‘The Secret’ – How to Accelerate your Financial Freedom?

How to accelerate Financial Freedom

Everybody wants to become financially independent. But very few actually get there.


There can be various reasons but I think that achieving something like Financial Freedom doesn’t just happen. It requires one to have a serious plan and more importantly, then commit to that plan. And that’s easier said than done.

Personally, I aim to achieve early financial independence.

If you were to ask me why then I will quote Charlie Munger – I did not intend to get rich. I just wanted to get independent.

And that for me is a goal worth having. But let’s not discuss my thoughts. I have already written about it in detail at F.I.R.E.

Let’s rather talk about you.

If you are beginning to get comfortable with the whole idea of financial independence or early retirement, then I am sure you would be wondering How much money do I need to Retire Early In India? Or how much is enough for Financial Independence & Retire Early (FIRE) in India?

It would be best to have a perfect formula for financial independence.

But there isn’t any.

Getting the right amount for regular retirement is a tough nut to crack in itself. And here, we are talking about early retirement. 🙂

But there are thumb rules that can get you going.

A popular one is – having a corpus equal to atleast 25 times your annual expenses.

This may be enough for some people but may not be for many others. For some 30X or 40X may be a more appropriate size. It depends on a variety of factors like current age, age of early retirement, life expectancy assumption, inflation % assumption before and after retirement, return estimates before and after early retirement and several other more serious factors like the sequence of returns risk, etc.

But as I said, if you are just beginning your journey – then the exact accuracy doesn’t matter and you can have atleast some target in front of you – which I think is a good one provided by the 25X, where X is your annual expenses.

You will, in any case, require several years to reach that first. 🙂 So relax about the accuracy a bit.

But as you get closer to your goal and/or the portfolio size grows, you need to run numbers more carefully and have additional buffers to make your early retirement plan more robust. And if it sadly means delaying it by a few years or saving more, then so be it. Better be safe than sorry when you are older.

So 25X is a good aim to have.

But what about the ‘secret’ that I mentioned in the title of this post?

Here it is…

If the X (i.e. Annual Expense) is small, you can save more and, in turn, reach the target of 25X faster.

Read that again.

And again if you are still unable to understand its importance.

Let’s take a small hypothetical example to make this idea crystal clear:

Suppose your annual income is Rs 12 lac. And your annual expenses (i.e. X) are Rs 8 lac.

So if we were to use the 25X thumb rule, then you would need 25 times Rs 8 lac – which is Rs 2 Cr as Early Retirement Corpus. And to achieve it, you will have Rs 4 lac every year (Rs 12 lac income minus Rs 8 lac expenses) to save for the goal.

Note – I have ignored inflation, etc. for simplicity here.

Now remember what I said earlier – If the X (i.e. Annual Expense) is smallER, you can save more and in turn, reach the target of 25X faster.

So let’s make the X a little smallER.

Your annual income is Rs 12 lac. And your smallER annual expenses (i.e. X) are Rs 6 lac (reduced from Rs 8 lac earlier).

Now if we use the 25X thumb rule, then you would need 25 times Rs 6 lac – which is Rs 1.5 Cr as Early Retirement Corpus. And more importantly, to reach it you will have a higher Rs 6 lac every year (Rs 12 lac income minus Rs 6 lac expenses) to save for the goal.

So the target has reduced from Rs 2 Cr to Rs 1.5 Cr. And you also have a higher amount of Rs 6 lac per year (instead of Rs 4 lac) to save for the goal.

So it’s a double benefit of having a reduced target and higher savings capability.

Decreasing your expenses (I know its tough) increases the potential to increase the savings – this fact alongwith lower target requirement can potentially accelerate your plan to reach the final corpus earlier.

Think of it like this – If your expenses are low, you will need a smaller corpus to support it for years to come. And a smaller corpus means that you will require a lesser number of years to achieve it. But if your expenses are high, then not only will your required corpus would be high, but it will also require more time and probably a higher saving rate.

