Retire Early and Rich

Your Own Money

Can Make You Retire Early

Rohit Gupta
COPYRIGHT & DISCLAIMER:

© Rohit Gupta

Retire Early and Rich

1st Edition
All rights reserved

MRP Rs. 299/-

ISBN: 978-93-94808-39-3

Published & Distributed by

Delta Publication

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All disputes are subject to Delhi jurisdiction only

 Dedication
This book is dedicated to
- My late father who always wanted me to excel in my
life.
- My mother and My wife –Without their personal life
sacrifices and support I could not have written this
book.
- My Little daughter – whose birth inspired me to do
something out of the box.
- To all my readers who will get a pathway to their
dream life.

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 Acknowledgment
I would like to acknowledge the following people for their
dedicated support and encouragement which provided me
with the great courage to write this book :
- My mentor (Anup Nishane) – Who has changed my
perspective on life. He has shown me the
possibilities in life.
- My mentor (Dr. Sandeep Gupta) – Who encouraged
me to write a book.
- My mentor (Ankit Neerav) – Who made me learn &
belive in law of attraction.
- My book writing mentor ( KP) – Who has provided
a systematic and structured way to write the book.
- Mr. Datta Tule – Who shared his inspirational
journey to financial freedom.
- My Editor (S. Lahiri and Nupur Dhingra) –Who
helped by editing this book to a beautiful copy.
- My brother-in-law (Mayank Agrawal), My friend
(Saransh Patidar) – They shared with me how they
are confident on some assets and how they plan
their investments.
- Thanks to all people who have directly or indirectly
contributed to the creation of this book.
- My apologies to the people, whom I might have
inadvertently missed out but they definitely are part
of this exceptional journey.
I am really grateful to all people in my life who have shared
their experiences with me and touched my life in any way.

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To all my teachers, gurus, mentors, and friends who
inspired me to write this book.

iii
 About the Book
One thing that comes to everyone is old age. Retirement is
always connected with old age and it's the most ignored
aspect of everyone's life. We don't have any clue how to plan
it effectively at our younger ages. And Sometimes people
take so much time to think about retirement, that they
don't have much time to plan it effectively. This book is an
initiative to give the correct guidance at the correct time to
the people with the money they already have in their life.

iv
 About the Author
Coming from a service-class family, getting educated and
start earning was the main motto of his life. He is a
management graduate in finance, currently pursuing
Charted Wealth Manager. In the last 13 years, after
working with fortune 50 companies of the world, he got a
chance to understand the personal financial issues faced by
people which he has tried to resolve by the help of this
book. His mission is to help more than 1,000,000 people
across India to understand the importance of planning
retirement early in life.

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 CONTENTS
DEDICATION .................................................................................. i
ACKNOWLEDGMENT..................................................................... ii
PRELUDE ...................................................................................... 1
CHAPTER1 INTRODUCTION ........................................................... 5
CHAPTER2 FINANCIAL CONCEPTS ................................................ 11
INVESTMENT ................................................................................. 11
INCOME ......................................................................................... 12
EXPENSES....................................................................................... 13
NEEDS AND DESIRES ...................................................................... 15
INVESTMENT INSTRUMENTS ......................................................... 16
INFLATION ..................................................................................... 17
INVESTMENT ANALYSIS ................................................................. 18
FINANCIAL PLAN ............................................................................ 19
RISK ANALYSIS ............................................................................... 21
CHAPTER3 PLANNING ................................................................. 22
WHY PLANNING ............................................................................. 22
EMERGENCY FUND ........................................................................ 23
TERM INSURANCE ......................................................................... 25
HEALTH INSURANCE ...................................................................... 28
VEHICLE INSURANCE ..................................................................... 30
TRAVEL INSURANCE....................................................................... 31
TAX PLANNING .............................................................................. 32
TAX IMPACT ON INVESTMENTS..................................................... 37
ACTIVITIES...................................................................................... 39
SUMMARY ..................................................................................... 39
CHAPTER4 INVESTMENT AVENUES .............................................. 40
REIT ................................................................................................ 42
GOVERNMENT SECURITIES AND BONDS ....................................... 43
GOLD.............................................................................................. 45
TAX ON SOVEREIGN GOLD BOND (SGB) ........................................ 45
KISAN VIKAS PATRA (KVP) ............................................................. 46
PUBLIC PROVIDENT FUND (PPF) .................................................... 47
SUKANYA SAMRIDHI YOJANA (SKY)............................................... 47
FIXED DEPOSIT (FD) ....................................................................... 48
ACTIVITIES...................................................................................... 51
SUMMARY ..................................................................................... 51
CHAPTER5 EQUITY ...................................................................... 52
EQUITY ........................................................................................... 52
DIRECT STOCK ................................................................................ 53
NATIONAL PENSION SCHEME (NPS) .............................................. 54
UNIT LINKED INSURANCE PLAN (ULIP) .......................................... 56
EXCHANGE TRADED FUNDS (ETF).................................................. 57
MUTUAL FUNDS ............................................................................ 58
ACTIVITIES...................................................................................... 66
SUMMARY ..................................................................................... 66
CHAPTER6 INFLATION ................................................................. 67
LIFESTYLE INFLATION..................................................................... 69
FAMILY INFLATION ........................................................................ 71
POWER OF COMPOUNDING .......................................................... 73
ACTIVITIES...................................................................................... 75
SUMMARY ..................................................................................... 75
CHAPTER 7 INVESTMENT ANALYSIS ............................................. 76
 INVESTMENT POLICIES .................................................................. 77
THE AGE GROUP OF 22-35 ............................................................ 78
THE AGE GROUP OF 35-50 ............................................................ 80
THE AGE GROUP OF 50-60 ............................................................ 82
ALL AGE GROUPS ........................................................................... 83
REAL ESTATE COMMON MISTAKES ............................................... 85
ACTIVITIES...................................................................................... 88
SUMMARY ..................................................................................... 88
CHAPTER8 FOUNDATION FOR EARLY RETIREMENT ...................... 89
RETIREMENT .................................................................................. 90
WHY RETIREMENT PLANNING IS NECESSARY ............................... 90
WHY PEOPLE DON’T PLAN FOR RETIREMENT? ............................. 94
HOW TO CALCULATE RETIREMENT CORPUS? ............................... 94
HOW TO GET POSITIVE BELIEFS..................................................... 98
VISUALISE ...................................................................................... 99
PERFORM A SELF-ASSESSMENT................................................... 103
ACTIVITIES.................................................................................... 104
SUMMARY ................................................................................... 104
CHAPTER 9 STRATEGIES FOR EARLY RETIREMENT ...................... 105
HAVE EMERGENCY CORPUS ........................................................ 106
HAVE MANDATORY AND REQUIRED INSURANCE. ...................... 107
MANAGE YOUR LOANS ................................................................ 108
PLAN YOUR TAXES ....................................................................... 110
PLAN YOUR INVESTMENTS .......................................................... 112
CHECK RISK-REWARD RATIO ....................................................... 114
DO PROPER INVESTMENT ANALYSIS ........................................... 114
CREATE MULTIPLE SOURCE OF INCOME (MSI)............................ 118
 ACTIVITIES.................................................................................... 122
SUMMARY ................................................................................... 122
CHAPTER 10 LIFE AFTER RETIREMENT ........................................ 123
THREE BUCKET STRATEGY ........................................................... 126
SENIOR CITIZEN SAVINGS SCHEME (SCSS)................................... 127
PRADHAN MANTRI VAYA VANDANA YOJANA (PMVVY) .............. 128
ANNUITY ...................................................................................... 128
SYSTEMATIC WITHDRAWAL PLAN ............................................... 129
POLICIES PAYING RETIREMENT INCOME ..................................... 130
ACTIVITIES.................................................................................... 132
SUMMARY ................................................................................... 132
CHAPTER 11 CONCLUSION ........................................................ 133
EPILOGUE ................................................................................. 140
 Retire Early and Rich

Prelude
The world is changing and evolving so rapidly. It is not a
revolution in the traditional sense, but the organisational
transformation has grown so widespread on a worldwide
scale. The reasons could be numerous; economic recession,
AI growth, cost reduction, and improved operational
efficiency.
Anand had migrated to Mumbai from his hometown in
Bihar decades ago. He considered himself lucky to get a job
almost immediately unlike his other friends who had
migrated with him. Anand, like his other friends, was a
graduate and was getting accustomed to the big city with all
its idiosyncracies. Anand worked in a reputed company and
so had to maintain a lifestyle that suited his social status.
He started shopping in the malls, eating out, having
parties, and using unwanted avenues for expenditure like
credit cards. He had also accumulated a lot of items like
furniture, gadgets, and articles of clothing which he could
well do without. Soon he ascended the corporate ladder to
assume a position of eminence and accepted the demands
of his parents and elders to marry and have children. His
social compulsions had prompted him to buy a rather
lavish house, car and put his children into expensive
schools. A major portion of his salary went into EMIs and
other social obligations. Time and again he put off thoughts
of the future in order to manage the present. However, time
and tide wait for no man and in 2020, the deadly COVID-
19 pandemic struck the world. Not many entities or
establishments could bear the stigma brought in by the
marauding virus. Anand and his family got infected and so
did his parents in their hometown. To make matters worse,
Anand’s company decided to downsize looking at the
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Rohit Gupta

declining business. Anand’s hospital bills had skyrocketed

and he rued not having a proper Mediclaim to help him out.
His company had retrenched him and thus it was difficult
for him to pay the EMIs and the credit card bills.
Soon, he started selling his car and other amenities to keep
up with the expenses.
Warren Buffet once said, “If you buy things that you do not
need, soon you will have to sell things you need.” Anand
had come across this quote several times but had always
put off his worries for another day. However, the day of
reckoning hit him harder than expected. He was left
penniless, jobless, helpless, and most pathetically...
hopeless.
A lot of Anands have been jolted by the ravages of time
because of their unplanned, disorganized, and disoriented
ways of living. Money is a strange commodity. It requires
utmost care and proper management. There are many tools
and media to keep one updated on the latest facilities
available to make money work for an individual to the
optimum level. However, in the rush for a daily living often
people like Anand procrastinate such important planning
for a later date. Sometimes, that later date never arrives or
when it does the damage has already been done.
It is important to plan one's financial future in advance and
with proper care. The utility of this book makes it more
prominent due to the sheer uncertainty of the times. While
it is important to alleviate the status of such Anands of
urban India should also be cared for.

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It is not a difficult task. Just awareness is all that matters.

 Do you want to enjoy your life with energy, time, and
money?
 Do you want to retire early in life to enjoy your
dreams before you get too old?
 Do you want to break away from the crowd and be
different than just a “brick in the wall”?
 Do you want to understand the rapid changes that
are happening in the financial sphere?
 Do you want to keep yourself updated with the new
norms that taking over the market?
 Are you sure that your work/job will get you to attain
the goals of your life?
 How long can you go without a consistent income if
you lost your work today?
 How long can you support your family and satisfy
your obligations?
 Don’t you think financial preparation could save you
from the disasters coming your way?
 Do you often rue about missed chances?
 Do you fear that your hard work would not provide
“you” with the fruit that it should?
 Are you conservative and unwilling to take risks?
 Do you want to know about wise investments?
The world has changed rapidly over the past few years. The
age-old suggestions on having a good life have become
obsolete and have been replaced by new methods. The

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Rohit Gupta

“New Normal” has ushered in the importance of smart

work over mere hard work and the pandemic has also
thrown up glaring lessons to be learnt.
It is important to break-away from age-old myths and get
into the “growth mentality” stature rather than sticking to
the “survival mode” status. There are proven ways to get
there. I am committed to hand hold people who are action-
takers and who want to have a better life to enjoy “NOW”!
It is easy to walk along the beaten tracks but that does not
necessarily guarantee you accomplishments of the life that
you might yearn for.
An age-old adage says: “Flow with the times, or be
influential enough to change the times.”
I say it in a different way: “Those who seek, explore, learn
and act diligently always blossom amongst thorns.”
TRY IT!!

“Life throws countless burdens on people, not to

make them feeble but to make them strong.”

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 Chapter1: Introduction
“Personal finance is self-responsibility, accept it
today or regret it later.”

Every activity and its success revolve around three

attributes which are; time, money, and energy.
Contentment or a sense of achievement and joy comes
upon us only when these three aspects of life are utilized to
the optimum proportion.
From our early 20s to our 30s we experience the most
youthful stage of our life. Generally, at this period we do
have great reserves of time and energy, but little money to
supplement the attainment of our wishes. This is the time
to learn, explore and discover. In this age, wealth only
means money to us.
During the age of early 40s to late 50s, we tend to reach the
zenith of our careers. This is the time when people make
money, have reasonably good savings, and create an
Rohit Gupta

economically stable ecosystem. However, during this

period there might be reserves of money and energy
available but little time to make use of the same. Here
wealth means Time to us.
After we attain the age of 60 and beyond, though we might
have enough reserves of money and time, we are left with
little or no energy to be able to enjoy the other resources.
Here wealth means health to us.
Thus, in life, we are always left with one of the core
components to ensure the full enjoyment of our life. Life
will have a different joy, if we can have all the 3 components
of time , money and energy together.
Often we might come across someone in our family - maybe
an elderly relative who might have worked hard throughout
his life and is known for having a healthy bank balance but
is barely able to walk. Time and again people might have
heard him musing, “What am I going to do with this much
money? It is my grandchildren who will enjoy it.”
The plight of that relative makes us ponder time and again
whether we might also end up in the same situation later in
our life. Can we not come out of this age-old malaise and
enjoy life at every stage of livelihood?

“Oh, the worst of all tragedies is not to die young,

but to live until I am seventy-five and yet not
ever truly to have lived.”
― Martin Luther King Jr.

Most people today are jostled in this vicious cycle of life.

When we were in school, we were told once you get good
marks in 10th ,life will be good. However, after the 10th ,we

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 Retire Early and Rich

were told once you get good marks in 12th ,life will become
graceful. During the last phase of college or even before
that, we are advised to work hard to get proper placements
so that life becomes gracious. After we get a job, it becomes
imminent to work hard during the initial 5 years of the job
to get settled with the new environment. Once we gain 5
years of experience and acquire reasonably good knowledge
in our domain, we are prompted to switch jobs to attract a
better package and get married in search of the elusive
balance of life. After achieving this,we are often informed
to be attached to the assurance of balance in life like
purchasing a house having a child, or having a good
amount of savings, we still remain entwined within
priorities and responsibilities. During our 40s & 50s, we
keep working harder, as per the social parameters to attract
bigger packages to finish off our loans and other
impediments to be able to unburden ourselves. At 50 and
beyond and we are grappled with the apprehensions and
duty toward children’s education, marriage, and least
priority is given to our own retirement. Once this is done,
it appears that life would be peaceful as never before.
People like us keep working hard day and night in the quest
for a better future for themselves and their families.
However, when they retire, they don’t have the energy to
enjoy life to the utmost. A vast majority of the middle-class,
working population falls within this torturous bracket of
life. Many people are unable to reach even retirement age.
The credit for this, of course, goes to the noxiousness of the
stressful lifestyle of the modern era, to quite an extent. So,
we face challenges at every stage of life, be it in childhood
when we learn to walk on our tiny legs or during old age
after gaining the utmost experience, social status, and hefty
wealth. We need to strike a balance between our
responsibilities and our happiness and should take the time
to live this beautiful life.

