Article 5
Retirement planning :
SOME CLARIFICATIONS, MINDSET ABOUT MONEY AND MANAGING FEARS
7 min read
12 May 19
By Amit Sangwan
1. Just back to my study after casting my vote. Have been recieving tremendous positive reaction, support and respect after writing my first 4 articles.
2. After having written about NFU and OROP yesterday I was expecting some backlash. But what came from one officer in a message form shocked a mystic like me also.
3. He was extremely annoyed about why I was not supporting NFU(I am not against it.I am against doing RR for it).And he casted doubt that this was a ISI handle. This got me thinking.
4. NFU is an issue which has caused lot of angst and bitter feelings among serving people. Some body like me trying to put cold water is being lamented as dushman and those wanting to increase this fire are perceiving themselves to be deshbhakt. Just fail to understand this skewed logic.
5. This is not an ISI handle. My name and number out there. 800 msgs come to me daily. Just for privacy reasons I want to keep it that way. Accusing this way is bit rude.Labelling as a friendly neighbourhood whatsapp Spiderman would be much better.
6. My aim with all these articles is to offer refreshing take on matters we faujis have been sweating on for yesterday at end. I think its high time we got out of that self eroding and self depricating victim mindset. Also I want to give confidence to people to enter the unchartered territory after retirement.
I will bring in fresh perspectives and clear such vitiated air that has been created of late around this wonderful profession of arms by few starved and perceptually deprived souls.
7. Writing the above complicated english para has taken a toll on my mental faculties. Wont be able to make this article so great now. At end of the day I am an ex Nda Jaat Ram from Rohtak ( settled at Gurgaon).Not from somewhere else as one odd chap may suggest or want to believe.
8. Some random clarification for previous ones
(a) Lumpsum retirement benefits for 20 yr Lt Col retiring Aug 2020 are leave encashment about 20 lakh. Gratuity 20 lakh.
Commutation 45 lakh. Agis survival benefit 10 lakh. So a total 95 lakh. Retirement posting claim 2 lakh. So 97 lakh. Every one year increase in service it will increase by 3 lakhs.So for 24 year service officer it will be 1.1 cr. Rank as brig or full col will increase it by 5 lakhs.
(b) Officers with disability should not commute pension as their pension will be tax free.In
coming times getting 8 percent net of tax returns will be a challenge.
(c) So if you dont have a big outstanding loan to repay, not commuting is an option.
9. Fears
(a) Children education and future
(i) Its a unnecessary worry. Your child is carrying your and wife genes. If both your genes average then at max with great efforts he or she can become above average but certainly not exceptional. This has to be understood.
(ii) Most conventional good jobs like Ias Ips and admission intoIIT etc will be taken by lower middle class. Because of Internet accessibility the class advantage has gone.Please see on youtube , videos of all subjects on civil services exam available. So crores of poor children at almost same level. See the profile of kids joining civil services. Even fauj for that matter. Our children cannot get that fire in the belly.
(iii) Go for unconventional ones. In media, advertising, fashion .will do an article on this later on. Basic idea any work which is dependent on personality and confidence of a person and not academic brilliance.
(iv) Please dont make kids engineer. If not from IIT or NIT or AIT, salary wont be more than 20 thousand.
(b) Question What will i do outside ?
Answer You can afford to do nothing.
As per the equation your living style will be maintained.
Question How can I sit idle?
Answer Then do something.
First question gets repeated again.
This is where people get stuck.Officers with tech skill or some confidence will not ask these questions. Others will have to find answer themselves .
(c) Question - What do i do with money i get on retirement ?
Answer Put in FD
Question But Fd returns are 7 percent only. Post tax 5 percent ?
Answer Ok then put in mutual funds.
Question But they are risky. I have seen nav fall by 30 percent . recently especially mid cap n small cap fund .
Answer Ok bhai invest in real estate.
Question What if builder runs away.So many people stuck in greater noida?