And this is the real secret!

Remember – this 25X figure is just a thumb rule.

And you also need to understand the risks that such thumb rules or any early retirement plan is exposed to – like sequence of return risk, unexpected and unplanned expenses, living longer than you estimated(!), extremely high inflation in retirement years, high medical expenses inflation that isn’t covered by your health cover, etc.

The actual number will be different for different people and circumstances.

The idea here was to show that higher your saving rate, the sooner you can potentially retire.

If you save just 10% of your income, then you can forget about early retirement. You need to save a lot more – like 30, 40 or even more than 50%. I am able to do more than 50% as I aim to achieve financial freedom by 40. Fingers crossed. 🙂

So that was about the simple thumb rule for computing how much money do I require for financial independence and early retirement (FIRE).

I like to talk about financial independence on Stable Investor quite regularly. It is one of the big financial goals I have. But I must also warn you – the maths of FI is such that you can speed up the theoretical goal achievement if you reduce expenses by a lot. But then, that would mean you are sacrificing your present for the future, which is good to an extent but not beyond it.

We always know how much money we have but we never know how much time we have. So we cannot entirely sacrifice the present.

Financial independence is a difficult goal which most people won’t achieve.

But even if you were to achieve it partially, even then it would provide you with a lot of control over your financial life. A solid early retirement corpus with reasonable return expectations will cover basic living expenses for longer than your life expectancy. That’s a good achievement no matter when you achieve it.

I still feel that aiming for some degree of financial independence (and not early retirement) via a high saving rate is a fantastic goal for most people. More so for those who see real threats to their jobs in near future. You never know when you might be forced to retire early & involuntarily.

At the same time, I recognize that not everyone is eager to achieve early retirement. And there are also people who like their luxuries. And that is fine as it gives them happiness.

The bottom line is that your goals are unique and you need to do what is necessary to achieve your financial goals. If financial independence is not one of them, then you can ignore it. But if it is and it’s more than a passing wish, then you need to do something about it. The independence that a big corpus provides is amazing. It even gives you that magical ability to say F*** Y** to anyone without thinking too much about the consequences. 🙂

Imagine that kind of freedom!

So if you are planning early retirement in India, then sit up and take action. Just wishing and asking questions like how much money I need to retire early in India will not be enough.

Involuntary Early Retirement

Involuntary Early Retirement?

Involuntary Early Retirement

Many of us aim to become financially free (or retire early)But not everyone is interested in it.

You too may not be considering early retirement. But it makes a lot of sense to prepare for it anyway.

Life isn’t fair (you know it) and is also unpredictable. It doesn’t always go the way we expect it too. And your actual retirement age may be much lower than your expected retirement age.


You never know when you might be forced out of job due to the availability of easily replaceable cheaper employees, technological disruption, a collapse of the industry you are part of, your inability to remain relevant to the profile, etc. Imagine your situation if after several years of work, you are ejected out of your role/company and unfortunately, are then too old to be considered for other roles. Or in other words, you are unemployable. That’s a tough situation to be in when not young.

And these are just some of the reasons. There can be several more. Job losses are a reality. Reasons can be many.

As the dynamics of employment across sector changes, most careers are becoming increasingly stressful. Who knows how long you can tolerate such stress levels? You may eventually consider taking early retirement due to high-stress levels in your job. That’s possible and is happening.

Leave stress. Other health ailments or serious injuries can also sideline your career abruptly.

And it is not just about you alone. A serious illness of parents, spouse or children may require (force) you to be actively involved in their treatment – which may make it difficult to continue your current job. You then have this difficult task of earning as well as taking care of them. At this point, you may have to either reduce your workload or even quit your job for some time.

In all the above cases, your ability to cope with the situation would be better if you have savings to fall back to. Pursuing financial independence or early retirement can reduce your hardships, atleast to some extent, if your working years are cut short for reasons outside your control.

Even if you don’t want to prepare for early retirement, you should prepare for involuntary early retirement.

