was like a taboo
right oh my God what is he doing and
therefore it was traditional right and
then obviously I saw India also opening
up and that's the time when it really
started coming up the curve so as an
investor I've been kind of driven by
that and I've lost like 30 35 years okay
in that era okay and only after I went
to us and came back to India it's like
after 35 really I started looking at
things till then it was predominantly
traditional and yeah I was pushed to buy
a child ulip plan when I had my child
and that's what happens when you don't
know about things and whatnot and any
return looks like great uh kind of
things so that's what happened and to be
honest wealth accumulation also starts
later right so wealth accumulation
started like in early 40s or mid 40s and
that's the time when I started looking
out and a lot of people also started
approaching me before that no one used
to approach me right there was no BMS
guy approaching me nothing was happening
in my life except my bank relationship
manager who would change every 3 months
and he would just call and tell this is
my new number right so nothing was
happening so obviously people started
and started understanding right I think
the biggest understanding I got of the
market happened when I actually sold my
esops okay okay I think that was the
time when I really got to know what it
is right because esoft financing was
huge that much of liability I never
thought I would take as an individual I
took it right and it was very short
liability not like a home loan right
which is extending it was a short
liability and what happened with me
unfortunately was that the market
started tanking down okay so once I took
that much liability my ESOP started
losing value and I started getting
margin calls okay and that's the time I
started knowing okay there are margin
calls and I have to pledge something and
what not right and that's the time when
I really got to know about all of this I
think world has changed a lot when I see
my daughter she is pretty much Financial
literate okay she at 15 or 16 only she
talks about Global Market she talks
about stock market she talks about
indexes this and that so that was
talking about what is future what is
options like you know these are things
on hard of so I think that's what it is
my generation which might be the
generation which will retire the
earliest in a private sector if you
really look at it that way was mid90s is
when people started coming into this
sector and most of these guys are
getting at the retirement age another 10
years or 5 years right and that will be
the time but I think so far it has been
traditional I also am from that but see
U being Guided by my older generation my
first take was to buy real estate okay
okay so the first big investment I did
was real estate okay even before FD yeah
like FD used to happen but there were
like small fds right and always FD has
been a little bit like oh I will why
should I lock in for 5 years or whatever
so I would take fds for like 24 months
or 3 years right and then when the fds
could would mature and come to me I like
seriously this is what I did right so
either way is the first big investment
was real estate okay and U I think it
was the same for my wife also so we kind
of did that and then we did couple of
big investments in real estate and after
doing two or three uh we kind of
realized that we have moved cities and
we have a real estate somewhere which is
not making sense and then we wanted to
kind of liquidate it and then we figured
out how difficult it is to sell a real
estate property and that kind of
prompted me saying this is of no use
right and by the time I real wealth
accumulation time had also come so a lot
of people were approaching me and
therefore I started getting
predominantly into into Equity right so
in either PMS or a or whatever right so
today my composition if I really look at
it take out real estate which obviously
remains a big bulk of it but if I remove
it I will be like 70 75% equities okay
and I would have started like debt that
way right gold I had never been allured
with for whatever reason and therefore I
don't own a lot of gold physical gold I
mean but yeah I do have some gold
instruments but if I really look at it
uh Co also changed a lot uh even my
patterns because Co gave me an
opportunity of working from home and
therefore having some time okay and
therefore I thought why don't I spend
that time in the stock market analysis
and therefore I created my own stock for
direct Equity yeah direct Equity so this
is the only time I created my own direct
portfolio and you know that direct
portfolio is pretty much matching my PMS
returns okay so I'm pretty happy about
it and uh you know it gives you a kick
to see every day how your Investments
are doing whether you can take it out or
not as IM material so when I when I see
mine I feel a lot of kick coming out of
it that that's great so that remains uh
so yeah my profile has changed the other
way around right uh which is surprising
but that's what it is right okay so uh
just talking about like how you were
