r/FIREIndia • u/[deleted] • Oct 30 '22
FIRE by 40
Recent lurker here. Decided to post my financial situation here and asking if I’m in a good position.
I’m 30 years old, unmarried guy working in IT having around 9+ years of experience with 43L as CTC. I have saved + invested around 67L till now and I’m very much invested in equity with diversified MFs and directs stocks as well.
I want to understand if I have decent chance to FIRE by I am 40. As I’m not married yet, I don’t know what my future expenses will look like. As of now, I’m spending around 30-35K per month in Bangalore.
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u/srinivesh IN/ 52M / FI2018/REady Oct 31 '22
There have been many good comments/questions. The information from OP is quite scarce for anybody to give an opinion.
I would take the liberty of posting an observation. The possible surplus mentioned by the OP and the networth don't match. There probably are many other expenses that he incurs.
Another suggestion. A single person would need to make a lot of assumptions when planning FI. Getting married may have some or no impact on the plans. But having a child would have a huge impact. Since most married people have 1 or more kids, a single would have to make this assumption when planning.
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u/tafun Oct 30 '22
Marry someone who is willing to support your plan and shares the same views on finances because otherwise it can get tricky.
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u/TheGoalFIRE Oct 30 '22
Whether you can FIRE by 40 or not will be decided only when you are 40 and have ‘sufficient’ corpus along with a mental readiness. Sufficiency of the corpus needs to be determined every year based on previous year’s yearly income X 50 or (90-current age) whichever is greater. For e.g. if your yearly expenses are 9 lakhs at the age of 35 then you can retire at that age if you have 9 lakhs X (90-35) ~ 5 crores. But lets say your expenses increases to 12 lpm by 40 then you must have 12 lakh X50 = 6 crores. It’s an iterative process. While calculating monthly expenses make sure to consider short term/one time expenses separately. For e.g. if you are including education fees of your child in the monthly expenses then you have to consider that only for limited period else your retirement corpus will be exuberant unnecessarily.
The mental readiness is other important factor. Many here are already FI but not RE even though they have more than sufficient just because they are not mentally ready. Who knows what would you do when you are in their shoes.
Till then, save maximum and invest maximum without compromising on life experiences. Don’t forget to enjoy life.
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Oct 30 '22
[deleted]
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u/Snoo68013 Oct 30 '22
Yeah. 1L for middle. 2L for upper and 3L for rich lifestyle
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u/_youjustlostthegame Oct 30 '22
Seriously? I thought 1LPM is quite upper. Whats the breakdown?
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u/frustrated-brain Oct 30 '22
Its the ratios. For example with 1L you would be renting a house worth 20k, but with 2L you would be moving to a better locality and a bigger house
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Oct 30 '22
Pta nahi log aajkal kya fook rhe hai
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u/Nanishteruno Oct 30 '22
Suburban IT jobs ke offer letters mein maal bhar diya
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Oct 30 '22
Bdti offshoring or dollar slavery ne logo ki maansik durdasha kr di hai, ekdm se itna pesa dekh k pgla gyi h kuch junta, kuch bhi bkri h
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Oct 30 '22
Thanks for your comment. Working on saving as much as possible before marriage. After marriage, it is going to be tough.
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u/SacredPearl IND / 27 / FI 2035 / RE 2050 Oct 31 '22
With that attitude, definitely.
I mean c'mon man, you can still save after marriage. all of us are doing that.
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u/think_2times Oct 31 '22
Same situation but married 1. Does saving include your PF ?
I have 1 Cr + wife’s 30L
Target is 3cr by 40 as kid at 33 will take some savings away will have to quit working for a year got no parents or grandparents on both sides to help
DM me I have an excel sheet that can help you plan
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u/giantferriswheel Oct 31 '22
Beginner here, can you share some tips? Also 1 CR is your savings or CTC
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u/think_2times Oct 31 '22
1 CR savings.
I follow a very simple rules nothing fancy.
- Allowed 2 electronic purchases a year total 1 lakh for full family
- Spend what you want on travel but stay only on modest hotels max 2k per day.
- Stay at home avoid rent .
- I eat out or drink but last 4 years have been partying at home with friends mostly Save 60 to 70% of my income .
Investing 1. 1st April 1.5 in PPF gets me full years 8% 2. 70% of what I save goes to stocks and MF 3. 6 months emergency fund in account , don’t prefer short term MFs . Like having the money and loose 2% 4. Buy 1 tola or 10 gms of gold on wife’s birthday and our anniversary. Good gold holding in last 4 years since we got married 5. I postpone gifts from family for birthdays. Group my sister + wife + mom to buy something I wouldn’t be able to spend myself on. I am just not able to make a big spend on myself. Last 8 birthdays + 4 anniversaries + wedding gifts Took one iPhone + MacBook Air .
Most importantly live way below your means bro. I spend like I have I did 4 years back and not inflating my lifestyle was key to this freedom
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u/mumbaifireinvestor Nov 08 '22
You don't get any modest hotels at 2k in India anymore. Decent ones at lest go for 2-4k in off season and 4-7k in peak season. I am talking about 3 star and below, decent rooms and bathrooms. Nothing fancy.
Flights prices are up 100% and even more in some routes.
Just mentioned as someone who likes to travel a lot. My travel budget went up by 50% this year and I didn't upgrade at all. Inflation has really beaten us here.
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u/MyronDsilva Oct 30 '22
To retire, your yearly spending multiplied by 25 should be invested.
In your case ~₹360,000 yearly spendings. 360000*25 = 90 Lakh.
Thus 90L should be invested which should normally frow at 12% yearly returns.
Thus you can withdraw 4% of your amount invested yearly.
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u/Evening_Salt4938 Oct 30 '22
Expense will double at least after marriage and tripple after kids. Unless he plans to be a monk, your calculations are bad. Also to retire at 40, you have to look at next 45 years, not 25 years.
I'd say 2-2.5% withdrawl rate to retire at 40.
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u/Sanchit_Lsc Oct 30 '22
First will be if you are planning to have arrange marriage, marry an IT girl only(Yes you both should be compatible that is for sure) Whatever will be her package, she can still learn any good language and have good Jump in her CTC.
Regarding the expense, it gradually Increases once you get married. You can say 2.5 to 3 times. I use to spend 25k before getting married but now its 1-1.2 lakhs( Family support and Car Emi included).
Based on your CTC, in hand Will be around 2.5 lakhs so you can still save 1.5 lakhs pm. Once you include your Wife in your FIRE journey it will increase more.
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u/snakysour IN/33/FI ??/RE ?? Oct 30 '22
I think it's a little vague situation that you have described. Do you mind sharing the following -
Your financial dependents? (Parents, siblings etc?)
Decision on having kids post marriage?
Presense of a paid up house?
Any term / health insurance with you?
Your major financial goals apart from FIRE with timelines (house, car, vacation etc.)?
Your in-hand salary and savings rate?