This is like having a Plan-B to ensure that life doesn’t f*** you.

And even the mathematics of investing supports this idea. Saving early makes it easier to accumulate a larger portfolio as you move towards the traditional retirement age.

You may be young today and not want to retire before 60. But when you turn 50 and are fed up of your job, then having a large corpus will give you the option of calling it quits and relaxing for the rest of your life. And that’s a great option to have.

Preparing for early retirement acts as an advanced preparation for normal retirement. It fast-forwards your retirement savings. And this front-loading of retirement savings creates an insurmountable advantage due to compounding that you will thank yourself in later years for.

And failure isn’t a bad outcome here. Even if you fail to reach the right corpus for early retirement, you will still be better off than if you didn’t attempt to pursue it at all.

I know many of you feel that early retirement is not real and there is no point pursuing it. But it is real. Maybe you don’t want to retire early at this point in your life. But who knows you might change your mind after a few years. Life can surprise.

But I must tell you that planning to retire early requires planning, discipline, high savings rate and proper management of your investments. It’s not easy. But as explained earlier, it helps to have tons of money when life is planning to surprise you unexpectedly.

Life comes with uncertainty. But if you plan well, this uncertainty doesn’t necessarily have to result in insecurity. 

So do think about it. And if you feel what I am saying makes sense, then start preparing for early retirement even if it is not your immediate goal.

Difference between Financial Independence Vs Early Retirement Vs Financial Freedom

Financial Independence Early Retirement Financial Freedom

The words like Financial Independence, Early Retirement and Financial Freedom are slowly but surely finding a way into the thoughts and vocabulary of us Indians.

Their numbers are still very small but surely, there are people who are not just asking ‘How much is enough to retire in India?’ – Instead, they are asking ‘How much is enough to Retire Early in India?’

The interest is definitely there as I myself got some coverage in leading Indian newspapers for aiming for financial independence (here and here).

Regular retirement vs Early retirement – some people are considering the latter. 🙂 And to be honest, it’s not hard to understand the appeal of early retirement or financial independence. Just ask this question a little loudly – How much money is enough to never work again in India? It sounds nice and liberating. Isn’t it?

I regularly receive questions like these on mail from readers – How much money is enough to retire at 40 in India? How much money is enough to retire at 45 in India? How much money is enough to retire at 50 in India?

So the interest is really there. But I have already written a lot about this topic earlier in FIRE – Financial Independence and Retiring Early.

In this post, I wanted to address the difference between Financial Independence, Early Retirement and Financial freedom as I see it. People use these terms interchangeably. But there are some differences.

I must also tell you that there are no perfect definitions here. So you can interpret these words as you like – as long as it helps you achieve what you are aiming for.

Difference between Financial Independence Vs Early Retirement

Financial independence and Early Retirement are 2 different things, but which are linked to each other in a way.

So let me try to explain it simply.

Financial Independence means having enough assets (or/and income generating assets) that you do not have to work for money again. Now here is the important part – you may still decide to continue doing what you are doing even after achieving Financial Independence.

Early Retirement, on the other hand, means actually retiring (and doing almost no income-generating work) because you have achieved Financial Independence.

For obvious reasons, if you plan to retire early and never work again, then you will need a much larger corpus than if you were to be simply financially independent.

Together, both FI (Financial Independence) and Early Retirement (RE) are referred to as F.I.R.E. but remember that there is a subtle difference between financial independence and early retirement.

That brings me to another aspect of FIRE.

Different Types of FIRE (Financial Independence Early Retirement)

One of the main questions when it comes to FIRE is ‘How much do I need to retire early?

As you might have guessed, the answer is different for different people.

