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Hi! I'm 43 - and in India, that's OLD!
Old 06-04-2011, 08:40 AM   #1
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Hi! I'm 43 - and in India, that's OLD!

Really!

I returned to India after slightly more than a decade overseas, and find the growth around me dizzying! While the passion and energy of the people around me is awesome - I find a recurring need to slow down and unwind and...hope you get the drift. At the same time, in a country of a billion dichotomies and ironies, of issues as ancient as the culture and new issues thrown up by the uncontrollable growth, there is a lot to force you think beyond yourself and several opportunities to make a difference...

So, after a lot of soul searching, I have reached the conclusion that I need to get away from the corporate rat-race and embark on a new journey... but before that I need to FIRE...

At 43, with an only kid headed for university in a year, with dependent parents (yes the're retired, but aren't FI) and being the sole source of income for the family (my wife is devoted to her career of being a full time homemaker), ensuring financial security for all of us is the key issue to resolve before taking that BIG STEP.

I plan to do it before I'm 45 (that's less than 2 years away), and I have a plan that I'm hopeful will get me there, but lots of questions and gaps that still need to be addressed. And what better way to work on it, than in a community of folks who've already done it or, like me are working towards it.

Hope to learn and share with you all!

Nash
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Old 06-04-2011, 11:36 AM   #2
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Welcome, Nash.

There's lots of good info and helpful posters on this board. Look forward to hearing more about your return to India and how life is there.

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Old 06-04-2011, 11:52 AM   #3
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Welcome. Can't wait to hear the details. Do you plan to stay in India or move abroad? I'm sure you will find all the advice and support, financial and otherwise, you're looking for here.
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Old 06-04-2011, 12:14 PM   #4
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All the Indians I know have maids, cooks, drivers, etc. Is that the case for you as well? In retirement, do you need to support all of their families as well?
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great game plan
Old 06-04-2011, 12:25 PM   #5
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great game plan

Quote:
Originally Posted by nash2012 View Post
Really!

I returned to India after slightly more than a decade overseas, and find the growth around me dizzying! While the passion and energy of the people around me is awesome - I find a recurring need to slow down and unwind and...hope you get the drift. At the same time, in a country of a billion dichotomies and ironies, of issues as ancient as the culture and new issues thrown up by the uncontrollable growth, there is a lot to force you think beyond yourself and several opportunities to make a difference...

So, after a lot of soul searching, I have reached the conclusion that I need to get away from the corporate rat-race and embark on a new journey... but before that I need to FIRE...

At 43, with an only kid headed for university in a year, with dependent parents (yes the're retired, but aren't FI) and being the sole source of income for the family (my wife is devoted to her career of being a full time homemaker), ensuring financial security for all of us is the key issue to resolve before taking that BIG STEP.

I plan to do it before I'm 45 (that's less than 2 years away), and I have a plan that I'm hopeful will get me there, but lots of questions and gaps that still need to be addressed. And what better way to work on it, than in a community of folks who've already done it or, like me are working towards it.

Hope to learn and share with you all!

Nash
Great of hear of your plan. Could you provide some additional basic information so that you can get better feedback.
Specifically:
1. Do you have a paid off house? Do you parents have a paid off house?
2. Are you living in Bangalore proper or in a smaller city nearby?
3. What do you have in terms of assest?
4. As I understand it, CD (FDs as they are called there) are paying about 8 to 9 % interest per year. Would it be fair to say that with you wife, child and you (along with a servant), you will need about Rs. 45,000 per month to live comfortably?
5. Do you have any investments in real estate? What sort of appreciation are you expecting in such real estate investments? (Are you concerned that there might be a property bubble brewing in and around major Indian cities?)
6. How is your health and your parents' health?
7. Are you willing to downsize and move to a smaller town with a lower cost of living?
8. Are you open to doing some part-time consulting etc?