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Rohit Gupta

“A person starts dying when they stop

dreaming.”
-- Brian Williams

We have all fostered many dreams and goals since our

formative years. However, the mercilessness of time has
often made us compromise with them. Haven’t we all gone
past attractive shops and restaurants and suppressed our
wishes for another day? Haven’t we, sometimes or the
other seen our dream car or villa on TV, in a magazine and
cursed our luck or wondered - will I be able to buy this ever?
Haven’t we been rattled and jealous by seeing our friends,
relatives, or associates going to various exotic destinations
and wondered why had God not given us such opportunities?
Have you ever wondered why only a handful of the
population achieve their dreams while others keep
languishing in misery? It is true that most people just
survive while only a handful is able to live. Yes, you
read that correctly, most people just survive for the next
moment as long as there is breath in the body. Why only
some people with no background or pedigree are able to
reach lofty heights which no one from their generation had
been able to reach? This is all because most of them had a
plan for their lives. You might be thinking now, that some
people are born rich. Leave those people in your count since
they were born with a silver spoon but you might be not, so
keep the focus on yourself while reading. Do not think what
works for anyone else will work for you as well. If you do
well in your life, it’s your family and you who will be having
a better life, not your neighbours, relatives, colleagues, or
friends. For some time, you need to become selfish and
concentrate on what you are doing for the good life that you
have always yearned for. Now, you might say I already have
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a good life. It’s good if you already have a good life, but have
you ever thought about whether or not you want to keep
working throughout life, get retired, and wait for the last
moments of your life? Or are you someone who wants to
retire early and is looking for someone who can help you
with this by giving you a proper methodology? You are
lucky to be reading this, you will definitely get a pathway
from this book which can really help you to retire early and
enjoy it. Let me explain this to you with the wonderful story
of two friends.
There were two friends, Rahul and Rohit living in the city
of Pune. Rahul was fresh out of college and had joined a
new job recently. Rohit was a person who used to help
people with wealth creation goals and methods to retire
early. Though there was an age gap of 10 years between
them, Rahul always used to seek advice from Rohit as he
used to consider him to be his elder brother. Rahul in his
childhood used to think that he will be having a lot of
money when he will start earning and would live his dream
life without the need of thinking about money. He had seen
his friend cum brother helping many people with finances.
So, one day he went to his home and said, “Rohit bhaiya -
I want your help. I am doing a job today as my parents
wanted me to get educated and start earning so that I get a
good life. However, I feel I don’t want to work throughout
my life as I have seen an uncle of mine who has all the
money now but is just waiting for his death. At the same
time, I don’t want to leave the job which is giving me a
salary for paying up my education loan and is helping me
to meet my all other important expenses. As you help
people with finances, can you help me to know what needs

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to be done considering my goals? How can I use my salary

towards it?”
Rohit said, “Yes Rahul. I am happy to see that you have
started thinking in this direction so early in your life. Most
people take a lifetime to understand it. Even some people
on their deathbeds agree that they did not live their life
fully. I will definitely help you. But before starting on it, let
me explain to you different concepts on finances.”
Let us all like Rahul, get access to the pearls of wisdom,
Rohit is about to share in the next chapters. Believe me!
The knowledge shared hereby and the application of the
methods revealed will take you nearer to your cherished
dream.
Come, let’s live our lives and not just survive through the
times.

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 Chapter2: Financial Concepts
“An investment in knowledge pays the best
interest.”
– Benjamin Franklin

There are many modes to ensure financial security. Though

some of the traditional forms of savings and building one's
financial portfolio might seem obsolete, there are enough
options for people to tread the right path by analyzing one's
financial plans. In the same context, it is paramount to
properly comprehend some of the common concepts in this
domain.

Investment:
An investment is an asset, object, or systematic plan that is
acquired or adopted to generate income or the appreciation
of one's financial health. Investments are done in pursuit of
proper planning toward future goals. Investments may be
Rohit Gupta

short-term, medium-term, or long-term. An investment

happens in the form of expenditure of some resources like
time, effort, money, or asset in the present times - in the
hope of receiving greater payoffs in the future.
For Example: If someone purchases a house and gives it out
on rent, the house will provide him recurring income over
a period and also have an asset value for him. He may also
sell the house at a much higher value in the future.
There are different investment avenues available in the
market like exchange-traded funds, direct equity, indirect
equities (Mutual Funds), Government Bonds, real estate,
commodity trade, sale of antique items, and much more. In
the present era cryptocurrencies, NFTs, etc are also making
their way into the market. There are many options available
for investments. However, one must choose the proper
modes based on his/her investment horizon, the
requirement of returns, risk appetite, safety of instrument,
liquidity of money , tax efficiency and many such factors.
Investments are mandatory to fulfill all future goals and to
manage expenses, exigencies, or emergencies.

Income:
Income refers to the money that a person or entity receives
in exchange for services rendered or the sale of products.
It’s the basic ingredient of investment and creates the basis
to enter into its zone. The quality and consistency of your
income decide the types and quantity of investments. Since
investment leads to long-term corpus building, the
consistency of income decides the corpus that you create
from your investments. Income for most people means
their total earnings in the form of wages, salaries, and
returns on their investments that they receive at some
defined frequency, which maybe on a daily, weekly, or
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 Retire Early and Rich

monthly basis. For businesses, income means the revenues

that are accrued from the rendering of services, the sale of
products, or the receipt of any kind of interest/dividend,
etc. Different types of characteristics of incomes differ in
nature and can be broadly categorized as:
1. Active Income – It is the revenue earned against
active work or real-time activity. A job or business
which requires our active involvement brings about
active income.
2. Passive Income – It’s the income that is generated
even when we are not actively involved. It is rather a
process or a system that generates money for us
even when we might be asleep. There are different
passive income sources like blogs, YouTube videos,
royalties from books & many other similar avenues.
For generating a sustainable income, we should first gather
enough knowledge about the requirements of the market,
about high-paid skill sets, and about our own areas of
interest. A deep study is needed to grasp the concepts
through which people might be getting highly-paid jobs or
might be running successful business ventures. Properly
planned, strategic investments can also create a lot of
wealth. It can be through direct equity, real estate, and several
available options. However, a regular and consistent flow of
income is required to enable or empower people to invest
wisely in an effort for creating wealth.

Expenses:
Expenses are the amounts that go out of your pocket in
exchange for goods or services. Some expences are
legitimate and inevitable but there are expenses that are

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mostly unnecessary. A house to live in, food, medicine,

utilities like water, electricity, phone bills, cable tv, gas,
newspaper, internet, etc. are indispensable expenses.
Household items and clothing also come under the same
bracket. Fuel and travel expenses towards work and family
compulsions are necessities too. Another important
expenditure happens for education which cannot be
overlooked. Expenses towards entertainment, vacations,
dinner outings, movies, and sports events are although not
necessities but do appear to be part of the agenda of life.
Many people indulge in wasteful and unnecessary expenses
which gives them little scope for investments. These
expenses are mostly triggered by the alluring advertisements
on social and print media and other online platforms. Many
people have expenses more than their income and because of
this they take loans and get into debt traps. One loan
compels one to go for other loans and soon a person gets
engulfed in a vicious circle. Investments should be
considered to be an important expense. Everyone should
plan to invest the money as the first priority soon after
having an income flow. To have a prosperous and trouble-
free life, a healthy balance between income and
expenditure should be maintained. The difference between
needs and desires are needed to be understood properly to
track all expenses.

“Too many people spend money they earned, to

buy things they don’t want, to impress people
they don’t like.”
– Will Rogers

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Needs and desires:

Needs and desires are the basis of all expenses. As a human,
we all have needs, demands, and luxuries to fulfill. We
should be able to define our needs and desires correctly in
our life from early on because if we don't have the definition
of the needs and the desires clearly defined in our minds,
our desires overcome our senses to transform into
necessities without our realization. The basic difference
between needs, demands, and luxuries in life can be
explained with an example.
There are 3 people – Ram, Ramesh, and Laxman. All of
them feel hungry at the same time.
Ram eats home made food to fulfil his basic need of hunger.
Ramesh wants to eat a burger to fulfil his hunger. Ramesh’s
need is now more of a demand in response to his hunger.
Laxman wants to eat at KFC, MC Donald’s, or some exotic
outlet to fulfil his basic need of hunger. This is a classic
example of luxury.
We all should understand clearly what the needs in our
lives are and what the demands in our lives are. If we do not
control our demands or luxuries properly, then demands
and luxuries take no time to become part of our life
resulting in unnecessary expenses. A commonly used
formula can be used to bifurcate needs, demands-luxuries,
and savings, investments. The formula is 50:30:20. From
the income that we earn every month, 50% of it should go
towards necessities. It may be rent, Utility bills, Groceries,
House or car EMI, Insurance expenses, and many such
things that cannot be avoided. 30% should go towards
demands and luxuries. It may be dining out, shopping,
travel, and many such things that are not necessary and can

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be avoided by looking for better alternatives. The

remaining 20% should go towards savings and investments
which will help you reach nearer to short-term and long-
term financial goals. We can think of swapping the demand
& luxury proportion with savings to have a better outcome.
future. This 50:30:20 will be beneficial when you have
started working. Later with increase of income, our focus
should be to increase the investments. More amount goes
towards investments , sooner you will be able to create a a
better corpus for a comfortable and desirable future

Investment instruments:
Investment avenues are different methods and modes of
investment. Knowing about different investment avenues is
very important so that we can choose the best options to realise
our goals in our life. Different investment instruments have
their own benefits and disadvantages. Before going for any
investment, we need to think about the factors below:
- Do we understand each component of the investment we
want to take up?
- Do we understand the risk appetite?
- Do we have the required investment horizon?
- Will we be able to continue the investment for the period
it demands?
- Does the Investment instrument really provide the
returns you really require or it is just imaginary returns?
- How safe is the investment instrument?
- How tax efficient is the investment instrument?
For Example: There are 2 people Ram and Shyam. Ram’s
daughter is about to go for graduation 2 years from now.

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 Retire Early and Rich

So, his priority should be capital protection and should be

away from any instrument that invests in equities.
Similarly, Shyam’s daughter would be going for her
graduation after 5 years from now. So, he can think of
investing in equities as he has sufficient time to invest and
get capital appreciation.
Everyone needs to have a check on risk appetite, rate of
returns, liquidity, lock-in, tax implications, and the year of
the target (goal) before committing to any investment.
Understanding an investment instrument is recommended
for getting the best benefits from the same. You can take
help from experts if needed, but don’t take the advice of any
novice who is also sailing in the same boat as you. They
might not be able to give you correct advice as they are
unaware of the right options.
In Chapter3, 4 we have dedicated information for
understanding commonly used investment instruments.

Inflation:
Inflation is the regular increase in prices of goods and
services and the subsequent devaluation of the currency. It
makes the money in your hand have diminishing value as
time passes due to the increase in prices. Inflation leads to
higher prices and lower purchasing power. It is impacting
the life of every human being whether they understand it or
not. Blaming the government or any statutory organization
for inflation is wrong since it is a trend that has carried
through history and will always remain.
For Example: Petrol was Rs.20/Litre in 1995 and in 2022
it reached near to 120. To have a better life in the future,

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Rohit Gupta

you need to plan your investments in a way to beat

inflation. If you are not planning your life by taking
inflation into account, then you are preparing for your own
doom, as the cost of things will keep rising with each
coming year.
Chapter 5 is an in-depth elaboration on inflation for better
understanding.

Investment Analysis:
Investment analysis is a way to analyze investments already
done in the past. When we had committed to investment,
we had some goals in our minds. Our goals however might
change with the changing times as :
-- Your responsibilities are different being single, married,
divorced , parents.
-- Your children are going to school / College or now are in
a job or getting married.
-- Your goals and dreams have changed with time.
-- You might want to retire early or start a new business.
So , with the changing times we need to check time and
again whether the investments are in line with the goals
that we are targeting. This is the biggest miss in most of the
people’s investments.
All the big companies release their quarterly statements to
check if they are in the right direction as per their goals and
targets. Similarly, we as individuals should also do our own
analysis on a monthly basis. If not possible on monthly
basis, at least this should be done on a quarterly, half-
yearly, or yearly basis. With changing times, there are a lot
of new investment avenues coming up and even our goals
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keep changing with time. So, analyzing our investments

will help us to alter the investment instrument if needed
within the required timeframe. We should really be
thoughtful as we are investing our hard-earned money.
Knowing whether our money is flowing in the right
direction and would yield the required returns or not, is
important for our successful financial future. Not analyzing
the investments means we are just relying on luck without
doing much ourselves.
Chapter 6 has been dedicated to investment analysis for
better understanding.

Financial Plan:
A financial plan is a roadmap toward all future goals. For a
stable and pleasant future, we should have a strong
financial plan. It is just like having a smooth road trip along
a super expressway. We mark the important points or
milestones on a map before we start traveling. Similarly, in
a financial plan, we mark the financial goals and the
proposed time for their realization. It is the first step
towards the fulfilment of one's future financial goals. It acts
as a bridge between one's current reality and all the
financial goals one may foster in mind. It is the step-by-step
approach towards reaching every goal. It keeps proper
track of investments, expenses, income, needs, and desires
in life. It helps us to save money so that we may easily
achieve our ultimate goal. It becomes a guaranteed solution
if you start early and be disciplined. Whatever we might
yearn to achieve, can only be accomplished if we can link
our dreams and our current life with a properly defined
financial plan.

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Rohit Gupta

People fear hearing the word financial plan. Though it may

sound complicated, however, it is actually, very simple. It’s
neither rocket science nor a difficult question of maths. You
just need to walk on the defined path with discipline. It is
just a way forward in the pursuit of happiness.

“It is very simple to be happy, but it is very

difficult to be simple.”
― Rabindranath Tagore

A personal financial plan typically includes the following

baseline data:
• Personal information e.g. Age, income, children,
residential status, etc.
• Financial goals that are important (Child Education,
Child marriage, Retirement planning) and dreams
(dream house, dream car, dream vacation)
• An overview of the big picture (assets, debt, etc.).
• Different types of incomes, expenses and recurring
investments
• Different insurance covers either mandatory or optional
Based on the above details, a finance professional can help
by charting out a debt elimination plan, an investment plan
to build assets, the best-optimized way to reach financial
dreams/goals, and income tax strategies for better tax
planning. One should definitely have a financial plan, for
getting certainty in your life.

“The biggest risk of all is not taking one.”

– Mellody Hobson

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 Retire Early and Rich

Risk Analysis:
Risk analysis is analyzing risks and taking decisions
accordingly. It is very important for everyone because
different people in different age groups have different
needs and risk appetites. Needs and risk-appetites serve as
the prime attributes for deciding on an investment
instrument. It helps people to check if the future goals are
in sync with the current risk taken in the investment
instrument.
This should be done with utmost care as one small mistake
may ensnare one into the wrong potholes of misguided
investment instruments leading to substandard returns.
For Example: A person aged 59, who is on the verge of
retirement has 80% of investment in equity. This means
the risk analysis is wrongly done and needs to be rectified
with immediate effect.
Rohit – “Rahul, Now you might have got a good
understanding of financial concepts that are important for
your personal finances.”
Rahul – “Yes bhaiyya. Can you now tell me, how I can
invest strategically to build a sizeable corpus?”
Rohit – “Yes Rahul, let me first tell you what are the
important things to do before committing to investments.”

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 Chapter3: Planning
“There are dreamers and there are planners; the
planners make their dreams come true.”
– Edwin Louis Cole

Why Planning
Planning is essential to stay focused on goals despite the
constant development of situations around us. We all have
hopes, dreams, and aspirations in life. However, how many
of us actually go on to achieve our goals? Often, we spend a
lot of time thinking or talking about what we want but do
not take the proper steps to achieve it. It’s not because we’re
lazy. It’s because we don’t know from where to start and
how to start since we don't have a plan. Planning the life we
want, can serve as a roadmap or guide to make those
dreams a reality.
It can help during the following:
 Retire Early and Rich

• Whenever it appears that life is spiralling out of control.

• There is a struggle to make decisions.
• We feel that we are lost and lack direction.
It is the process of deciding in detail how to do something
before we actually start doing it.
Think about this for a second:
• Whenever we travel, we plan our trip.
• Before getting married, one always plans for the wedding.
• Before throwing a party, one plans the event.
• If we want to make more money, we need to plan for it.
In all the above cases every activity was assisted by a plan
and the better the plan, the greater the chances of success
in the execution of the same. Every form of greatness that
we see around us has a much deeper foundation. Similarly,
planning things way ahead of time helps us to have a
smooth financial journey that is not punctuated by
emergencies and mishaps. Proper planning is the most
important aspect before committing to any financial
proposition as it helps to access all aspects properly from
every possible angle, way ahead of time before the
execution.

Emergency Fund:
An emergency fund is a spare cash that is used during
financial distress and emergencies. People who had
managed to keep some reserves of the emergency fund
were able to survive and sustain through the Covid-19
pandemic.

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Rohit Gupta

The primary purpose of the fund is to meet emergency

expenses during unforeseen circumstances. Emergencies
can be of any form ranging from short-term requirements
to long-term exigencies.
Short-term emergencies can be unexpected like repair
works at home, breakdown of any item at home/car,
unexpected family travels, theft or burglary at home or
during a journey, uninsured illness needing costly
medicines and treatment.
Long-term emergencies can be prolonged duration of job
loss, medical or family conditions requiring a long break
from work, damage to a house in a natural calamity, a long
break after maternity, or uninsured chronic illness
requiring a big amount.
It should be calculated based on the current monthly
expenses. Here all expenses should be thought of as one
may encounter them throughout the year as well. It can be
cumulative of one’s 3-12 months of current monthly
expenses. The primary objective of this fund is to help
people when they need it urgently and without any delay.
While some emergencies may give the space of a few hours
or days to prepare, others may require funds immediately.
Therefore, the avenues that one should use to park their
emergency fund should be highly liquid and easily
accessible. People can keep these amounts in auto-sweep
fixed deposits, liquid mutual funds, or even use the over-
draft facilities of loan products. The overdraft facility of the
loan products can help in saving a reasonably good amount
on interest as well. Most people today have a home loan and
they do prepayment when they have funds available.
Instead of doing pre-payment, one can keep those amounts
in an over-draft account to save on interest and utilize that

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amount in case of emergencies if needed. People should

plan for an emergency fund properly as it saves them from
breaking other investments or taking extra loans to fulfil
their needs during emergencies.

“Planning is thinking about the future and doing

something about it now.”

