At the start of year One of our F.I.R.E journey Naren was all psyched up about starting and running his own business. Sugandha was burned out from the Big Indian Wedding and years of working in fast paced corporate life and was looking forward to completely chill.
Alert- this post is filled with personal information. That is the only way we could share what went in those initial years. if you find some of it too mundane please bear with us. This post has snapshots of old documents we used to write our ideas, photos and any other material that we felt communicates about what went back then:-)
We wrote about year Zero couple of months ago and you can read it to refresh your memory.
First half of 2015
We got married in November of 2014. After wedding we came straight to Goa. We rented a beautiful 2 bedroom row house in a most alluring Village in Goa- Aldona!
If we have already not raved enough about Aldona- here are some photos! We had Moto G back then and photos from our phone do not do justice to this charming village so we are using photos from Indiatales. If you want to know more about Aldona check out the article on Aldona by indiatales.com.
Photos of our neighbourhood
By the time we settled into our new house in a quaint little village of Aldona. It was time to fly to Naren’s parents in Chennai for post wedding meet and greet.
From Chennai we went to Kerala to attend a dear friend’s wedding. The wedding and new year coincided so we decided to head to Munnar for a quiet New Year Celebration.
By the time we came back to Goa it was 1st week of January, 2015.
We had started penning down our thoughts in 2014. I am sharing them with you here. These ideas and philosophy may give you a good idea into what was going in our heads back then.
We used excel sheet as an idea board. If you do not know already sugandha was an excel geek back then. Naturally everything was jotted down in to one or the other sheet.
Glimpse into our minds and Plans in 2015
- This sheet has ideas from our brainstorming sessions. We divided all our ideas into WORK IDEAS– something we had to do to earn money and SOUL IDEAS- something we craved to do personally.
- You can see quotes at the top of the sheet- We chose a quote that represented our frame of mind, gave us motivation and clarity.
- “You should never leave things you like, leave everything aside”- was penned down by Sugandha during this process.
*Sugu is short for sugandha and that is how her friends call her.
5. We then picked few ideas we really liked from above sheet and elaborated them in another tab. refer below:
6. Again note it has 3 Quotes. last one is by Naren. these reflect more on our relationship.
7.You may not understand all of it because we have not elaborated but this is just to give you a rough idea.
Another Snapshot8. Some more condensation of above ideas. See all along we wanted to pen down and share our ideas.
January – April, 2015
Most of the first half of the year was spent on fine tuning our daily expenses, creating short, mid and long term financial goals and creating a plan to meet those financial goals.
Some Key highlights of this time
- We had negligible active income at this point. Obviously it bothered us. So, first thing we did was to try and reduce our expenses. We both were coming from well-paying jobs and had a lifestyle that we now had to tone down drastically to match our current financial situation.
- Before moving to Goa we had budgeted our expenses at Rs. 42,000p.m. On the ground we spent approx. Rs. 55,000p.m
- Back then and even till today we think of our family as a lean start-up 🙂
- It took both of us months to agree on what we can reduce or totally eliminate from our monthly expenses. We had spent good half of 2014 mentally preparing ourselves for this lifestyle change.
Below is a snapshot I found in my computer. 🙂 Those were magical days, all the dreams and planning we used to do together really brought us closer as a family.
Thinking and writing about it has brought a big smile on my face:-).
SNAPSHOT OF OUR FINANCIAL GOALS IN 2015
List of Our Short and Medium term Financial Goals:
- One of the first things we did after starting our lives in Goa is to create an emergency fund to cover 6 months of our living expenses (we later increased it to 12 months and we maintain it till today). We wanted something solid to fall back on in case our business didn’t pan out.
- In 2015 itself we had decided to save up for maternity and 1st year of kid’s expense.
- We had also saved up/allocated in advance for all the stuff we later bought for the house. The first house we stayed in was furnished so we did not need all the stuff immediately.
- The money we saved for a Foreign Vacation in 2017, was later directed towards early retirement.
*personal joke- every year we save money for international holiday, but end up allocating that money to some other goal…planning for holiday abroad feels like too much work…
How much time do you spend in planning your international holiday? do tell us in comments.
List of Our Long term Financial Goals:
Long term Financial Goals
- We had started to save for our retirement in 2015, but we had not yet decided to go for Early retirement.
- Also, at this point we wanted to buy and live in a Homestead. This idea we dropped the following year since we realised neither of us like to do too much physical labor. This realisation came after our experience setting up a small vegetable garden in the backyard 🙂 FacePalm – romance meets the reality! thank god we did not wait till age 60 to discover this about ourselves.