So, more information on line with the questions above will be most helpful.
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Old 06-04-2011, 01:47 PM   #6
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SandsofTime has given good pointers. My 2 cents to it (if you may say so)

Unfortunately, India is really bad at keeping statistics so when SandsofTime says if OP is ready to move to another city of less expenses, its very difficult to judge. I am exactly 11 years now out of India and desperately trying to go back but for variety of reasons unable to. One of reason being, I don't know where to settle down. I can not judge cost of living in certain cities. Its difficult to even compare main cities so forget smaller towns. I don't want job to decide my place to settlement but place of settlement should get me a job. Similarly, unless OP works in HR, he has no access to the data used to determine payscales in different cities (which is obtained from ministry of human resources and AFAIK, is not open to everyone.) This data is very useful when it comes to comparing cost of living in different cities.

Another aspect is cost of health, its soaring exponentially and unfortunately as most of the Indians think that whatever comes out of US is the best, they are also adopting to US medical system model, so stupid. Hence quality of healthcare is deteriorating and the cost is soaring. I don't want to live in a small town with my old parents where good medical care is miles away through highways where there is no respect for ambulance.

Thirdly, CD may pay 9% but the inflation is 14%. Value (or purchasing power) of the Rupee is reducing everyday. How do you tackle such issue? This is out of your control, unless you are a bigwig.

OP has a kid who soon goes to the university. If (s)he goes to a private professional school like Engineering or medicine, OP will pay hefty fees. I hope he has thought about it.

This is just a tip of the iceberg. I am from Mumbai and my knowledge of Bangalore is just of 7 day visit in 1999, so can't comment much but from where I see it, you are taking a big chance UNLESS as SandsofTime pointed, you have your house/apt paid off, you have assets in real estate and (volatile) stock market, enough cash sitting in the bank and/or gold investment (you being from Bangalore), plus ready to do some part time work post FIRE, it will be difficult to get your things rolling.

To be brutally honest with you, I would wait till at least my kid is out of the university to FIRE. During those 4 or 5 years, I would prepare for FIRE and tell my kid, no flunking or KT is allowed, straight in, straight out.

One question to OP, you have worked overseas, are you eligible for any pension from any other country than India? Thats of course after you turn 65 but still you do have count in when you crunch numbers.

@ SandsofTime - I am strongly suspicious that Indian property market is overinflated with the help of politicians, its going to calm down sooner or later. Last chief minister of Maharashtra did only one job, transfer FSI from less populated areas of Mumbai to densely populated areas of Mumbai so that he could fill his pocket from the builder lobby but now property market has cooled down a bit, projects have slowed down as very few are coming forward at such high price tag and tight loan regulations. I decided to go for an apt but with weak USD, I changed my plan.
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Old 06-04-2011, 02:01 PM   #7
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Welcome, Nash.

There's lots of good info and helpful posters on this board. Look forward to hearing more about your return to India and how life is there.

omni
Thanks Omni. Returning to India, is almost always an emotional, rather than a rational decision - but I've been here for just over a year now, and have so far not felt the urge to pack my bags and head out again.

Nash
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The plan is to stay put in India
Old 06-04-2011, 02:11 PM   #8
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The plan is to stay put in India

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Originally Posted by flyfishnevada View Post
Do you plan to stay in India or move abroad?
Hi Dan! The plan is to stay put here in India. Of course, that's partially an emotional response - but it helps that everyone talks about the pendulum swinging East (China/India and the like) the next few years...

Nash
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Old 06-04-2011, 03:01 PM   #9
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Quote:
Originally Posted by SandsofTime View Post
Great of hear of your plan. Could you provide some additional basic information so that you can get better feedback.
Specifically:
1. Do you have a paid off house? Do you parents have a paid off house?
2. Are you living in Bangalore proper or in a smaller city nearby?
3. What do you have in terms of assest?
4. As I understand it, CD (FDs as they are called there) are paying about 8 to 9 % interest per year. Would it be fair to say that with you wife, child and you (along with a servant), you will need about Rs. 45,000 per month to live comfortably?
5. Do you have any investments in real estate? What sort of appreciation are you expecting in such real estate investments? (Are you concerned that there might be a property bubble brewing in and around major Indian cities?)
6. How is your health and your parents' health?
7. Are you willing to downsize and move to a smaller town with a lower cost of living?
8. Are you open to doing some part-time consulting etc?