Term Insurance:
Term insurance is a life insurance plan, which provides
high life cover at affordable rates. Life is unpredictable, we
can plan for our future but we can never assure whatever
we have planned would get to taste the fruits of success. You
may not always be around to take care of your family and
that’s when a term plan ensures your family is well protected.
It provides financial coverage to the policyholder’s family
against a fixed amount of premium for a specified period of
time which is denoted by the policy term. If the insured
individual dies when the policy is active, a death benefit is
paid to the nominees of the insured individual. Term
insurance not only provides financial protection to the
family in cases of most unfortunate events, but it also has
various other benefits as well:
• Multiple Death Benefit Pay-out Options.
• Additional riders for different needs.
• Income Tax Benefits.
• Critical illness coverage.
• Accidental death benefit coverage.

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Rohit Gupta

Proper planning for opting for the right type of insurance

should be the first priority of any individual before going
for the investment.
For Example: Ram and Shyam both work in the same
company, ABC, and are of the same age. One day while
working in the office Shyam suffered a heart attack and
passed away. Shyam’s family had to suffer a lot as Shyam
had a home loan, a small daughter, and a wife who is a
homemaker (housewife) and he was the only breadwinner
of the house. After his demise, his wife had to sell their
house and complete the due amount for the loan, and kept
the remaining amount in the bank account for her
daughter’s education and other needs. If Shyam would
have taken a term insurance policy, his family could have
lived in their own house without getting bothered by the
obstacles in the future. This incident provided Ram with a
lesson and he immediately bought a term cover for himself.
Nobody wants to become a Shyam for his family. One
mistake of his has landed his family in deep trouble.
For deciding the term insurance amount, important factors
to consider are insurance premium, claim settlement ratio,
features like death benefit, critical illness covered, waiver
of premium, and various such riders. Another important
thing to check which is ignored by most people is to make
a list of loans and liabilities that one may currently be
carrying, current monthly expenses, number of dependent
people like parents, children, or a homemaker (wife)
currently depending on the income. This will help to have
adequate coverage insurance amount. Everyone should
plan to take term insurance when they are young as when
one starts aging the premium keeps increasing with each
passing birthday.

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 Retire Early and Rich

For Example: Ramesh and Pankaj are two friends, aged 25

years, working in the same company. They attended a
session at their company regarding term insurance and
Ramesh got convinced to buy term insurance. However,
Pankaj remained adamant and refused to invest citing it to
be a waste of money. Ramesh bought term insurance by
paying approximately Rs. 13000/per annum for one-crore
cover, till he turned 60 years of age. This premium of Rs.
13000 would be the same till he turned 60. Now Pankaj,
after 7 years understood the importance and thought of
buying term insurance. He was required to pay around Rs.
20000 for the same one crore insurance. Now, this
increased premium of Pankaj will remain the same for the
remaining years. Ramesh will be paying 4,55,000 during
the whole tenure and Shyam will be paying 5,60,000. Here
Shyam has not saved money. Instead he paid 1,05,000
extra by delaying the decision and during this tenure of 7
years, his family was at complete risk.
One mistake is commonly done by people and that becomes
the prime reason for their claim rejection. Mistake is they
provide false information about pre-existing diseases,
smoker/non-smoker category or any other information.
Insurance companies directly reject the claim, when they
come to know that false information was provided while
taking this policy. Most people do this, to save on
premiums now. What people do not realize is that this term
insurance was taken for the benefit of their family when
they will not be with them. I am sure no one wants their
family members to run away from pillar to post for getting
this claim and finally getting rejected.
If we don’t have term insurance and something happens to
the earning member of the family then the complete family
has to suffer. I am sure nobody wants the family members

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Rohit Gupta

to face a miserable condition where they have to ask friends

and relatives for monetary help. One should understand
the fact that this is an investment for the betterment of the
future of your loved ones, not a wastage.

Health Insurance:
A health insurance policy is a product that protects a
person against the financial implications of a wide variety
of health-related expenses, ranging from those caused by
minor illnesses and injuries to critical diseases. Therefore,
health insurance serves as a protective financial shield for
people in case of a major medical expense. It reimburses
the bills or pays the medical care provider directly on behalf
of the individual. Comprehensive medical insurance cover
the cost of hospitalization, day-care procedural expenses,
medical care at home (domiciliary hospitalization), and
ambulance charges, amongst others.
A health insurance plan helps people to stay covered
against various diseases. Additionally, it helps to boost tax
savings too. Under section 80D of the Income Tax Act,
1961, one can claim tax benefits against one's health
insurance premium.
Benefits of buying health insurance:
1. Health Check-ups every year.
2. Covers Out-Patient-Duty requirements.
3. Covers pre and post-hospitalization.
4. Covers pre-existing diseases.
5. Provides cashless treatments.
6. Provides additional sum insured.
7. Provides tax benefits.

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People should think of buying health insurance earlier in

life as the chances of having a disease in old age are higher
as compared to when one is young. In case you get some
disease and you think of buying health insurance, then
either you will not get a favourable policy, or even if you get
one, it will be at a much higher price. Along with term
insurance, this should be mandatorily availed by everyone,
otherwise, the cost of negligence might be too high.
For Example: There was a person called Rakesh who was
quite a reckless person. He did not have any health
insurance, as he thought that since he was fit and fine why
should he waste money on health insurance premiums? He
recently changed his job and was coming back from office
celebrating his last day in his company. On the way, he met
with a major accident and he got admitted to the hospital.
He had to pay Rs.1 lakh for the complete treatment out of
his pocket as he did not have the corporate cover because
of leaving the job. His family did not have that amount, so
they took a personal loan to pay this amount. This loan has
added an extra EMI which could have been avoided in case
he had medical insurance.
If Rakesh had separate health insurance other than
corporate, he could have saved Rs. 1 lakh he had to pay for
his treatment and could have avoided the hassles of having
a personal loan as well.
There are various aspects to check before buying health
insurance: whether the premium is on the lower side, claim
settlement is good, hospitals covered are nearby, no sub-
limits on room caping or on specific diseases and other
policy features should be as per our need. There are so
many domiciliary benefits that are provided by insurance
companies with add-on riders that could help the sufferer
with the treatment at their place as well. Having proper

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Rohit Gupta

health insurance helps us to save various costs involved in

case of any health issues. This can lead us to a deep
financial crisis as well. So, this should be mandatorily taken
by all.

Vehicle Insurance:
It refers to ensuring one’s vehicle against unfortunate and
unpredictable incidents. It is a mandatory insurance cover
that every vehicle owner in India must have, be it a car,
truck, tractor, or two-wheeler. It safeguards against
accidental damages or theft of the vehicle and also
safeguards against third-party legal liability for bodily
injury and/or property damage. It also provides personal
accident cover for the owner-driver/occupants of the
vehicle. Motor vehicle insurance can be bought through
online or offline modes from companies authorized by the
Insurance Regulatory and Development Authority of India
(IRDAI).
Types:
1. The Third-party Vehicle Insurance Policy – It is a
basic plan and is mandatory as per The Motor
Vehicles Act. Not owning this basic vehicle
insurance plan while driving/riding in India can
lead to heavy monetary penalties. It covers the
vehicle owner’s liabilities in case the insured vehicle
injures a third party or damages their property.
2. The Comprehensive Vehicle Insurance Policy-- It
includes the benefits of a Third-party Vehicle
Insurance Policy as well as covers damages to the
vehicle in case of an accident, fire, riots, or man-
made and natural calamities. This policy offers
enhanced coverage.

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3. Zero depreciation cover – It is also known as

bumper to bumper cover. With zero depreciation
cover insurer does not have to pay the depreciation
cost in case of depreciation of the damaged or
replaced parts and policy holder can claim the full
amount. Typically, during claim settlement, an
insurer deducts the depreciation value of parts
before replacing the damaged parts. However, with
this add-on, there’s no such deduction, and you
receive the 100% claim amount (apart from any
other specified deductibles or applicable costs as per
the policy’s terms and conditions).
For Example: Mahesh was having comprehensive
insurance for his car. While on vacation, his car met with
an accident. As the insurance was comprehensive, car was
not fully covered and he has to pay 20,000 from his
pocket.
Although the government has made third-party insurance
as mandatory but people should definitely take zero
depreciation coverage to cover all the costs involved in
case of an accident.

Travel Insurance
It is a unique product that offers you financial assistance in
case something goes wrong while one is traveling.
Imagine being in a situation where the luggage had been
misplaced, or someone has been a victim of theft in a
foreign country. Dealing with such situations can be
expensive and difficult. That is precisely why travel
insurance is so crucial!

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It covers a range of scenarios, including medical and dental

emergencies, theft of money, loss of passport or other
important documents, flight cancellation, and
misplacement or lost luggage.
For Example: Mohan was going to visit his cousin in
Europe. He has taken travel insurance unwillingly as it
was mandatory to travel. After reaching Europe, he felt ill
because of climatic changes. He has to get hospitalized
where his insurance cover was used after paying some
mandatory amount. Has he not been covered, he would
have paid the entire amount by his pocket.
Many countries have mandated travel insurance to travel
to their countries, but travellers should definitely take
travel insurance to avoid the hassles and have a joyful
journey.
“Planning saves you from big collapses of the
future.”

Tax planning:
Tax planning is the analysis of one's financial situation
from a tax efficiency point of view to plan one's finances in
the most optimized manner. It helps people to utilize tax
exemptions, deductions, and benefits in the best possible
way to minimize the tax burden. It is the process of
analyzing a financial plan or a situation from a tax
perspective. It ensures that all elements of a financial plan
can function together with maximum tax efficiency. It is
one of the significant components of a financial plan.
Reducing tax liabilities and increasing the ability to make
contributions towards retirement plans are critical for
success.

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There are many tax-saving options for all taxpayers as

mentioned below. These options allow a wide range of
exemptions and deductions that help in limiting the overall
tax liability. Below mentioned are the sections:
80 C – life insurance premiums, tuition fees, housing loan
principal payment, PPF, tax saving mutual funds (ELSS),
ULIP, NSC, Sukanya Samridhi account, FD.
80 CCC – For amount deposited in annuity plan of LIC or
any other insurer for a pension from a fund referred to in
Section10(23AAB).
80 CCD(1) – Employee contribution to NPS account.
80 CCD(2) – Employer’s contribution to NPS account.
80 CCD (1) (B) - New pension scheme.
80 D – Health insurance paid for self, spouse and children,
parents, senior citizens, preventive health check-ups.
80 DD – Treatment of dependent and the handicapped.
80 DDB – Treatment of specified diseases for non-senior
citizens and senior citizens.
80 E – Interest on education loans.
80 EEA – Additional tax benefit on affordable houses.
80 EEB – Interest on loan for the purchase of the electric
vehicle.
80 G – Donations to charitable funds or institutions.
80 GGA – Donations to scientific research or rural
development.
80 GGC – Donation to political parties.

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Rohit Gupta

80 GG – If you pay rent but don’t receive HRA from the

employer.
80 TTA – Interest on the savings account.
80 TTB – Interest received by senior citizens.
80 U- Physically handicapped resident – self.
10(13A)- House rent allowance.
10(14)-Children Education
10(5)- Leave travel allowances for traveling in the country.
24 -- Interest component of home loan.
Tax-saving blunders that most people often make:
 Mixing insurance and investments.
 Investment planning not done with respect to tax-
saving instruments
 Investing in dependents spouse (there are better
ways: Parents/ HUF/company)
 Creating auto-renewal Fixed Deposit.
 Hiding correct income from the department.
 Not filing ITR (lands you in problems when applying
for loans).
 Buy without thinking that the investment can help
you in wealth creation instead.
 Buying at the end of the year just to claim taxes.
 Various times companies (Employer, Insurance)
pay after deducting TDS (Tax deducted at source).
Sometimes it was wrongly deducted and has to be
claimed while filing ITR.
For Example -- Ramesh gets 10 lakhs in inheritance. He
has a loan remaining of 10 lakhs with 10 years tenure at

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9%. He is confused should I repay the loan or continue the

loan.
Let us see if he continues with the loan and utilizes these
10 lakhs for investment, how it will benefit him:
Year 1-9 Year 10
EMI 12668 EMI 11612
Principal + 152011 139343 on the
Interest 10th year
Every Year
Component
Tax @10% Every 152011*10% 139343*10
Year =15201 =13934
Tax @20% Every 152011*20% 139343*20
Year =30402 =27869
Tax @30% Every 152011*30% 139343*30
Year =45603 =41803

Total Tax Saved Total Tax Saved Gross

Total
Year 1-9 Year 10
Tax
Saved
Tax 15201*9 13934*1=13934 150743
Saved =138609
@10%
Tax 30402*9=273618 27869*1=27869 301487
Saved
@20%

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Rohit Gupta

Tax 45603*9=410427 41803*1=41803 452230

Saved
@30%
Now you might think, we would have paid Rs 5,20,109
extra by continuing the loan. If you would have invested
that 10lakhs @12%, you would have received Rs
31,05,848. This is roughly 6 times of the amount you
would have paid. Here we have not considered the
amounts, you would have saved in taxes every year and
invested. It will also generate some returns for you. So,
you might have understood if taxes are used efficiently, it
can be beneficial for financial wealth.
Things to check before planning:
- One should segregate the primary income across multiple
PANs. Personal PAN for salary and business income
under HUF/ private limited/ partnership should be
separate.
- One should anticipate the expenses for the year like rent,
health insurance, life insurance, vacations, and existing
EMIs, and optimize one’s salary for maximum
exemptions.
- One should claim deductions for things that they would
anyway spend money on eg: Health insurance, term
insurance, interest, and principal component of a home
loan.
- One should claim deductions if they spend money to
support a disabled dependent, self, or medical care.
- One should invest money based on goals and one’s risk-
taking ability without considering tax savings only.
- One should claim deductions for investments that are tax
savings in the financial plan.
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- One should check and weigh the option that is most

suitable to one’s portfolio – old and new tax regimes
should be studied at regular intervals.
-One should try to use all the sections in the best possible
way, as per one’s usage and requirement.
Planning the taxes way ahead of time, starting from the
month of April of a fresh fiscal year can help one to save
a lot of time, money, and effort which can help in wealth
creation as well.

Tax Impact on Investments:

Investments are made either with the intention to grow the
capital on investment or to save tax. Money is taxed at
different stages of investment. We use EEE(Exempt-
Exempt- Exempt) for simplicity where E stands for
Exemption at different stages to identify the best
instrument for investments where:
The first E identifies whether an investment in an
instrument qualifies for a deduction or not?
The second E identifies whether the interest earned during
the accumulation phase is taxable or not?
The third E identifies whether the money withdrawn in a
lump sum amount (sum of the principal and returns) is
taxable or not.
Other variants of EEE are:
EET stands for Exempt Exempt Taxable. Investment and
received interest are non-taxable, but maturity value is
taxable.

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ETE stands for Exempt Taxable Exempt. Investment is

eligible for an exemption, received interest is taxable and
maturity value is non-taxable.
Checking the tax status of various instruments is important
to identify the best instrument for investment after tax
deductions, if applicable.
Rohit – “Now, Rahul you know what has to be planned
before starting investments.”
Rahul – “Yes Bhaiyya. I am now eager to know how to
begin my investment journey.”
Rohit – “Of course! For that, let me tell you the various
investment instruments that you can use to attain it. There
are two areas to invest in, first is the fixed-income
instruments and the other is equity. In the next chapter, I
will explain to you the fixed-income instruments that have
almost fixed, stable, or less risky returns.”

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Activities:
1) Check how much emergency coverage you have
now and how much is required ?
2) Check how much term insurance and health
insurance you have now and how much is required
?
3) Check if you have your own house or own car and if
you have its insurance or not ?
4) Check all the tax sections carefully which you might
be eligible, but you are not using ?
5) Check whether the investment instruments you are
using are under EEE/ EET/ETE category ?

Summary:
1) Emergency cover of 3-12 months should be
accumulated based on your family responsibilities.
2) Health Insurance and Term insurance are
mandatory insurance, even if you are having it from
your workplace.
3) Vehicle insurance and property insurance are
mandatory only if you own a vehicle or a property.
4) Travel Insurance should be mandatorily taken if
travelling to foreign countries.
5) Effective tax planning utilizing appropriate sections
helps in minimizing taxes and ultimately wealth
creation.

