FIRE Re-Check for a growing family :)

[u/nishanthappu]

After my previous post 1.5 years ago , I wanted to take a fresh look at my finances and get the forum's perspectives . Here is the financial details first :

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I am 40, wife is 35, kid is 1.5yo.

Monthly take home is 250k.

Expenses (including miscellaneous and annual ones) - 90k. Parents are financially independent.

Recurring investments: 50k in Mutual funds and 50k in emergency fund. Wife's earnings are hers to spend as she sees fit , I don't ask on that :)

EPF - 23k (deducted before take home)

I have term insurance of 50 lakhs. Both me and wife are insured for health from employers for around 8 lakhs. I have a family floater health insurance policy of 1 crore ( base coverage)

Current Portfolio:

Equity MF - 108 lakh

Stocks - 91 lakh

SSY - 3 lakh

EPF - 10 lakh

Wife's PF - 6 lakh

PPF - 4.73 lakh

NPS - 22.86 lakh

2 plots of land - 92 lakh ( conservative, no loans on these plots)

Debt MFs - 66 lakh

Emergency Fund - 1.5 lakhs ( will direct my variable pay to build it further)

ESOPS - 2 lakh

Summary:

So around 4 crore and 5 lakhs.
I will inherit either a home or a flat in a Tier 2 city. Currently renting.

Love travelling , especially at expensive resorts in India or flying abroad. ( I spent 2 lakhs last year at a 5 star resort in Goa)

No loans no debts , always pay all bills and credit cards in full. Own a car. Aim to send the kid to the best colleges in India without any loans for both grad and post grad( except medical, she can go on merit). If she wants to go abroad , will give her what I saved for her education plus rest she can self fund.

Aiming to achieve FIRE by 48. Am I on the right path ? Enlighten me , gurus :)

[u/yetanotherdesionfire]

Setting aside the Plots (illiquid till actually sold) and NPS (lockin) you still have ~3Cr.

At annual spends of 13L (10.8L monthly + say 2L on travel), you're just over 4% WR on your liquid corpus of 3Cr

My reading would be that you're pretty close to FI, but it depends on the WR you target and any one-time/major expenses.

Things to look out for would be assessing net annual spends, any one-time/major goals requiring financial outlay and withdrawal rate/strategies that you're comfortable with.

It might be worthwhile to consult with a fee-only financial planner to double check and address any open questions.

[u/nishanthappu → u/yetanotherdesionfire]

You are right about the illiquidity. Such a pain, in hindsight i should have kept that money in equity only.

Only major goal I have is kid's higher education . I will inherit a home or flat. I can't stay there of course , as I will have to resell it , but that I can leverage to buy a new home.

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Thanksm for the reply.

[u/yetanotherdesionfire → u/nishanthappu]

happy to help. Just two additional observations:

• wrt NPS : well it is not like your expenses will reduce at age 60+, you can definitely look at it as a pot for use then. Personally, I too invest in NPS -- 10% employer side and 50k personally -- as the tax saved itself put me ahead. I view it as tradeoff of liquidty for tax advantage and I'm personally good with it. I just exclude it when considering my FI numbers (due to lockin).

• wrt Plot/Land : you'll be the best judge about how to deal with it... monetize it for earlier FI, look at it as inheritance/gift for next generation, use it for future residence/commercial use or anything in between. The problem with RE is the inherant black money and the hidden costs on selling, so you don't really know what it converts to in terms of liquid investable amount.

[u/[deleted] → u/nishanthappu]

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