So, more information on line with the questions above will be most helpful.
Thanks for getting the ball rolling with your very insightful questions SandsofTime!

1. Do you have a paid off house? Do you parents have a paid off house? Yes (almost) and Yes. Almost, because it's just completed, and I have a small residual to pay before I take possession. And of course, then there's furnishing and other expenses to make it liveable - we're talking about Rs 2 to 2.5 million in total ( between 45-55 K US).

2. Are you living in Bangalore proper or in a smaller city nearby? In Bangalore at the moment, but depending on how things work out with some of the post FIRE options I'm exploring, might move to the outskirts of Mumbai - but that's not any cheaper...

3. What do you have in terms of assest?Besides the apartment above (I'm currently renting), I have about 650K US in savings, retirement accounts and investment accounts. Because I'm somewhat in transition, the cash part is larger than I acre for (about 25%), and the rest is almost equally split between Fixed Income (including some FDs) and stocks (mainly index and large cap funds, with a few individual stocks I hold out of vanity). I'm still working on an appropriate asset allocation (AA).

4. As I understand it, CD (FDs as they are called there) are paying about 8 to 9 % interest per year. Would it be fair to say that with you wife, child and you (along with a servant), you will need about Rs. 45,000 per month to live comfortably?That seems to be about right, but like I mentioned in my intro, I also need to support my parents. All in, I'd say about 20K US per year

5. Do you have any investments in real estate? What sort of appreciation are you expecting in such real estate investments? (Are you concerned that there might be a property bubble brewing in and around major Indian cities?) Other than the apartment mentioned above, none. I am extremely concerned that a property bubble is brewing, but then like my DW keeps reminding me, I've said that for as far as she can remember, and unless she had intervened, we'd be paying at least 35% higher for the apartment ( we signed up about 3 years ago)

6. How is your health and your parents' health? So far no major complications. But age, stress levels and a fairly unhealthy diet coupled with lack of physical activities, threaten to make that an issue in the future. But the last couple (or three) factors are all 'controllable' and happy to say, I'm making a start. My parents have (almost) no health insurance, and while my wife, kid and I are covered by our corporate plan, I am yet to decide on additional/private cover. Also toying with the idea of self-insurance, but haven't figured out a way of making a call - as yet.

7. Are you willing to downsize and move to a smaller town with a lower cost of living? Yes - but the answer to that depends on two things - where our kid goes to college ( yea we're having issues imagining an empty nest) and secondly, what I end up doing with the time on my hands.

8. Are you open to doing some part-time consulting etc? Yes, that's an option. But I'd rather do something more meaningful. Oops my slip is showing!

Thanks again SandsofTime - responding to your questions has made me start thinking - something I've been putting off for a while now.

Nash
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LOL!
Old 06-04-2011, 03:08 PM   #10
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LOL!

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All the Indians I know have maids, cooks, drivers, etc. Is that the case for you as well? In retirement, do you need to support all of their families as well?
LOL! Unlike my compatriots who you are acquainted with, we only have one part-time help and hope to keep it that way - for as long as we can. If we did have a bevy of helpers working full time for us, I would imagine it would be difficult not to feel responsible for their families.

Nash
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Old 06-04-2011, 03:34 PM   #11
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I am exactly 11 years now out of India and desperately trying to go back but for variety of reasons unable to. One of reason being, I don't know where to settle down. I can not judge cost of living in certain cities. Its difficult to even compare main cities s....
Hi Noel! Been there (took me 12 years) - it's difficult to take a purely 'rational' decision when it comes to returning to India...

