How millennial investors can retire in their 30s
Hello doston, Angel Broking ke iss millennials and investing special podcast mein aapka swagat hai.
Doston, hum mein se kaun jaldi retire ho ke, pahado ya kisi beach-town mein chill nahi karna chahta?
Par yeh itna aasan nahi hai. Agar hum jaldi retire karna chahte hain toh uske liye aaj sacrifice aur savings dono hi karni padegi.
Apparently, USA mein ek movement chala tha under which loads of corporate professionals were working diligently on retiring early.
This movement was called FIRE, short for Financial Independence and Retire Early.
Under this movement, young corporate professionals aimed at saving as much as possible and using those savings subsequently to set up a life for themselves after retirement.
As the name suggests, the movement was based on two pillars. One is to set up one’s own financial independence and the other was to take early retirement. But ismein bhi multiple factors are at play. Let’s dig deeper:
In the financial independence part, aapka paisa should work for you rather than the other way around. Aap do type ki kamaai karte hai: Ek hai active income aur doosri hai passive income. Jab aapki passive income active income se zyaada hoti hai, then you can be considered to be financially independent.
Agar aap apne 9-to-5 job pe apni income ke liye dependent rahege, toh early retirement ki savings banana mushkil ho sakta hai. Zaroori yeh hai ke aap, multiple sources of passive income taiyaar karein.
Par yeh aap kaise karenge?
Sabse pehle, aapki savings aapke income ka kitna percentage hai yeh determine kijiye. Agar aap 50-70% of your income savings main daal sakte hai toh aapke early retirement lene ke options badh jaaengein. This sounds difficult if not impossible. Nobody said this was going to be easy.
Doosra point yeh ke aapka total retirement amount kitna hona chahiye yeh determine kijiye. Let us suppose ke aapka annual income hai about Rs 10 lakhs. Ab retirement corpus determine karne ke liye iss number ko 25 se multiply kijiye. So, if you want to retire by 30-35, you would need to have atleast Rs 2.5 crore with you. This is just an example, the amount varies on your lifestyle, expenses, and etc.
Teesra point yeh ke ek plan banaye on how long it will take you to reach your goal.
Teen alag-alag tareekon se you can go about approaching the FIRE method.
First method ke under you should aim at increasing savings and decreasing expenses.
Second method ke under you get to spend a little more but because of higher expenses, you will not be able to retire as early as you want.
And under the third method, you try and amass as much savings as possible to kickstart your startup journey. If your startup succeeds then you will be able to retire early. Startups are always an exciting place, the chances of high risks and potentially high rewards are on the cards.
Iske saath-saath aur bhi cheezein hai jo aap kar sake hai:
Aapko jo cash gifts milte hai- rishtedaar ya padosiyoon se- ke ghar jaane pe unhe kharch mat kariye. Invest them in a fixed deposit or equities or a debt fund.The idea being money saved is money earned.
Debt ko har haal pe avoid kariye: Hum mein se kai logon ko lagta hai ke credit card rakhna bahut jaroori hai. But hum mein se kai saare hai jo credit card ko irresponsibly use karte hai and consequently build up interest charges and late payment penalties. Agar aap credit card responsibly and cautiously use nahi kar sakte toh unse dhoor hi rahiye.
Apni spendings ko aggressively monitor kariye. Income haath mein aate hi usse savings ki taraf redirect karein. Jo balance hai usko expenses ke liye use karein. Expenses ko deprioritise karein auur savings ko prioritise. Isi tarah se aapka retirement corpus banega.
Another must-have is to get insurance. Without insurance, your savings could be wiped out in a medical emergency. Iske alawa, you probably have dependents who will need income after you have passed away. Getting insurance becomes doubly important.
Emergency fund banana behad jaroori hai. Life unpredictable hai. Kab kya ho jaaye, humein nahi pata. Ek strong emergency fund aapko life ke mushkil waqt bahut kaam aa sakta hai.
Ek backup plan taiyaar rakhiye. It is not necessary ke aapki life aapke plan ke according kategi. Life bhi, ek famous former sports personality ke quote jaisi hi hai- jo quote yeh tha- “Everyone has a plan until they get punched in the face.” Har jane ke paas plan hota hai and then life happens. Isiliye ek back up plan hamesha ready rakhe.
Apna interest kabhi bhi withdraw na karein. Interest ko bhi reinvest karein taki interest pe bhi aapko interest mile.
Ok, now that we are done with the rules you should follow for FIRE, let us have a look at how and where to invest.
In case you are a young professional with no dependents:
Agar aap ke upar koi dependents nai hai and you are a young professional then your maximum investments should be in the equity markets. Ek thumb rule jo often follow hota hai to determine your equity investment is 100- your age. So, if your age is 25, then 75% of your portfolio should be in equities. It’s a general rule of thumb, asliyat mein aapko aapki risk appetite ke according decisions lene chahiye. Nothing is guaranteed, yaha.
In case, aap working professional hai with two kids:
In this case, aapko capital preservation pe zyaada focus karna padega. For that you will have to reduce your investments in equity and increase your investment in debt. Aapka portfolio should consist of 40% in equity schemes or direct equity investments, 20% in ETF, 30% in debt funds and 10% in liquid schemes.
To be fair, there is no hard and fast rule that can be followed strictly. Like I said earlier, your investment portfolio changes according to your risk appetite and risk tolerance capacity.
Ek aur baat. Financial experts ka kehna hai ki har koi jo early retirement lena chahte hain unhone yeh examine karna chahiye ke woh early retire kyun hone chahte hai? Aisa kya kaam hai jiske baare main aap passionate hai aur kya woh kaam kar ke aap paise kama sakte hai ya nahi? Agar aap ko woh kaam mile jise kar ke aap 50-60 tak passionately kaam kar sakte hai toh early retirement lena ka mann nahi karega aapko.
Lastly, doston, yeh baat yaad rakhiyega ke stock market investing main risk hamesha rahega. This podcast has been made for educational purposes only and the investor must do his own research as well.
Aise aur interesting podcasts sunne ke liye humein follow karein hamare youtube and other social media channels ke zariye. Until then goodbye and happy investing!
Investments in the securities markets are subject to market risks. Read all the related documents carefully before investing.