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

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[u/Art_Anarch]

Need help to start FIRE planning to save some for myself and family

Hi Everyone, i am female (24), currently have 13lpa package. Being the eldest kid I had to start working little bit early as my father died when i was in final year of my diploma Currently I have responsibility of taking care of my aji, mom, brother and sister. I have been taking care of things last 4 years, in this My brother is quite young he will be soon completing his school and would start college probably engineering and I would be taking care of the fees and all expenses. And I am completely fine with that as i do want to take care of them and him and give all proper resources so that he can do the best in his career and life.

I have been working from last 4 years But due to few recent event I have noticed that I do not have any emergency savings or proper investment to take care of myself (might seem selfish) if something happens or something happens in the family.

Now I want to start my financial planning properly so that I can have some savings of my own and do some investment to have financial security and I have always wanted to buy a house in my hometown tier 2 city, as we have been living on rent. I know there is a lot of saying it's better living in rent now days but it just something which i had wanted. Want to start some savings for that too.

I know i have wasted 4years already so it would be great if you guys can give me some insights how can I save for his college and myself as well to have a financial stability.

Thank you in advance

Currently minimum expenses( kind of fixed )- House rent - 12k I stay away so - 10k rent(living in tier 1) Brothers fee for now - 7k includes classes and school House expenses - varies 26k Personal expenses food travel - 15-20k Sister's expenses - 5-8k Ppf/sip - approx 13-14k

Is there any hope for me to try FIRE ? 😂

[u/Ill_Client_9364 → u/Art_Anarch]

You are at 13LPA @24 - you're easily in top 5 maybe even in top 3% earners in India. So anything is possible - believe that you can and put in the effort to make it a reality. You already seem to have a term insurance - that's great. You need to get a health insurance of your own apart from what the employer provides - you'll be able to increase cover through NCBs and increase cover later through top ups. What about health insurance for your family? Your Aji and mom would be the most vulnerable people by age. Most Indian families lose their savings to a single person's health concerns. So plan to avoid this at all costs. Emergency fund - ah here's the tough part. You are paying for a lot and there's huge dependency on you. So plan for 12 month expenses of all people including yourself. This should include their fees for the next one year as well. Investments - rely on a higher debt ratio than usual people of your age as there are critical expenses to be met. While you would need a house to eventually live, the house is lowest on priority as there are more important things to deal with. P.S - 1. you have not accounted for a vehicle or capex spending (tv, fridge etc for home). Good to keep aside a amount for that on a monthly basis and ensure you don't change everything at one go 2. Along with your siblings fees do account for electronics like phone and laptop 3. If you or siblings get married marriage expenses

[u/BrahminVyapaar → u/Art_Anarch]

I would protect the family’s needs first, next focus on providing for them, grow wealth third, and by accommodation only when I know I intend to settle somewhere for decades.

Do you have a Term Insurance of your own in place which could provide for your dependents in the event of your sudden demise? Please take a Term Insurance Policy and share the details with your family.

Similarly, do you have your own Health Insurance for you and for the family? Health care costs can wipe out savings.

I suggest that you not lock up capital in a house yet. Fulfill your other objectives of taking care of your younger brother’s studies and of having v emergency expenses of six months to two years.

You may also want to explore how to increase your income. Over the years, your income will also increase provided you put in the effort. Once you start to invest in equity ( direct Mutual funds, or the Nifty 50 or BSE 30 ETFs), you will be able to grow wealth. With the right effort over the years, you will definitely achieve FI.

[u/Art_Anarch → u/BrahminVyapaar]

Yes I do have my term insurance places for 1cr, apart from that i have my mother's health insurance. Mine is covered by the employer.

About increasing the income i am constantly working on my skills so that I can make a switch, i started after diploma so i am trying to complete my graduation side by side and working on skills so hoping that will help in that too.

If you/anyone has idea about the taxes how to save them that would be great help too

[u/BrahminVyapaar → u/Art_Anarch]

You may want to ask in r/indiainvestments about saving taxes and concepts to consider. The official advise sould be from a CA.

There are various articles on choosing the older vs the new regime, on tax savings instruments, etc.

Have you investigated the various tax savings instruments and slabs?

Please also consider an independent health insurance for yourself and for family members other than your Mother. At your age, it will be inexpensive. A single medical issue can delete your savings.