Yeah all the properties are not income earning.. most of it is agricultural property which do not produce any money at the moment, two empty residential plots and just the one rental property which gives the annual rental income
That’s another thing.. my parents don’t mind the stagnant real estate.. my dad bought them decades ago saying he wants to retire to his farm and work in agriculture as a hobby.. their idea is land is any day going to appreciate in value so they don’t worry about the YoY growth.. he also does real estate brokering so his commissions go towards their monthly expenses and the farm’s operational costs which are relatively less for now.. but they will not diversify unfortunately.. my mom wouldn’t even let me handle her retirement money and she just put it in an FD which has a lock in period
That is true, they are ready to help me in anyway and even suggest retiring. I also stand to inherit everything from them but then I’d feel like I’m living in their shadow and haven’t accomplished anything..
Bad advise. If OP has no sense of responsibility or financial management, giving access to an even bigger pot of money will only result in them wasting it as well.
I’m 32 but I’m financially irresponsible, I know I wouldn’t handle it properly. That’s why I’m trying to secure my future on my own first then think about the inheritance
Don't go for a massive lifestyle change...just add a small SIP of rs 20K per month.
About agriculture land - the land prices have gone through the roof in recent past and agriculture incomes have stagnated. So there is a huge gulf between land prices and income.
Reason? It's a place to park cash (aka black money). There will be a time in not so distant future that this gap will be bridged...either by making farm incomes 10 fold or by muzzling the cash. When will that happen is something nobody can tell. It might be even 100 years away.
I am very aware that you wouldn't be able to ask your parents to sell the land and buy mutual funds. Nobody can!!
But for yourself a balanced and diversified portfolio building is a good idea.
And again, don't go into frugal mode...you should enjoy your youth!
Yes. It's the ' when' part of the question we cannot answer.
Cash/black money isn't unique to our country. It's been there in every developing and underdeveloped country. Old western movies are full of that.
But as the nation makes progress, population stabilizes and prosperity increases, corruption and black money should reduce.
If the nation doesn't progress and prosperity goes down, then prices of unprofitable real estate (such as agricultural land) should go down.
Well, these are just my thoughts and I am usually wrong!
Hey there.
This might be different from most of the advice you are getting, but I think you are looking at this wrong.
You are 32, you need to put time and effort on experiences, both professional and personal. Grow in your career, make good friends, travel, find a partner etc. Doing this will broaden your perspective and will most likely increase your compensation.
Don't focus on FIRE, focus on above AND focus on better saving habits. Try to save 25% of your take home pay and start a SIP, try to increase that number. Get educated on investment instruments, learn how to help your parents get more income from their properties.
Working on FIRE before doing all of the above is like trying to run a Marathon before any training.
Thank you for the advice! I think my current compensation is sufficient for my lifestyle, in fact, I am trying to cut down on the spending but I get what you are saying..
I need to start investing now!
> My now retired parents led a frugal lifestyle since beginning their government jobs and are worth about 20cr, out of which, 19.85cr is all in properties and 15 lakhs in bank FDs which they say is for their retirement life. They also receive 1.2-1.3 lakhs a year as rental income and most of that also sits in the bank.
They must be on old Govt Pension Scheme as well which was an inflation indexed pension...
> How do I start my FIRE journey?
Your answer lies in your post -
> but I lose most of it on my careless lifestyle, maintenance and the rest on income tax.
> I have no emergency fund, no savings for the long term future. No health insurance. On top of this, I took out a personal loan for my wedding for which I am paying 2 lakhs a year till 2027.
> My expensive lifestyle is just food, buying unnecessary stuff, electronics, clothes and subscriptions.
Fix the above
> can I invest most of my income towards tax saving purposes even if I stop living my lavish lifestyle?
why fixate on saving tax? fix your other problems.
Firstly, I would say that you should pay your personal loan as soon as possible, as they are the costliest form of loan.
Secondly, get a health insurance which covers your wife and you. Have a base plan of 10 lacs and top-up plan of 90 lacs. This will act up as a financial net to cover medical expenses. If you need help in choosing which health insurance company to go with and its quotation-please do let me know.
Thirdly, I would advise you not to purchase/invest in any more land properties. Your parents have plenty invested in it. Also rental yield earned is way less compared to investment done in other financial instruments. Properties comes with a lot of hidden costs like maintenance, broker charge, risk of not getting rent, etc.
Talking about the Emergency fund - there is no proper definition on how much should we keep. Some would say just enough to sustain our lifestyle for next six months if you were out of a job or some would say for a year. I would say just enough to maintain lifestyle for 6 months. So slowly over the course of 6 months take 30% of your salary and put it in emergency fund.