- We had created a goal for kids college and kids Marriage but we decided not to save anything for Kids Marriage. Kids college fund we started only 3 months before Kabir was born.
Now lets move to the most asked question!
Did we get nervous about our decision to quit our jobs, relocate to Goa and start a business?
OH YES! We did get nervous, s%$t scared and had loads of self-doubt.
By the middle of the year we were hit by many unexpected situations. We had some good enough reasons to worry. The most challenging things we remember we faced that year were:
1. Falling FD Interest Rates
When Naren had returned to India, F.D interest rates were over 9%. so he was confident that between interest income, business income and future rental income we were all set to meet expenses. But F.D interest rates started going down and once we understood the famous Indian inflation rates, we had no option but to move the F.Ds into Equities (blessing in disguise). But that meant no interest income.
2. Slow Growth of Business
Business was growing slower than we expected. Naren’s initial confidence was shaken because income was growing very slowly and there was also a serious business downturn mid-year
3. Delay in Possession of our Apartment
We had assumed by now we would get rent from our apartment. But in reality the house developer was nowhere near handing over the apartment.
4. Sugandha had respiratory issue
Naren took to Goa’s climate very well but Sugandha developed bronchial allergy. We made more than our share of trips to the hospital emergency room during this time. Life takes you by surprise. You live an unhealthy lifestyle for years altogether and the year you make a healthy change you fall sick 🙁
We now laugh at the irony that life is. At that time we did feel a bit frustrated and demotivated.
This was just the first half of the year……….. Keep tuned in for the second half.
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I am quite new to this concept of RISE but I really like the idea of investing savings (50%) given the power of compound. However, I fail to identify the right instruments to invest and how much to invest.
I had bought hdfc equity fund direct plan growth option around 2 years back with Rs5000 SIP and in the reports I see my total investment is 200,000 and the current value of this is 234,532. Is this going good? How should I calculate my returns and how do I identify good investment options given that I am looking for a retirement in another 7 years.
H jyoti. You can use XIRR function in excel to calculate your investment returns. If you are not well versed with excel give us a couple of weeks, it is a good question. we will write a blog post on it. The second question- How to identify a good investment option? It is a more complicated question. books have been written on it. We will definitely have to answer it in some future blog post or as I replied to your e-mail you can take our personal Finance course this year.
I also replied to you e-mail and explained that goal based planning is a right way to go. Where you look at your goals, time horizon and risk to select investment product. One thing I can say however if you are planning to retire in 7 years, you should consult fees based SEBI registered financial planner to help you with this. Freefincal has done us a great service by compiling this list- https://freefincal.com/list-of-fee-only-financial-planners-in-india/
Lovely article but if I had to guess, I’d say primarily written by Sugandha? It’s a bit different from the kind of article a FI/RE fanatic would write. The article is high-minded – full of plans, dreams, goals etc. but noticeably short on the boring, practical stuff only us obsessives would be poring over
– What was your investment strategy – debt/equity, long/short term investment mix etc.?
– How much of your expenses did you expect your rent, dividends and interest payments to cover and how much did you plan to meet through withdrawals
– What was your withdrawal strategy
– primarily from debt or was it a mix of touching debt and equity?
– withdraw at the beginning of each month, quarter or even year?
– did you withdraw your estimated expenses, slightly less or maybe estimates plus a little buffer?
– How did you handle unexpected expenses?
– How did you handle tax (less important for you guys since I’m assuming you didn’t have much tax advantaged investments like PF/PPF to worry about – Naren having returned from abroad and Sugandha I think having already withdrawn it from what I remember from an early article)?
– What advise would you have for other first-yearers as they step into the unknown of early retirement?
Maybe I’m jumping the gun and you’re planning to handle these in the post on the second half but just thought i’d throw in something for you to think about.
Yes, Sugandha is doing most of the writing but it has Narens prospective too. In the first year, we both were a bit dreamy and vague in our approach. As you can probably see from the excel sheet and business ideas we had back then. One good thing, however, is that time helped us eliminate things we do not enjoy doing. So it had its own benefits.
Point taken, we will try our best to give out as many concrete details as possible in the second part. However, at that point, we did not plan beyond annual budget and business ventures. Saving up aggressively for early retirement was not our priority in the first year. So we had not even thought about safe withdrawal rate or any other sophisticated withdrawal strategy at that point. We had savings and we were focused on running a profitable business before savings run out. Only after business started making money that we moved to develop our ER strategy.