Theloststory
Well-Known Member
Do you have a chart like this for the Indian markets?
How are you planning your retirment
- Thread starter Theloststory
- Start date
You can infer it from two graphs. Using the first graph you can see that SENSEX dividend yield average around 1.5%. The second graph shows the net asset value (NAV) for SENSEX over the years (1992-2018). You can now take 1.5% of NAV as dividend every year and see that it rises over time because NAV keeps on increasing. Your expected dividend for each year will be 1.5% of NAV for that year. In 1992 it would be 1.5% of around 4500 = 
67.5 per share (Assuming 1 share is exactly equal to NAV) and today it would be 1.5% of 35,000 = 525/share. This is still ignoring the fact that the value per share has increased from 4500 to 35,000.
67.5 per share (Assuming 1 share is exactly equal to NAV) and today it would be 1.5% of 35,000 = 525/share. This is still ignoring the fact that the value per share has increased from 4500 to 35,000.
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Theloststory
Well-Known Member
I mean compare the share market to real estate over say last 10years?
Islandsportivo
Active Member
I did few investments in the property. Hope it is going to be enough.
No, it will never be enough. Just look at Ukraine. All it takes is one war (or earthquake) and all real-estate is gone. Physical gold can be stolen. You need assets that are not physical. If India allows it then you also want bonds, etc. outside India. You need to diversify your portfolio.
I also made investments in property, but not much. I'm going to have a small business on my retirement. I've already discovered the startup cost, I'm learning a lot about the viability and product discovery. Then, my next step will be creating my business, financial, and marketing plans. I so hope I'll make it work.
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Both Real state and Gold are bad options for old people. Once children get married they get gold from older generation and this Istri Dhan get transferred ultimately to a different family and if not given to children, keeping gold around is not safe for old people.
Property in old age used to give some fixed rental income but in pandemic this regular rental income too has stopped coming or has become unpredictable and irrational.
In India best thing is Government pension right now which keeps on increasing with inflation.
Property can be very hard to maintain in old age.
But anyway you need roof at head in old age and if it is self owned then it is good.
There are cases where property issues and problems can be handled, but those are very advanced ways and require a lot of money. One way is to create a trust, put all property in a trust, select a corporate trustee and write a document that clearly describes how trust assets will be distributed upon your passing. Trusts are an advanced subject and there are different kinds of trusts with their pros and cons. However, if someone has financial assets worth 10 crore or more then trusts may be something worth considering. Trusts also sometimes help in avoiding property fights that will happen when you get old. There is always a very high probability that spouse of your children would start nagging for your property. Real-estate and gold are very visible assets, so without a trust, your old age will be miserable. Trustee manages the assets and will be responsible to maintain property, lease or rent it. A typical cost of corporate trustee is generally 1% to 2% of your trust assets. Some banks provide corporate trustee services and can be used to manage your wealth and pay you periodic income from your trust.
10 crore or more then trusts may be something worth considering. Trusts also sometimes help in avoiding property fights that will happen when you get old. There is always a very high probability that spouse of your children would start nagging for your property. Real-estate and gold are very visible assets, so without a trust, your old age will be miserable. Trustee manages the assets and will be responsible to maintain property, lease or rent it. A typical cost of corporate trustee is generally 1% to 2% of your trust assets. Some banks provide corporate trustee services and can be used to manage your wealth and pay you periodic income from your trust.
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You can also look at annuties that will pay pension like income for life. Go to policy bazzar and type annuities. Annuities will take cash from you upfront and give you income for life.
For someone who is 63 years old, gives
1 crorers to annuity company (SBI Life, HDFC, ICICI bank, etc.) can get monthly income anywhere between 45,000 to 54,000 for life. There are variable income annuities that increase payment based on inflation. The problem with annuities is that if someone dies early then bank gets to keep their 1 crorers. However, if someone lives till 120 then annuity will pay that person the promised amount. If you apply for annuity at 70 then for 1 crore, you may get an income of 80,000 for life.