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 Chapter4 :Investment Avenues
“How many millionaires do you know, who have
become wealthy by investing in a savings
account?”
– Robert G. Allen.
Real Estate:
Real estate investments involve the purchase, management,
and sale or rental of real estate for profit. Real estate can be
considered one of the safest investment instruments where
people can keep getting rent and the price of property keeps
on increasing under normal conditions. However, buying a
property for residential purpose is never called an
investment. I have seen people normally considering their
own house of living as an investment too which is not the
correct way to think. A house or a commercial property that
people may buy to put on rent is the actual way of using real
estate as an investment. When you invest in a property by
taking a home loan, you can get a deduction of 1.5 lakhs in
 Retire Early and Rich

principal and 2 lakhs in interest. This helps you in tax

saving as well.
Rental yield is the way to analyze the potential of real estate
as an investment option. It is the annual rate of rental
return, which an investor can earn from his invested capital
in a property.
This further implies that investment in affordable or mid-
segment projects can fetch you higher returns than high-
ticket purchases. However, the probability of the same
depends upon factors such as project type, location,
amenities offered, level of maintenance, and the
developer's brand.
The rental yield formula is Net rental yield = [(Annual
rental income – Annual expenses) / Total property cost] x
100.
For Example: Property cost is Rs 40 lakhs and rent per
month is Rs 10000
Net Rental Yield = ((10000*12)/4000000) *100 = 3%.
This example is a real example from a property in Pune.
Similarly, rental yields in the top eight metro cities in India
are as:
Delhi NCR 2.79 percent
Bangalore 3.45 percent
Mumbai 2.44 percent
Ahmedabad 3.22 percent
Chennai 3.10 percent
Hyderabad 3.16 percent
Pune 3.09 percent
Kolkata 3.96 percent
Source: 99acres

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Rohit Gupta

Checking on rental yield will really help one to know

whether the investment will be beneficial or not.
The biggest drawback of buying a property for investment
is its illiquid character as most properties take time to be
sold out.

“Diversify your investments to rectify your

returns.”

REIT:
REIT stands for real estate investment trust. It’s a great
alternative to real estate. It solves the drawback of liquidity
that real estate investments suffer. It works in a similar
manner to mutual funds. In mutual funds, a pool of money
is collected to invest in various schemes, and similarly, the
pool of money is collected to invest in REITs. A Demat
account is required to purchase REITs. REITs are traded
just like shares or exchange-traded funds. If someone
wants to invest in real estate but doesn’t have large chunks
of money and still wants to take the advantage of the
growth in real estate, then REIT can be a good option. Here
one can have ownership of the real estate for a much lesser
amount, maybe even as low as Rs.300. Here diversification
of real estate is possible and it is professionally managed.
Liquidity is the best part and it stops all the hassles of
searching for a buyer, talking to a broker, showing the
property, and checking the legality and paperwork. They
allow for fractional ownership depending on the amount
people invest. The risk is less as 80% of the properties are
completed commercial properties. Any interest or dividends
received can be exempted from taxes depending on tax
concessions received by REITs. These are regulated by

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SEBI and cannot be started by any other person just like

that. They invest in properties that are ready or more
income-generating like Commercial properties, as the rent
is more here. More rental yield means more profit for the
investor.
90% of the rental income received is distributed to
investors. Limited options of the Embassy, Mindspace, and
Brookfield BRRL are available. One can even think of
mutual funds that invest in REITs. REIT is one of the best
options to invest in real estate with only a small amount.
NOTE: Mutual funds will be discussed in Chapter 5.

Government Securities and Bonds:

Government securities are debt products issued by the
central and state governments of India. The government
issues such bonds to have liquidity as they require funds for
the purpose of infrastructural developments. The bonds
issued by the government are called government bonds or
G-sec and are issued to either fund certain development or
operational activities or when it is going through a liquidity
crunch. Such bonds are considered to be a lower risk as it
is highly unlikely for the government to have the
inadequate cash flow to falter on interest payments. The
bonds issued by private organizations are called corporate
bonds. The minimum amount for investment is Rs.1000
with no capping. G-sec is primarily a long-term investment
tool issued for periods ranging from 5 to 40 years. Bonds
have become an ideal investment instrument for investors
who do not want to put all of their eggs in one basket. A
basket should have an idle combination of debt and equity
to effectively create a diverse portfolio of the guaranteed
corpus. That’s why investors look towards bonds as a

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steady income source over time. However, similar to other

financial instruments, bonds also include risks. The best
way to mitigate the risks involved is to choose AAA-rated
public sector companies.
Bond prices are inversely proportional to market interest
rates and are dependent on various factors such as the
credibility of the issuer, maturity, and interest rates in the
market.
Different types of government securities and bonds:
1. Fixed-Rate Government Bonds: These are
issued by the government to offer a predetermined
amount as interest at regular intervals.
2. Sovereign Gold Bonds: These are a type of bond
that provides an alternative to purchasing physical
gold as tradable security. The Reserve Bank of India
issues SGB on behalf of the Indian government,
denominated in grams of gold.
3. Floating-Rate Government Bonds: It has
fluctuating interest rates and provides different
interest payments to bondholders from time to time.
If the investors want to mitigate the risk profile to a
negligible level and can wait for a minimum period of 5
years, then government bonds and securities are the ideal
investment options. Such bonds are ideally suited for
investors within the 30% tax bracket. Government bonds
provide guaranteed pay-out and principal repayment and
can be utilized as an effective addition to the core portfolio.

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Gold:
Gold is the favourite investment instrument for a majority
of the investing population in our country and has
consistently proven to be a powerful inflation hedge. There
are broadly 4 ways in which gold can be bought - Gold
exchange-traded funds, gold mutual funds, sovereign gold
bonds, and physical gold. When bought in physical form,
safety is the biggest issue. Making charges are in the range
of 5-40%. Apart from that, a GST of 3% is charged.
Gold mutual funds are a good option for someone looking
to get exposure to gold with as low as Rs. 1000. Sovereign
gold bonds are the best option to invest in gold, for people
with sufficient time and for those who are looking for gold
as an investment option. Here we get some interest every
year till the locking period of 8 years currently. The amount
received as capital appreciation after the locking period is
tax-free.

Tax on Sovereign Gold Bond (SGB)

STCG (short-term capital gain) -- If these are sold before 3
years of purchase, the gain is added to income and taxed as
per the income slab.
LTCG (Long-term capital gain) -- If these are sold after 3
years of purchase, 20% tax (if indexation) is availed, and
10% if not.
Indexation is a method used to adjust the purchase price of
an investment to reflect the effect of inflation on it.
It increases the buying price of the asset, resulting in higher
profits. At least 5-10% of one's portfolio should be allocated
to gold as it is an evergreen commodity and will never lose
its shine.
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Rohit Gupta

Here the investor saves on the following:

• 3% GST on the purchase of gold.
• 1% TDS which is charged if the physical gold is of more
than two lakhs rupees in value.
• GST on the making charges.
• Long Term Capital Gain if held till maturity or via HUFs
(Hindu Undivided Family) and Trusts.

Kisan Vikas Patra (KVP)

KVP is basically an initiative by the Indian Government to
encourage small savings in our country for the investor's
secure future. It is suitable for investors who are reluctant
to take risks, have surplus money, and are looking for
assured returns. KVP is a small savings instrument that
facilitates people to invest in a long-term savings plan. Any
resident Indian can invest in the KVP scheme and can
obtain a certificate either jointly or individually, or in the
name of a minor. It is a fixed-rate scheme designed to
double your investment after a predetermined period of
time. The main target audience for this scheme is people in
semi-urban and rural areas. The minimum investment
starts from Rs. 1000 with no maximum limit. It offers tax
benefits of up to Rs. 1.5 lakh under Section 80C of the
Income Tax Act, 1961. It can be bought from the nearest
post office and is a good option to accumulate wealth over
time without any fear or risk.

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Public Provident Fund (PPF)

Anyone looking for a safe investment option to save taxes
and earn guaranteed returns should open a PPF account. It
enables one to build a retirement corpus while saving on
annual taxes. A PPF account can be opened by an adult for
themselves or on behalf of a minor. It has a lock-in period
of 15 fiancial years as financial year in which the account is
opened is not counted. Deposits can be made in a lump sum
or in installments. The deposits must be made every
financial year during the tenure and such deposits are
exempted from income tax u/s 80C. A minimum deposit
amount of Rs.500 per financial year is required to keep the
account active. If people fail to do so, a penalty is charged.
A PPF account can be opened at either a Post Office or at
any nationalized bank like the State Bank of India or
Punjab National Bank, etc. These days, even certain private
banks like ICICI, HDFC, and Axis Bank among others are
authorized to provide this facility. PPF is one investment
vehicle that falls under the Exempt-Exempt-Exempt (EEE)
category. This means that the principal invested, the
interest earned as well as the maturity amount are tax-free.
PPF is the best instrument to have wealth creation by
secure means with a tax-saving option.

Sukanya Samridhi Yojana (SKY)

It is a government-backed small savings scheme for the
benefit of the girl child. SSY accounts can be opened at
designated banks or post offices. It has a tenure of 21 years
or until the girl child marries after the age of 18. The SSY
scheme comes with a higher interest rate along with several
tax benefits. From a taxation perspective, SSY investments
are designated as EEE investments. This means that the

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principal invested, the interest earned as well as the

maturity amount are all tax-free. Under existing taxation
rules of SSY, the tax benefit on the principal amount
invested is up to Rs 1.5 lakh per annum under Section 80C.
It is considered to be a good option to invest in a girl child’s
future requirements of higher education and marriage.

“Returns matter a lot. It is our capital”.

-- Abigail Johnson

Fixed Deposit (FD)

A fixed deposit is a type of term investment offered by
several banks and non-banking financial companies
(NBFC). FDs are one of the most popular ways to save
money. They are a safe investment, offer good returns, and
are easy to start. An FD investment is valuable in many
ways:
• Offers an opportunity to earn a higher rate of interest on
surplus funds.
• Yields assured returns.
• Minimum duration is 7 days and the maximum is 10
years.
• Senior Citizens get a higher interest of 0.5% on the FD.
• It has the flexibility for withdrawal at the end of tenure or
receives monthly, quarterly, half-yearly, or yearly pay-
out.
• Highly liquid as you can withdraw the amount during the
tenure also with some penalty.

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• Loan can be availed against an FD in case of financial

emergencies.
• Not dependent on market conditions.
During Covid19, people having fixed deposits were not
impacted by the stock market condition as they knew their
money is stable and they will get returns based on the fixed
deposit document's terms and conditions.
People with less risk appetite can have FD for a stable
portfolio.

“In investing, what is comfortable is rarely

profitable.”
– Robert Amott

Till now we have discussed gold, real estate, REIT,

Government Security, PPF, Sukanya Samridhi Yojana,
Senior Citizen Saving Scheme, and FDs. All these options
provide stable and secure returns and are suitable for
people having low-risk appetites. These investments
require huge amounts to be invested for a long tenure to
reach a specified goal.
Let me give you an example:
Ramesh wants to have a corpus of Rs.1 crore after 20 years.
He chooses one of the investment products discussed above
that gives 8% return.
For generating One crore corpus with 8% returns, Ramesh
has to invest 17,000 each month for the next 20 years.
NOTE: We have not mentioned any return percentage
with any product as they keep changing with each coming

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quarter. Here we have considered 8% which is on the

higher side.
Rahul – “Bhaiyya, the options discussed till now require
huge investment with less return. Is there any other option
that can provide better returns?”
Rohit – “Yes, we have many instruments under equity for
better returns. Let me explain it in detail in the next
chapter.”

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Activities:
1) You might be having a real estate loan. If not,
someone in your circle might be having it. Calculate
the actual amount paid in full tenure of payment of
the loan.
2) Find out the current return percentage range of the
instruments discussed in this chapter.
3) Try to find the amount required for generating
Rupees one crore corpus for each instrument
discussed till now.

Summary:
1. Fixed income instruments give similar types of
returns.
2. Fixed income instruments are suitable for low-risk
appetite people.
3. The use of Fixed income instruments to create a
corpus will make a steady stream of cash flows.

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 Chapter5 Equity

“ Someone is sitting in shade today because

someone had planted a tree long time ago.”
– Warren Buffett

Equity
Equities provide you with a chance to build a diversified
portfolio. It is a better option compared to the investment
avenues discussed in the last chapter, as they give good
returns. Equities are the best way to participate in the
growth of any business by investing in it. There are
different ways to invest in equities. We will be discussing
the same here.
 Retire Early and Rich

Direct stock
Direct Equity -- Investors buy stocks of companies listed in
the stock exchange using their Demat account. With this,
one may become a partial owner of those companies and
with the growth of the company, stock prices increase. This
feature helps the investor in making profits.
For Example: Suppose one buys 100 stocks of Xyz Company
at Rs.100. Within a few days of purchase, the stock prices
go up to Rs. 110. Then the profit that the investor will be
making on it is 110-100 i.e. Rs. 10 per share. The number of
shares bought has been assumed to be 100. So, the total
profit comes to Rs. 1000 (100x10). Similarly, if, after the
purchase, the stock price goes down to say Rs.95, then the
loss the investor will be making on it is 100 -95 i.e. Rs. 5 per
share. As the number of shares has been assumed to be 100
so, the total loss becomes Rs. 500 (100x5).
There are so many businesses around us and we might be a
consumer to quite a few of them. One can buy the stock of
any such company (if listed on the stock exchange) based
on the popularity and performance of the brand. If one does
not buy the stocks of a popular brand, then one might miss
out on not becoming part of its growth story. We have so
many people working in IT industries, pharma companies,
and manufacturing industries. They know that their
companies are the best in the business and yet, they do not
invest in the growth story of their company and lose the
profits that they could have made by investing in them.
However, before investing in stocks through direct equity,
there are various questions an investor needs to ask
himself.
Questions like:

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1. What is the business of this stock company?

2. What are the future prospects of the industry and
this company?
3. Till when will I remain invested?
4. Am I investing because someone told me or do I
really see value?
There are many questions like these that one needs to ask
oneself before and after investing. Some people use
fundamental assessments, whereas others use technical
analytical methods to decide which stock to buy. If people
don’t want the hassles or don’t have time to do such an
analysis, then there are ways, as stated below, to
nevertheless, invest in equities.

National Pension Scheme (NPS)

NPS is a social security initiative by the Central
Government. It is a pension cum investment scheme
launched by the Government of India to provide old age
security to the citizens of India. One can invest in a mix of
equity, government bond, corporate debt, and alternative
assets. Once the decision is made on the asset mix and fund
manager, the money is invested in specific schemes in these
4 asset classes.
Withdrawals from NPS can be understood as :
Withdrawal on Lump Sum Pension
Maturity 60% 40%
Before 60 years 20% 80%
Death of subscriber 100% 0%

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The lump Sum received in any of the scenarios is tax-free

income. Pension income is taxable as per your salary
bracket.
It is a good scheme for anyone with a low-risk appetite and
who wants to plan for retirement with a regular pension
(income) in the retirement years. It is a boon for individuals
who retire from private-sector jobs. A systematic
investment like this can make a massive difference in
someone’s life, post-retirement.
The major benefits of NPS are as follows:
1) It is the world’s cheapest retirement plan.
2) It is a voluntary scheme and is open to all Indian citizens
falling between the age group of 18 to 60 years.
3) The scheme comes with a lot of flexibility which allows
people to choose their investment options.
4) One can also switch between different investment funds.
5) The NPS account can be operated from anywhere in
India.
6) The plan involves transparent investment norms.
7) It helps one to plan retirement with the assurance of
receiving assured returns at retirement.
8) The investor can get additional tax benefits under
Section 80 CCD.
Pension Fund Regulatory and Development Authority
(PFRDA) regulates the operations of NPS. NPS
contributions can be made through both online as well as
offline means. NPS fund managers manage the
investments and therefore the investor is spared the hassle
of tracking the investments. It is a good scheme for people

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who want to take advantage of equity and have a low-risk

appetite as well.

Unit Linked Insurance Plan (ULIP)

ULIP is another way to get the benefit of equity. It is a
combination of equity and investment. By investing in it,
one can invest in a mix of equity, government bond,
corporate debt, and alternative assets. There are fund
managers in the insurance companies who manage the
investments and therefore the investor is spared the hassle
of tracking the investments. ULIPs allow us to switch our
portfolio between debt and equity based on our risk
appetite as well as our knowledge of the market’s
performance. Benefits like these which offer investors the
flexibility of switching is a huge factor contributing to the
popularity of these investment instruments. There are
several points to keep in mind before investing in any ULIP
scheme. The first is to make sure that the investment in
such a policy is in line with the future goal we might have
in mind. What are the investment goals that we might be
looking at? Since a part of the premium is going to be used
for investments, and since market risks are present, does
that work? If a fixed sum of money is required at maturity
or death of the investor, the total investment may need to
be carefully calculated. They have a lock-in of 5 years. It
means money cannot be redeemed in those 5 years.
Generally, ULIP plans are transparent, but it is necessary
to check all the charges which will be levied. Comparing
different plans offered by different insurance companies
will give the option to choose the best plan. Since
investment is envisaged, it is important to check

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everything. These are best suited for individuals with a

long-term financial plan of wealth creation and insurance.
Whether it is for retirement, children’s education, or other
financial goals, a ULIP continued till maturity works as an
advantage. It gives the investor the dual benefit of savings
and protection, all in a single plan.
From a taxation perspective, Ulip investments are
designated as EEE investments as they have involvement
of insurance. This means that the principal invested, the
interest earned as well as the maturity amount are all tax-
free. It is one of the best investment for individuals who are
not savvy with equity but would like to get benefit from
long-term capital appreciation.

