Beware the returns

You think your have made a killing at the stock market?
You are gloating over a return of 24%?
The newspapers tell you that if you had invested in shares you would more than double your money in 3 years. Or whatever.
But have you taken inflation into account?
Yes inflation. The factor that eats away your real money.

Here, read all about it in a short blog entry.

Invest wisely and have a happy new year.

Planning for Retirement - Too Early?

Ok! Let's do some computation.
Assume you earn around Rs. 30,000 per month. In about 5-10 years time you should be earning much more, but let us settle at Rs. 70,000. By the time you retire you should be earning many times this, but perhaps, you are ok with the living standard you have with Rs 70,000 and would like to maintain this even after you retire.

But now, you are just 30. Why worry about retirement now? Here's why ...

In the next 30 years, when you are 60, to be able to maintain the living standard @70,000, you need to earn upward of 3,00,000 per month. I have considered 5% inflation. The inflation makes your money's purchasing power weaker.

Perhaps, 70,000 is too big a figure. Let us stick to Rs. 30,000. After all by the time you retire, your children would have settled. You would have a nice, comfortable house and your needs would have reduced.

30,000 at 5% for 30 years Rs. 1,29,000+

Reduce it further ... 15,000 at 5% for 30 years is Rs. 64,000+ per month

Will your savings / investments today yield even Rs 64,000 per month (after taxes) when you retire? If not, what are going to do about it?