I was an NRI

I mention that I was an NRI in the Disclosure of this blog but I wanted to address this issue head-on because of a recent comment in JagoInvestor where someone said only NRIs can save a lot in a short time which is a false statement and only serves as an excuse for the self-pity crowd.

Here’s my brief NRI story:

I worked and earned in the U.S for about 9 years. I returned to India in 2013.

But before you go “oh! that’s how you saved so much so quickly”my U.S salary was not really highI started with a really low salary and since increments are based on your previous salary … my salary grew very slowly especially when I was a startup employee for 6 years.

Note that as of this time, we’ve saved up only 30% of our early retirement target. See the progress bar on the right hand side.  This 30% includes my wife’s savings also. I’m now in India. This means that I’ll be saving the remaining 70% of our early retirement target working from India. My wife is currently on a break from work to explore her interests meaning we are a single-income household for the past 3 years. So I’ll be demonstrating how early retirement is possible in India by my personal example in the years to come!

My NRI salary was only good enough to buy a Rs.45 lakh apartment over 5 years without requiring any home loan. This works out to an average savings of Rs.75,000 per month for 5 years. (Rs.45 lakhs divided by 5 years). Given the real-estate crash in India right now, the apartment is now worth about Rs.65 lakhs after 9 years since I booked it in 2008 which is a terribly low CAGR return of only 4%! I would have invested that amount in mutual funds instead if I had educated myself.  The first 3-4 years of my NRI stint, I was paying off my education loan and large credit card debt I had gotten into due to poor financial habits.

I was always embarrassed that I did not earn the big salaries of my peers in the same age group. But as I write this disclosure I’m glad I didn’t because I learned to save instead to achieve my goals and not succumb to increased lifestyle expenses with increasing salary 😉 Moreover it is my U.S experience that helps me apply Early Retirement ideas from the U.S to Indian conditions.

I grappled with the dilemma of whether to mention that I had been an NRI at the time of writing the Early Retirement article and finally decided not to mention it so that readers were not distracted from the main message of saving at-least 50% of your salary each month. From the comments on the article I can now say that my decision was correct because no one complained it was not possible to save 50% on an Indian salary. Because people were already saving 50% of their Indian salary as EMI to repay house loan just not as mutual fund SIP like I was advocating.

Coming back to this self-pity comment : recently on JagoInvestor an NRI had written an inspirational article how they had saved Rs.1.5 crores in just 7 years by investing aggressively in equity and not buying real-estate. But this commenter dismissed the achievement by saying only NRIs can do it and people in India should keep saving till age 60. I posted a reply to their comment showing how people on an Indian salary can also save the same amount in just 7 years.

My reply to the self-pity comment saying only NRIs can save a lot in a few years:

1. You should compare this NRI author with a double-income household working in IT in bengaluru/pune where husband and wife each bring in Rs.1 lakh/month. I know Indian households where one spouse’s salary is used for house loan EMI and the other spouse’s salary for expenses. If this double-income couple saved Rs.75,000/month in mutual funds then @ 12% CAGR they would have Rs.1 crore saved in the same 7 years as this NRI. That is compounding & equity returns at work.

2. If households in India can afford to pay EMI of Rs.75,000 per month on a Rs.75 lakh house loan then they can invest the same amount each month in equity too. Most people in India are saving a lot each month but in the wrong manner as EMI which this NRI smartly avoided.

3. You say people in India don’t earn that much.
But I’ve recently hired IT people in Pune & Bengaluru with minimum take-home pay of Rs.1 lakh/month for 5-7 years experience. That’s when I realized that such high salaries are the norm in Pune, Bengaluru etc. You have to agree that the past decade or so has been lucrative for IT and MBA people working in India.

4. Quite a bit of people reading this blog are high-earners early in their careers in IT, MBA etc
It is possible for them working with their spouses as a team to emulate this NRI’s impressive achievement.

5. Lastly, you are discounting the fact that cost of living is also high for NRIs as it is denominated in their foreign currency. So unless you are consistently frugal, you won’t be able to save much. What is impressive about the author is that he has consistently saved for 7-9 years which requires determination.