Exchange Traded Funds (ETF)

ETF is a financial security that tracks or replicates the
performance of an underline asset. The underline asset can
be equity, index, gold, silver, sector, bonds, currency, or
global index. Exchange Traded Funds are seen as attractive
investment bets given their low cost, stock-like features as
well as the tax exemption that some categories of ETFs
offer.
They are considered to be a fusion between a stock and a
mutual fund and can be sold and purchased just like any
other stock on the stock exchange. The major requirement
to invest in ETF is to have a Demat account.
There are several advantages of Exchange Traded Funds.

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 They are considered to be quite cost-efficient.

 They allow the investors to create a diversified
portfolio for themselves.
 They allow investors to enjoy tax exemptions when
traded in large volumes.
 They can be traded anytime during the day when the
market is open. In other words, the trading can
continue throughout the day. The only issue is that
we need to buy at least 1gm. of gold.
ETF is one of the most suitable instruments for investors
who want to have diversification at low cost.

“Mutual funds were created to make investing

easy, so consumers wouldn't have to be burdened
with picking Individual stocks.”
– Scott Cook

Mutual Funds:
A mutual fund is a pool of money managed by a
professional Fund Manager. It is a trust that collects money
from a number of investors who share a common
investment objective and invests the same in equities,
bonds, money market instruments, or other securities. The
income/gains generated from this collective investment are
distributed proportionately amongst the investors after
deducting applicable expenses and levies, by calculating a
scheme’s “Net Asset Value” or NAV. Simply put, the money
pooled in by a large number of investors is what makes up
a Mutual Fund. There are fund managers who manage the
investments and therefore the investor is spared from the
hassle of tracking the investments on a regular basis.

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Mutual funds have a full universe of funds ranging from

debt to equity. They are broadly classified under the asset
class:
1) Equity MF —They primarily invest in shares/stocks of
different companies. They have the potential to generate
significant returns over a period. Hence, the risk associated
with these funds also tends to be comparatively high.
2) Debt Funds — They invest primarily in fixed-income
securities such as bonds, securities, and treasury bills. They
invest in various fixed-income instruments such as Fixed
Maturity Plans (FMPs), Gilt Funds, Liquid Funds, Short-
Term Plans, Long-Term Bonds, and Monthly Income
Plans, among others. They can serve to be a great option for
passive investors looking for regular income (interest and
capital appreciation) with minimal risks.
3) Money Market funds -- Investors trade stocks in the
stock market. In the same way, investors also invest in the
money market, also known as the capital market or cash
market. The government runs it in association with banks,
financial institutions, and other corporations by issuing
money market securities like bonds, T-bills, dated
securities, and certificates of deposits, among others. The
fund manager invests the investor’s money and disburses
regular dividends in return.
4) Hybrid funds – They are an optimum mix of bonds
and stocks, thereby bridging the gap between equity funds
and debt funds. The ratio can either be variable or fixed. In
short, it takes the best of two mutual funds by distributing,
say, 60% of assets in stocks and the rest in bonds or vice
versa. Hybrid funds are suitable for investors looking to
take more risks for ‘debt plus returns’ benefits rather than
sticking to lower but steady income schemes.
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Let us understand the major types of Equity Mutual funds

that are widely used:
1) Large-cap – They invest in large companies, primarily
the top 100, in teams of market capitalization.
2) Midcap -- They invest in companies primarily in the
101-250 bracket in teams of market capitalization.
3) Small cap -- It is one of the most aggressive categories
of equity mutual funds because the stocks chosen under
this category is of companies that are listed after the 251st
rank in terms of market capitalization.
4) Flexicap -- there is no market cap linked restrictions
for investment in largecaps, midcaps and small caps
category.
5) Multicap – They need to have a minimum of 25% each
in large caps,midcaps and small caps category.
6) Equity Linked Savings Scheme (ELSS) -- These
are the tax-saving mutual funds that invest in equity
instruments to create a sizeable corpus. These funds allow
investors to reduce the taxable income by up to Rs 1,50,000
per financial year by investing that amount in ELSS funds.
It has a lock-in period of 3 years which is the lowest as
compared to any other tax-saving tools under section 80C.
7) Index funds -- Index funds are passively managed
funds in which the portfolio includes all the stocks of an
index. These are used to diversify the equity investments
through the index to grab the overall growth and normalize
the associated risks of equities.
8) Thematic funds -- Thematic mutual funds invest in
the stocks of companies that are based on a particular
theme. The theme can be international exposure, rural
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India, MNC, energy, PSU, etc. A theme may comprise

multiple sectors which have the same flavor. These funds
are most suitable for experienced investors.
9) Sectorial funds -- Sectoral mutual funds are equity
funds that can only invest in the companies which belong
to a particular sector. These funds are considered risky and
are suitable for experienced investors as these funds can
provide exponential gains or losses depending on the
market condition. Generally, most of the stocks associated
with a particular sector tend to follow similar trends.
10) Value/Contra funds -- The value-oriented funds or
contrarian funds are mutual funds that bet on
underperforming stocks which are available at cheaper
prices. These funds are risky but the right value/contra
fund can give significant returns in the long term. Investors
with a high-risk appetite can choose these schemes for
long-term gains.
11)Large and midcap funds -- This category of equity
mutual fund uses stocks of the top 250 companies listed in
the Indian stock market. It is a combination of large-cap
and mid-cap mutual funds. These funds invest in equity
instruments of large-cap and mid-cap companies. The
large-caps are stable and less risky while the mid-caps are
risky but have better opportunities for growth. The
combination allows investors to gain high returns in long
term with a moderate to high-risk factor.
12) Focussed funds -- As per the norms of SEBI, a
focused fund can only invest in a particular number of
stocks belonging to a particular number of sectors. The
number of companies is 20-30 in number. These funds
limit the diversity in the portfolio as over-diversifying the
portfolio can reduce the returns.
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Few tips for Investing in Equity Mutual Funds:

1. Know Your Investment Objective: Investment in
equity mutual funds must be done to achieve a certain goal.
Investment objectives can be wealth creation, retirement
planning, buying an asset, etc. The tenure to achieve the
goal must be kept constant and the fund selection should
be done accordingly.
2. Know Your Risk Appetite: Investors of equity
mutual funds must know their risk tolerance level. A
variety of equity funds are available in India with different
risk factors. An investor must choose the one which
possesses the risk that is in line with the investment
objective and risk tolerance level.
3. Maintain Discipline: Discipline is the key to being a
successful investor in equity mutual funds. Decisions made
in a panic must be avoided. SIP investment must be
continued until the objective is reached. By not investing
during the bear market, an investor might miss the
opportunity to buy more units at a cheaper price.
4. Stay Updated: Equity mutual funds are subject to
market risks and investors must keep a track of market
trends and updates. It is not essential for a SIP but better
decisions can be made with the help of the proper
knowledge of the market trends. If a market is falling,
additional purchases can be made on SIP to maximize the
output.
5. Regular Monitoring: Equity mutual fund investors
must check their investments at regular intervals and make
a decision to refurbish the portfolio or SIP amount if
needed. If the portfolio is constantly facing loss, assistance
from an expert can be taken to alter the investments.

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6. Diversify your investments: Don’t put all your eggs

in one basket. Instead of investing all your money in one
fund, it is better to spread the investment amount over a
number of schemes. The chances of loss get reduced and
the diversification allows consistent growth.
7. Don’t Focus on NAV: NAV decides how many units
will be assigned to the investor. A higher NAV does not
mean a better fund or a lower NAV does not mean the
growth will be faster. The growth of NAV must be checked
by percentage rise or fall. 1 unit of a fund with a NAV of Rs
1000 is equal to 100 units of a different fund with a NAV of
Rs 10.
8. Selection of Scheme is the Most Important Part:
The selection of a mutual fund must be done after
considering every aspect of a fund including volatility, the
risk-to-reward ratio, experience, and strategy of the fund
manager, portfolio structure, investment style, stock
selection style and past performances under different
market conditions. Past performances must not be the only
factor to consider as a fund doesn't need to repeat what it
has done in past, but it can surely give an idea of the ability
of the fund.
The chance of any investor getting confused is high here as
there are so many options available. So, sometimes finding
a fund suiting his needs becomes an important aspect. It
requires expert guidance to decide on this. Financial
advisors could be the best possible available option to get
help in case of confusion, as they are deft with the
amendments and current scenario and are supposed to
prepare or evaluate financial document summaries,
investment performance reports, and income estimates for
their clients.

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Rohit Gupta

Major difference between buying a stock and a mutual

fund, that most of the people don’t consider is:
Stock Price Mutual Fund
When stock prices go When NAV comes down,
down, you have to select you need not worry and
stocks efficiently else you can buy without worry as
might get stuck with a crap fund managers will buy
stock that might not come the right stocks at right
up for various years. time.

“Courage taught me no matter how bad a crisis

gets, any sound investment will eventually pay
off.”
– Carlos Slim Helu

After going through different instruments of debt and

equity, one might have understood that every instrument
has its own pros and cons. As an investor, we need to
understand in and out of different financial instruments
and then choose what suits our financial goals. Our
financial condition and commitment differ and so the idea
of any one size fitting into all strategies have no relevance.
Personalized investment solution is the need of the hour
and this need could be fed with the help of financial
advisors. As their major role is to prepare a particular
financial plan for each person and guide people throughout
the investment journey. Risk-taking ability, future
financial goals and investment horizon vary from person to
person. They are supposed to manage clients’ portfolios up
to date with the requirements of the market. Most investors

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 Retire Early and Rich

prefer a combination of debt and equity to have a stable and

robust portfolio in different market scenarios. For deciding
how much percentage of investments should be in equity
and how much should be in debt, a simple formula of 100-
Age can be used.
For Example: As your age is 25, 100-25 is 75. So, you can
invest 75% in equity and 25% in debt instruments.
Rahul – “Thanks bhaiyya. Now I think I can start my
investments.”
Rohit – “No Rahul. Wait for a few more moments. Let me
make you understand the important concept of inflation
which is commonly ignored by people.”

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Rohit Gupta

Activities:
1) Find out the current return percentage range of the
instruments discussed in this chapter.
2) By using the percentage from Activity 1, try to find the
amount to be invested for reaching one crore in 20 years
by using each of the instruments.
3) Compare it with the last chapter chart you prepared, it
will help you to choose the correct investment
instrument.
4) Check your debt % and equity % based on your age.

Summary:
 Equity investments have more risk.
 The risk will be less if we understand the instrument
completely before investing.
 Equity investments give better returns than fixed
income instruments.
 Equity investments can create huge corpus with low
amounts.

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 Chapter6: Inflation
“ Inflation takes away from the ignorant and
gives it to well informed.”
– Venita VanCaspel

Rohit – “Rahul, just imagine you are a married person

and you have an infant. If this would be the scenario, then
how much do you think you would require for your child’s
education after 18 years from now?”
Rahul – “As per current statistics, as per my calculation I
would require Rs 10 for my child’s higher education.”
Rohit – “Rahul, Rs.10 Lakhs is correct as per the current
requirement but you need to consider inflation which is
the most important aspect to consider before planning for
investments.”
Rohit Gupta

Rahul – “Yes, I did not consider it as I am not aware of it,

can you please explain in detail about Inflation, as I never
knew it affects my investments as well?”
Rohit explains -
“Inflation is the regular increase in prices of goods and
services. It makes money in your hand lose its value with
each passing year. As prices keep increasing, inflation leads
to higher prices and lower purchasing power.
Inflation happens because of two things:
1) Demand - Pull Inflation – Growing demand for goods
and services leads to insufficient supply. If something is in
short supply, you will be bound to buy it at a higher price.
For Example: In 2020, there was a global economy shut
down due to the coronavirus pandemic. As the demand for
Covid19 medicines kept increasing with more patients, and
the supply was less, so prices kept increasing.
Demand-Pull inflation leads to cost-pull inflation.
2) Cost–pull Inflation – When raw material prices increase,
businesses in turn increase the prices regardless of
demands.
For Example: An increase in the cost of petrol results in an
increase in transportation costs which in turn increases the
cost of vegetables and other things we use in daily life.
3) Built-in inflation - As demand-pull inflation and cost-
push inflation occurs, employees may start asking
employers for a raise. Workers may start asking businesses
for higher salaries.
Things that we are able to buy for Rs.10,000 today might
require Rs.19,670 after 10 years considering the 7%

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 Retire Early and Rich

inflation rate. Similarly, after 10 more years i.e. 20 more

years from now, the same item would attract a cost of Rs
38,696. This price will keep doubling every 10 years,
making the price of the same item go up by Rs 1,49,744
after 40 years. These are worrying figures that warn us to
plan in accordance with inflation for all future expenses.
This is the reason, investments should be planned
considering inflation in mind, but sadly people are not
aware of it and it is often ignored resulting in financial
blunders.”
By now Rahul had started understanding the correct
meaning of inflation and how it’s impacting his life.
Rahul – “Ok, bhaiyya. Now as I have understood inflation.
Can you please tell me, how much I would require planning
for my child’s higher education 18 years from now?”
Rohit -- “Rahul your Rs. 10 lakhs requirement would have
become 55 lakhs considering 10% as the rate for education
inflation.”
For a few minutes, Rahul was shocked to hear the figure,
but then he said: “Thanks for making me realize the correct
amount that I would require. It is a staggering amount.”

“The luxuries of yesterday have become

necessities of today.”

Lifestyle inflation:
Rahul - “Sometimes I think my expenses are increasing so
much. Is this because of inflation?”
Rohit – “Yes, it is all because of the lifestyle inflation.”
Rahul – “Please explain this as well to me in detail.”

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Rohit Gupta

Rohit – “Lifestyle inflation is inflation that happens when

you allow your spending to gradually increase with the
increasing income over time as you desire a more luxurious
and comfortable lifestyle. Lifestyle inflation is what causes
people to get stuck in a cycle of paycheck-to-paycheck life
where they just have enough money to pay the bills and
wait for the next salary to get credited to their bank
accounts.
For Example: Around 10 years back, people used to wear
unbranded clothes, watches, and shoes but now most
people wear branded clothes, shoes, and watches.
This is what lifestyle inflation does to you. It creates
luxuries of life to become necessities. The salaries or
business incomes of people have not increased at the same
pace as their lifestyle inflation. So, planning a proper
lifestyle to combat inflation has become very important.
Below are some of the ways by which we can reduce the
impact of lifestyle inflation on ourselves.
1) Calculate how much your raise is after calculating and
deducting all the taxes.
2) Celebrate the rises, but do proper calculations before
thinking of buying a car, or a house.
3) Be aware of your spending choices.
4) Think about extra funds towards paying loans ,credit
card bills and doing investments by checking which is
more appropriate.
5) Keep some percentage of increased money every month
for spending extravagantly.
6) Keep a major percentage of increased income committed
for long-term investment goals.”

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 Retire Early and Rich

“Inflation creates a big hole in the pocket of non-

planners.”

Family Inflation
Rahul - “Ok I have understood lifestyle inflation. But is it
the same for all people or it is different for different
people?”
Rohit – “You have asked a very good question. People need
to know about their family’s inflation. A country’s inflation
can be checked by anyone by going to the government
website or by various other mediums. But knowing the
family inflation is important as they need to plan
accordingly.”
Family inflation is a form of inflation that depends on
various parameters like the number of family members, the
age group they are in, the requirements they have based on
their current lifestyle, and the lifestyle they want to have.
For calculating family inflation, you can use below steps:
1. Check the monthly expenses of your family currently.
2. Compare it with last year’s monthly expenses of your
family.
3. The difference between both expenses is your family’s
inflation.
Fact:
After calculation, you would see that it is more than 10%.
Hence planning should be done not only considering
country inflation but family inflation too.
Check the age of your family members and the expenses
that accrue based on the lifestyle they currently have.

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Rohit Gupta

Stated below are the basic expenses of various types :

Expense Type Expenses

Housing House Rent/Loan, Apartment maintenance charges,

Property Tax, Miscellaneous expense

Utilities Electricity, Water, Gas, Phone Bills, Cable tv,

Newspapers, Internet, Misc. expense

Household Household(Maids, cook, Driver, Nanny), House

Repairs, Home appliance, curtains, linens, Carpets
etc,Misc. expenses

Food Groceries, dining out

Health Care Medicines, Doctor consultation, Eye-care, spectacles,

lenses, Regular lab tests, Dentist and dental treatment,
hospoitalisation

Family Care Child Eduction fees, Child Care – day care/care taker,
Children hobby classes, Monetary Support for
dependents (Parents or Children), Misc expenses

Transportation Vehicle Maintenance and Repair, Office/School Bus

Cost, Petrol/Diesel, Misc. expenses

Travel Short Vacation, Long Vacation, Family Visits, Misc

Recreation and Health Club. Gym Fees, Hobby Classes, Movies and
Entertainment Sports Events, Dining Out (Discertionary) Misc.

