Retirement Gameplan: The Road to Financial Freedom

Summary

In 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

• 💼 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.
• 🏦 Traditionally, working for an Indian company was frowned upon, and there was a stigma associated with investing in the stock market.
• 🌐 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.
• 🔄 Infosys and other IT companies were struggling during the Y2K period, but they have since evolved, showing resilience and growth in the tech sector.
• 🏘️ There is a persistent preference for government jobs in India due to the security and pension they offer, which dictates lifestyle choices.
• 💡 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.
• 📉 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.
• 🌱 The younger generation, including the guest's daughter, shows a higher level of financial literacy and interest in global markets and investment options.
• 🏡 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.
• 📊 The guest's current investment portfolio is predominantly in equities, either through PMS or direct investments, with a smaller portion in gold instruments.
• 📈 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

00:00

💼 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.

05:02

🏡 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.

10:02

🌐 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.

15:04

📊 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.

20:05

📈 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.

Keywords

💡FIRE concept

The Financial Independence, Retire Early (FIRE) concept is a strategy that emphasizes saving and investing aggressively to reach financial independence at an early age. In the script, the concept is mentioned as a 'version' that contrasts with traditional Indian views on employment and investment, where working for an MNC was highly valued, and investing in the stock market was seen as taboo.

💡ESOPs

Employee Stock Option Plans (ESOPs) are a form of company stock that is given to employees as part of their remuneration package. In the transcript, the speaker discusses how selling their ESOPs and dealing with the financial obligations that came with them provided a significant learning experience about market volatility and personal finance.

💡Portfolio

A portfolio refers to a collection of financial investments held by an individual or institution. The script mentions creating a direct portfolio, which is a personal collection of stocks that the speaker manages, and it matches the returns of their PMS (Portfolio Management Services), indicating a diversified and well-managed investment strategy.

💡Wealth accumulation

Wealth accumulation is the process of building up assets over time. The speaker notes that wealth accumulation typically starts in early to mid-40s, aligning with the time when many people begin to seriously consider their financial future and retirement planning.

💡Real estate

Real estate refers to land and the buildings on it, which can be bought, sold, or rented. In the script, the speaker talks about their initial investment in real estate and how it was a traditional choice influenced by their older generation. However, they later realized the challenges of liquidating real estate, leading them to explore other investment avenues.

💡Equities

Equities, or stocks, represent ownership interests in a company. The speaker discusses shifting a significant portion of their investments into equities, either through PMS or direct investment, reflecting a move towards more dynamic and potentially higher-return investment strategies.

💡Retirement planning

Retirement planning is the act of considering one's financial needs and planning for the retirement phase of life. The transcript emphasizes the importance of retirement planning and dispels myths such as relying on children or government support. The speaker shares personal benchmarks and calculations for retirement corpus, highlighting the need for financial discipline and planning.

💡Corpus

In the financial context, corpus refers to the total amount of money invested or saved. The speaker uses the term to describe the total amount of money they anticipate needing at retirement, which they calculate based on their expected lifestyle and income needs.

💡Rule of 72

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 mentions using this rule to make decisions about their investments, providing a practical example of how financial principles can guide investment strategies.

💡Discipline

Discipline in finance refers to the practice of consistently following a set of rules or strategies to achieve financial goals. Throughout the transcript, the speaker emphasizes the importance of discipline in financial planning, investment, and retirement savings, suggesting it as a key factor for successful wealth management.

💡Myths

The speaker discusses several common myths about retirement and investment, such as the expectation of always being young, relying on children for support, or expecting government jobs to provide complete security. By debunking these myths, the speaker aims to encourage a more realistic and proactive approach to financial planning.

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