before you left for us right and
comparing that to your experience and
profile and how India was back then uh
you worked in the US you came back to
India what has changed over the years
yeah so I would say a lot okay so India
was a very socialist country okay so I
left the country in like 2001 and then I
was there until 20067 right in us but
before that India was predominantly a
very socialist left leaning country
everything was thought of from a
socialism perspective right so even in
an IM like mine okay so mere suggestion
by me that uh let the market forces
decide on placement let anyone get as
many offers as they want was met with a
lot of disdain people were like oh
people will not get offers this and that
so there was that brain drain was Big
Time happening which don't think is
happening now it has cured down to a lot
of extent when I see a lot of youngsters
and good people still around and looking
at jobs startup EOS system was
non-existent right uh the companies like
infosis vpro were struggling at that
point of time Y2K had just happened and
India had kind of got a kie kind of a
you know thinking that these are Y2K
Kies right and what will happen post Y2K
so a lot of West people always thought
that India will be done once 5 2K is
over right what will Indian tech
companies do but I must say that Indian
tech companies as well as the tech
techies per se right they have really
changed they have done a great Evolution
okay so that has happened brain rain and
again when in my time getting a job in
an Indian company was like really looked
down upon okay oh you couldn't get a job
outside and not in an MNC that's why
went so there's a lot of difference
right and I do miss that uh if I had
taken an Indian company then then then
it would be in a different life cycle of
career for sure so yeah so a lot of
things um definitely have changed okay
now obviously talking about a lot has
changed but there might be some things
which are still the same right what do
you think hasn't changed yeah I think
this love for government jobs uh doesn't
change okay so that's one common factor
which was then and which is uh here
today also and I don't know why that
love is there it has been difficult for
me to Fathom it uh my father tried to
inculcate in me a love for that
government job which he did but it never
mattered right it's so he always kept on
saying okay this is a job where you know
no one can remove you and you can be but
in my head it works the other way around
right it might be that I want to change
yeah right then what what happens to me
right and uh then there was a lot of
talk about retirement being covered buy
a government job and whatnot right
pension you will get a pension this and
that but I always felt it that my father
kind of took a lot of Lifestyle Changes
because he had to put his lifestyle in a
pension way so he did it the other way
around and it's true for everyone I saw
in in his generation or whatever right
it's the pension which decides your
lifestyle right it's not the other way
around so yeah so yeah if you are okay
with that good for you but if you are
not then it doesn't make sense at all
you so since we already at that topic
retirement right and I see my dad also
thinking my dad is like like 58 they
saying in 2 years closer to retirement a
lot of people might not be uh sure of
what corpor they need at a time what do
you think of like retirement and J so
I'm scared okay to be honest I share it
okay it is uh so I don't know so even if
you look at today uh taking myself out
of the equation looking at Market in
general because yes I keep on talking to
a lot of seniors I keep on talking to a
lot of people who have just retired or
retiring uh there's a constant fear okay
and no one wants a hard Landing yeah uh
but mostly people do get it because
they're not planned that way because see
in India usually it is like I will kind
of expense out and whatever is save I'll
invest and mostly whatever is saved will
also not invested it's lying in the bank
account right and at some point of time
you suddenly realize that this is not
enough okay and this this problem exist
uh across the landscape so so yeah I do
fear uh how much do I need uh of
retirement I have some kind of uh
benchmarks so like you know if you are
60 you need kind of 6X of your income so
I've created some kind of uh these kind
of figures right if you are 55 it's 9x
if you are 50 it's like 12x right if you
are like 40 then it's somewhere close to
you know 20 to 25x okay yeah and it just
keeps on going right so if you have 30
it's like 60x okay right 2 was like
90x so it's like that because I know
that you know this whole fire concept is
a worsh right there's no way okay
because most of the times you are doing
job not for money also and you're doing
job because you have to be jobed in a
sense right so and what has happened
also in India and it has been a Common
Thread in West for sure because I've
worked there it's like you don't know
when you will be forced to retire yeah
so everything is not up to you it's not
a government job right that I want to
retire so I will retire or 60 is my age
