Follow this step-by-step process to retire early than 99% people | Financial Planning

expected expenses you will incur from the beginning. Have a very, very clear management. About that fact, in my case, Kaa works out to 2 lakh rupees. There is a video I made somewhere so please go and watch that is the maximum limit so 2 lakh is what I am estimating and then comes the second key takeaway is that you need to save and invest quickly to reach your target, which is based on 4% withdrawal rule, for example, which is okay, I need 4 lakh rupees every month as s swp and then how much money do you need to have? the kitty or the 1C pool is fine, so that's point number two, point number three is that you must be able to grow your portfolio at a minimum of 10%, because there is an inflation angle and there is a 4% swp, okay, so now Since we have understood the mathematics of

retire

ment and the formula surrounding it, let's start to delve into the concept of

retire

ment methods and what are the best assets to invest in to achieve that

financial

independence or

early

retirement, so let's see what

people

think.

If I go and invest my money in mutual funds, I withdraw stocks. The same thing happens if I go and buy like five stores, then yes, again, I will retire very

early

,

people

retire buying real estate, also people retire buying stocks, also mutual funds. Also, the point is that whatever you are buying, that asset must be good, there is no point in buying absolutely meaningless stocks that are going to go to zero, how will that help again in retirement

planning

? A related point here is that if we just go and buy dividend stocks then our retirement is pakka, see guys what ends up happening is when you buy mutual funds or stocks the problem is the markets sometimes go up like

this

and then fall so now if you are counting on the fact that every month or every year I need to withdraw 4% of my portfolio and the 2008 type situation type situation The market took four 4 years to recover every year I need to withdraw 4% of my money market, unfortunately it has been corrected 50 to 60% and now you are sitting withdrawing unnecessarily and all that so it becomes a problem for you so understand that both mutual funds and stocks have a component called As Guaranteed Volatility , regular performance is not the area that is useful in mutual funds and stocks, people just imagine pfolio pfolio, but the drawdown is also quite massive, so you have to mix and match with three other instruments here, so

this

is very very important. use mutual funds and stocks to grow your portfolio in what math is more than 10% why 10% because I told you the math before that 4% is your swp and 6% is what 6% is inflation so yes, say well if your average portfolio which is a combination of this part and this part if that portfolio needs to grow at a weighted average, google what does weighted average mean if the weighted average return of your portfolio needs to be greater than 10 % so from the growth part, well there should be at least a 12 to 15% return here and then that's also okay because what this blue part does is this part of your portfolio gives you stability and this part of your portfolio gives you what gives you growth, a lot of people in the stock market Capital better real estate real estate investing no, you have to mix and match in order to plan for retirement, that's the key concept you need to understand, so now let me dig deeper. quickly on what some of the best options are within this space if you're

planning

for retirement, if you're choosing mutual funds and if you don't know anything, just go and put your money into something called an indexed mutual fund expense ratio, it's a really expensive expense. low because the fees you pay to mutual fund people end up eating up a large portion of your portfolio.

Here's a tweet I made on that simple topic that if you are planning for retirement, then 30 30 years 40 40 years planning for retirement correctly every 30 years they will invest in some mutual. finance what ends up happening if there is a difference of 2% commission from 1 to 2% commission well, here is a math that I explained: if you invest Rs 25,000 monthly at a kager of 12% for a period of 30 years, the portfolio total or the size of the corpus is 8.82, the same math at 14% kager, it turns out to be 14%, but we think it is a big problem, no, read this tweet carefully, a very, very important tweet from the point of view of retirement planning, so if you are choosing a mutual fund and your goal is to grow your money at 12% which is the historical kager of nifty50 or the entire Indian market, just go and buy Index Fund, you have the lowest risk, no problem, so this is the second key point, if you are going to invest in stocks, then you should choose stocks with the intention of knowing how to get out of them.

Now this is something I teach primarily in my member community as well, so go check it out and you'll learn a lot more Nuance investing techniques. I still say that if you are a serious investor, try it for 2 three months yourself you will see a change in your investment style, but stocks are not bought unless you know the fundamentals, unless you understand the basics of stocks, Stocks are wonderful if you're looking to grow your portfolio by 15-20% in cash and accelerate your timeline for retirement. What about real estate FD bonds? Well, real estate, for example, when you buy a house, you buy it for your own consumption.