Quote:
Originally Posted by noelm View Post
Another aspect is cost of health, its soaring exponentially and unfortunately as most of the Indians think that whatever comes out of US is the best, they are also adopting to US medical system model, so stupid. Hence quality of healthcare is deteriorating and the cost is soaring. I don't want to live in a small town with my old parents where good medical care is miles away through highways where there is no respect for ambulance.
That is a big worry! I'm fairly confident of getting affordable medical help for the routine and minor day to day requirements, as well as for non-critical/non-emergency type of hospitalization/surgery, in almost any second tier city here. However, when it comes to major problems, I guess it's better off to be in one of the metros/larger cities. And COST would certainly be an issue. I'm currently covered, as are my wife and kid, but my parents are not (and cannot). But when I quit my job, do I buy health/hospitalisation cover for the three of us, or do we set aside a sum to self-insure? Looking for a way to work this through...


Quote:
Originally Posted by noelm View Post
OP has a kid who soon goes to the university. If (s)he goes to a private professional school like Engineering or medicine, OP will pay hefty fees. I hope he has thought about it.
Think about it every day (and most nights). You're right - it can be a sizeable chunk of our savings - and it is this, that will really determine if I can achieve FIRE in 2 years or whether it takes me a couple of years longer...


Quote:
Originally Posted by noelm View Post
To be brutally honest with you, I would wait till at least my kid is out of the university to FIRE. During those 4 or 5 years, I would prepare for FIRE and tell my kid, no flunking or KT is allowed, straight in, straight out.
Agree. Not sure I would like it very much, but yes if that's what it takes...

Quote:
Originally Posted by noelm View Post
One question to OP, you have worked overseas, are you eligible for any pension from any other country than India? Thats of course after you turn 65 but still you do have count in when you crunch numbers.
I was on a defined contribution plan, so already accounted for in my savings/assets

Again, Noel thanks very much for forcing me to think about the hard issues. On some issues, it's remarkable, how similar our thoughts are. BTW, I grew up and went to school in Bombay too. And depending on how things turn out, we may make Mumbai (nah.. Navi Mumbai) our home again.

Nash
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Old 06-04-2011, 04:27 PM   #12
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Mumbai

I was fortunate to visit India once.

I was amazed at the contrast of the large cities and small towns when compared to the USA. People were generally friendly and courteous.

I also visited Goa and went to Karnataka (sp?) state deep into the jungle where they located one of their nuclear power plants. Experienced wild monkeys in the trees like squirrels here. Wild cashew trees and tales of the wild tigers and elephants in the jungle. The colony 10 miles form the plant had huge fences to keep something out.

I went to Mumbai in November 2008 and left just 3 days before the terrorists came looking to kill people that look like me.

It was wonderful and amazing and an adventure of a lifetime. I know some Indians who run some stores in the area. They visit home every year or two and miss it. I can see from the hugely contrasting cultures between the US and India that many Indians would get very homesick.
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Old 06-05-2011, 12:27 AM   #13
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Originally Posted by nash2012 View Post
Thanks for getting the ball rolling with your very insightful questions SandsofTime!

1. Do you have a paid off house? Do you parents have a paid off house? Yes (almost) and Yes. Almost, because it's just completed, and I have a small residual to pay before I take possession. And of course, then there's furnishing and other expenses to make it liveable - we're talking about Rs 2 to 2.5 million in total ( between 45-55 K US).

2. Are you living in Bangalore proper or in a smaller city nearby? In Bangalore at the moment, but depending on how things work out with some of the post FIRE options I'm exploring, might move to the outskirts of Mumbai - but that's not any cheaper...

3. What do you have in terms of assest?Besides the apartment above (I'm currently renting), I have about 650K US in savings, retirement accounts and investment accounts. Because I'm somewhat in transition, the cash part is larger than I acre for (about 25%), and the rest is almost equally split between Fixed Income (including some FDs) and stocks (mainly index and large cap funds, with a few individual stocks I hold out of vanity). I'm still working on an appropriate asset allocation (AA).