to retire you know you might become
irrelevant to the organization in your
early 40s it is happening to a lot of
people and I'm seeing that to happening
a lot in the tech sector for sure a lot
of my friends are going through it okay
and I see that so they are forced to
retire in some way or the other because
they know otherwise they'll be stagnant
right in whatever they are doing so
either they res skill themselves and
once they reskilled then they figure it
out themselves so nowadays I think
people at least people who are little
you know kind of upward upwardly mobile
kind of people they are figuring out
their own path to retirement right A lot
of them would want to be relevant more
than retirement and for them that's the
key thing right being relevant always
right I think that's what is happening
so people might be leaving for maybe
starting startups at an older age and
might be a phenomenon which is happening
um might be taking some Paths of
consulting or advisory or whatever see
the mere fact that we see so many people
applying for independent director
position and clearing the SE exams to be
one shows you that you know people are
looking out right otherwise like who was
really bothered about it so yeah so
that's it yeah I do
fear okay so uh obviously I I read this
Ken article wherein it said that a lot
of people have to involuntary take
retirement cuz 45 46 they're not able to
find Opportunities but for sure it's
like a problem and people don't have a
sense of how much cers they need at
retirement can you share some more scary
numbers like in this lens yeah see
number wise so this is my personal
belief that 2050 or 2049 elections will
be fought on elders okay because what is
happening also if you see uh we will be
like 15 16% population will be 60 plus
in India currently ALS Al if you look at
figures 5 5 and a half th000 people
become elderly every day yeah and this
will grow to like 40 45,000 45 yeah in
2050 so it's going to be like huge right
if you look at from a retirement
perspective people who are like employed
so that will be like 25,000 people daily
will get retired okay so these are like
big numbers okay and what is also going
to happen is that people who will retire
will have a say yeah see currently
people who retire are kind of lost it's
a Lost Generation right less than 15
yeah it's like less than 15% they are
dependent right on their sons daughters
they're not really the biggest taxpayer
also so from a government perspective
also is not making a lot of sense but it
will change okay people who are rich
will retire people who have a lot of
cers will retire people who pay a lot of
taxes will retire and therefore they
will have a say right and that will
change so like other countries which has
happened it will change and therefore
you know once the politics start getting
involved you know things will change
yeah right and that is some numbers are
scary in that regard another thing which
is happening obviously you see a lot of
formalization of employment also
happening okay so for example all these
Piggies and Olas and whatnot these are
formalization of employment right so
you'll see all of that also happening
you can see it in epfo and the kind of
way epfo is increasing right so yeah a
lot of Tailwinds uh which are there
people are going to retire in big
numbers and this will not be very good
also because you see there's a lot of
urbanization which is happening and
India has not been able to create a lot
of urban centers so they remain very
concentrated so people move right and
people move to do job or people move to
do something so if you have moved
leaving your parent behind why do you
think your child won't move right it's
just a question of time right so child
will definitely move to some other place
right and if you have moved to an urban
center one of the top 20 maybe then
obviously this person your child is
going to move outside in some way or the
other right so you will be left alone so
in a sense all of these Emptiness is
becoming going to be a huge population
problem and I think that in your
marketing lingo will become the main
important thing the empty NS right so
that's that's bound to happen and we see
it uh every day it's happening people
being alone people being left and it's
scary actually it is scary okay because
as I told you I keep on meeting these
people and when I meet like 70 75 plus
those kind of people I think they are
lonely most of them you know when they
talk to me and they talk to others it's
it's the loneliness and there's a fear
of loneliness right that fear is very
difficult for me and you to comprehend
at this point of time but when you are
lonely that will happen right and then
that fear is not good at all it's a
generation and it will it will have an
effect right as a society also if 16%
17% of your Society is like living in a
constant fear of isolation and
irrelevance then it will affect the
society right so we will have an issue
so yeah if someone looking at this uh
episode thinks that retirement is near
and they have to start planning what are
the myths on retirement planning they