People’s lifestyles, their spending habits, financial situations, their real ability to take risks and several other factors influence their perception of how much might be enough for retirement. And therefore, the amount needed to achieve FIRE is different for everyone. But still, there are two major types of FIRE that people use as references:

  • LEAN Fire – This is a low-cost approach to FIRE. The idea is to reduce your expenses to the bare minimum (become ultra frugal) and achieve FIRE as soon as possible. It’s about having a life rich on time but short on luxuries. Lower the expenses, lower will be the FIRE corpus needed and sooner one can achieve it. That’s the logic here. For people targeting LEAN Fire, achieving the freedom at the earliest possible age is the most important factor.
  • FAT Fire – This is at the opposite end to LEAN Fire on the spectrum of FIRE. The goal is to retire early but not at the cost of quality. People who aim for FAT Fire also want to achieve it in a way so as to have enough for a better lifestyle. The corpus required for this is higher than LEAN Fire.

Both of these approaches are at the opposite ends. And it’s a matter of personal choice as to which one is better suited for whom.

In fact, there are no strict definitions. You can even label the levels in between as FIRE Level 1, FIRE Level 2, FIRE Level 3, etc. and take an aim at what you think is more suited for you.

And if you do an online search, you will find blogs for various levels – early retirement blogs, early retirement extreme blogs, frugal FIRE blog and what not.

So after having discussed Early Retirement and Financial Independence (both Lean and Fat FIREs), let’s tackle something related…

What is Financial Freedom?

I must warn again that there are no perfect definitions here. But I will try to say what I feel.

With Financial Independence (assuming something between LEAN and FAT), you are more or less locked into your chosen lifestyle. So if you chose LEAN FIRE and call it a day, then you really need to live frugally all your life because your corpus is smaller. On the other hand, if you chose FAT FIRE and took early retirement, then you can live a better lifestyle.

Now comes the difficult part to explain. 🙂

Financial Freedom I feel means that you live a much better life than what was possible in LEAN-Fire but also have the ‘real freedom’ to do few unplanned things (and spend on them) which you may not consider doing if you had a frugal lifestyle. In a way, it’s like having a FAT-Fire but with more flexibility.

Let me try with a mathematical example:

Suppose you are planning to achieve FIRE and have the following expenses:

  • Basic Expenses (Frugal Living) – Rs 40,000 per month
  • Discretionary Expenses (Better Living) – Rs 20,000 per month

Now if you are going for the LEAN-Fire, then you are mathematically allowed to spend Rs 40,000 a month. So that’s Rs 4.8 lac per year.

If you are going for FAT-Fire, then it allows you to live a life of Rs 60,000 per month kind of lifestyle (Rs 40K basic + Rs 20K discretionary expenses). That’s about Rs 7.2 lac per year.

Remember, having a FIRE corpus means that these kinds of expenses should be possible for you (with increasing inflation) for the rest of your life. And for early retirees, this means several decades!

Now comes Financial Freedom…

If I have the financial freedom, then mathematically, I should be comfortably able to spend annually:

  • Basic Expenses – Rs 40,000 x 12 months = Rs 4.8 lac, plus
  • Discretionary Expense – Rs 20,000 x 12 months = Rs 2.4 lac, plus
  • Another level of (optional) discretionary expenses = Rs 20,000 x 12 months = Rs 2.4 lac
  • Some unplanned luxuries (or unexpected expenses buffer) on an annual basis – Another lac or so

That’s real financial freedom! You can spend extra on few things here and there without having to spend sleepless nights thinking whether your corpus will run out before you run out of years or not. It also provides you with the buffer to spend in case of emergencies.

Achieving financial freedom also gives you the freedom from worry about money. And that’s the real freedom I guess.

So if I have to summarize, the timeline for corpus achievement goes like this:

LEAN F.I.   —>   FAT F.I.   —>   Financial Freedom

Early Retirement is up to the individual as to when he wishes to quit in between these levels. You can even look at these 3 levels as follows:

  • How much do I need to retire early?
  • How much do I need to retire early comfortably?
  • How much money do I need to retire early and never work again? 🙂

More Thoughts

I know a lot of people feel that FIRE is just about cutting your expenses and saving more. But that is not rightly completely. I would say that its also about simplifying and redesigning your life, which obviously gives you more time to focus on other things.