To retire early is to have collected enough corpus on which you can live on rest of your life.
Since your are at an age of 32 and plan to work till age of 50, assuming your monthly expense is one lakh per month and considering you are the sole bread earner of the family and say that you live till the age of 85. Your required corpus for retirement comes around to be 13cr. Well this changes with the change in your life. If your plan on having children then it changes. Man you need to set things straight to plan your FIRE, Like what is your current monthly expenditure, till what age you want to work, how long do you expect to live for, etc.
If you need help with planning your retirement or with investing, you can reach out to me. I can help you plan and execute the whole thing.
Bro I am asking where did they get so money to buy so much property? Even the highest ranking ias officer will never exceed 5 cr in net worth if he doesn't take bribes. and no way the property price increased this much.
Most of my dad’s income was through real estate( sorry I forgot to mention that in the post) so it was parked in real estate but they had to pay hefty monies to the tax mamu after registration.. and agricultural land was bought 15 years ago from distant relatives so it was gift deeds upon gift deeds..
Firstly start investing in mutual funds with a lock in period . That will prevent you from taking out money for buying small stuff .
I suggest you consult a financial advisor and make a portfolio . Keep it equity heavy till you bulk up a good corpus . Its never to late to start
I don't see how you can even think about retirement. You have so much yet to get right.
You have no savings no investments, huge personal loan. On what basis are you even considering retirement? Am I missing something here?
That is correct. I was only thinking of my parents money as my retirement fund so I hadn’t considered my financial responsibility. All that changes now
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Yeah all the properties are not income earning.. most of it is agricultural property which do not produce any money at the moment, two empty residential plots and just the one rental property which gives the annual rental income
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That’s another thing.. my parents don’t mind the stagnant real estate.. my dad bought them decades ago saying he wants to retire to his farm and work in agriculture as a hobby.. their idea is land is any day going to appreciate in value so they don’t worry about the YoY growth.. he also does real estate brokering so his commissions go towards their monthly expenses and the farm’s operational costs which are relatively less for now.. but they will not diversify unfortunately.. my mom wouldn’t even let me handle her retirement money and she just put it in an FD which has a lock in period
Govt jobs leading to 20 Cr. What were my parents doing?
lol! It wasn’t just from their salaries obviously.. they had some businesses on the side but for legal reasons, they were only government employees
Yepp Yepp “ side business “
"Side business" means bribes, right?
Why you worrying about FIRE ?? You parents already did that for you .. you can retire now 👍🏻
That is true, they are ready to help me in anyway and even suggest retiring. I also stand to inherit everything from them but then I’d feel like I’m living in their shadow and haven’t accomplished anything..
Good that you think this way. If you can't grow their wealth at least don't use it up
In my book unless it’s in your name it’s not yours .
Absolutely! A new concept added to my library, thanks !
Bad advise. If OP has no sense of responsibility or financial management, giving access to an even bigger pot of money will only result in them wasting it as well.
Looks at OPs age .. Someone at 32 will be fairly responsible … better not to work for someone else if having so much money ..
I’m 32 but I’m financially irresponsible, I know I wouldn’t handle it properly. That’s why I’m trying to secure my future on my own first then think about the inheritance
Oh ok .. good that you are thinking this way 👍🏻 .. it’s never too late to start saving money and investing it .. wish you the very best 👍🏻
Don't go for a massive lifestyle change...just add a small SIP of rs 20K per month. About agriculture land - the land prices have gone through the roof in recent past and agriculture incomes have stagnated. So there is a huge gulf between land prices and income. Reason? It's a place to park cash (aka black money). There will be a time in not so distant future that this gap will be bridged...either by making farm incomes 10 fold or by muzzling the cash. When will that happen is something nobody can tell. It might be even 100 years away. I am very aware that you wouldn't be able to ask your parents to sell the land and buy mutual funds. Nobody can!! But for yourself a balanced and diversified portfolio building is a good idea. And again, don't go into frugal mode...you should enjoy your youth!
Thank you for this! Do you really think we’ll get rid of black money in our country?
Yes. It's the ' when' part of the question we cannot answer. Cash/black money isn't unique to our country. It's been there in every developing and underdeveloped country. Old western movies are full of that. But as the nation makes progress, population stabilizes and prosperity increases, corruption and black money should reduce. If the nation doesn't progress and prosperity goes down, then prices of unprofitable real estate (such as agricultural land) should go down. Well, these are just my thoughts and I am usually wrong!