Miscellaneous Charitable Contribution, Legal Expenses, Gifts,

emergency expenses

“It’s not how much money you make, but how

much money you keep, how hard it works for
you, and how many generations you keep it for.”
—Robert Kiyosaki.

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Power of compounding
Compounding is the process in which an asset’s earnings,
from either capital gains or interest, are reinvested to
generate additional earnings over time.
Compounding creates wonder in long term. Albert Einstein
had once quoted “Compound interest is the eighth
wonder of the world. He, who understands it,
earns it. He who doesn't, pays it”.
When it comes to calculating interest, there are two basic
choices: simple and compound. Simple interest simply
means a set return percentage of the principal amount
every year. Compound interest is the situation where your
principal generates some returns and which is added to the
main principal before investing. This creates exponential
returns.
For Example:
Time Simple Compound
period Interest(SI) Interest(CI) @10%
@10%
Start 10000 10000
1 11000 11000
2 12000 12100
5 15000 16105
10 20000 25937
20 30000 67275
30 40000 174994

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Rohit Gupta

Here you can see, after 1 year, the amount is the same for
both SI and CI. Compounding starts to be seen from the
2nd year onward. After the 2nd year, the amount of SI is
Rs. 12000, but CI is Rs. 12100. It’s the difference of 100
only as of now. Once this is continued for the next 5 years
the amount from SI will become 15000 but the amount
from CI will become 16105. It’s the difference of Rs 1105.
After 10 years, the amount from SI rises to 20000 but the
amount from CI has now become Rs. 25937. It’s a big
difference of Rs. 5937. This continues and in 30 years, an
amount of 10000 becomes 40000 by SI but the amount
from CI will become Rs 174494. You can now see the magic
of the power of compounding in longer durations. So, the
earlier you start the better it will be.
Rohit – “So, Rahul by now you would have understood that
our investments should be able to beat inflation and the
power of compounding can create a huge corpus.
This can help you to lead a successful, secure, and beautiful
life in the future with your family.”
Rahul – “Yes, bhaiya, however, I have one question here. I
have a few family members of mine. Some of them are in
their '30s, some are in their '40s and some are in their 50s.
Will the investment strategies be the same for all of them?”
Rohit – “No Rahul, it will not be the same for them. Let me
explain the investment analysis in the next chapter.”

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Activities:
1) Ask your parents or any elderly person what is the
minimum value they remember of anything they are still
using. Compare the percentage growth from its lowest
price.
2) Check the price of the shoes, watches, mobiles, and
clothes you used 5-10 years back and what is their cost
today. How much is the percentage growth from the
previous price?
3) Check the statistics of salaries for people 5 years ago and
what is it now. How much is the growth? How much is the
percentage growth from the previous salary?
4) Compare and check the percentage growth in expenses
and income?

Summary:
1) Inflation is reducing the purchasing power with each
coming year.
2) Lifestyle inflation is hitting us unknowingly as luxuries
have become necessities.
3) Family inflation is a major concern for all people and this
should be taken with ultimate seriousness.

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 Chapter 7 Investment Analysis
“The Investments of today are the foundations of
a dream life. The luxuries of today are the
foundation of a disastrous life.”

There is a huge meaning attached to investments. Proper

investments for a trouble-free life should be one of our
main pursuits of thoughts. Earning a livelihood is not
enough for living. Proper investments assure us a proper
life. There are many instruments and policies that promise
good returns over a period. However, as mentioned before,
every person has a different need and a specific purpose in
life. It is important to understand various parameters of
investments and returns before opting for an investment
proposition.
 Retire Early and Rich

This is an important portion of the book where important

aspects of investment have been discussed, dissected, and
analyzed. It is pertinent to weigh all the options and align
them as per individual needs.

Investment policies:
Investment policies are bought with different investment
objectives. Investment preferences depend on various
things like risk tolerance, constraints on the investment
portfolio, and how the investments are being managed and
monitored by several companies in the market today. They
are all prime examples of the same book with different
covers. Presentations are different for them, but the end
product is more or less the same. As personal loans come
in various forms like wedding loans, travel loans, home
renovation loans, pension loans, and medical emergency
loans, similarly, investment policies are having different
types like lump-sum amounts, pension amounts, child
education policies, retirement policies, or even gradual
release of funds every month/quarter/year. We as humans
have emotions and we flow with that.
If we think about retirement, we take retirement or pension
policy and believe that it will serve our purpose. If we have
the goal of child education, we take some policies related to
child education benefits. To some extent, these policies
help people to get tax benefits. But what we miss
calculating is the impact of inflation on our lives.
For Example: A friend, Rakesh is 30 years old and his child
is 2 years old today. He and his wife want to plan for the
child’s graduation which will be 16 years from now. As per
current costs, he plans for Rs.10 lakhs for his child’s
education. However, 16 years from now, the education cost

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Rohit Gupta

of Rs. 10 lakhs will become Rs. 46 lakhs, considering 10%

inflation in education.
We have already understood this concept in the last chapter
on inflation. This is just a revision. Had he planned for Rs.
10 lakhs then he would have been in big trouble as the
actual cost required is Rs. 36 lakhs more than what he
would have planned for. This is what is happening to most
of the people around us today. When asked about what was
the reason for buying XYZ policy, they say - since it was a
retirement policy or pension policy, or child education
policy, so I bought it. The financial year was about to end,
so we bought the policy for tax-saving purposes. A person
who was known to me and who is an advisor has told me
that it’s a good policy, so I bought it. These are some
common statements of most of the people. Are you also one
of them?
You might have understood now what is lacking and what
needs to be changed. If you are not planning the amount as
per the actual requirement of the future, then somehow you
will be missing big on the goals you have planned for.
For ease of analysis, requirements have been broken up as
per age groups of individuals in the middle-class
categories of the working population.

Rich people prioritise investments and growth,

and poor people prioritise luxuries and survival.

The age group of 22-35

In the age group of 22-35, people are mostly young and they
think of life to be on their toes. They think like everything
will happen as they wish and think. People in this age group

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might be doing some job or business, going for higher

education, or being homemakers for their families. We will
not be considering the students going for higher education
here as they are yet to start earning. But definitely, this will
help them when they start earning. Most people in this age
group have financial responsibilities of completing their
education loan, education expenses, other expenses, and
supporting their family. In this age group, they have time
and energy to learn and grow in their lives. Saving some
amount of money, maybe 15-20% of their take-home
salaries towards building a big corpus can start from here.
Instead of investing in the name of child education, child
marriage, and retirement planning, they should have an
amount and time period in their mind and calculate the
same in consideration of the rate of inflation. As people in
this age group may wonder how can we think of child
education, child marriage, and retirement planning. These
goals are very far. We are still very young to think about
this. What is the hurry? Let’s just enjoy the money we are
getting. But the bigger picture is that if someone starts
planning early in life, then accomplishing these goals for
the future would be easier for them. They would have a long
time to take the benefit of compounding and if they start in
their 20s, they can actually retire in their 40s. They should
have a goal amount and time period in their mind
considering rate of inflation.It is this age, where a good
foundation for a complete life has to be built and clear
understanding of the difference between needs, desires,
and luxuries has to be developed. They might have learned
this from their parents at younger ages as well. But the
actual implementation of it starts when you start getting
money in your hands. Different people have different

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Rohit Gupta

definitions of needs, desires, and luxuries. Getting your

definitions right is very important.
When I talk to people, they say ’yes, we know what is
compounding. We have already studied compounding.’ But
actually, they have just read about it and have not fully
understood the concept of compounding to the core.
The formula of compounding is :

𝑅 𝑛𝑡
𝐴 = 𝑃 (1 + )
𝑛
where A stands for the total amount, P stands for principal,
R stands for Rate, N stands for the number of times interest
is applied per time period, and T stands for the number of
years or time. In this formula, 3 things are important.
Principal, Rate, and Time.
In this age group of 22-35, we can utilize the benefit of time
and rate. Time as we have a good number of years before
retiring. We can get higher returns by taking a risk and
making compounding work in our favour. Even with a
small amount of money into investments, wonders can be
created as they get a long time and high risk can be taken
to create a sizable corpus.
For Example -- A person aged 22, if they start investing
2000rs per month for next 38 years. They can create a
corpus of 1.86 crore at 12% return.

The age group of 35-50

In the age group of 35 to 50, most people are experienced
enough that they start understanding the complexities of
life and want to put things into planning, if not done

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already. People in this age group would be having

children, must have bought a house, or might be planning
to have one. Most of the people at this age have goals of
child graduation, child marriage, retirement corpus,
dream house, and dream car. In this age group, people
generally have good money and energy but they have less
time to enjoy the same. The definitions of needs, demands,
and luxuries have already been there in mind now. Some
luxuries might have become necessities in their life. But
these luxuries can still be cut down by getting our
priorities right. People of this age group have the maturity
to understand what is right and what is wrong for them,
which might not be expected from people in their 20s and
early 30s. Putting some amount maybe, 15-20% of their
income from job/business can help towards the proper
planning of all future financial goals.
The formula of compounding is:

𝑅 𝑛𝑡
𝐴 = 𝑃 (1 + )
𝑛
where A stands for the total amount, R stands for Rate, N
stands for the number of times interest is applied per time
period, and T stands for the number of periods or time.
In this formula, 3 things are important. Principal, Rate,
and Time. In this age group of 35-50, people can utilize the
benefit of principal, rate, and time. People might have
more money to invest after setting their priorities
correctly. They still have time to take the risk and make
compounding work in their favour. They might have
started understanding now where they can take risks and
where they cannot or should not. As their definition of risk

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Rohit Gupta

has already sorted out by getting knowledge from various

expert sources.
For Example -- A person aged 35, if they start investing
10000rs per month for next 25 years. They can create a
corpus of 1.89 crore at 12% return.

The age group of 50-60

In the age group of 50-60, most people have a home loan,
and their children are growing up and are on the way to
their graduation. Some people who get disciplined enough
or could generate more outflow of money might have
finished their home loans based on their level of
understanding. Some people might have started thinking
of early retirement as they might not have had much
energy left or they might have started having some health
challenges.
People with queries in their minds fail to plan at the right
time. Some of the queries are pertinent and some are not.
How my child’s education will be done?
How my child will get married?
How I can have early retirement?
How I will be able to survive after retirement?
Many such questions get them puzzled every other day.
They might be having a good income till now which might
be going towards expenses and loans. But still, if expenses
are managed properly and loans can be reshuffled or can
be converted to a better rate of interest. They may still
have time to make things work in the right direction. It is
better late than never. They should definitely understand
their mistakes now and plan things for all their financial

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goals. They will be having a life to survive for 20-30 years

even after retirement. If not planned even at this stage, life
may become difficult from here on. The formula of
compounding is:

𝑅 𝑛𝑡
𝐴 = 𝑃 (1 + )
𝑛
where A stands for the total amount, R stands for Rate, N
stands for the number of times interest is applied per time
period, and T stands for the number of periods or time.
In this formula, 3 things are important. Principal, Rate,
Time. In this age group of 50-60, we can utilize the benefit
of the principal. People might have more money or
principal from this formula of compounding to invest as
they might have good earnings based on their years of
experience. They need to invest a good amount of money
for the proper planning of goals and make compounding
work in their favor. Their risk appetite is less now as they
have less time for investments and their goals will be there
and have to be planned accordingly.
For Example -- A person aged 50, if they start investing
80000rs per month for next 10 years. They can create a
corpus of 1.85 crore at 12% return.

All age groups

People in all age groups generally invest out of ignorance.
They want to save tax, want to plan for future goals for a
better future for their family and they do investments for it.
They really don’t do proper analysis before doing any
investment. Analysis should be done and they need to ask
the right questions to themselves like:

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Rohit Gupta

Will that be giving me the correct returns?

Will that be sufficient as per inflation?
Are the numbers supportive, by checking policy
documents and what was explained by the seller of the
policy?
What does the history say, if the documents have some
assumptions made?
Are the interest rates declining, stable, or increasing in the
longer term where the investment is planned?
What can be an alternative investment?
Can one check any other investment plan that will suit the
risk appetite?
Do people need to open up their minds to learn about
other investments?
Can one fulfil the goals of tax saving and wealth creation
simultaneously?
If you are able to get the answers to all the questions
mentioned above, then you will definitely be able to do it
correctly or select better investments suiting your
financial goals.
Age Investment Number of Rate of Corpus
Years left for Return
investment
before turning
60years
22 Rs2000 38 12 1.86
years Crores

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 Retire Early and Rich

35 Rs10000 25 12 1.89
years Crores
50 Rs80000 10 12 1.85
years Crores
Note : These are figures for normal retirement, if you want
to retire early, Then either you need to focus on the
investment amount or rate of returns.
For Example: A friend Ramesh is 25 years old. He wanted
to invest. One of his associates (Rakesh) had informed him
about an investment plan that generated around 8%
compounding return. Rakesh had informed Ramesh that
he had to invest around Rs. 17000 per month for the next
20 years to reach his goal of Rs. 1 crore. Rs. 17000 per
month was quite a high amount for Ramesh. So, while
pondering about it he got a chance to meet Rohit who
informed Ramesh that he could meet his goal by investing
just Rs. 10000 per month as it generated 12%
compounding returns. Although Rs. 10000 was on the
higher side for Ramesh, nevertheless, it was more
manageable as compared to Rs. 17000 per month as
informed earlier. This was possible as Rohit, based on his
experience, had analysed the risk appetite and horizon of
Ramesh and told him to invest in 3-4 mutual funds in
various combinations to help Ramesh take advantage of the
power of compounding and diversification.

Real estate common mistakes

The most common mistake people make:
 They love absolute numbers. They don’t follow the
rules of mathematics and they don’t care. I bought
this for Rs. 20 lahks and it is now worth Rs. 2 crore

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Rohit Gupta

is all they will tell you. The return might be a poor

single-digit number, over the long years. No one
understands inflation and doesn’t want to take it
into consideration.
 People find an excuse to buy a property. Twenty-
five-year-olds buy for settling down when they
don’t know where their job will take them. Thirty-
five-year-olds buy for retirement, assuming they
will move into a 20-year-old property when they
retire. Forty-five-year-olds buy for children who
won’t even come back to pay society’s dues. Fifty-
five-year-olds buy to engage in farming, bird
watching, natural living, and fresh air, who
previously didn't even get out of their AC offices, or
cars.
 People buy with great hope and idealist dreams.
Our children will get married here; our parents will
live happily here; we will retire in this place; we will
sell this off if we need the money; this will only
appreciate and we will be able to raise a loan
against it if needed; and so on. A house enables
these dreams like no other investments. People
imagine and visualise these events and feel pleased
about them. They almost never sell as they don’t
want the dream to end.
 People love the physical possession that property
entails, creating a subject for lofty social
conversations, without much thought on the global
economy, project interest rates, or duck questions
on valuation.
Instead, you should think about how much amount you
have paid in the full tenure. In case you reduce or increase
the tenure what will be the benefit or loss?
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 Retire Early and Rich

For Example: Aman has a Loan amount of 40 lakhs, the

rate is 8% and the loan tenure is 10 years. His EMI was
calculated to be Rs. 48531. In full tenure, he would have to
pay Rs. 5823725 including Rs 1823725 in interest. After
discussing with Rohit, Aman increased the tenure of his
loan to 20 years, and now his new EMI had become Rs.
33458. The difference between new and old EMI is now Rs.
15073. In full tenure, he would be paying Rs. 8029825
including Rs. 4029825 in interest. This is like paying Rs.
2206100 more towards the loan. This is what most people
calculate. However, Rohit was a person with finance
knowledge. So, he suggested Aman to use the residual
Rs.15073 towards investments which could generate 12%
compounding returns. The total amount that Aman got
after investing this Rs. 15073 was Rs. 1,50,60,146 which is
roughly 7 times more than what he paid by increasing the
loan tenure.
Rohit – “Rahul, now I hope you might have got an answer
to your question about whether the same investment
strategy can be used for all or not.”
Rahul- “Yes, bhaiyya! Now I really want to know the exact
plan for early retirement.”
Rohit – “Sure Rahul, I want you to build the foundation of
retirement in your mind first before going to the strategies.
So, let’s discuss that in the next chapter.”

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Activities:
1) Write down what is your age group and what are your
primary goals?
2) After reading this chapter, what are the goals that have
got added to your list?
3) Check your home loan total amount to be paid in
complete tenure and check if by increasing the tenure and
using the saved amount as an investment, how much you
will be getting as a return?

Summary:
- Different goals are there for different age groups.
- There are different questions people in all age groups need
to ask themselves before taking any financial decisions.
- Common real estate mistakes people do and how to
correct them.

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 Chapter8: Foundation for early
Retirement
“Retirement is a crucial goal, plan it today or
repent later.”

