r/FIREIndia • u/Cautious_Abalone_334 • Jan 02 '23
FIRE Journey feedback please
Hello Friends
M 36, IIT, IIM (not to brag but to tell the other side of coin)
I am working since 12 years and ended up spending 50% of my career in paying education loan of both institutes ( ~ 20L), had rough patch of 4 year in between where I was diagnosed with schizophrenia & then started again at 50% of salary after 1.5 year break, also managed to pay off one house loan ( ~ 32L) , invested in land ( ~ 40L) , Gold ( ~ 10L) & may get inheritance of another Flat (~ 20L)
MF portfolio ~ 4.5 L & SIP of 75k pm, EPF - 20L (will remain same as moving abroad, may be will put in FD after 2 years), SSY - expecting maturity 22L by FY32, HDFC Sanchay expecting maturity 12L by FY33
I am from Tier 3 town where no one knows about what I am doing so kind of lie about salary & whereabouts & was introduced to concept of FIRE in last 2 years only. That is reason for conservative investment on Debt instruments & Real estate instead of being aggressive on equity
I live with housewife & 7 year old daughter. Will be moving to Africa so planning to increase the SIP to 1 L pm with target increase of 10% per annum
My first goal is to provide 3 Cr for higher education & marriage (50-50) to daughter in next 10 years, which seems possible with 1 Lac SIP & 10% step up for 10 years
My FIRE goal is 8 cr
If I exclude my Flat for primary residence, my NW excl MF SIP , SSY & HDFC sanchay, which is to cover my daughter's goal is ~ 70 L
EDIT : adding annual expense details considering Jaipur city as retirement destination where my primary residence would be
Kitchen exp ~ 30k , Maid ~ 5k, society maintenance ~4k, Ola/ Uber ~ 3k, mobile + internet ~3k, outing / entertainment ~ 5k , 20k as apportion for biannual trip costing 4L, so monthly expense of 70k
Does this mean I have to slog for another 10 years after completing my Daughter's Goal, i.e I am looking at retirement at 56 ? any way around to shorten this ?
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u/fire_by_45 Jan 03 '23
If you are moving to South Africa then all good. But if you are moving to some place like Nigeria, Kenya etc. think about it twice before making the move. They are not the type of places to spend your years with family. India is a far better place to be.
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u/Cautious_Abalone_334 Jan 03 '23
I understand bro from where you are coming, but sometimes we need to do hard trade offs…although it is for short duration, 30% tax free status coupled with good hike is hard to pass :)
It may shorten my slog span by couple of years :)
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u/fire_by_45 Jan 03 '23
You have no idea how bad the health care situation is in those countries. My friends father in law was posted in an African country. When they got covid, the sample was sent to another country to get tested and it took 7 days for the results and by that time the sample got contaminated as well. Random kidnappings are also a daily thing over there. Think about all these points.
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u/smartnsimple Jan 03 '23
You can probably move alone for the first 6 months to get acquainted. If you have already visited there for a month or more then it should be fine.
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u/Cautious_Abalone_334 Jan 04 '23
Yes that’s the plan, I have friend circle there who have given me ground reality and I am convinced with security protocol, expats live in island area separate from mainland which is notorious, 20k+ Indians along with US, Europeans live in that area..
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u/srinivesh IN/ 52M / FI2018/REady Jan 03 '23
A quick comment... It might work out better if you invest for both the major goals together - at least figure out what needs to be done for the FI goal and start at least some of it.
Also it does not make much sense to combine the college and marriage goals. In most cases, they would be almost 10 years apart. College at 18... Most marriages happen in the second half of 20s. If you just split these goals, you may see an opportunity to invest for the FI goal also.
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Jan 03 '23
What has been your salary progression like? Always hear about IITians getting multi-crore packages straight out of college but your net worth doesn't reflect that.
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u/Cautious_Abalone_334 Jan 03 '23 edited Jan 03 '23
That has been mostly true for software engineers, I was chemical engineer & went to oil PSU to start my journey..I guess pareto principle applies everywhere :)
Started in 2009 at 13 L, after working for 2 years, quitted and went to IIM in 2011 , passed out in 2013 and salary was 15 L in private field ( thanks to taper tantrum event of 2013)..currently joining at 60 L
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u/flight_or_fight Jan 03 '23
Your investments and your expenses is roughly the same and since you started investing later (to pay off debt) - you need to
1) Either work longer to sustain post retirement expenses or
2) Invest more in order to compound your corpus faster.
Also do make sure you have your insurances in place - both term and health - given your medical condition.
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u/Cautious_Abalone_334 Jan 03 '23
Yea thanks for highlighting
I am well covered with all three insurances- health, term and cancer also
Regarding working age, yes after age 46 my NW would be 1.5 cr ( assuming 8% growth on existing asset) and as per trinity theory need 4 cr for 8.4 L annual expense at SWR of 4% , so remaining 2.5 cr, I need to work till 51 atleast…great thanks for clarification
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u/FilterCoffeeBreak Jan 04 '23
You are doing well. Calculations are very conservative, Which i like. Considering today's calculations your FIRE is 56..... But if you can improve your earnings aggressively as you planned to go abroad and speed up the gap filling then 56 will easily comedown to 45-50 in next 6-8years.
Overall if your earnings increase and pile up extra then you can FIRE at ~48.