Aiming for FIRE helps you test your relationship with money. And it’s like asking yourself as to ‘What would you do if you didn’t have to work for money ever again?’ It also helps you decouple the idea of happiness from owning material things. It’s amazing when you actually realize it.

And one more thing. Achieving early retirement (and not just financial independence) not just requires cutting back on expenses. It also requires you to have a decent income from which you can save a lot.

If you are serious about achieving financial independence, then you should begin early. There are various thumb rules for financial independence and early retirement (FIRE). One such rule is that depending on when you wish to retire, you should have about 20-30x your annual expenses in your FIRE corpus. But let me tell you that thumb rules are good to begin with. Once you start your journey and are making progress, you need to ask more serious questions like:

  • How much money (Corpus) do I require for financial independence and early retirement (FIRE)?
  • How long will my corpus last?
  • How much can I draw from the corpus each year?
  • Can I draw more than what I answered in the above question, atleast in some years?
  • What will the inflation be in my retirement years?
  • What are my expected returns?
  • What will be the impact on your corpus if markets enter a bear phase just at the start?
  • What if I need to spend some money on unplanned and unexpected emergencies?
  • How will my other financial goals be tackled?
  • Have I saved enough for these other non-retirement financial goals?
  • And several other questions

Early retirement is an alluring goal or dream. No doubt about that. But to be brutally honest, very few aim for it. And even fewer can really achieve it. Most people are generally too late to begin with.

And apart from money, what does it take to retire early? …It takes a lot of focus and determination and a thick skin. And that’s because if you discuss these things with other people, you are sure to find many who will ridicule you. But if you are serious about it, then it means you will be going against the crowd and you will have to give a f*** to societal norms. If you don’t, then be ready for a regular retirement. That’s good and traditional too. 🙂 And there is ofcourse more to life than just money.

People feel that early retirement is a sort of hack to sort out their life! But I feel that retired life has too many other important aspects than just money. You really need to find out what you will do with all those years?? 🙂

If you are asking or searching for answers to questions like ‘How to plan for early retirement?’, then please beware of all the self-confessed best early retirement blogs, financial independence retire early blog, online resources, early retirement calculators, retirement corpus calculator India, financial independence number calculator, etc. Everyone has a different need and hence, the Financial Independence number and the Financial Freedom Plan will be different for everyone.

Time to end this article now.

In the debate of Financial Independence Vs. Regular Retirement, I would say that I prefer the FI. …But that’s my choice. If you feel that even the regular retirement is fine for you, then obviously that’s right for you and you should stick to regular retirement planning. You should never be forced to take a side because of the undue influence of others. Your life, your choice.

How to retire early at 40? How to retire early at 45? How to retire early at 50? What year can I retire? – Before you begin asking these questions, just stop and think for a moment as to is this really what you want? Or you are running away from something?

As for me, my aim is Financial Independence (and Financial Freedom). As for Early Retirement, I am too much in love with what I do (Investment Advisory and Goal-based Financial Planning) to currently think about retirement. 🙂 And that is the reason I focus on Financial Independence over Early Retirement.

But do not be disheartened if some of what I say seems too difficult to achieve. If you are willing to do what is necessary to achieve financial freedom, then let me tell you one thing – IT CAN BE DONE. I repeat. IT CAN BE DONE.

Dev Ashish Retire at 40

Featured in Mumbai Mirror (for How to Retire at 40)

My wife and I got some coverage in Mumbai Mirror a few days back.

The coverage was about people in India are working towards their Financial Independence (or Early Retirement) and trying to answer the question 🙂 How to Retire at 40?

Dev Ashish Retire at 40

Here is the article:

Dev Ashish Mumbai Mirror Early Retirement India

And here is the online link to the article.

Some time back, we got featured in Times of India about a similar topic of ‘Early Retirement in India’. Here is the link to that article.

Most readers know that financial independence is one of my major financial goals. I plan to do it by 40. Fingers crossed! 🙂 But let me clarify one thing here… as many people get it wrong.

