Financial Independence To Retire Early (FIRE)

FIRE (Financial Independence To Retire Early) as a concept has been prevalent for a while. It largely means to live very frugally in the first 15 years of your professional life, save & invest aggressively, make your nest egg, retire when you are young and live the rest of your life doing what you would want to do. Chase your dreams & be out of the rat race. Is it required in the Indian context? Yes it is.

As more & more institutions want their top management to be young & their top deck to be lean, a top notch professional career doesn’t seem fulfilling after You hit the 45-50yr bracket. How many of us have the courage to kick start a new venture @ 50??

A low single digit number for sure.

But yes, all mutual fund investors, can create wealth in India to F.I.R.E.
Methodology is very simple & easy to achieve if you are disciplined in your approach & promise to stay invested. The asset class is equity, the product is Mutual Fund & the method is SIP (Systematic Investment Plan).The keyword here is “Time“.

How much time are you prepared to give your investments. If you invest a monthly amount of 50,000 for a time period of 12 years in a good equity scheme. You can generate a monthly income of 1,00,000 for 50 years & after 50 years ,You r still left with a corpus of 2.77 Cr.

Here are the workings for an SIP Investor to FIRE

Current Age – 33 years

Current Age	33 years
SIP start Date	Nov-21
Investment Period	12  years
SIP Amount (Mthly)	50,000
Return Rate On Investment (XIRR)	12%
Corpus after 12 yrs	1.59 Cr
Retirement Age	45  years
Withdrawals – Month & Year	Nov 2034 Onwards
Monthly withdrawal Amount	1 Lakh
Expected Rate Of Return On accumulated Corpus	8%
Withdrawal Duration	50  years  (till 2084)
Total withdrawn amount (Nov 2034 – Oct 2084)	6 Cr
Corpus Value after 50yrs (as on Oct – 2084)	2.77 Cr