should be conern see the biggest myth is
you'll forever be
young this forever be young is a myth
everywhere right so people come with
that mindset oh something will not
happen to me whatever happened to
someone else will not happen to me right
so that seems to be a constant myth
which people live with okay and that is
why they don't plan 20 30 years it's
like it's just a long time 20 30 years
we'll see when it comes right it's like
we'll see we'll see and you know it's
too late always to see that's that's a
big myth MH other myth is that you know
there is always Sons and Daughters to
fall back on U that is a myth okay when
I talk to even today a lot of people
yeah son and daughters will do but
they'll do as much as they can okay
they'll not do as much as you think they
can right and there's a huge difference
in that in that aspect and again if God
and hope is your only strategy in life
then it will not work out right and the
Big Daddy myth is gone because
government was the big daddy it was a
socialist society government would take
care of you but look at how many
government jobs and how many even if you
look at UPS and whatever which has been
launched it's like what 23 25 lakh
central government and maybe 90 lakh
state government whatever it is right so
2 CR that's it right where are the
others so obviously privatization has
happened and a lot of private jobs are
there much more than government so that
myth that big daddy exist uh you know is
no more right I think the biggest myth
also today is that I will get some
advice okay from somewhere okay there's
that myth yeah that yeah some Mama Banja
POA whatever will advise me and you know
he has retired and done a great job okay
and when you come to it you'll realize
that what a shitty job that person has
done okay so whenever I met people I've
always seen them cribbing about taking
advice from someone and they like oh why
did I take that advice right so the
missing bit of formal advice is again a
problem but that myth that you'll get an
advice from someone and you know your
senior has done a great job of
retirement that myth is there you know H
gup has done a great job so I talk to
that will not work because he might not
have and no one has done it right so
yeah so these are some of the myths how
does one plan for retirement
then well U see basically planning is
simple so if you go by those kind of
figures which I talked about right so
remember that that's something which you
need right so it's very simple that
whatever you are retiring with let's say
your salary is 100 rupees and if you're
retiring with 100 rupees you essentially
have to ensure that you know 30% of your
expenses on your salary will always be
covered so if you want to survive till
let's say 85 then for 25 years 30 rupees
per year if 100 is your salary you need
right and obviously you'll invest so
there is a factor of investment which
goes into it so maybe it's around 60 65%
of the Sal in that sense so 18 and 18 to
20% is what you should take for that
many years so if it's 100 rupees your
salary then 20 into
right that is how much you should have
so it's a very simple rule and that is
how much you should have and that is how
much liquid assets you should have right
because assets obviously assets also
which you are not using goes into your
net worth and therefore you should also
look at it that way I think lot of
people get locked into their assets okay
and I I always feel that's a big problem
because whenever I talk to these people
uh they are like having some plan ulip
plan this plan that plan which they are
caught into and they don't know how to
exit okay and they don't and they have
been like kind of given so much fear by
their agent or whoever that if you exit
you'll get nothing right they are kind
of caught into it and that's a general
problem with all of us who are not like
savv investors we get stuck with our
investments and this whole volatility of
money which is actually is equal to
money kind of goes out of the equation
right so I think that's the best way U
keep on exiting keep on churning our
portfolio you ensure you have that much
of you know Corpus uh to plan uh yes you
should look at longterm but yeah you
should also not miss out on shortterm so
if you have shortterm games you have a
clear understanding don't make your
shortterm investment into long-term CU a
lot of people do that right they put the
money thinking for six months I put but
then it continues right and it's like
yeah growing growing suddenly one day it
will drop right so if you thought it
shortterm it's shortterm okay even if
it's going great take it out right
longterm even if it's going down be it
long term right stick to a discipline
see retirement is all about sticking to
a discipline okay so in that sense NPS
is a great instrument because it
actually forces discipline into you
forget everything else but that
discipline is what you need in life so I
think these are some of the basics uh
you need to manage nothing else one last
question we gen asks to everyone do you
have a sense of Corpus that you will
need at retirement yeah yeah I have a
