How I wish I had the data – core, raw, authenticated, available for free – on Indian investors that my blogging friends in US have about American investors.

I am sure it will NOT happen and we will have to live with our own pathetic data and assumptions. If the regulator (sitting with about Rs. 5000 crores in the bank?) cannot organize data, yuck what more should I say….sigh!

The Americans live by one Rule – called the “4% Rule”. It says if you retire and have an X amount as a corpus, there is a 94% chance that you will outlive 30 years of retired life if you withdraw 4% of your corpus every year.

Assumptions were:

– Bond interest rates will be about 2.9% p.a. post inflation.

-Equities will give you about 9% p.a.

– you will live 3o years in assumption and

– your medical care and social security payments will be there for you.

What has gone wrong in the past 10 years. ALL ASSUMPTIONS.

What are the assumptions we make in India?

– Interest rates will vary from 8 to 11% p.a when you save in banks or govt securities.

– Equities will give about 19%p.a. return over long periods of time

– dividends will be tax free, there will be no Estate duty.

– you will live 10-14 years in retirement.

– if there is a shortfall your children will chip in

– your real estate WILL always appreciate at 20% p.a.

Forget what can go wrong in US – in fact all 4 have already gone wrong there..

In India the following can happen:

Interest rates can remain at 6% for say 10 years in a row.

Inflation of medication, doc fees, and what retirees need can be at 13%

Equities give good return, but your direct equity portfolio took too many losses because YOU were inattentive

You have one child and he/she is not doing well at all / do not wish to help you.

Your house is in a location which is NOT appreciating AT ALL – and it is also a tough place for you to live.

Be prepared, that is all…..


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  1. “In India the following can happen:
    Your house is in a location which is NOT appreciating AT ALL – and it is also a tough place for you to live.”

    Has it EVER happened in india till now?

  2. @Subhas
    Builders are defaulting. Explain how even in cities like bangalore builders are defaulting. Take recent example of CENTURY realestate default.

    I pity on aunties who say “my son has bought a house of 30 lakhs”. what they dont say their sons have a life long obligation of more than 75 lakhs towards emi.
    I neither have a house of 30 lakhs nor have loan of 75 lakhs, What I do have is banking stocks 😛 😛 (which strives on aunties )

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