Answer Ok do a small start up of your own or wife .Some artifacts kind.
Queation What if it fails. My life long earnings sunk.
Answer ok i will do portfolio management service for you and hand hold you . We will invest in various asset classes depending on economy cycle, political environment ,crude oil price and trumps state of mind.I will charge 3 percent as fund management fees.
Reaction : It sounds nice.
But 3 percent is too high. You are a friend. Why charge so much for just telling where to put money. How much time it takes to tell a plan ?
I think i will continue because i have 1 cr in PF and will get 8 percent intrest. In fact i will take re employment also.As second posting in that will be choice.
Its ok if i get first one in field.
10. I have witnessed above conversation so many times.
Remember two kind of people will help you and give advise.
One who will charge you money. He will have a vested interest in making you invest in a particular thing. It may be beneficial to you also. Seek good ones.You can ask them any number of questions. Argue with them. After all money is going to them. Develop conviction after the process and go ahead with them.
Second one will give you for free.They are rare good souls to be cherished. They may be friend, may be doing as hobby or it may be there niyati (dont know english word for it).
Dont argue with them. Cross check their advise. Ask how the conviction can be developed. Don't hassle them with endless questions. No one can ever invest on borrowed conviction. You have to develop your own.
Example general perception is that in real estate in India rental yield is 2 to 2.5 percent .
But if i tell you it can be 10 percent .even 12 percent. What will most likely reaction? One of disbelief and followed by unnecessary argument .
11. The problem with faujis is for so long we are used to operating under SOP s and set pattern approbed by higher ups that we become clueless without them. In fauj the commander and system seeks certainity for the mission to be successful whether its surgical strike or corp cdr or army cdr visit.
Nothing is left to chance.There is always a a plan B or plan C. Being in fauj for so long this approach to life has seeped in our subconscious. Also there is a penchant to see orderliness every where.Nearing retirement you need to get rid of this.
12. Above approach to life is very counterproductive in civil world which thrives on uncertainity and cuous. Whole insurance industry is based on it.
Seeking certainity in this uncertain world causes misery.
13. Actionable points for the week
(a) Dont fret about kids education .What they study and end up doing is totally different ? Expose them to various possibilities.
(b) Read book
Art of thinking clearly.
(c) Money cannot give happiness. But its a tool to navigate the troubles of life. Having it certainly helps. Money is important but the way you earn it is even more important. So introspect at what cost are you earning it.
Next one most likely on Mutual funds vs real estate and how to go about it. Also concept of passive income and active income will be introduced. Something if one understands it can change the way you live.
Note
1. In our childhood all of us would have played various games like pittu kho kho kabaddi or r more organised ones like football and cricket.
2. If there was a pool of say 20 kids. 2 kids were nominated as captains. And they used to select teams.There was a toss who will start the selection process.
3. The star and stronger players were selected first. Then the team players or personal favourites. The kids in 8 9 10 number were the ones not fitting the above qualities.
4. As children if we were in 8 9 10 number, understanding the above process was difficult and we continued playing irrespective. Even if some of us had the maturity to understand what was happening, we had a little choice as pool of kids was limited. It was ok to play in cricket when nobody gave you batting or bowling. You did only fielding. And were normally the ones to get ball out of kaante wali jhadi.
5. If the above 8 9 10 is happening to you in adulthood or midlife then Sir its time to change the game.
There is no limit of type of games to be played. Choose a new one of your liking.
6. Know when time is up. For superannuating officers
Sir Bahut din ho gaye democracy ko defend karte huey.
Time to enjoy the democracy now.
7. Hope some value added. Please post queries by whatsapp.also please mention where u belong to because advise to bangalore guy will be different from chandigarh one. Also a brief back ground. Also please dont ask how you should make career choices. Mtech or staff college. I am not that honhaar to guide on these.
Abstract things, intuition and emotions is what i excel.
9911702005
No comments:
Post a Comment