After having entered the age beyond adolescence, the

primary focus of the maximum urban population is to take
up a job to brighten future prospects of live and livelihood.
However, earning a livelihood is only a minor fraction of
meeting the requirements of life. The major part of
livelihood is realized when one doesn’t have to pursue the
need of money. Every need is taken care of by the corpus
one makes for retirement. One can make a corpus at any
stage of life and retire unperturbed. During the formative
years of career creation and development, one generally
enters the rat race to earn and save. This is a time when one
generally fails to enjoy other avenues or latent passions due
to scarcity of time, intent, and money. However, retirement
Rohit Gupta

is the age when one can pursue other finer components of

life and it is not mandatory to wait up to 60 years to be able
to achieve retirement.

Retirement
The normal mindset when we hear about retirement
perceives a 60-year-old person, but actually, it depends on
the profession. Gymnasts can retire by 25, cricketers by 35,
actors by 75, and there are politicians who never retire.
Some people have forceful retirements because of their
health or family conditions. You do not need to wait till 60
or a prescribed age for retirement. You can retire early too
if you have your required retirement corpus. There are
many people in our country without retirement funds or
gratuities. Hence, the need of planning retirement becomes
much more important.

Why retirement planning is necessary:

Walter Orthmann, a 100-year-old man from the southern
Brazilian city of Brusque has managed to enter the
Guinness Book of World Records for working at the same
company for over 84 years. He explained his philosophy to
the organization. “I don’t do much planning, nor care
much about tomorrow. All I care about is that tomorrow
will be another day in which I will wake up, get up, exercise,
and go to work; you need to get busy with the present, not
the past or the future. Here and now is what counts. So, let’s
go to work!”
Source -- First post
There are many such stories that we come across every
other day where people do not have plans. We may find

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someone in our families too, who might have had a very

good life when they were working. However, after having
stopped working, they struggled to even arrange for two
square meals per day. For most people, their finances are
defined by the salaries they receive every month. Their
existence is pretty much defined by the routine of their
jobs.
Max Life Insurance Company Ltd conducted a survey on
retirement in partnership with KANTAR. The survey
resulted that the Majority of Indians are falling behind
when it comes to retirement planning, Survey has shown
that India’s retirement index stood at 44 on a scale of 0 to
100, indicating that Indians are lagging behind in
retirement planning. Over the next 8-9 years, the number
of people whose age will be above 60, will grow by 41
percent. So, planning retirement has become more of a
necessity than optional.
In places like the US, Australia, Europe, and many other
countries, the retirement age is increasing and it had been
more than the other nations. It’s only in India that people
are talking about retiring at 45-50 years. However,
retirement should be planned and one should have proper
retirement plans considering the below reasons.
• People Don’t want to work after 60 or even before that.
• It is the most crucial and costliest goal for anyone.
• Urbanization and nuclearization of families – People used
to live in joint families previously. Due to improved
opportunities, they have disintegrated into different cities
and have more nuclear families.
• People have Less working age –The learning phase has
increased to 25 recently as compared to 20 earlier and

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earning age has decreased now from 40 years to 35 years.

Higher learning age leads to people joining the workforce
late and spending less time at work. Additionally, they want
to retire early as well.

• Life expectancy has increased -- Due to medical

advancements, life expectancy has increased. More life
expectancy means more age to survive with the money
post-retirement.

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• Cost of medical facilities is rising --With increasing

medical upgradation; the cost of medical facilities is also
increasing. Medical expenses are set to rise around 10% p.a.
in the coming years.

• Dependency on daily activities -- People might not be able

to do their daily activities independently. Activities such as
dressing, feeding, washing, toileting, mobility, and
transferring might require help and you might not have
your children near you to take care of. They might be out of
the city studying or working.
• Maintenance of current lifestyles – Proper planning is
required to maintain the current lifestyle you have during
your working age.
• Liquidity – People should have adequate liquidity in case
of emergencies.
• Spouse support – Support of money is required for the
spouse after any of the partners has lost his/her life.

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• Leave a legacy – People should think about leaving a

legacy for future generations, maybe children and
grandchildren.
• Pension Plan – Major part of our country is not covered
under any formal pension system.
• No Loan – People don’t get any loans for meeting needs
after retirement which they easily get in working years as
they have income coming every month.

Why People don’t plan for retirement?

• Most people keep retirement as their last priority – Other
priorities of child education, child marriage, dream house,
dream car, and dream vacations take over the most
important goal of retirement planning.
• Dependency on children – Most people assume that their
children will take care of them at older ages. It’s good if they
do so, but what if they are not able to do that because of
their own priorities in life as you have yours now?
• Fear of the unknown – If you lose money in investments,
it will be gone forever. You will not be able to earn more
and make up for the losses. This makes most people
apprehensive to take any action.
• Why to do it now – People think they are too young to
start thinking about retirement. They park the thought
about retirement till they are in their 50s.

How to calculate retirement corpus?

• Estimate your expenses for today. – Write down all your
basic expenses of food, water, clothes, house maintenance,

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phone, shopping, traveling, medicine, and any other that

you think will be there after retirement too.
• Check Investments, assets, and income you have – Write
down all the investments, assets, and income sources you
have now. From different investments how much return
roughly you will be able to generate?
• Estimate your expenses after retirement – Any major
goals, maybe child education and child marriage should be
mentioned here. Whether they will come after retirement
or else, they should be dealt with separately.
For Example: Raman has a basic expense of Rs. 50,000 per
month. Considering 7% inflation, and his retirement 20
years from now. We need to know, how much he would
require after 20 years from now and how much is the
monthly investment. Then, we can refer to the table below:
Present Required Assumed Monthly Yearly Corpus that Monthly
Cost After Inflation Requirement Requirement generates the SIP
(in years) yearly required
(Monthly*12)
requirement (Assumed
@6% ROI @12%)

Basic Rs 50,000 20 7% Rs 1,93,484 Rs 23,21,819 Rs 3,86,96,844 Rs 39,1117

Monthly
Expenses

NOTE: This can be different for different people, based on

their current income levels, job status, responsibilities, and
many other aspects.
Common mistakes people do with retirement corpus:
1. Consuming investment funds like a provident
fund, PPF for marriage, home, or other purposes.
2. They forget to get pf transferred.

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3. Procrastination or not saving – Savings do not give

a direct result. People want immediate results.
Savings help in any emergency situation.
4. Most people don’t know how much to save and
invest.
5. Some people spend their retirement corpus before
retirement on buying luxuries.
6. People are not concerned about asset allocation
which helps by diversifying our risks.
7. Do not try to understand the implications of before
and after taxes on investments.
8. Don’t pay attention to health which makes them
spend huge on health later.
9. They pay hefty charges to financial advisors.
10. Some people took retirement when they should
have taken a break or changed their job. Leaving
them with no income.
11. If people get money, they invest in gold or real
estate. Very few people put it in financial assets for
their long-term goal of retirement planning.

“You define your own life. Don’t let other people

write your script.”
– Oprah Winfrey

Try to alter your glares of perception!

You can change your financial future by changing the words
you use and the way you think. By changing the words and

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start thinking like a rich person, retiring early and being

rich would be easy.
The idea itself, of thinking to be financially free or retired
gives tremors in the body of people and they start doubting
themselves. A few questions that directly come to mind are:
How will I be able to do it?
Is it really possible to retire early or plan for retirement?
No one in my family was able to plan early retirement. How
can I even think of it?
Others are also working throughout life. I also need to do
the same. Don’t I?
It might require so much hard work. Will I be able to do it?
Questions like this start coming to your mind and the
maximum number of people surrender to these questions.
They keep working till their retirement unless they see
some of their friends or known people achieving financial
goals early and enjoying a better life. Normally, people
don’t do things or think out of the box, as no one in their
immediate friend list, relatives, or colleagues were able to
implement the things and make them work in their favour.
They would have every other excuse to tell why they were
not able to succeed and will keep stating that it was easy for
the other person. These people call successful people lucky.
But, deep down inside their heart, they are aware that they
did not take the correct decisions or they didn’t put in the
right efforts to reach the financial goals they had dreamt of.
Instead of cursing or being jealous of people who are ahead
of you in the journey, try to be with them as it is very
important to learn the mindset, they might be having

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because of which they were able to implement those things.

It’s the mindset that will make you or break you.
While our alternatives for achieving financial
independence are endless, we frequently conform and see
fewer options due to our pre-existing path of ideas and
basis.
Do you find yourself wearing the same brand of clothes as
your father? Do you have a favourite brand of coffee or tea
because that's what your mother usually drank? Perhaps
you lean for a particular fashion name since it was all you
and your friends spoke about when you were younger. It's
human nature to gravitate toward the same things our
loved ones do in order to be accepted and liked, even if it
puts unwanted constraints on us. To get a broader
perspective, we need to shift our trance to have a clear view.
Change the thought process from
Will I be able to do it?
to
Why I cannot do it?
Never ask life, “Why me?”
Rather say, “Try me!”
Remember, if it is done by at least one person in this world,
then you can also do it.

How to get positive beliefs

• Belief is what makes you take the first step and then life
unfolds its magic. This has been mentioned in “The Secret”
book and by all the celebrities or the people, you admire
today.

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So, just start with basic steps and keep working on them to
create a different version of yourself.
• Check you are listening to whom:
Is that a person who has already achieved the goal?
Is that a person, you feel has a positive spark and will
definitely achieve the goal?
If that person is not in any of the above categories, then that
person will not be helpful in changing your thought process
for making better changes in life. Such people will always
be cribbing, crying, cursing, and have a jealous mindset
which has never helped anyone in achieving their goals.

“The possibility of today was a dream

yesterday.”

Visualise
To get started, imagine your dream life, How do you want
it to be? Be as specific in the details as possible. You might
have fantasized to relax on the beach of Maldives, driving
your dream car (Ferrari), spend a vacation with family in
Paris. For effective results, go to a calm place, where there
is no sound at all, close your eyes, put the ear buds, take a
deep breath, and refer to the below link:
https://spotifyanchor-web.app.link/e/IPZJszmx0wb
Else read the below lines imagining each word as a truth of
today.
Imagine yourself in the bedroom of your dream house,
waking up to the sound of birds chirping or the splash of
water coming from the waterfall nearby. If you have your
pets - a dog or a cat, imagine they are licking you.

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I want you to close your eyes and feel the breeze coming in
from the window. I want you to feel the softness of the
bedsheet, and how soft the mattress is. As you wake up and
stretch, what time is it? How is your bed, is it rectangular
or square? What is the colour of the carpets or ceilings, who is
there beside you? You say good morning, to your
husband/wife/children who are just next to you with a smile,
welcoming the new day. As you wake up, I want you to
imagine yourself going for a walk outside. As you go out of
the room, what does your home look like? You have some
amazing furniture and the dining table may be from
Pepperfry, home centre, or any other brand that you might
have always imagined or seen in some magazine or a
friend’s place. An amazingly designed kitchen with a
glistening granite slab. Walk through your house, and
notice everything that you see. Notice the smell and sounds
around you. If you have kids, listen to them as they play
happily. As you walk outside, go to the terrace and see
everything that you can. I want you to visualise every minute
aspect in detail. Do you see a swimming pool outside? Do you
see a beautifully maintained garden along with the pool with
an edge-to-edge beautifully cut grass with a few mounds to
enhance its splendour? I want you to get ready for your
office now. What clothes would you like to wear? the brands
you have always dreamed of, maybe in an Armani suit. You
see yourself getting dressed in the best quality clothes of
your dream brand. You are now having breakfast with your
family. What kind of aroma you are getting from the
breakfast, what has the chef made for you, may be your
husband or wife made it for you. Visualise the smile on the
face of your family while they eat it with you.
You are now going to work. Which car do you own or how
many cars do you own? You select to go in which car. Which

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one is it, is it a rolls Royce, A Ferrari, A Mercedes, or any

other car that you have always wanted to have? Which color
is it? You see the driver coming out and asking you, do you
want to leave for the office. You hand him your briefcase, and
files and you say, yes. He opens the door for you and you step
inside. Imagine for once the sophisticated-designed car and its
luxury from the inside.
As you go on the way to the office, you experience the
luxury of your car and are happily enjoying your way to the
office, watching the views outside the mirror glass of your
car. You reach your amazing workplace, It’s an amazing
office, with tons of supportive people, and an amazing team
working towards making your dreams come true. You are
the boss and you admire your employees. They are your
biggest fans. See the impact you are creating from the work
that you are doing.
After leaving the office, I want you to visualize the place
where you are going and how you are giving back to the
world. You have a charity organization, an NGO, or an old
age home, You go to that place, you get out of the car, you
meet the children or the old people who live there, You can
see in their eyes, the love and respect they have for you, the
gratitude they have for you. People are having tears
watching you, as they come to know that you are the one
who has created a difference in their lives. You can feel the
gratitude coming from them. You can feel the impact you
are making in this world. Such a beautiful and mesmerising
life, isn't it?
Now, I want you to imagine or visualize going shopping one
day in your amazing car, You are walking inside a mall,
visualise yourself purchasing a gadget, or clothes based on
your likes, you don’t have to look at the price tag, See the

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freedom that comes with it, you can get anything that you
want, it’s the freedom of choice, freedom of wealth.
Imagine you ask your spouse, mother, father, or anyone
you love, to buy anything that they want. Maybe the most
expensive thing, see the love and pride in their eyes,
noticing who you have become, from where you began, and
how far you have reached.
Now, you are heading towards your dream 5-star hotel
where you have hosted a party for your near and dear ones.
When you enter the hotel, the chef comes to greet you, he
exactly knows what are your favourite dishes, and you have
a great party with your loved ones and now you are on your
way back home.
After reaching home, You have some entertainment in your
lavish house and start packing for the vacation that you are
going with your family/friends/ anyone you wanted to go
for a long time at a favourite destination of yours, maybe
Paris, Maldives, Switzerland or any of your dream
destinations.
Now, you are hugging or curdling the person you love, you
both feel proud of the life that you have created for yourself
and your family, and you feel tons of gratitude for the
people who have been part of this journey.
You are now going for a peaceful deep sleep for having a
beautiful day waiting for you.
Now, once you open your eyes, you might be having tears
or you might be in an adrenalin rush to have seen all your
dreams come true.
Think about what you need to do to achieve your dream life.
Make a list of steps, required to reach early retirement or
financial goals of the dream car, dream house, dream

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vacation, and comfortable life with family. Try to be

realistic, but at the same time, don’t hold yourself back
from dreaming big. Once you dream big, you could be able
to put effort to turn them into a reality.

Perform a self-assessment
A self-assessment of your achievements so far gives you a
starting point for your life plan. Look for the lessons
learned and experiences you don’t want to repeat. Identify
your strengths and weaknesses. While doing self-
assessment, ask questions to yourself on different areas of
finances including the following:
 Am I having adequate emergency corpus with me?
 Am I having all the required insurance?
 Are my loans managed properly?
 What are my financial goals and are my
investments aligned with them?
 Is my tax planning/saving correctly done?
 What are other sources of income I have?
 Am I analysing my current investments and
making changes from time to time based on the
modifications and changes in the goal?
Rohit: “Rahul, let us understand each of these questions in
detail in the next chapter which will actually help you to
retire early.”

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Activities:
1) Think and write the things that you think might have
missed, if you don’t plan retirement now.
2) Make a vision board with all the pictures of how you
might look retired, how your house will be, what car you
will have, and every other detailed specification, and keep
it in the room where you spend most of the time.

Summary:
1) Retirement is the most crucial and costly goal. Its
planning should be done with utmost importance.
2) Change your self-talk and think about possibilities in
everything.
3) Visualise and feel the life you would be living, once you
have planned early retirement properly.

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 Chapter 9 Strategies for early
Retirement
“The earlier you plan your retirement, the easier
your life would be.”

Retirement planning is arranging for a consistent flow of

funds after retirement. It means putting money away and
investing with the objective in mind that this money would
support you to sail your boat during the tides of old age.
Your retirement approach will be determined by your
ultimate objective, income, and age. Growing elderly can be
costly. While frivolous expenses may be reduced, medical
bills are likely to grow. When you include the weight of
inflation, not having enough money to cover future needs
can bring stress and worry. The goal of a retirement
investment plan is to provide financial security in your later
years without relying on others. The sooner you start, the
better it would be for you. Although young people in their
Rohit Gupta

twenties may not be concerned about retirement, starting

early allows for more flexibility. If you missed the bus, you
can pick up where you left off.
A good retirement plan should be divided into three
phases: investment, accumulation, and withdrawal. You
should concentrate on investing and building your corpus
until you are in your early 50s. As you approach retirement,
you should be able to convert the money to safer
investments so that you can rely on it after retirement.
Many individuals do not consider insurance to be an
important aspect of retirement planning; nonetheless, it is
a critical and necessary component. Life insurance protects
a surviving spouse. If you are no longer present, your
spouse may face financial difficulties on their own.

