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Stop Putting This Off! 9 Steps

Sep 25, 2015

In this issue:
» 9 steps to securing your golden years
» India's twin deficits - starkly unlike compared to foreign countries
» A round up on markets
» ....and more!

00:00
I just finished reading a guide that my friend Anisa and her team at Common Sense Living have been working on for months now. And at the end of it, I was literally cursing myself for putting off reading it all this while. Aptly titled Retire Rich, the guide puts in place everything that you need to do to retire without a worry, whether you plan to do it next year, or many years down the line. In short, it is a complete blueprint to get your retirement planning right.

I completely agree with Anisa that retirement planning is a more serious issue than most of us like to think! So the longer we put this off the riskier it gets.

Since Retire Rich is available only for the next 24 hours through a special introductory offer, I strongly suggest that you take the biggest and most important step for your financial life right away.

To make it easier for you, Anisa has put down 9 Retirement Planning Steps that you need to take today. Over to Anisa...

We like to dream about how wonderful retirement will be-those free days when we're no longer chained to our desks. When we can kick back, relax, walk in parks, play with our kids, travel the world, pursue our passions... Ah! The dream.

Unfortunately, as a wise man once said...

'Retirement can be a great joy if you can figure out a way to spend time without spending money.'

So when you dream of your idyllic retirement-strolling through the valleys of Kashmir and floating on the canals of Venice-stop to consider the one thing you will need to make it a reality: retirement income.

No one wants to think about putting money away for when they won't be gainfully employed. I know how easy it is to procrastinate, but the single most important thing you can do today to secure your golden years is grab a pen and paper, run off a few prints of your bank statements, and start planning.

Now is the time for proper planning. And these are the nine steps that will get you there:

  1. Start early. Better yet, start now.

    • 'I have enough time to go before I retire, so why rush? Let me focus on living now, we'll see what happens tomorrow.' - said no wealthy person ever.

    Time is your friend, especially when it comes to retirement. Whatever your stage in life, start planning right now.

    Starting early has two unbeatable advantages:

    1. You have the flexibility to take big risks. And as we all know, bigger risks lead to bigger rewards. But if you fall, no worries, you have time to pick yourself up and start again.

    2. The magical power of compounding will grow your little money into big piles of wealth. Remember what Einstein said: Compound interest is the eighth wonder of the world.

    So start now, or regret each day you let slip away.

  2. Sit your family down.

  3. You are not an island. And you are not the only person in your family who cares about spending and saving wisely. You are also not the only person smart enough to understand money.

    To plan for your future and that of our family, to identify your financial goals as a family, and to work towards them together, you must unite your family around finances.

    This also has other advantages-if you, as the breadwinner, were not around anymore your family would be able to take care of themselves. Also, your children, if involved in this process early, will grow up to be more financially aware and secure.

  4. List your financial goals.

  5. All financial planning includes more or less the same steps. If you are already sitting down and planning for your retirement, it is a good idea to include your other financial goals and prioritize them accordingly.

    Your in-case-of emergency fund should be your highest priority. You will have other goals-children's education, buying a house, a wedding, etc. Figure out what you are saving for, how many savings buckets you need, and plan to fill them accordingly.

  6. Spend wisely.

  7. Every rupee you put in one of your savings buckets, instead of spending right away, will multiply. The more money that goes in a bucket, the richer your life will become over time.

    But what about right now? Should you deny yourself today for an uncertain tomorrow?

    No, of course not. You simply prioritize. You learn to spend on the things that give you the most value and the most joy today, instead of wasting it on things that have perceived value. Spend on things that make you truly richer (a good education, a good experience such as travel, a good home), rather than poorer (anything that is more expensive because of a logo or a brand name).

    So make a budget-and stick to it. And make sure you are spending on intelligent luxuries.

  8. Examine your investments.


  9. Are you sticking religiously to a budget, scrimping and saving, and then chucking all your savings into some asset that is either too safe to be rewarding (fixed deposit anyone?) or too risky to be safe (all equity all the time)?

    Both approaches are wrong. What you need is a diversified asset allocation strategy that will be fruitful and safe - that gives you growth and stability. The strategy should also match your personality, your risk appetite, your financial situation, and your life. Remember what happens if you put all your eggs in one basket?

