Retire Young to Live Better

It looked like any other retirement party at the office. Only it wasn’t. Robert, or Rob to his colleagues, was only 40 years old!

Robert had been working for a large IT company for the past eight years. Throughout his tenure, he scaled meteoric growth and won several promotions to become the Vice President of the Service Delivery function. His colleagues and superiors were equally perplexed at Robert’s decision to put down his papers, once and for all.

“Are you kidding? Robert, you have been performing so well, there’s much to achieve. Also, you are so young! Why do you want to waste your life, and how will you survive without a regular income?”

There were similar questions from his peers and superiors when he broke the news to them, and though he didn’t explain himself earlier – smiling contently in response to all the questions – Robert took the little podium to address his team, co-workers and bosses, for one last time.

“I know I have created quite a stir in the company by announcing my retirement, only days after my 40th birthday,” Robert smiled bemusedly. “Many of my friends think it is a rash decision, and I am not prepared for the financial troubles that will consume me if I stop earning a regular salary.”

There was pin-drop silence as everyone listened attentively to Robert. Indeed, many of them thought that retiring so early in life is merely a romantic idea, and not at all a practical one. They were all going to be proved wrong.

“Today, I am going to tell you a story. In fact, a piece of advice that shaped my life,” continued Robert, “I was fifteen. Young and restless, as they say. My parents worked at good positions in top organizations, and we were seemingly quite well off. I never had to ask anything twice, and I would see my parents enjoying finer things in life, too. In short, I was under the impression that we were very rich and that there would always be enough money to buy anything I desired or needed.”

Robert paused for a second to look around the audience. He could tell that many in the crowd had come from a similar background as his.

“My parents got me the latest gadgets and equipment, fostering my interest in computers and IT. They always inspired me to get higher education from a reputed university abroad. And I, too, was set to follow the path my parents had envisioned for me. So, it was decided that I would pursue Computer Engineering, then an MS from USA or Europe, and eventually, get a cushiony job at a multinational.”

Robert knew that many in the crowd would have dreamt of a similar academic and career progression. In India, education is considered as the means of securing high-income jobs.

“Luckily, nothing of that sort happened to me,” Robert spoke again, “That summer, I met my uncle, who was visiting us after several years. Many in my family saw Uncle Noel as a recluse and even a bit of a lunatic. However, I liked him and loved listening to his stories.

“During this particular visit, Uncle Noel told me that he came specially to meet me. I was delighted, although I knew that he was a busy and wealthy man and would not come all the way from the USA to meet a gawky teenager, it felt good.

“For a couple of days, he asked me several questions about my plans for the future, my likes and dislikes, my aspirations, and my purpose in life. I was a tad overwhelmed, as no one ever asked me such questions. But I liked the fact that Uncle Noel listened to everything I had to say without judging me or making a comment.

“A few days before he was due to leave India, he called me for a walk on the beach. I accompanied him happily. While walking, Uncle Noel asked me what I wanted the most in life, to which I replied that I wanted to be happy and content in whatever I do. I also added that I am studying hard to get into a good college, preferably in a foreign university, so that I could get a good job, which in turn, will help me live a comfortable life.

“Uncle Noel asked me, what if for some reason, I had to leave my well-paying job? What if you can’t find a job, even after having experience and education?

“I was stunned. These things do happen, I knew. Recessions and cost cuts lead to massive job cuts across industries. I was suddenly scared and unsure about my future.

“Uncle Noel smiled and said that there is a way you can secure a fulfilling, financially independent life – no matter you have a job or not. I was incredulous, can this happen? Can anyone live a comfortable life, and meet all his or her expenses without having to work for it?

“Uncle Noel said that if I was patient, determined and disciplined, it was possible. He told me about regular investing in mutual funds, slow and steady investments that I must increase as I started to earn. Since I didn’t have any idea at that time, Uncle Noel guided me in investing in a good mutual fund. I took out Rs 500 from my pocket-money each month to pay the SIP, which is an acronym for Systematic Investment Plan, a tool that lets you invest in mutual funds on a monthly basis. A mutual fund, on the other hand, is a pool of money from thousands of investors; a qualified Fund Manager invests the fund in various stocks and other investment tools.”

Many in the crowd were aware of mutual funds; it is another matter that only a handful invested in them regularly.

Robert continued, “Taking out Rs 500 from my pocket-money was a big deal in those days. I had to cut several of my expenses, which was hard, but I eventually learned to differentiate between needs and wants. From Uncle Noel, I found out that a foreign degree would cost my parents a fortune. So, I decided to prepare for a prestigious Indian university, and look for work opportunities in the country. Inspired by Uncle Noel, who has a few patents in his name, I developed a banking software that I sold to a large IT company for a pretty sum and landed a good job in the same company. I kept working hard, and I kept increasing my investment amount.

“In the meanwhile, I married, and today, I have an eight-year-old son who is crazy about soccer. Following my uncle’s advice, I had made a goal of attaining financial independence by the time I turn 40. Today, my portfolio is giving me monthly returns way more than my salary. I do not need to work for money.

“I have planned this hiatus from work to be able to spend more time with my son. He is good at sports, especially football. I want to be his first coach and mentor and want to accompany him for training camps and matches. And guess what, I can afford to do this!”

The entire hall erupted in cheers and applauds. Most of his colleagues were simply dumbfounded as they knew that even after years of working and earning, they were not financially independent.

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Celso Fernandes, Goa’s financial doctor, can be reached at +91-9422058741.