Investing for Retirement

Will you be able to maintain your lifestyle after you retire?

Is it possible to retire early?

How much is enough?

Most of us have asked ourselves these questions. Yet few of us give them serious thought or take steps that actually bring us closer to the answers.

In our experience, what people are really looking for is not retirement planning as much as financial freedom: the freedom of not having to worry about where the next paycheque will come from, the peace of mind that it brings, and above all, the freedom to choose what to pursue next based on interest rather than income.

So what stops us? Why don’t more of us pursue what we really want?

Often, the answer comes down to how much we have saved so far. That, in turn, depends on two things: how much we have put aside over the years and how well that money has been invested.

Here are four basic rules that we strongly recommend you follow to attain financial freedom or early retirement.

Start saving whatever you can as soon as you begin to earn. Even small amounts saved early can make a big difference over the long run. Delays are very damaging to long term wealth creation.

Increase your savings as your income grows through your career. Think of it like a booster…the more you do this the more likely you are to attain early retirement.

Keeping all your savings in “safe” options such as fixed deposits may not help your money keep pace with inflation. Depending on suitability to your risk profile and how far away your goals are, consider including growth assets such as equity in your portfolio.

Just as you would consult a doctor for your health, consider working with a qualified, registered investment professional for your investments. Saving a little on professional help can prove costly if it leads to larger more damaging investment mistakes.

What not to do?

Knowing what to avoid is just as important as knowing what to do. Some common mistakes:

  • Short-term trading in equities
  • Investing with borrowed money
  • Spending more than you need to, and not saving enough
  • Buying insurance as an investment without understanding its costs and returns, instead of keeping protection and investment separate
  • Investing in individual company shares without understanding the business
  • Trying to time the market
  • Avoiding growth assets such as equity altogether when you have long-term goals

Some of this may be new to you; some of it you may already know. But knowing is only half the job. What makes the difference is putting these principles into practice and sticking with them over the years. Financial freedom and early retirement are rarely easy, but they are largely shaped by the choices we make.

Read some of our other articles here…

Newlyweds can double their retirement corpus by starting early

How much is enough for early retirement?

How to retire at 44!

Speak to us today about investing for early retirement. There is no fee for our consultations: as a mutual fund distributor, we are paid through commissions from asset management companies/fund houses, which we disclose to you.

Pagdiwala Investments | AMFI-registered Mutual Fund Distributor | ARN-186203 | APMI-registered PMS Distributor | APRN-00370

Mutual fund investments are subject to market risks; read all scheme-related documents carefully. This content is for general information only and should not be construed as investment advice.

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