A house is not an investment in itself. the one you are living in, for example, you are seeing that I am standing and recording a video. This house is in K. I will always live in house K. Why? Because I'm consuming this, but the real estate I own is any and all real estate. has commercial use or is doing some kind of commercial activity so to speak, even the villa I bought in Goa which is on Airbnb generates 6-8% return for me, every shop I have generates 6% return performance. Now why am I talking about 4% 6%? Just look at real estate, it gives you stability, for example, imagine a situation where the stock market has corrected by 50%, you need your 4 lakh annual expenses, what will you do? the stock market if you are 100% stock investor, but on the other hand, if you own some real estate, that real estate gives you cash flows, you may have already bought, I don't know, by the time you retire, it's I may have four. five stores, so every year you could earn Rs 68 lakh in rental income and it gives you the option to put more money in a down market because you have that cash flow stability B, it meets your requirement that from that point of view example Now I know that many critics will say that time agrees, guys.

I'm not saying that they know that there is a 100% proven method that they will use and that everything will be Hy ​​Dy, but the point is diversification, there are some assets. like these which are for stability point of view so instead of having all your money or stable money in real estate you can put some money in bonds don't do fds but do government bonds because the yield or the rate of return on government bonds is slightly higher. that FD thing, so that's the good part, so understand that I'm giving you all the options you need to mix and match.

The ultimate goal you need to achieve is very simple: your portfolio grows at more than 10% and that can easily happen for you the moment it starts happening you will have it pretty easy. Now let me close the video by talking about four or five actionable points that you should start executing in the year 2023 to accelerate your retirement planning timelines so that there are There are four action points that I will leave you with. Action point number one is that if you recently started making money or if you are already making a lot of money but not saving much, start with the goal of saving 10% of your salary, just 10.% and all that, please, do it, do it on your own, you will get more freedom, you will have less stress in life, okay, so the first

step

is to literally start saving 10% of your salary and every 6 months try to increase your savings rate. by another four to five percentage points, so, for example, it's October and you just started saving money, you start with the goal of a 10% budget, it can happen now, like next March, April, take that number at 15%, what is the goal?

To what extent should you do well, ideally, well or I would like to know that an extremely good scenario would be that you would end up saving 70% of your salary. I save almost 95% of any money I earn, because I enjoy the flexibility and inflation of the lifestyle. that doesn't mean yes, I don't drive a car, no, I do all those things that I drink, like a good Italian coffee and many other good things that I do well. I travel abroad, but I budget wisely, that's the point where you should spend within your limits. For example, for me, 2 L of monthly expenditure is a lot.

I can do a lot of things now, my income level may be very high so 2 lakh may seem very high but that is not the case. I still spend a good amount of money, but despite that, my savings rate is very, very high and that's what you need to focus on, point number two, that if you're new to investing, don't be that 90% of people in that 991 rule, start with index investing, if you don't know anything, just go and do it. sip on the index, you're fine, no problem, the commissions become all good, good things, there you will be able to grow your money at 12 12 and a half% kager what is the average return and you will be fine, so this is the point number two, this way you will migrate from that 90% segment to the 9% segment, at least intelligently and then eventually you will try to get into that top 1% segment by learning about direct investing in stocks.

The third key point you need to branch your growing portfolio. a portfolio and a slightly risk-free portfolio, so if you understand bonds, invest in bonds, if you understand real estate, invest in real estate. The point is that you have to have some cash flow stability and buy good assets, then you get to the bottom line that you have a basic sense of what that money goal is that you need to have, it should be 1 CR or 5 CR or 10 CR or 100 CR whatever that money is, it depends on your lifestyle, what you currently have and what you expect your lifestyle to be, for example if your goal is I am working in Mumbai and I am going to earn money in India and my goal is to eventually retire in New York, so for that versus if your goal is like, okay, I'm working in Mumbai now I want to settle down. in this particular village in India, so I hope you have that perspective that this math or setting that goal is something that you're going to have to figure out depending on where you are currently.

External comparison, for example, if you are currently at 1 lakh. rupees Are you satisfied with the lifestyle you currently lead? Is married? Aren't you married? What future responsibilities might you have? For today, do that calculation. Maybe it's like double the additional responsibilities. Therefore, 2 lakh is your monthly target. This is your expense, now run the 4% calculations that I explained to you and you will have a very simple answer: what is the site of the Corpus Christi? So, on that note, I recommend you watch this particular video which is about why the Youth of India are going bankrupt

financial

ly.

If you watch this video, you will avoid making many mistakes in your retirement planning, so watch this video and see you soon.