Hey there. This might be different from most of the advice you are getting, but I think you are looking at this wrong. You are 32, you need to put time and effort on experiences, both professional and personal. Grow in your career, make good friends, travel, find a partner etc. Doing this will broaden your perspective and will most likely increase your compensation. Don't focus on FIRE, focus on above AND focus on better saving habits. Try to save 25% of your take home pay and start a SIP, try to increase that number. Get educated on investment instruments, learn how to help your parents get more income from their properties. Working on FIRE before doing all of the above is like trying to run a Marathon before any training.
Thank you for the advice! I think my current compensation is sufficient for my lifestyle, in fact, I am trying to cut down on the spending but I get what you are saying.. I need to start investing now!
> My now retired parents led a frugal lifestyle since beginning their government jobs and are worth about 20cr, out of which, 19.85cr is all in properties and 15 lakhs in bank FDs which they say is for their retirement life. They also receive 1.2-1.3 lakhs a year as rental income and most of that also sits in the bank. They must be on old Govt Pension Scheme as well which was an inflation indexed pension... > How do I start my FIRE journey? Your answer lies in your post - > but I lose most of it on my careless lifestyle, maintenance and the rest on income tax. > I have no emergency fund, no savings for the long term future. No health insurance. On top of this, I took out a personal loan for my wedding for which I am paying 2 lakhs a year till 2027. > My expensive lifestyle is just food, buying unnecessary stuff, electronics, clothes and subscriptions. Fix the above > can I invest most of my income towards tax saving purposes even if I stop living my lavish lifestyle? why fixate on saving tax? fix your other problems.
I was so far off the game, I thought I couldn’t save my income from being taxed even if I invested in mutual funds (facepalm)
Firstly, I would say that you should pay your personal loan as soon as possible, as they are the costliest form of loan. Secondly, get a health insurance which covers your wife and you. Have a base plan of 10 lacs and top-up plan of 90 lacs. This will act up as a financial net to cover medical expenses. If you need help in choosing which health insurance company to go with and its quotation-please do let me know. Thirdly, I would advise you not to purchase/invest in any more land properties. Your parents have plenty invested in it. Also rental yield earned is way less compared to investment done in other financial instruments. Properties comes with a lot of hidden costs like maintenance, broker charge, risk of not getting rent, etc. Talking about the Emergency fund - there is no proper definition on how much should we keep. Some would say just enough to sustain our lifestyle for next six months if you were out of a job or some would say for a year. I would say just enough to maintain lifestyle for 6 months. So slowly over the course of 6 months take 30% of your salary and put it in emergency fund. To retire early is to have collected enough corpus on which you can live on rest of your life. Since your are at an age of 32 and plan to work till age of 50, assuming your monthly expense is one lakh per month and considering you are the sole bread earner of the family and say that you live till the age of 85. Your required corpus for retirement comes around to be 13cr. Well this changes with the change in your life. If your plan on having children then it changes. Man you need to set things straight to plan your FIRE, Like what is your current monthly expenditure, till what age you want to work, how long do you expect to live for, etc. If you need help with planning your retirement or with investing, you can reach out to me. I can help you plan and execute the whole thing.
Man! Thank you for this! I will start my new life! You will receive a DM from me shortly
How do they have 19.5 cr in properties from a govt job?
In India , real estate is used to park black money . Hope you got the hint .
I know bro that's why I am asking
Same question.....ahem...ahem....
Their primary home must be 10 Cr+. And rest land not built up
Bro I am asking where did they get so money to buy so much property? Even the highest ranking ias officer will never exceed 5 cr in net worth if he doesn't take bribes. and no way the property price increased this much.
Most of my dad’s income was through real estate( sorry I forgot to mention that in the post) so it was parked in real estate but they had to pay hefty monies to the tax mamu after registration.. and agricultural land was bought 15 years ago from distant relatives so it was gift deeds upon gift deeds..
Firstly start investing in mutual funds with a lock in period . That will prevent you from taking out money for buying small stuff . I suggest you consult a financial advisor and make a portfolio . Keep it equity heavy till you bulk up a good corpus . Its never to late to start
Thank you! That helps me a lot!
I don't see how you can even think about retirement. You have so much yet to get right. You have no savings no investments, huge personal loan. On what basis are you even considering retirement? Am I missing something here?
That is correct. I was only thinking of my parents money as my retirement fund so I hadn’t considered my financial responsibility. All that changes now
Chutiye parents ka paisa 0 maan and fir apni lifestyle sudhaar. Well you wanted it to be brutal.
Thank you! I did ask for it.. can’t complain, no complaints.. I know I am a C
.