Gold has an inverse relationship with US dollar. If you plot gold performance when dollar was not doing well, you will see it doing very well. Gold is useful asset for portfolio diversification. Never buy physical gold. Buy an ETF because I see in several Indian TV shows where people go to sell gold and the buyer accuses them of stolen gold and asks for receipts. When you cannot show recipts then the buyer buys it at 80% of its original market value.
How are you planning your retirment
- Thread starter Theloststory
- Start date
Prasham
Armchair Traveller :(
You've got it wrong somewhere. Considering the current state of real estate in India, most of the young men are struggling to buy a home. Usually they live with their parents if they are in the same city or else rent a property. So actually its the kids who use house of their parents for many years even after getting job or even married.
IMO even if I don't consider the religious preaching, morally too its a simple give and take, parents raised the kid for 20-30 years and then its turn of kid to take care of their parents for rest of their life.
IMO even if I don't consider the religious preaching, morally too its a simple give and take, parents raised the kid for 20-30 years and then its turn of kid to take care of their parents for rest of their life.
That is bad behavior and wrong assumptions. Who said that you have to buy just when you start working? You rent and may be get roommates. And no, it is not give and take. Parents should only have kids if they can afford them. Parenting is a choice. If it is give and take then it should be consensual. You cannot give birth to a child and carry out your parenting responsibilities (likely in sloppy manner) and then say that I helped you out and now you take care of me. This logic does not work for me. In fact, most parents have kids that they cannot afford and kids pay a huge price when they are born in poor family. This is what I mean by a culture of irresponsibility. People load you with financial burden and a smart person should reject these false ideologies.
If you want financial success, you have to cut costs. People would stick their financial bills on your back. You have to be emotionally strong and reject these bills. If you don't then you make your and your kids life miserable in the process as you have to repeat this erroneous cycle. If parents love their kids then they do not take their freedoms away by moving into their adult kids life. Responsible parents raise their kids well and leave assets to their kids when they die. That is real love for kids. Anything else is selfish and conditional love masked in entitlement.
This is not a theoretical statement either. My parents have the most respect for me as they are getting older because they see that I am the most sincere person as I did not take any money from them. My interactions with them are not driven by any selfish reasons whatsoever. Well, other sibling cannot be trusted as everything they do is driven by selfish reasons. And it is not even your parents. If you are married then it is the parents of your wife as well. If you have a bad luck then your wife may have a nikhatuu brother who wants to live in your house while he searches for a job.
Theloststory
Well-Known Member
Lets not digress from the main thought here.
How are you planning your retirement?
What do you think would get the best returns compounded over a period of time?
I don’t know much about investing but perhaps some interesting ideas can be brought up here?
How are you planning your retirement?
What do you think would get the best returns compounded over a period of time?
I don’t know much about investing but perhaps some interesting ideas can be brought up here?
Like I said before, the first thing you do is estimate numbers. Life spans, medical expenses etc. I will give you few rules of thumb people use to estimate lifespans if you do not have any terminal illness. Generally, the number of years until death are estimated as (100-age)/2. If you do not have any terminal illness and your age is 60 then you have 20 more years to live.
Now, you also have to account for how much you will end up spending on others based on your obligations towards your parents. Indian government will mandate that you pay no higher than
10,000 per month to your parents (Maintenance and Welfare of Parents and Senior Citizens Act, 2007 - Wikipedia). You have to consider that aspect into your calculations. If you read the law then Indian government would even hold grandchildren accountable for their grandparents as long as grandchildren are adults.
There is a similar formula on what percent of your portfolio should be invested in stocks. Generally, people use (120-age). If your age is 30 then you should have 90% invested in stocks. The formula is American where retirement age is higher. In Indian context, you may use (100-age). This means at age 30, you should have 70% invested in stocks and rest in conservative investments like gold, cash in bank (demonotization risk in held in hand), and bonds.
There is an investment thread and also I believe a similar retirement thread where many options were discussed 3-4 years ago. Here is that thread.
Retirement Planning
Now, you also have to account for how much you will end up spending on others based on your obligations towards your parents. Indian government will mandate that you pay no higher than
10,000 per month to your parents (Maintenance and Welfare of Parents and Senior Citizens Act, 2007 - Wikipedia). You have to consider that aspect into your calculations. If you read the law then Indian government would even hold grandchildren accountable for their grandparents as long as grandchildren are adults.There is a similar formula on what percent of your portfolio should be invested in stocks. Generally, people use (120-age). If your age is 30 then you should have 90% invested in stocks. The formula is American where retirement age is higher. In Indian context, you may use (100-age). This means at age 30, you should have 70% invested in stocks and rest in conservative investments like gold, cash in bank (demonotization risk in held in hand), and bonds.
There is an investment thread and also I believe a similar retirement thread where many options were discussed 3-4 years ago. Here is that thread.
Retirement Planning
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dichkaun
Well-Known Member
I use this: https://freefincal.com/the-even-lower-stress-retirement-calculator/
Gives me a fairly good idea on what's needed.
How one gets around to accumulating what needed is another ball game.
Gives me a fairly good idea on what's needed.
How one gets around to accumulating what needed is another ball game.
I used two metrics to plan for my retirement. First, your portfolio assets must exceed (pre-tax annual income * Age)/10. Where "*" is the multiplication operation. Finally, you have reached your goal when the ratio (Annual Expenses/Portfolio Assets) is less than 0.025. The reason for this final goal is that most balanced portfolios will give dividends that are higher than 2.5% of portfolio assets. As long as you make sure that all your stocks are major index funds, dividends will increase at a rate higher than inflation, so you are really done. Your portfolio is on auto pilot provided that you have adequate resources for health care. If you have gold in your portfolio then you can tap this for health care expenses without impacting dividends.
Theloststory
Well-Known Member
@Bigdaddy does your calculation include inflation?
This is an interesting article here on real estate VS mutual funds.
https://www.stableinvestor.com/2015/06/mutual-funds-vs-real-estate-investing-india.html
This is an interesting article here on real estate VS mutual funds.
https://www.stableinvestor.com/2015/06/mutual-funds-vs-real-estate-investing-india.html
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The general answer is yes. See the following chart on annual dividend per share for two ETFs on US major indices (S&P 500) large cap (ticker SPY) and Small Cap (Russel 2000, ticker IWM). If you see trend line then SPY dividend per share rises on average 20% per year and IMW dividend rises 9% per year on average. However, you can see volatility as well. For example, dividend per share drops to zero for the year 2009. Assuming that you have a balanced portfolio containing stocks and bonds, you still will be fine. The job of stocks is to help you keep pace with inflation. Bonds will give you stability in income. Just make sure that you are invested in ETFs. If you are invested in individual stocks then you will have to worry about constant trades and will not have the stability or peace of mind.
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The article is still kind on real estate investing as it ignores real-estate selling costs and property insurance costs.
There are other risks of real-estate as well. Things like earthquakes, floods and fires could knock your real-estate to zero value if you are not insured.