look news india
Achieving financial freedom amidst the hectic 9-to-5 life in the IT and corporate hub of Pune has become the biggest dream of today’s youth. In this series, a 38-year-old IT professional couple living in Baner-Hinjewadi belt of Pune have set an example by preparing a surefire roadmap to get freedom from their job and take early retirement at the age of just 38. Today, when most people remain entangled in the web of loans and EMIs even after the age of 60, this couple has taken a big step towards achieving financial independence before time by adopting the ‘FIRE’ i.e. Financial Independence, Retire Early model.
What is the one rule that decided their FIRE formula?
The foundation of this couple’s entire financial plan is based on the policy of keeping a strict check on ‘Lifestyle Inflation’. As the income of most professionals increases, so does their expenses, their desire for expensive gadgets, luxury cars and big houses also increases rapidly. This couple set a fixed standard for their salary from the very beginning. Despite doubling his income, he never let his monthly living expenses go out of control. Instead of converting every increment of income into new expenses, he implemented a strict 70:30 rule, where 70 percent of total income went directly into investments and only 30 percent went toward running the entire household budget.
Disciplined investment and portfolio diversification strategy
For early retirement, mere savings are not enough, but consistent investment in the right asset class plays the most important role. Understanding the power of compounding, this couple from Pune made a balanced allocation among Equity Mutual Fund SIP, Index Funds, Public Provident Fund (PPF), National Pension System (NPS) and Sovereign Gold Bonds. By staying in the equity market for a long time, his investment portfolio gave an average return of about 12 to 14 percent, beating inflation. Additionally, instead of getting stuck in the trap of heavy EMIs in real estate, they stayed in a rented house and invested their huge down payment funds in growth assets.
Tight security cycle to deal with inflation and medical emergency
People often ignore future health costs and health emergencies when planning for retirement. The couple made health insurance and a dedicated medical emergency fund a top priority in their retirement strategy. Instead of relying on corporate insurance, he took a comprehensive super top-up health insurance plan for his entire family. Additionally, he kept a liquid fund reserve equal to the next three years of mandatory household expenses so that he does not have to sell his core investments in case of any possible downturn in the stock market.
Big lesson and future financial roadmap for the youth of Pune
Premature retirement does not mean leaving work and sitting idle, but getting the freedom to work for your choice, passion and mental peace. This financial independence achieved at the age of 38 is a living proof that if financial discipline, clear goals and control on unnecessary expenses are maintained, one can become self-reliant before time even while living in the metros. This case study is an inspiration for all those salaried youth who want to get out of the loan and show-off culture and make their future secure and stress-free.
