[pseudo_coder]

Originally Posted by vikramvicky1984

Yes they allow up to 80% in normal cases (including if one wants registration & furnishing costs). If you can show other assets- LIC, FD, PF etc. it can go even higher.

I think you are talking about total loan eligibility.

[varunanb]

Originally Posted by shankar.balan

I am given to understand from my Financial Adviser, that if one wants to live a life of great comfort and do anything one wants to fearlessly which includes plenty of holidays and travel and all the trimmings, then it seems that one needs to have a clean 12 Cr Rupees of Corpus.

I would have furiously nodded my head in acknowledgement had he told this 5 years back. I have been thinking about this for the last 10/12 years and finally had a corpus built and quit my job in 2014 (Its the same week I got my first Infraction in Team-BHP ). That proved to be one of the many mistakes I did in my life.

The main challenge with this was the time available post retirement. We did utilize this for various hobbies like Travelling, cars, bikes, movies and many more. At the end of the first year, we managed to spend 3 times more than our yearly expenses. The corpus was dwindling at an alarming rate and something had to be done. By the time this realization set in it was already 2 years.

That's when I realized early retirement is all about

1. Moving the income from being Active to Passive.
2. Income should grow at a rate faster than the Active income phase of our life to even maintain our lifestyle.
3. Requires enormous discipline, both financial and personal, else you will be back knocking the doors of previous companies.
4. Time should take precedence over money, if it is the opposite, its the biggest stress one can add to themselves.

So after this had to re do the complete strategy. Minimized Insurance, MF's and other SIP's to a bare minimum, only on insistence of my highly conservative Dad, else would have completely moved out of these options.

Now, almost 3 years from the date, we are a little closer to being Financially independent in a way money will never have to cross my mind and that day is not far.

So if someone is planning an early retirement, a faster growing Passive income is the way to go.

[poloman]

Originally Posted by Latheesh

Housing is a major area I observed people always overspend. I know few people who pay 50-70% of their monthly salary towards home loan EMIs. That is a very scary situation.

Totally agree with this. This is the main reason why most of the IT folks will never achieve financial freedom.

I bought a 2BHK in a prime area in east Bangalore 12 years back. Closed EMIs 6 years back.Now most of the people who bought here along with us has moved on to buy their second but expensive properties worth more than a crore.They retain the old one as well. Mind you all these are in outskirts like Haralur, Varthur etc with no water or roads.

Now in forties if you take a loan of >1Cr you will be under tremendous pressure. Some of these folks have only one kid and never understood their logic of buying 3/4/5 BHKs in far off places with not even basic facilities. To each their own..

[kavensri]

Originally Posted by poloman

I bought a 2BHK in a prime area in east Bangalore 12 years back. Closed EMIs 6 years back.Now most of the people who bought here along with us has moved on to buy their second but expensive properties worth more than a crore.

Same here. I brought my 2BHK flat in 2005, completed the loan in 2010. Then I constructed a 2BHK house in Chitradurga as a backup plan, if at all I move away from this city. In last 2-3 years, many of the owners in my apartment have brought their second house (mostly 3BHK flat from reputed builders or villa house) spending 1+cr. Some of them may be comfortable with this kind of spending at this age, but I would never do that even though I am capable of taking one more loan and may as well clear the loan if my current job serves me for another 7-8 years. But my thinking is, if I have 1cr in my hand, I would any day go and buy a pension plan from LIC which would fetch me minimum of 50k per month till I live As they say, to each their own…

[shankar.balan]

Property is a pretty much dead investment because it is illiquid in nature and most times, only ends up benefiting the next gen or future gen who can cash out on what the first gen built.
Unless one is extremely lucky, one rarely gets to see property investments mature and benefit one’s self in one’s own lifetime.
And now, frankly, there is such a glut of real estate that in my own estimation, it has been a poor investment atleast for the last 10 years.
I dont think we’ll see that same kind of boom again in Bangalore, like what we saw happenin 2002-2006 timeframe.

[poloman]

Originally Posted by kavensri

if I have 1cr in my hand, I would any day go and buy a pension plan from LIC which would fetch me minimum of 50k per month till I live As they say, to each their own…

One crore loan can easily end up in repayment of 2Cr. With that kind of money you can do n number of things. I have only one kid who will soon be in college. Good education for her and family tours to foreign locations all are on priority list not a monstrous apartment with empty rooms.