Becoming financial independent or achieving early retirement doesn’t mean that I would not be doing anything after I turn 40. It only means that I would have accumulated enough money to take care of my expenses for the rest of my life.

I will without a doubt continue to do what I am doing right now – investment advisory.

Here once again, I must thank my wife Aditi who is my partner in crime in working towards this goal. Without her support, I could not have imagined aiming for such a goal. 🙂

If you are new to this idea of Financial Freedom or FIRE (Financial Independence & Retiring Early), then I have already written about it a few times:

Will try to write more about various aspects of Financial Freedom in near future – as I can clearly see that there are many people out there who wish to make Early Retirement as their biggest financial goal.


Featured in Times of India (for Early Retirement)

My wife and I got some coverage in Times of India a few weeks back.

The coverage was mainly about how some Indians are working towards their Financial Independence (or let’s say Early Retirement).

Here is the article:

Dev Ashish Stable Investor Times of India

After the article was published, I was amazed by the number of emails I received from people telling me how they too wished to achieve financial freedom. It made me happy that people are giving importance to this idea – irrespective of the reason that’s driving them.

Most readers would know that achieving financial independence is one of my major financial goals.

By when – Let’s see… I am planning to do it by 40. Fingers crossed! 🙂

But let me clarify one thing here… as many people get it wrong.

Becoming financial independent or achieving early retirement doesn’t mean that I would not be doing anything after I turn 40. It only means that I would have accumulated enough money to take care of my expenses for the rest of my life.

I will (no doubt) continue to do what I am doing right now – investment advisory.

Here, I must thank my wife Aditi who is my partner in crime in working towards this goal. Without her support, I could not have imagined aiming for such a goal. 🙂

If you are new to this idea of Financial Freedom or FIRE (Financial Independence & Retiring Early), then I have already written about it a few times:

Will try to write more about various aspects of Financial Freedom in near future – as I can clearly see that there are many people out there who wish to make Early Retirement as their biggest financial goal.

Financial Independence Day

financial independence financial freedom

If you are reading this, I am sure you wish to become financially independent some day. You might have been secretive about this dream of yours, but given a chance you would be the first one to get out of the rat race. 🙂

Now financial freedom means different things to different people.

Being independent mostly means not depending on another’s authority. Or you can say that when you’re financially independent, you work because you want to and not because you have to.

And that is what I like about this concept.

To bring in Charlie Munger’s words in the context:

Like Warren, I had a considerable passion to get rich, not because I wanted Ferraris – I wanted the independence. I desperately wanted it.

Personally speaking, I want to become financially independent much before 60. And if I get it right, it should be done by early 40s.

Am I close to it? Not yet.

But I am working towards it.

I know I need to be smart about handling money. But not too smart.

I need to think differently most people. But not everytime (and not just for the sake of being different).

I know that by simply avoiding making stupid mistakes and being lazy enough to stay on course, I can reach the goal.

But is there a guarantee?

No there is not. I cannot control everything.

But I am trying and I am optimistic about it.

Many people think that being financially independent and retiring are one and the same things.

But you can be financially independent and not retire from active work. And that is what I am aiming for. I don’t want to retire but I want to be financially independent.

Now there is a well-followed blog named ‘Early Retirement Extreme’. And if I remember correctly, the author has written that one can retire very early (even in 5 years) if you can save more than 75% of your take-home pay each month for about 5 years!

Now I can’t do that. Seriously. 🙂

Don’t wanna retire like that.

I would rather delay my retirement financial independence… 🙂

As I said, this is not what financial freedom means to me.

Being financially independent is not enough. There is more to life than just hoarding money for years, to spend it when I am old.

And life will not wait for me till I achieve my financial freedom.

So I am better off balancing my desire for financial freedom with that of living a decent and fulfilling life.

And to be very honest,

I don’t want to choose between Life and Money. I want both. 🙂

So how do you go about finding your own financial independence?