I will definitely consider this as the “inspiration story of the decade” for young people entering the workforce
We need inspirational stories like this because IT & MBA jobs are no longer secure that you can hope to work till age 60.

Health is “real” Wealth

I’m recovering from a lengthy and painful throat infection this new year. So I thought it would be apt to start 2018 with this topic. All of 2017 I took pride in never taking a single pill except a painkiller for a dental issue. I finally took some Ayurvedic pills for this infection after realising that this infection might be serious.

YOU MISS HEALTH ONLY WHEN YOU DON’T HAVE IT:

I obsessively talk a lot about money but all the money in the world means nothing if you don’t have the health enjoy it. Like I mentioned in the Early Retirement article, my wife & I do Health SIP in some simple ways : yoga, nutritious food, morning walks, swims etc. I used to cycle & play badminton a few years back and I would love to get back to both activities.

DIABETES – A LIFESTYLE DISEASE:

Personally my need for Health SIP comes from the fact that both my parents are diabetics and I can see how their quality of daily life is reduced in old age, so I’m obsessed with avoiding diabetes as much as I can through healthy living.  My mother tells me they used to call diabetes “the silent killer” because people would know someone had diabetes only after they died. On the surface the person who died would look healthy but diabetes was corroding organs inside.

WORK & LIFE STRESS CAN MAKE YOU SICK…PERMANENTLY:

Diabetes is an epidemic in India even among poor people.  I was shocked to learn that apart from poor diet and zero exercise, a major contributing factor is “stress” especially for men.  In the case of women, stress is known to cause hormonal changes leading to weight gain among other ill-effects.

If you want to avoid major health expenses in your old age then you need to start paying attention to your:

  • DIET
  • EXERCISE
  • STRESS

The conventional approach to retirement is to earn the maximum  and save the maximum because you never know how much you need… coz you might get diabetes and diabetes treatment is expensive etc etc. But we forget that eating out every day because we are at work, skipping exercise because we work long hours and not dealing with work stress means that it will all catch up as you get closer to old age and will be very expensive to treat not to mention your quality of life will be so poor you can’t even climb stairs easily or travel to visit your children etc. So the solution is to lead a balanced life.

quote-man-sacrifices-his-health-in-order-to-make-money-then-he-sacrifices-money-to-recuperate-dalai-lama-80-98-11

 

We are trying a different approach inspired by moneymustache’s badass approach. We already see the oldies in our family and what kind of problems they face.

For example:

  • Elderly ladies always have knee problems from standing in the kitchen for long hours every day cooking for the family 3 meals a day
  • Elderly men have diabetes from having a “desk job” and not exercising enough
  • Liver problems from alcohol abuse
  • Antibiotic resistance : needing higher dosage of western medicine as a result of popping pills indiscriminately …Fever? take a Crocin, Headache? take Saridon etc . Would it have killed to let the fever go away on its own in 5 days? The body would have developed better immunity that way.

OUR HOLISTIC WELLNESS PLAN:

So our plan is to avoid atleast what we can see the oldies suffering from . And then prepare for some of the issues our generation is likely to get like

  • Poor eyesight from starting at phone & computer screens for too long
  • Diabetes from junk food, no exercise and work stress
  • Alcohol abuse as social drinking becomes more mainstream
  • Heart problems from working in stressful work environments or not dealing with personal life stress via meditation, exercise, better communication etc.

Here are some simple changes we’ve made to our diet, exercise and stress-management.

DIET:

  • Home-cooked food & eating out less but in high quality places.
  • Moderate Alcohol for social occasions.
    • Disclosure: we have a cook who comes home and makes us home-cooked food. The benefits far outweigh the costs.  

EXERCISE:

  • Swimming
  • Walks
  • Yoga

STRESS MANAGEMENT:

  • Meditation
  • Improving communication with spouse.
  • Not habitually checking on work after work-hours.

Starting now, I urge you to make small & simple changes to your diet, exercise and stress-levels. Trust me you’ll save a ton of money staying healthy.

Around me I see super-active and healthy 80-year olds and very-unhealthy and tired 60-year olds.  How old you “feel” is a matter of how healthy you are. Please start taking care of your health atleast now before it is too late.