4. As I understand it, CD (FDs as they are called there) are paying about 8 to 9 % interest per year. Would it be fair to say that with you wife, child and you (along with a servant), you will need about Rs. 45,000 per month to live comfortably?That seems to be about right, but like I mentioned in my intro, I also need to support my parents. All in, I'd say about 20K US per year

5. Do you have any investments in real estate? What sort of appreciation are you expecting in such real estate investments? (Are you concerned that there might be a property bubble brewing in and around major Indian cities?) Other than the apartment mentioned above, none. I am extremely concerned that a property bubble is brewing, but then like my DW keeps reminding me, I've said that for as far as she can remember, and unless she had intervened, we'd be paying at least 35% higher for the apartment ( we signed up about 3 years ago)

6. How is your health and your parents' health? So far no major complications. But age, stress levels and a fairly unhealthy diet coupled with lack of physical activities, threaten to make that an issue in the future. But the last couple (or three) factors are all 'controllable' and happy to say, I'm making a start. My parents have (almost) no health insurance, and while my wife, kid and I are covered by our corporate plan, I am yet to decide on additional/private cover. Also toying with the idea of self-insurance, but haven't figured out a way of making a call - as yet.

7. Are you willing to downsize and move to a smaller town with a lower cost of living? Yes - but the answer to that depends on two things - where our kid goes to college ( yea we're having issues imagining an empty nest) and secondly, what I end up doing with the time on my hands.

8. Are you open to doing some part-time consulting etc? Yes, that's an option. But I'd rather do something more meaningful. Oops my slip is showing!

Thanks again SandsofTime - responding to your questions has made me start thinking - something I've been putting off for a while now.

Nash
I am not sure if the 20-25 lakh (2 to 2.5 million rupees) is the total cost of the residence or the balance of what is to be paid on it. It appears that if you were able to purchase the property for 20-25 lakh, then that sounds like a great price.
Regardless, here are my thoughts:

1. Essentially, you need a whole lifetime of income stream as you, along with your DW, will probably live another 40 years or so. Therefore, I feel that all your necessities need to be paid off and you must have minimal monthly outgo. Income is important but due to the passive nature of income in FIRE, the vagaries of the market or other circumstances outside of your control may (will) affect the "income". However, the "outgo" is fully calculable, and additionally, the uncertainties of future inflation (I do not expect outright deflation in India any time soon) can be minimized if not totally eliminated by having as many necessities of life paid off in full.

Therefore, building upon my previous line of questions, it appears that you are well positioned for a comfortable FIRE life in India, with certain caveats. $650K , which a handsome amount, is not so big an amount that you can be entirely carefree of the future.

Here is my humble suggestion on how to handle it:
1. Pay off your home in full;
2. Consider either some sort of part-time consulting in your field of expertise, or if you have some other calling, then engage in that calling.
3. Your monthly expenses should not be more than Rs. 45,000 per month, if you have a paid off home. Frankly, you ought to be able to live on a little less than Rs. 45,000. Perhaps the parents will need an additional Rs. 20,000 per month. Now, in dollars that about $1000 for you and an additional $500 for your parents. How can you most easily generate $1500 or about Rs. 60-65,000 per month without a lot of headache.
Well, seems to me that you may want to allocate about $ 200,000 into some FDs at 9%. This amount should be MORE than enough to generate the necessary monthly income for you, DW, as well as support your parents. At $200,000 you will earn about $18,000 per year, and that is about $1500 per month ($1000 for you, $500 to be used on parents). In fact, you probably won't use all of the money every month, and therefore, maybe able to put back some to hedge against inflation.
4. As for the remaining $450,000, I would consider diversifying the heck out of it. So, a little in stocks, a little in real estate (an apartment) or even some agricultural land, and yes, even precious metals (perhaps after a little pull back on gold). Botton line, as to the $450,000, diversify it a lot. The growth on that money should be more than enough to hedge against inflation.