[Red Liner]

Here is a good read: From Discover on Google https://www.timesnownews.com/the-buz...wedding/526849

[shankar.balan]

Originally Posted by Red Liner

Here is a good read: From Discover on Google https://www.timesnownews.com/the-buz...wedding/526849

It’s a crazy read. I mean does anyone here want to live like that?

[Red Liner]

Originally Posted by shankar.balan

It’s a crazy read. I mean does anyone here want to live like that?

Well the guy is only 24 and he has his entire life ahead of him now!

[GutsyGibbon]

Originally Posted by Latheesh

Housing is a major area I observed people always overspend.

It is also an unreasonable %age of their net assets. People hang on to their houses and plots no matter what. I can understand the emotional attachment with things like jewelry, but houses and plots need not have that kind of emotional attachment. People go through years of hardship only to hang on to their increasing RE assets. The only people who sell RE are those who are in a severe cash crunch. Illness, dispute between children, etc. I never see people cashing out on a RE investment and take a dream vacation. The one exception is a person selling RE to fund a wedding of their child. I am not sure if some one dreams of spending on a wedding, or if they are compelled to spend.

I feel, the experience of living life is undervalued, and RE is overvalued. This is one of the reasons the rent to mortgage ratio, is totally out of whack. I can rent an apartment for RsX while the EMI for that same apartment is 2X. How can this sustain even when the RE appreciation has subdued.

[civic-dk]

I am one of those rare ones who have encashed the 2nd house to get rid of housing loan, replace my ageing Civic with a top end Seltos and park big chunk of money in safer investments. This frees up my hand for years to come and will allow me to take that yearly phoren vacation that me and my wife have been thinking of. I have crossed half century in my life just recently.

[srsrini]

Originally Posted by civic-dk

I am one of those rare ones who have encashed the 2nd house to get rid of housing loan, replace my ageing Civic with a top end Seltos and park big chunk of money in safer investments. This frees up my hand for years to come and will allow me to take that yearly phoren vacation that me and my wife have been thinking of. I have crossed half century in my life just recently.

is all that I can say. I really wish that more would join in getting off unproductive assets - real estate, and others.

[pgupta]

In my view Retirement planning is more about mindset than about having a large corpus. There are just so many variables in estimating a sufficient future income that getting it right is almost impossible. However in my opinion a critical prerequisite for early retirement is high degree of willingness and readiness to adjust to unplanned circumstances. So for me it is more about developing this mindset as there is a limit to how much probably I can earn.

[adithya.kp]

I think he has used a very conservative ( rightly so) return of 8.33% to generate 1 crore income from 12 crore corpus. That translates to 8.33 lac income per month. So why do you think such a corpus is sufficient only when the monthly expense is < 1.5 lac?. Even if the expense is 4 lac per month, the retained earnings is still 4.3 lac per month. This retained earnings will again go back to the original corpus and will help compound. That will take care of inflation, one off expense etc.

Originally Posted by ece2k2

I think with a 12 crore corpus, one should limit his/her monthly expenses to 1.25 to 1.5 lakhs to be on the safer side. This is hoping that the average inflation remains at about 6-7% over the next few decades. But if someone manages to build that sort of corpus and also have a secondary source of income (say rental income) that takes care of his/her regular expenses, that would be awesome. This would ensure that the corpus can enjoy the full power of compounding for the years to come.

[pseudo_coder]

Originally Posted by adithya.kp

I think he has used a very conservative ( rightly so) return of 8.33% to generate 1 crore income from 12 crore corpus. That translates to 8.33 lac income per month. So why do you think such a corpus is sufficient only when the monthly expense is < 1.5 lac?. Even if the expense is 4 lac per month, the retained earnings is still 4.3 lac per month. This retained earnings will again go back to the original corpus and will help compound. That will take care of inflation, one off expense etc.

If one has a corpus of 12 crores, one can put it in a commercial real estate. 6% rental per year is achievable. 4% is pretty easy, which means 48 lakh per year, or 4 4 lakh per month.