Will it work if you just read an article or two on say How to Become Financially Independent in 5 or 10 Years? Or if you used some checklist, early retirement planning calculator or financial independence calculator?

These steps will no doubt be a good start.

But that’s it. These are just….start(s).

And there is a lot more to be done.

The biggest challenge of adopting such an enormous goal (like achieving financial independence) is that the only way to actually achieve it is to change your mindset. And as this article puts it,

That can be a difficult transition. When you commit to saving a major portion of your household income each year, you’re choosing to live in a way that’s likely significantly different than how you were raised and also significantly different than how the vast majority of [people] live.

And the author goes on to put out 9 strategies to change your mindset:

  1. Spend Time Thinking About What You Want Most from Your Life as a Whole
  2. Spend Additional Time Thinking About How Your Daily Choices Work Toward That Life
  3. Learn How to Separate Needs and Wants
  4. Separate Your Desires from the Desires of Others
  5. Research All of Your Purchases
  6. Take Your Time and Be Patient (Financial independence is all about the long term. It’s about patience. It’s about taking your time. It’s about being willing to move slowly toward something big that really matters instead of moving quickly toward something small that doesn’t matter as much.)
  7. Educate Yourself Daily
  8. Maximize Appreciation of the Free Things in Life
  9. Build Reinforcing Relationships

And these are not easy changes. Read them again and you will know why.

Now lets come back to the possibility of retiring early in India.

Can it be done?

Yes. Ofcourse.

Can I prove it?

I can’t.

But you can chose to believe me when I tell you that two of my friends have already done it. One is 33 and other is 38. Younger one got lucky and the older one was super smart with money (took risks that paid off).

Then there was this guy I wrote about few years back. He was unhappy, busy and never gave much thought to early retirement planning or thinking how much money was needed to retire at say 45. But one smart decision and he had enough money to retire. And that is what he did. He is doing well now.

Want another example?

I have it – a financially wise reader accumulated tons of money by following a simple, disciplined and powerful investment plan.

So there is absolutely no doubt that it can be done.

Just few days back, another friend of mine asked me a question.

How much do I need to retire early in India?

Now there is no one right answer to this. And I told him this and that his ‘how much’ would be very different from my ‘how much’. 😉

Every person will have his/her own number and it has be worked out mathematically and very very carefully.

As our discussion on the topic progressed, he confided about his poor state of finances. And this friend of mine is earning Rs 25 lac+ annual package. And without getting into the details, I will say that he has totally messed it up. (He now even wants me to now help him put his finances in order professionally….)

So I bluntly scolded him – that inspite of earning so well, he would be unable to retire even at 60 if he continues doing what he does with his money.

So ideally, he has no right to even think about retiring early for now.

Having not even created an investment plan to retire at 60, he was asking how to make the exit at 40. It was ridiculous.

I told him to become realistic and atleast put in place a simple investment plan and stick to it. Once that is achieved and his finances are under control, only then should he even think about early retirement (or financial freedom or financial independence)

Suggested Reading – Jonathan Clements’ decade old article (in Wall Street Journal) on how to know whether you are in control of your finances or not – Your Finances Are Under Control When …

I am not suggesting that everybody aim for financial independence. Some people are just better off and more comfortable working in a routine-heavy day job.

But there are a few who are quite capable of taking an aim at financial freedom. And even if they fail, it won’t hurt much. They will in any case be able retire at 60 (when generally everybody does).

So such people should think about it.

All they need is to take the first step. And rest everything will fall in its place with time…

Here’s a small suggestion to ponder over this Independence Day weekend.

Take some time to come up with a day (or year) you want to become financially independent.

Declare it as your…

Financial Independence Day.

Or call it whatever you like – use F words if you like 🙂 (for example – F***-the-day-job Day).

Just do this.

Once you have done that and if your desire for achieving financial freedom is really strong, you will take steps to understand how to achieve it.

You will start asking the right questions. More importantly, you will start looking for answers. And that is what will take you eventually to your financial independence day.