Regarding the Child's Education: If you were previously in the US, and if you child has a green card or US Citizenship, then you may want to consider having the child get his/her education in the US. If the child is begin his/her college, then the child should be able to go to as state university (eg. a UC or a Cal State in California) and based on your situation, would probably get a lot of Pell Grants and Cal Grants. With a little bit of part-time work, and maybe some minimal student loans, the child will be able to get a nice education here in the USA (I am assuming a lot here, as far as where you previously lived as well as green card etc)
In the alternative, you could have your child attend one of many, private universities in India (eg. Manipal, or a host of other universities etc).

Now, as to what are you going to do with all that time? You are totally correct in saying that a decision to RTI (Return to India) is a very emotional one, are you perhaps in the "Swades" movie frame of mind? I do wish you the best in whatever path your spirit has compelled you to take.
As you know, Life is short. Do keep posting as you proceed forward in your journey.
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Old 06-05-2011, 12:03 PM   #14
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Thanks SandsofTime. A lot of good points to chew on. I intend to explore each of the key issues and come back with more questions and hope to learn from you and others in this wonderful community. In the meantime, thanks again for making me feel so welcome and being willing to share and help.

Nash
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Old 06-15-2011, 10:23 AM   #15
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Hi from Hyderabad. Good to see fellow Indians in the forum. I'll just put in a few random thoughts :

* Inflation is real killer, specially food. In last 5 years since we returned from US, food bills for us have clearly doubled.
* Education / Marriage expenses / Medical are other high inflation areas.
* If FIRE is ur focus then why not a smaller city ? Could reduce ur expenses by 30-40%.
* Have u thought about withdrawl plan/AAP ? With 60-65K monthly withdrawl u can set up to pay almost 0 tax.
* how about provision for irregular expenses like vacations / appliance- car replacements , big ticket items?

We r in similar boat, 39 now (too old in India) and shooting for my Hubby to FIRE in 5 years.

-Desigirl
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Old 06-16-2011, 01:07 AM   #16
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@DesiGirl:
yes, you are correct, there are lots of us Desis on these various forums lurking around, and sometimes, participating.

I am hoping to FIRE within 1 yr. We have two kids, 7 and 4. Crazy dreams swirl through our minds like morning mist in Dalhousie.

You make an excellent point in shedding light on the increase in the cost of living, especially food, in India over the last four years.

I am curious to know how your transition to India has gone over last few years. What key points can you share with the rest of us about life and economic realities there?
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Old 06-17-2011, 08:28 AM   #17
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Observations/Thoughts on Life in India / Early Retirement (Not done yet) -

* Inflation..inflation....land of 10-11% guaranteed returns and 15%+ food / education inflation...experienced it personally
* Earlier US used to feel expensive now as far as goods go India feels expensive, services r still quite cheap though.
* Improvisation and replacement is the key ... living like locals will bring down the expenses as compared to sticking to returned NRI mode, mangoes are 30-40 per kg, washington apples 150 per kg, good cheese could be 2K for 250 grams so eat local, behave local ...
* From kids point of view (have 2 age 10 & 7) education inflation is significant and r ur kids willing to slog itt out in desi system. Seen lot of people going back to US or sending kids for education and footing insane bills of $250K+
* But I can see with age India is lot better place to be around as compared to US - medical and other services being lot cheaper, lots of people and much better social life .

Will sshare more but feel free to ask questions and I woulld be glad to answer.

-DesiGirl
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43 years- me to..one more year to go to India
Old 07-11-2011, 07:54 AM   #18
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43 years- me to..one more year to go to India

Hello everybody,

I just came across this wonderful forum and thought of sharing some details of myself, my proposed plan and at the same time seek some inputs and guidance from experienced forum members . Here are some details :

Goal : Go back to India in 2012 for following reasons :- 1) Want to be with ageing parents 2) Want my son to get some exposure and education in India as my belief is that the competition, action and struggle may prepare him for the later years 3) Want to pursue some interests which I currently cannot, dont want to work full time!.

