Hey do you want FIRE in your life.
Amazed!
Hey, don’t worry it is not real fire in your life but it is F.I.R.E.
Here, FIRE stands for Financial Independence and Retire early in your life.
Here the goal is to save and invest aggressively so that you can retire some time in your 30’s or 40’s or in other words retire early.
Table of Contents
What is the meaning of Financial Independence?
FIRE is the road map to early retirement. Financial Independence is a stage where your assets generate enough passive income to meet your expenses for life. It is the stage when you need not to work to a income for your day to day expenses.
To achieve financial freedom in your life you can build on assets such as house property, mutual funds/ stocks, deposits, annuity and dividend except from your money.
Reasons to retire early/ Why early retirement required?
Rohan said, I am happy the way I am in my life, then what is the need of early retirement?
What will I do after getting retired?
Do you think me too just sit and relax all the time?
I said, No, financial Independence does not mean that.
Financial Independence means a point in life,where you don’t have to work a full time job if you don’t want to, at least for your day to day expenses.
You can feel freedom and pursue your dreams for the rest of your life.
In other words, the FIRE movement is a way/ a life hack to escape from your dis-satisfactory jobs early, instead of devoting your life time to it.
Alternatively, FIRE relieves you from the fear of losing a job or getting fired from your present employer due to whatsoever reason.
You know, how people are losing their jobs during this corona virus time or are forced to leave their jobs.
Certainly, fire can save you from such mental tension and agony.
Simple steps to have Financial Independence and Retiring Early
It is necessary to follow a process to achieve financial Independence.
We prepare strategies to achieve our goals but somehow in the middle we either loose track or deviate from our path.
Therefore Implementation is very necessary.
Start investing early
An early retirement in India means a break on regular income from your job, therefore, it is very important to invest as soon as you start earning.
Increase your investments periodically
It is absolutely true that one can not make huge investments at the start of their career.
Also financial independence in future does not mean poor present today.
Consequently, the alternative is to increase your Investments periodically, maybe once in a year and keep on increasing the amount.
Additionally, you may consider to invest a lump sum amount in the beginning of the year or whenever you get a bonus from your employment.
Invest in inflation beating Asset Classes
It is important to consider inflation into account before reaching any conclusion. It is imperative to invest in inflation beating asset classes such as mutual funds/ stocks to build wealth fast.
4.Have a contingency plan
Just like investing in a medical insurance plan it is also mandatory to have a separate contingency plan so that you do not give into your retirement Corpus in case you need money for any type of contingency in your life
5.Invest aggressively
You have to hold your stomach tight and keep patience to invest in aggressive investment products such as mutual funds. you can invest via SIP route because SIP reduces market volatility. Additionally, it also gives you rupee cost averaging.
6.Buy adequate medical insurance
Medical insurance is a need of the hour because your years savings can be ruined by one single hospitalisation only.
You know, it takes years to build a good Corpus.
You may have to pay huge bills in case of any medical emergency for you or your family members. Thus, it is vital to buy adequate medical insurance to build a good Corpus.
7.Stay away from loans/ debts
Loans are not bad but it is the interest that may take all your earnings, your savings and leave you nowhere.
Certainly, it is important to stay away from loans as far as possible.
If you cannot stay away from loans then try to pay the loans as fast as you can.
How to plan Early Retirement in India
You can easily achieve financial Independence with right planning, starting early, investing regularly and increasing your contribution regularly.
Steps to retire early in India
- Calculate your current monthly expenses including your regular bills and payments.
- Time left to retire i.e. your retirement age – your current age
- Estimate your life span.
- Take help of an online financial calculator to calculate the desired Corpus required to retire early in India.
- Alternatively, you can take help of a Certified Financial Planner to help you to calculate you retire early Corpus so that you can have financial independence.
- Now get set go.
- Start investing aggressively in mutual funds, safe instruments as FD, real estate etc.
- Keep track of your target amount and your investments.
The point here is to get a regular income from your money if you deposit your Corpus in a bank or somewhere else and you can fulfil your day-to-day requirements from the interest income from it.
Conclusion
It is not difficult to retire early in India but to achieve financial freedom, you have to invest strategically, continuously and increase your contribution periodically.
Doing all this can successfully bring FIRE elements in your life.
Please comment and tell me about your views about it.
Please feel free to contact us to have FIRE in your life.
