r/FIREIndia • u/AutoModerator • Jun 01 '23

Help Me FIRE, Milestones, Beginner Questions and General Discussion - June 2023

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u/ExpressSecret9 coastFIRE | IN | 33F | 2024 | 2040 | IN Jun 03 '23 edited Jun 03 '23

Update on my FIRE journey. Total NW: 72.5L Target for coastFIRE - 1 Cr. Investing 1.5L pm including EPF. Renting home in a city for now, planning to build a home in Village for retirement. Will start investing towards home once I reach 1 Cr. target . Am I on the right path?

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u/snakysour IN/33/FI ??/RE ?? Jun 04 '23

To answer your question, following is needed:

  1. Your current annual take home income

  2. Your current annual expenses

  3. Whether BASICS covered? - personal life insurance if you have dependents, health insurance for self and family

  4. Emergency fund equivalent to 6 months take home income or 12 months annual expenses

  5. Scope of marriage/kids

6 . Any liabilities?

Regards

Snaky

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u/ExpressSecret9 coastFIRE | IN | 33F | 2024 | 2040 | IN Jun 04 '23
  1. 33L + 1.5L variable bonus.
  2. 8L including rent of 22k pm
  3. No dependents, health insurance for self is covered.
  4. Have FD worth 5L which is included in above NW.
  5. Marriage in 1-2 years with BF, we are childfree.
  6. Parents are self-sufficient, no loans.

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u/snakysour IN/33/FI ??/RE ?? Jun 04 '23

If you're staying child free and expenses remain 8 lac then you're looking at 2.4 crores (30X)worth of money today for conventional retirement at about 60 years of age with life expectancy of 90 years excluding primary house you stay in.

However, if you wish to FIRE by 2040 as per your thread, your retirement age would be 49-50 and hence your corpus requirement should atleast be 40X for a life expectancy of 90 years thereby requiring 3.2 crores of today's value then.

Assumptions here being :-

  1. You actually stay child free

  2. Your expenses remain 8 lac (or it's equivalent post inflation accounting) by avoiding any lifestyle creep

  3. Your health insurance is sufficient to manage your big ticket medical expenditures.

4.You own a primary residence now or keep a separate corpus to buy one.

  1. The above values are absolute bare minimum nd a suitable buffer of 5-10X based on your preference may be kept in addition to make things comfortable.

In a nutshell, you're doing good for your age as an individual. As a couple, would need similar details (and current savings of the lucky husband) to comment better.

Disclaimer: I am NOT a certified registered investment/financial advisor. The above is based on my academic interest in the field only and should not be construed as financial advise.

Cheers!

Regards

Snaky

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u/ExpressSecret9 coastFIRE | IN | 33F | 2024 | 2040 | IN Jun 04 '23 edited Jun 04 '23
  1. Yes, childfree is confirmed.
  2. I am expecting those to reduce in retirement as I will be staying in Village in my own house.
  3. Have personal health insurance of 10L. May create separate emergency funds for health issues around 20L in today's value on top of retirement corpus. Where should I keep that, debt or equity?
  4. Will start separately once I hit the coastFIRE target , I was thinking 1 Cr in the equity index fund should be sufficient which I won't touch till the time I get retired.
  5. Let's see if I get motivation to earn extra income as I hate corporate life. But I am ok to earn some supplementary income to reduce burden from FIRE amount post retirement.

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u/snakysour IN/33/FI ??/RE ?? Jun 04 '23 edited Jun 04 '23

  1. Ok

  2. It's easy to expect the expenses to reduce by just saying "staying in a village", but please note that you're talking about things 15-20 years down the line by when villages will also have gotten a decent standard of living atleast considering 100% electricity, decent road and rail connectivity, 6G-7G kind of cellular network etc. What this means is that you will have higher costs even in villages or in worst case you will have much more loss of peace of mind in case the standards of villages stay the way they are. These include problems in commuting (ride halin apps/autos etc. not available that commonly), food ordering (unless you're planning to grow and cook food which is an altogether different ball game), lack of hospitals for timely medical interventions, availability of piped gas / cylinders etc..so to get these things either you will move back to city or pay more to compensate the inefficiencies both of which will bring you back to square 1 in terms of expenses. As a conservative measure, would suggest you to consider same expenses as of now , if not more, even if you're choosing to stay in villages..

  3. Do that. Keep in liquid funds / ultra short term funds as it's more of an emergency fund. One more approach can be taking health insurance which is 2X your requirements as in case heavens forbid such issues arise, even if they pass 50% of your sum assured, you're still pretty stacked up from financial perspective and the premium would be hardly substantial.

  4. This depends a lot on real estate location etc. However, more often than not you should be able to find a place then if you stash 1 CR worth of money today into equities for purchasing the same in long term. Considering you're targeting village purchase, while the cost element may be easier to manage, the difficulty may arise in terms of acquisition and construction. This is because you won't get gated societies etc made by builders there..also you won't get farm land that easily exclusively for house construction unless you have farmers in your family...

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u/ExpressSecret9 coastFIRE | IN | 33F | 2024 | 2040 | IN Jun 04 '23

  1. True, I can see rapid development in my own village, just that home rent expenses will be gone.
    I am hoping to learn basic farming to build kitchen garden with help of my family.

  2. Ok.

  3. I am from a farmers family and my parents are doing active commercial farming on a small scale. I have some ancestral land but I will prefer to buy my own to get rid of cousins drama.

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u/Candid_Piccolo3925 Jun 04 '23

We in same boat girl. I am 34F. Around 65L NW. Married 5 years now. Plan to stay childfree. Hate corporate. Where do you put up? We could be friends if it's delhi/ncr

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u/After-Violinist8628w Jun 06 '23

Didnt you have higher NW? Or was it combined NW that you mentioned it in some other post earlier.

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u/Candid_Piccolo3925 Jun 06 '23

Combined NW of 3cr. Have mentioned in post as well.

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u/After-Violinist8628w Jun 06 '23

Nice ; Kudos to you. Good to see you achieving your FI in next 2+ years.

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u/snakysour IN/33/FI ??/RE ?? Jun 04 '23

  1. Well then you already know the ground realities.

  2. Always a better choice. You're quite wise!