Family: We are a family of three, myself -43 years, wife and son- 7 years. I have dependant parents in India. I have been employed for the last 21 years, 11 of which have been spent outside India. Wife has a full time job of managing the home!!

Vital Statistics:
1)Liabilities/ Loans- ZERO
2)Assets:-
  • 3 apartments ( 1 fully paid for, 2 under construction and funds allocated for balance payments). One apartment will be for self occupation and the other 2 will be for rental income and capital appreciation when needed. Approx value $ 600,000 or Rs 26 million
  • Equity/Mutual Funds $ 160,000 or Rs 7.2 million
  • Fixed Deposits (FD's) $ 389,000 or Rs 17.4 million
3) Medical Insurance :- Policies in place with maximum permissible by Insurance companies of Rs 5 lakhs per individual( Rs 0.5 million) for 3 of us and parents have their own insurance coverage (their coverage may not be sufficient though).

4) Education & Marriage expenses for my son: Within the Equity allocation mentioned above, Rs 1.5 million /$ 33,000 is earmarked for this purpose, which I am assuming will grow over the next 10-15 years to the desired amount.

5) Life Insurance Cover already in place. Premiums being paid annually.

EXPENSES:
My estimated expenses monthly are around $ 1000 or Rs 45,000 per month with another $ 300 or Rs 10,000 for my parents, adding to Rs 55,000. I am allocating another 300 $ /Rs 13,500 towards insurance preumium and vaction expenses. Monthly Grand Total is estimated at Rs 68,500 or $ 1522.

Plan:
Interest on FD's is expected to give me a monthly income of Rs 85,000 after tax, which should cover all my expenses for next 3 years. With inflation creeping in, I propose to use the rental inflows from the other 2 properties to keep my income above expenses. With passage of time, if needed may sell off one property.

Given the high food inflation in particular in India and general levels of inflation, am still very unsure whether I am taking the right step. Comments, questions and suggestions are most welcome!!!
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Old 07-20-2011, 09:45 PM   #19
Dryer sheet wannabe
 
Join Date: Jun 2010
Posts: 23
Quote:
Originally Posted by DesiGirl View Post
* Have u thought about withdrawl plan/AAP ? With 60-65K monthly withdrawl u can set up to pay almost 0 tax.
-Desigirl
Nice to see the posts. Can Desigirl or others, explain the above can be setup please, in India ofcourse?

manglore, your plan looks good, with no personal experience, I cannot say much. But, always wonder if a rental investment is worth the principal, specially when you start it out new.
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Old 07-21-2011, 05:09 AM   #20
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Join Date: Dec 2009
Location: Hyderabad
Posts: 75
Mangylore I would say that since u r not in India right now, ur estimate of $1K per month expense may just be that - "estimate". I would be probably want to actuallly put everything through dry-run specially as somebody who is not in India. you could easily spend 10K+ on maid & driver. For me it costs almost 15K per month for 2 kids education in non-international school. So I would suggest budgeting in detail including all irregular expenses and still testing it. (We have been in India for 5 years and I have been collecting expense data using Money s/w to get a solid handle on expenses and also inflation rate and pattern)

Fireindus for 60K per month withdrawl both you and ur wife can do 30K each or 3.6L p.a. (You have to setup ur assets properly). Out of that you could earn 1.8 L each from FDs with no tax liability so even if u want to withdraw everythin in form of interest you'll have to pay 10% on remaining 3.6L which is 36K or 5% tax liability in total.

http://finance.indiamart.com/taxation/income_tax/rates.html

Now if you take reaining income in form of capital + gains your tax liability would be reduced even further. Long term capital gains on securities are currently 0 in India :

http://finance.indiamart.com/taxation/capitalgains.html


You could also make use of provisions under 80C to cycle ur investments to further reduce ur tax liability (Based on ur AAP).

-DesiGirl
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