  10. Start creating extra income opportunities.

  11. In theory, the money you put away in your investments will sustain you through your retirement. In reality, it's never enough. You might live longer than you expected, your rate of return might be lower than you expected, the rate of inflation could be higher than you expected, you could have an expensive emergency or illness...

    But there is a simple and definitive way you can deal with all of these challenges. Don't give up your active income. Keep working through retirement - not at a painful slave job, but spending just a few hours a week doing something you love and still making money.

    If you like to write or consult or take pictures, if your talent lies in sales or marketing or management-the years of wisdom and knowledge you have collected can be transformed into an active income.

    But can you find opportunities that you can use to make income that will contribute to your ideal retirement lifestyle?

    The answer is a resounding yes, but I'll get to that in a minute...

  12. What's Your Number?

  13. If you don't know where you want to be, how will you ever get there? In retirement planning, it's crucial to have a number that you work towards. Your retirement number, what we like to call your 'magic number', is the amount of money that you need to quit working and live comfortably for the rest of your life.

    To calculate that number, you need to know what your expenses will be in your second life, how long you expect to live, how much return you realistically hope to get on your investments, and how much extra income you plan to make.

  14. An Extremely Easy Way to Retire Rich

  15. Don't worry; it's not that complicated. So grab a pen, a calculator, and your bank account statements. But wait...you'll need one more thing-a streamlined, detailed yet easy-to-follow, step-by-step guide to help plan the retirement of your dreams...

    And that's exactly what we're here for.

    After pondering all the questions anyone dreading retirement is asking -

    • How do I find easy ways to supplement my income?
    • How do I protect my assets?
    • How do I invest wisely?
    • Can I save more for tomorrow without compromising on my life today?
    • Basically, how do I picture my dream retirement, and find my way to it?

    We brought together just the right team of experts to answer these questions and created the ultimate retirement planning resource. Click here to take a look at the Retire Rich bundle and take your retirement from dream to reality.

    But wait, there's one more step...

  16. Enjoy the Ride.

  17. Retirement planning is an extraordinarily freeing journey for anyone. It is a chance to envision a dream, and then work towards building it into a reality.

    Before you start retirement planning - thoughts of retirement stress you out, it's a niggling worry, a looming darkness... After you start planning though, it brings so much clarity and light into your vision of your life, that riding into the future becomes a pleasure.

    That's why I urge each one of you, whoever you are, whatever stage of life you find yourself in... start this journey now.

    And enjoy the ride...remember the words of MK Soni: 'Retire from work, not from life.'

Click here to get the ULTIMATE RETIREMENT PLANNING BUNDLE.

What steps have you taken to start planning for your retirement income? Let us know your comments or share your views in the Equitymaster Club.

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03:30
 Chart of the day
Countries with low household savings borrow abroad to fund their investment needs. Hence such economies run a current account deficit. India, however, is an exception to the rule. Indian households are amongst the best savers in the world. In some years, household savings made up as much as 67% of the country's total savings. But India runs a current account deficit despite a relatively high household savings rate. And this is because the savings of India's corporate and government sectors are inadequate to meet the country's investment needs. More importantly government's wasteful expenditure combined with lower household savings can be a lethal combination for the economy.

The gross household savings for India, which stood at 23% of GDP during 2014 is lower compared to 28% in 2012. So it is imperative for India to arrest the decline in household savings so as to keep the current account deficit in control.

China's spectacular growth story has been much a result of the country's historically high savings. The country's gross domestic savings are almost double that of India's savings.

So while India already has advantage of strong demographics, strong household savings growth is a must have until the government gets its house in order.

Why household savings are critical to India...


04:30
Major Asian markets are witnessing selling pressures, after the Federal Reserve chair remarks on the interest rate hike sometime later this year. The stock markets in China (down 1.02%) and Singapore (0.56%) are leading the pack of losers. The Indian stock markets are closed today.

04:50
 Today's investing mantra
"If you spend more than 13 minutes analyzing economic and market forecasts, you've wasted 10 minutes" - Peter Lynch

This edition of The 5 Minute WrapUp is authored by Tanushree Banerjee (Research Analyst) and Anisa Virji.

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1 Responses to "Stop Putting This Off! 9 Steps"

Sathyamurthy

Sep 25, 2015

Your "Retire Rich" marketing won't find takers unless you provide genuine reviews/testimonials. Your dry marketing techniques only give the impression that your "Retire Rich" is going make one poorer by the subscription fee.

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