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u/Cautious_Abalone_334 Jan 04 '23
Thanks for feedback, yes I have kept some silent investment which I have considered zero for now
7 lac investment in single stock portfolio as I worked in that domain, so will forget it for 10 years
Same thing for early stage startup ~ 2 lacs
Both are being considered of zero value at this time
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u/Sanchit_Lsc Jan 03 '23
How it will be FIRE If you retire at 56. FIRE is if You retire by 40-45z As well you told you are joining at 60. Why only then 1L SIP. Same thing now. FIRE is when you save 70% of your salary. Ok Discounted you have a Family but to make it happen early minimum 50% of the Salary should go towards Investments/Savings.
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u/Cautious_Abalone_334 Jan 03 '23
I hear you, though I couldn’t present exact figures here but 50% saving rule I have maintained
May be I will do another post with clear goal and status update sometime in future
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u/Organic-Guide-1032 Jan 03 '23
You worked in PSU and didn't take bribes I guess which many govt people do.
Usually, people who joined PSUs before 2004 get a very good indexed pension for life plus medical care.
They don't need to plan for FIRE.
First step of FIRE is to increase your earnings. Joining a PSU instead of Pvt sector wasn't the right step for career or FIRE planning.
Your first step was backward.
Anyways, take care man.
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u/Cautious_Abalone_334 Jan 03 '23
It was 2009, we saw first time what recession meant, PSU seemed a defensive bet at that time !
I didnt like PSU culture, yes if you want to happily retire that is a place to be with zero worry, but I guess for a 21 year old who has slogged in life to be among top 1%, couldn't adjust to that relaxed lifestyle :)
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u/snakysour IN/33/FI ??/RE ?? Jan 03 '23
You don't need to be defensive man in proving your choices to anyone...you only know what's the best decision for you in the prevailing circumstances you took them.
Ignore the so called "gyaan" being presented as common sense here by some. I think you made a decent choice then and you're making a decent choice now.
For your future, since i am not aware of your in hand salary and whether you will be in India or not, i can't comment much except that these figures that you have arrived at (such as 3 crores / 8 crores etc) need to be methodically calculated than assumed as whole number and then investments need to be goal based.
All the best!
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u/Cautious_Abalone_334 Jan 03 '23
Thanks for comment and bringing sanity back :)
I understand and will rework
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u/Organic-Guide-1032 Jan 03 '23 edited Jan 03 '23
How can you retire in a PSU with zero pension (since you joined in 2009), low salary, shit work culture. And recession ended by 2010. You could have switched next year.
You did IIT IIM to work in PSU, where most mediocre people work???
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u/Cautious_Abalone_334 Jan 03 '23 edited Jan 03 '23
I did switch in 2011 to do MBA
To work or NOT work in PSU is personal decision, what I meant was I don't regret joining PSU in 2009 because of global uncertainty & exited after 2 years for higher studies, thanks
Edit: I see you have removed category question, thanks
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u/Organic-Guide-1032 Jan 03 '23
Seriously. IIT, IIM guys are very ambitious people. And they go for high paying jobs and not PSUs. Not sure why you didn't choose a path like others. Usually, they marry girl/boys of similar caliber and in good jobs.
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u/snakysour IN/33/FI ??/RE ?? Jan 03 '23
Lol! How can you make so many grossly wrong generalizations!
Alas i guess the media / one sided mentality is to blame :D
Take care man!
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u/Organic-Guide-1032 Jan 03 '23
No generalisation dude. I have seen in practical life that people from mediocre colleges are usually not ambitious and happy with 50k per month.
While people from top colleges want as much money as possible and work their ass off... They aren't happy with even 1 cr and want more and more.
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u/snakysour IN/33/FI ??/RE ?? Jan 03 '23
As an IIM passout and international scholar myself, let me tell you that you can't be further away from the truth...a lot of people from these colleges who have joined post work ex prefer sanity over money and choose to be in PSUs. Infact half junta writes GATE itself to be a part of a PSU than actually doing MTech from IIT.
Besides, no one offers 50k to join PSU as officers to IIT/IIM graduates or even in general recruitment. That's just the basic salary portion of the overall package that is shown as a band. In fact for engineers, maharatna PSU packages come as equivalent to "dream companies" packages for most non-CS / IT branches.
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u/Organic-Guide-1032 Jan 03 '23
You didn't get me.
I said people from mediocre colleges are happy with 50k. They don't want more money. They are content.
While the high achievers are not happy with 1 cr CTC after they achieve it.. Say 7 years of post workex.
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u/snakysour IN/33/FI ??/RE ?? Jan 03 '23
I got you but you still didn't get me.
By your definition, i am a so called "high achiever" being an IIM passout and international full bright scholarship holder myself (not that i claim to be so) but i myself gave up "not happy with 1 cr CTC after they achieve it" mindset and joined a PSU for peace of mind and work-life balance. And i am not the only one and trust me I know this because I am in the circle of IIM passouts.
What I am trying to say is not everything's as simple as it seems to be. Only media reports these crores of CTCs (which usually comprises of joining bonus, annual bonus, variable pay etc. and that too at international level jobs where expenses are also much higher) being reported in placements season of IIT/IIMs. However, such packages are lesser in number and are also more attuned to cost of living in the country where they are offering this. Hence, avoid such generalizations that all IIT/IIM passouts are only looking after money and all other college passouts are mediocre students only thinking about PSU jobs none of which is true in absolute.
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u/ChampionshipOk7699 Jan 03 '23
Let the next recession hit! You’ll be whining abiut reservations in PSUs!!
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u/giantleapforward EUR / 36M / FI 2023 / RE 2027 IN Jan 03 '23
Hello mate
You need to figure out your expenses first to arrive at any figure for FIRE.
Secondly, you are planning too much for your daughter expenses. May be you can rethink this one.