Retirement Planning

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One Crore Retirement Plan

A stupid retirement plan

First the stupid part ...
Everyone has a retirement plan and usually it is linked to some amount of accumulated wealth. I will retire once I accumulate one crore, and so on. One crore retirement plan is the most stupid and unfortunately also the most common plan. So is two crores for retirement a better plan? No, it is equally stupid. How about ten crores for retirement? equally stupid.

Why stupid?

There is a fundamental flaw in the one crore retirement plan. Earning money is tough, accumulating wealth takes a long time but losing money is easy and takes no time at all. One, two, ten crores might sound like a big amount, but is very small when you consider how easily it can be lost. To list a few, family emergency, health emergency, failed business venture, failed partnerships, loss in risky assets, real estate & land deal delays, legal entanglements, cheating & fraud victimization, heck even basics like healthcare, marriage, parenting and education. And then the unknowns, from sinkhole under your house to WWIII and what do you think will be the cost of a bottle of drinking water twenty years from now? (If you don't believe this, read about Amitabh Bacchan and his ABCL Corp venture)

An ideal retirement plan

Second comes the better part ...
What is a good retirement plan? Well, ideally you should never aspire to retire until you expire. But there is a  problem here too, our skills will not always be relevant to the industry and our health will not always be supportive. So what should one do?

A practical retirement plan

Third comes the bitter, better part ...

One should always focus on building perpetual streams of income instead of savings. It could be anything, room rentals, royalty payments, ad income from popular websites, compounding investments, ebay shop, art & hobby, snack shop, gardening & farming, e-commerce, freelance photography, writing, coding, anything that interests you. It's important that it should be something that you enjoy doing, so that you can happily do it forever as long as you live. You should be passionate about it, so that it does not seem like hard work. You should get a "life is good" feeling while working on it and you should feel proud when you think about what you are doing.

Plan well before you start

Ideally look for things that are independent of location. If you want to go to Shimla or Alaska for retirement, it should not disrupt your perpetual income source. Look for something that is fairly automatic and does not require too much manual labor and time. If you are unwell for sometime, it should not disrupt your perpetual income source. Look for something with minimal dependencies, it means fewer things that can go wrong. Try to build multiple such sources. If one or two things go wrong temporarily, it should not disrupt your perpetual income source. Don't start with a grandiose plan that can have a high cost of failure, start with something small and scale it up if it works. It should be perpetual in nature, small and continuous income spread over a lifetime is much better than one big income followed by nothing. It should be renewable. At any point of time if you lose everything you earned until that day, you should be able to start all over again without any worries. If you have expertise in your domain, it will be easy for you to rebuild. If you choose something you enjoy and do it for a long time, you will develop the expertise needed.  It will test your patience, but have patience. Don't quit your job, most jobs offer a decent social and intellectual environment (besides career, money, blah blah) and is good to be engaged with, as long as feasible.

A good time to start 'no retirement' planning

Start early, start now. It will take time. But you will be happy in future that you started this today. Best of luck and happy retirement free life !