Why people remain poor…
Well there are many definitions of being rich or poor. I will put a very harsh criteria – if you cannot live off your passive income by the time you are 45, you are poor.
Harsh? Cruel? Well, what if you lost your job and cannot find a good job ‘in keeping with your status’ ? what will you do?
Well lets look at the reasons:
- Spending all that you earn: Never heard of investing 30% of your income?
- Expensive house: If your electricity bill, society charges, emi, utility costs, property taxes are about 35% of your take home?
- Expensive car: If your Emi, maintenance, petrol, and driver costs are 30% of your family take home pay?
- Children’s Education: Are you planning to spend 30% of your net worth (ignore car, house, wife’s jewellery)?
- Your vacations cost you more than 20% of your ctc?
These are all mathematical – the other part is emotional. Do you tell your children “we can afford this…after all I am earning so much” – could be telling your friends, siblings, parents….again you are cheating yourself.
I always hold that you need a Million US $ to retire. Now you can game the system by saying ‘I have I Million US $ based on the PPP theory’ – i.e. the $ is to be valued at Rs. 35 for India – so you need Rs. 3.5 crores instead of 6.9 crores as the official exchange rate.
Did not like this post?
Sorry, change your life style……i will not change the numbers….
John M
Good message and totally agree. We need more brutally honest messages and a good kick in the butt sooner than later.
Ankit
you mean having 3.5 crores INR is needed to retire as of today? can you please clarify?
Jagbir
Very few authors/people have guts to slap lazy bums with numbers! heard something which nature follows diligently? it’s “survival of fittest” so either wake up or regret. You deserve all praise for putting straight facts in your blog though it’s another observation that most of folks read, think and put ‘action’ to tomorrow which never come!
Manu
Subra Sir,
Amazing wisdom filled words. People like me need to keep guard against such behavioral creep, as I grow in my career & life. Thank you.
Ganesh
Very crisp, precise and in your face article. I completely agree with Subra Sir’s views. Just one request. I tried searching, but couldn’t find an article on passive income stream generation. With the changing taxation on dividends, this has become more of a challenge. If you can share some wisdom on that, it would be really enlightening.
Murali
You didn’t list another most important reason (applicable at least to me)
NOT INVESTING IN EQUITY