sense I have a clear understanding of
how much I need in like cores and
whenever I look at that figure I'm like
it's not possible but it is
possible and actually when I saw it like
5 years back I said no way in the world
I'll make that much but you know I think
some uh obviously markets have helped
and some savviness I'm close to it okay
so I definitely have that in mind
because really when I looked at it I was
close to like 40 42 maybe right so you
can imagine then 30X okay is is the kind
of cus right so 30X of my salary was the
cus okay and I moved it that way right
and yeah things have planned out um
thankfully uh in that way because of the
markets and because of everything which
is moved but you don't know right it's
the markets and again I'm looking at my
lifestyle currently but things might
change because as you acquire wealth
your lifestyle changes for sure right
and that is not the lifestyle which you
have looked at 5 years back right you
upgrade your lifestyle yeah you upgrade
your lifestyle and certainly you need
more so that 30X might be changed right
it might not be enough so there will
always be that right and you will always
chase it but yeah on in a nutshell as I
told you those figures those X's uh that
is something you can follow for sure and
yeah always the rule of 72 can help you
okay which is obviously you divide it
any instrument whatever Roi you are
expecting by 72 and that's the double
okay uh so that many years it will take
for you to double I divide the return
that I want by 72 72 let's say I want
12% returns so 72 by 12 in six years I
in six years you'll double right that's
that's how it is so just look at that
thumb Rule and then you double and then
you quadruple right God so it's like you
just think of it so if I have a corpus
of let's say 1 CR I know with a 12%
return I'll I'll have two CR in sixcess
yeah it's it's simple maths and if you
start doing it and looking at your
portfolio also in that way and wherever
you feel that the rule of 72 is not
applying in the way you had thought of
exit and change it right okay so I look
at it that way rather than looking at a
instrument B instrument C instrument I
look at okay these are the returns which
was expected this is not what is
happening okay make this CH make this
change right so do you make changes
annually or like so actually I take a
quarter View okay okay so every quarter
I sit okay and I have yet to find any
app or whatever in case you making then
please tell me okay so I sit with exual
sheets I put everything together right
and kind of make out and say okay I need
to do this I need to do that right
because every quarter you will land up
with either some excess cash or some
excess requirement right and then you'll
have to make some adjustments because
you always know that there is a big
annual holiday coming right you always
know there's something big education uh
you know free fees coming or whatever
and if you are not kind of planning it
then it becomes a problem it's like you
are collecting money from here and there
and then you know of Los so you should
put your money like this is the
investment money yes and this is the
expense money it's easier to do that so
up front you do it go otherwise
everything gets mixed okay it's just
like retirement planning right because
it's very easy to get mixed you plan for
retirement but then you are using it for
everything there's nothing else for into
your cus yeah exactly so plan it it's a
discipline issue I always believe
Finance is all about discipline okay
there's no other thing because even if
you look at it from from an investment
perspective so a lot of people ask me
okay investment what is it based on
right so I always look at three factors
for investment investment is based on
returns obviously it is also based on
the effort required to do that
investment okay and the third factor is
obviously the trust okay the second
factor which is the effort required this
is where fds and RDS have played a great
role okay why do people invest it's the
easiest there's no effort yeah there's
no effort required so why aay for lay
man you know Financial world is so
complex and you and me have made it even
more complex right so for the guy it's
like yeah it's so easy right so he is
giving more weightage to effort
understand and obviously trust you give
a lot of weightage too so you will
obviously go to an instrument you trust
or an institution you trust so it will
always follow these two so it's a very
simple equation yeah people who are very
Savvy they return this that right why do
I M sell you know it's a question which
a lot of people ask me
yeah so if you really look at it people
effort is zero no and theace of
mind yeah you are like least bother you
are okay that friction of making an
effort and something going wrong right
all that kind of stuff is taken away in
this instrument so people are okay even
if it's 2% less how does it
matter it's like that way so yeah so
those are things that's how to do it
thank you so much so discipline is my
key theme absolutely thank you okay
thank you
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