How do you climb a Mountain? Or go on a difficult trek? Maybe with a group of friends or alone?
Well climbing the Retirement Mountain is somewhat similar to cnlimbing a mountain….How do we start?
Ideally you should start as soon as you get a job! Well immaterial of when you start, here are the steps:
1. The Internal feeling that you should go on that Journey! Only when you really feel that you should go on that journey will you take the necessary steps willingly. So ask yourself “are you ready for the journey?”
2. You will need a plan! Once you decide that you have to climb the goal mountain (in our case the retirement mountain) you will need a plan, and the strength and energy to execute the plan! When you open your PPF account, buy a pension plan, buy ‘Retire Rich: Invest Rs. 40 a day’, you have taken your first step towards retirement. It is nice if you have a plan – in your head at least. Ideally, if you write it down, it will be a great thing to do!
3. Concentrate! If you are at the bottom of a mountain, you will see many paths. You must, MUST, must understand the power of concentration.
4. Use your plan, power of concentration, focus and create a ROUTE MAP. You need to know the distance, the altitude, the temperature (I am just going to Kodaikanal for a run and expect to run in about 10 degrees temperature, oops), and your own strength. You will realize that strength and concentration are very important for you to function! You need to know the mile-stones (net worth at each age?), the benchmarks, so that you can monitor your progress.
5. The Path is tough. The road is narrow. Sometimes crooked. Most times slippery. Have you trekked in the monsoons? It slips. You need to be careful. The staff (stick) is very useful in a slippery climb. So is the shoe with good grip. Do not lose focus. Your will find many opportunities to lose your way. Wander off the path, and it’s easy to get lost. The basic path is simple but narrow. Spend less than you make, save well and convert that saving to good investment! The bigger the gap between income and spending, the smarter the asset allocation, the shorter your hike. There may be a few changes here and there, but the basic road (path) is narrow, slippery, treacherous and will need full concentration. One miss and you can slip and fall! It’s easier to reach your destination if you remain on the proven trail.
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