What is Retirement?
It is a stage when you do not do any WORK to earn money. The other way to look at it is to say ‘your MONEY accumulated is enough to feed you and meet your other needs – from a combination of income and capital gains’.
So for a working couple, when is the Retirement complete? Well, well there are a few stages when you go :
Let us say you are in your late 20s and want to retire in your mid 40s. It is difficult to be more ambitious given current life styles…
1. Both husband and wife working: earning just enough to pay for housing EMI, school fees, car payments,…etc. and saving a small amount of money for retirement.
2. H and W working, having a surplus and investing the surplus in nice assets which give a REAL but volatile return.
3. H and W working, creating extra income and H starting to earn some extra money from his passionate hobby. Could be photography, web designing, SEO, copy writing, ….etc.
4. The Income from H’s business, dividends, and W’s income is now enough to pay for all the expenses
5. H leaves his job!
6. W starts some side business – H taking the burden of running the house physically too – as he is now self employed.
7. W’s business income is about 50% of her salary income….and she is feeling confident.
8. H’s business is doing well, investment income is flowing well, W leaves her job.
9. NOW you have really retired.
Retired means you have created a few sources of income – in this case 3, you are working for yourself AND YOU ARE happy. No soulless corporation chasing you….all EMI over, a nice corpus in well allocated assets, having rental, dividend and interest income ENOUGH TO take you through a simple life. Money flow coming from both BUSINESSES that you enjoy (hey you are retired, but working in jobs that you enjoy!)…
this is the retirement transition…
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