Have Emergency corpus

Savings is a type of capital that you have in your bank
account. This should be handy in case of emergencies, as in
that situation, you would be requiring immediate funds. In
the chapter on planning, you already read about the
emergency cover and its importance. Plan your emergency
cover of 3-12 months for effective planning. It can be
decided based on your current responsibilities:
 If you are Just 25 years old and earning, having no
dependents. Then keeping 3 months expenses
corpus will be sufficient.
 If you are having a family with children, parents.
Then keeping 6/9/12 Months expenses will be a
better plan.
This will not only prepare you for any emergency by giving
you confidence that everything is covered in life but it will
also stop you from going into a cycle of the debt trap. Most

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people don’t have emergency cover and they keep taking

loans, making them land in the cycle of a debt trap and it
becomes very difficult to get out of it. This mistake of theirs
makes them go away from their dream of early retirement.

“Good financial habits provide a dream life.

Bad financial habits bring a disastrous life.”

Have mandatory and required Insurance.

Insurance is a way to manage your risk properly. There are
different types of insurance currently available like term
insurance, health insurance, vehicle insurance, property
insurance, and travel insurance. Term and Health
Insurance is the mandatory insurance for all so that your
family is secured in case of any mishappening or any
medical emergency. Similarly, other insurances like vehicle
insurance, property insurance, and travel insurance are the
required insurances and they should be on a need basis. In
case you have a vehicle, go for vehicle insurance. If you have
a house, go for property insurance. If you are travelling
abroad, go for travel insurance. The importance of these
insurances and how they should be planned is mentioned
in chapter 3 under planning. We should have all the
insurance in time else in case of mishappenings, this can
create a big damage to your pocket as you might be bound
to take a loan or break your investments. This will destroy
all your future goals as well. So, planning on time is
essential.

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Manage your Loans

The loan is an instrument used when you don't have the
amount to manage a need of yours. In such cases, you take
the amount from a bank or any other Institution. Before
thinking of any loan, you need to ask these questions to
yourself.
Is this loan going to create an asset or liability for me?
Am I taking a loan for a need or demands/luxuries of my
life?
Is this really needed?
Will I be able to manage the loan?
Will I still have the scope for investments for all other
future goals?
Am I buying a house, as I want, or it’s because of peer
pressure?
It should be joint or single-owned?
Is there a better loan product available at lower rates?
Which home loan tenure will be beneficial for me-
5/10/20/30 years?
If I increase my tenure and use the difference for
investment, will it be beneficial?
These are some of the major questions people should
definitely ask themselves before taking a loan. However, I
have hardly found people thinking all this before taking a
loan.
I will share the story of my friend, Rakesh.
One day, I was discussing with him his future goals in life.
To which he replied that my current situation itself is not
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sorted out, and I am not sure how to think of the future.

After a few days, I got a notification on Instagram that he
bought a new car worth Rs.10 lakhs. When I called him to
congratulate him, he asked me whether it was the right
decision or not. I am no one to comment there, but based
on my discussion with him in the past, it seemed to be a big
blunder. As he shared that he was struggling with his
present and he bought a car that was probably not needed
as his earlier car was working perfectly fine for him, giving
him superb mileage, and did not need a hefty sum for the
regular services. On the other hand, his new SUV was more
like having a white elephant that pleased the eyes but was
an encumbrance to the pocket.
For many people, this might be happening today as well.
You need to ask yourself; if you just want to live a life to
show off to others or if you really want to live a well-
balanced life today and tomorrow as well. People just think
of short-term pleasures by sleeping unnecessarily, not
working hard, chit-chatting just to pass time, and
unnecessarily spending time watching the OTT platform.
Though they might be getting short-term profits but they
are incurring much greater long-term losses which they
realize later in their lives.
Many people today, take loans just because they received a
message or it was readily available to them. They do not
calculate how much they will pay in the complete tenure by
taking that loan. People today have a series of loans and
sometimes I have even seen people having many loans
which have been equivalent to their current salary as well.
So, you can understand what type of situation they will
have in their future life.

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Plan your taxes

Tax planning, Tax Avoidance, and Tax evasion are often
misinterpreted by people. But these are totally different
things.
Tax planning is a way to plan your taxes in a better and
more efficient way. Here we are effectively saving taxes by
effectively using deductions and exemption. There is no
violation of law but efficient utilization of deductions,
exemptions available.If you are not planning the taxes
efficiently, then some or the other way, you are paying
unnecessary taxes based on whichever tax bracket 10%,
20%, or 30% you are in. In the chapter on planning, you
have already read how to plan taxes in an efficient manner
using the different sections.
Tax avoidance is the use of legal methods to reduce taxable
income or tax owed.
Tax evasion is an illegal activity in which a person or entity
deliberately avoids paying a true tax liability. Those caught
evading taxes are generally subject to criminal charges and
substantial penalties.
If your income is less then 7.5 lakhs then you can choose
new tax regime without a second thought. But if your
income is more then 7.5 lakhs then you need to check which
all exemptions and deductions you will be claiming to
decide which tax regime is better for you. In the latter case,
to save the taxes, you need to adopt the old regime which
would be a better and wise option to choose from.
We could better understand effective tax planning with the
help of example by taking the figures which might be used
while filing an income tax return.

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Assume a CTC of 16 lakhs, Here Basic salary will be 50%

of the annual CTC of 16 lakhs, ie. 8 lakhs.
Annual CTC 1600000
Exemption of Employer's Contribution (12% of -96000
basic of 8 lakhs)
Gross Salary =1504000

Exemptions
Exemptions under Section 10 on Gross Salary 1504000
HRA (25% of CTC) -400000
Leave Travel Allowance -50000
Prerequisites (If any) 0
Net Salary =1054000

Deductions to find taxable income

Deductions on Net Salary of 1054000
Section 80C -150000
Section 24 -200000
Loss from House Property = Rent – 30% Rent –
Property Tax – Interest
Section 80CCD(1B) -50000
NPS employers Contribution -105400
Section 80D For self and immediate family -25000
Section 80 D for Senior Citizen Parents -25000
Section 80 TTA ( Interest on saving account) -10000
Taxable Income =429960

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In 2022-23, Individuals earning equal to or less than Rs. 5

lakhs annually are eligible for tax rebate under Section 87A,
making the tax liability NIL. Every penny saved in taxes can
be utilised for investing which in turn will increase our
retirement corpus too.
With escalating living and healthcare costs, many senior
citizens are now facing the challenge of outliving their
retirement resources. People frequently overlook the fact
that retirement savings taxes and inflation can steadily
deplete their corpus.
As a result, for retirement planning, it is critical to evaluate
the tax advantages provided by various investment
instruments. If you only consider returns, you may miss out
on opportunities. Learn how to optimise the tax advantages
of your retirement funds.
We should use ethical ways only to save our taxes. Using
unethical ways may land us in trouble later, if not today.
In the chapter on planning, you already read about the tax
planning sections and how they can be used effectively. If
we plan our taxes effectively, it will help us to save money
and invest that money towards wealth creation.

Plan your Investments

Investment is a way you can put money into different assets
and gain some capital appreciation along with wealth
creation. We should plan our investments in a proper way
so that we can achieve all our future goals of child
education, child marriage, retirement planning, dream
house, dream car, dream vacations, and many such goals.
You should link investment instruments with all the goals
you have currently, by deciding the required amount,
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considering inflation in mind. Starting early will help your

investments to grow and will provide for sufficient amounts
on maturity as compounding works better when given time.
In the previous chapter, we have already come across why
retirement needs to be planned way ahead of time, instead
of waiting for the last 5 years before retirement.
For Example: There are two friends Mahesh and Kamlesh,
both 24 years old. Both wanted to retire by age of 50.
Mahesh was serious and wanted peaceful and early
retirement. So, he started investing Rs. 10,000 every
month. With a 12% compounding return, he was able to
generate Rs. 2.2 crores in the next 26 years the total
investment being Rs. 31.4 lakhs.
Kamlesh, on the other hand, kept enjoying his life and did
not do any investments. When there were only 10 years left
before his retirement, he thought it was high time to make
some investments for retirement. He wanted to meet the
goal, so he started to invest Rs 80,000 every month for the
next 10 years. His total investment became Rs. 96 lakhs but
still he was unable to match the returns generated by
Mahesh. This shows the importance of the time period in
the power of compounding.
Age Every Age Every Age Total Total
month month Investment Corpus
investment Inverstment

Mahesh 24 10000 40 10000 50 31.2 lakhs 2.2 crore

Kamlesh 24 0 40 80000 50 96.0 lakhs 1.9 crore

Morale: Start early and get more returns on maturity.

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Check Risk-reward ratio

Today, there are various instruments available in the
market to invest. As an investor, our goal should be able to
check the risk-reward ratio. It varies from person to person
based on age, gender, marital status, the place they live in,
people in the close circle (friends, family, and relatives), the
era in which they were born, and various other parameters
as well. Every instrument has different rules to play just
like a game. Understanding all the rules of the game makes
it easier for anyone to play it. Similarly, try to understand
any investment instrument deeply, before thinking to
invest in them. Risk- reward ratio of the instrument should
be favourable to you as an investor, and only then you
would be able to reap the benefits of that instrument
properly.
For Example: Anshul is in his late 50s and has 2 more years
before retirement. He thinks about investing the amount in
equity. This will be a bad decision for him as the risk-
reward ratio will not be favourable for him. Anshul’s friend,
Aakash is 31 years old and has more than 20 years of
retirement. Aakash can think about investing in equity with
a long-term lock-in of 15 years as well, as he has sufficient
time.

Do proper Investment analysis

Investment analysis is a way to analyze investments already
done in the past. With every passing year, our goals of
investing might also change. As goals keep changing,
analysing and making changes in old investments become
highly important. In the current world, everything happens
very fast. As far as investments are concerned, we need to
be at the tip of our toes to make changes as the impact of
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government policies, economic policies, and global

changes can have a big dent in your portfolio. On 17th
January, Nifty 50 was at 12352 and within 3 months on 3rd
April, it made a low of 8083. For most retailers, it was a big
loss. But all real investors wait for such moments to buy
things at discount. It was like the stock market had some
big billion-day sales at that time. Hence, investment
analysis plays a very important role in maximizing the
returns in a true way. If you don’t have time and interest in
this, you should definitely try to take some professional
help or develop an interest to learn about these things. This
will really help you to have good returns for your
investments. If you don’t analyse the investments, then you
are just leaving things to destiny and it might land you in
big trouble in the future, as returns might not meet
expectations. Just take control of your life by taking control
of your investments.
For Example:Rakesh and Ramesh are two close friends,
who completed their graduation in 1986 and started
working then on. In 1986, they started investing in PPF
with Rs. 100/month. At that time PPF interest rate was
12%. Let’s assume the return is the same 12% for complete
tenure although it has declined now. In the next 30 years,
the investment of 36,000 becomes Rs 3,52,991. In 2016,
One day Ramesh just checked the latest PPF returns and he
was surprised to see that PPF returns have drastically come
down to 8%. So, Ramesh told Rakesh to change the
investment instrument. But Rakesh did not take this
seriously and he continued with the old investment.
Ramesh changed his investment instrument to another
giving him 12% compounding return. After 7 years, Rakesh
and Ramesh both checked their investment returns.
Rakesh with 8% return on his old investment had Rs

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Rohit Gupta

5,78,816 in 2022. When Rakesh asked Ramesh about his

returns, he was surprised to hear that Ramesh’s total
amount had accumulated to be 7,33,183 - a difference of Rs
1,54,367.

Year Investment PPF Year Current Year

1986 Each month 2016 Investment 2023
Rakesh Rs 100 12% Rs PPF Rs
352991 continued 578816
@8%
Ramesh Rs 100 12% Rs SIP Rs
352991 investment 733183
@12%

Moral: Investment analysis done on regular basis can

make a big change in the total corpus. Investing on a
regular basis rather than attempting to time a lump sum
investment might assist you in becoming a more
disciplined investor. You are compelled to invest whether
the price is high or low. This removes some of the emotion
from investing while also avoiding any delays in putting
your money to work. You can start with small amounts. You
don't need a large budget to invest in a monthly investment
plan. Money is one of the primary advantages of a long-
term investment strategy. Keeping your stocks in your
portfolio for a longer period of time is more cost-effective
than buying and selling frequently since the longer you
retain your investments, the fewer fees you must pay.

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Concept
Investment analysis is a way to analyze investments already
done in the past. With every passing year, our goals of
investing might also change. As goals keep changing,
analysing and making changes in old investments become
highly important. In the current world, everything happens
very fast. As far as investments are concerned, we need to
be at the tip of our toes to make changes as the impact of
government policies, economic policies, and global
changes can have a big dent in your portfolio. On 17th
January, Nifty 50 was at 12352 and within 3 months on 3rd
April, it made a low of 8083. For most retailers, it was a big
loss. But all real investors wait for such moments to buy
things at discount. It was like the stock market had some
big billion-day sales at that time. Hence, investment
analysis plays a very important role in maximizing the
returns in a true way. If you don’t have time and interest in
this, you should definitely try to take some professional
help or develop an interest to learn about these things. This
will really help you to have good returns for your
investments. If you don’t analyse the investments, then you
are just leaving things to destiny and it might land you in
big trouble in the future, with returns not meeting
expectations. Just take control of your life by taking control
of your investments.

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Rohit Gupta

Create Multiple Source of Income (MSI)

On the left side of the above image is a table with only one
leg. If that leg breaks off, the table will collapse.
On the right side is an image of a table with multiple legs.
If one leg breaks, the table will wobble, but still, stand
somehow.
You can think of your life as a table and the legs as your
income stream. You need to set yourself with multiple
income streams so that your life doesn’t collapse if one fails.
There are 7 different ways to earn multiple sources of
income:
1) Earned Income – Income from jobs/Side hustle. By
being active, whatever money, you make is called
earned income. This is the most common source of
earning for the majority of people by doing a job or
working for someone else. This definitely helps
other people to become richer day by day as you
work harder for your income and other person
makes huge profits out of it. It is nothing wrong or
right. But, there are other ways to make your earned
income for you. You can start a business of your
interest. Owning your own business gives you the

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potential to make far more money than you could

ever earn working for someone else. Of course, it
takes a lot of hard work, dedication, and time to
build a successful business in the starting few years,
but it can very much reward as you will enjoy
working here being your interest area. This will be
very much satisfactory and beneficial in long term
both financially as well as for your personal life.
2) Dividend Income – Income from stocks, mutual
funds, and ETFs that are held in brokerage accounts.
You can buy stocks/ mutual funds/ ETFs based on
your analysis. Whenever the underlying stocks make
profits, you get dividends out of it. It is not
compulsory but there are various good dividend-
providing stocks. It’s the best form of passive
income because you don’t need to do anything other
than reinvest the dividends you have received.
3) Rental Income – Money earned from renting out
properties. The properties may be residential
apartments/duplexes, commercial real estate, or
storage units. It is the best way to earn passive
income.
4) Royalties – These are payments made to you for
letting someone use your products, ideas or
processes. You even get royalties for the use of your
intellectual property, such as patents, copyrights,
and trademarks.
5) Business Income – It is the income you make from
running a business.
Types of businesses you can start:1111111
I. A service-based business: This is a business
where you provide a service to customers.
Exa`mples of service-based businesses
include babysitting, pet sitting.

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II. A product-based business: This is a business

where you sell products to customers.
Examples of product-based businesses
include online stores.
III. A franchise: This is a business that is based
on an existing business model. Franchises
are popular because they offer a proven
business model and support from the
franchisor. Examples of franchises include
McDonald’s, KFC, Haldiram etc.
IV. Online business: This is a business that can
be operated entirely online. Examples of
online businesses include blogging, drop
shipping, and affiliate marketing.
6) Interest Income – It is the money you get from
lending your money to someone else. Investing in
banks, bonds give you interest. It is a great way to
generate passive income because you can earn
money without having to do any work!
7) Capital Income – It is the money made by selling
an asset for more than you paid for it, some of the
prime ways can be a house, land, or stocks.
Example – You bought a house at 10 lakhs and sold
it at 30 lakhs. 20 lakhs is the capital income.

Concept.
MSI is a way that you have income coming in from
different sources and you are not dependent on just one
source. You should think about it because dependency on
one source of income may be a problem in case of
recessions, mis happenings, job loss, or a medical
condition making you bedridden for a year or so. Even if a
source has started giving you just Rs.100, that can be
counted as a source of income for you. The income that
you generate from multiple sources can be invested
toward getting better returns. Also, MSI gives you the

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time and freedom to live life on your terms and with your
choices. You must be able to live within your means. You
must either spend less or earn more money to increase
your riches. With inflation and rising costs, cutting costs
can be very tough. If you can't lower your spending any
further, adding another source of income will help you
cover more expenses while also increasing your savings
and investments. Inflation has raised the expense of
living. The most affected are basic necessities such as gas
and grocery prices. Adding a second source of income can
help pay for greater day-to-day expenses. You'll have more
money for necessities, as well as savings and investments.
Also, MSI gives you the time and freedom to live life on
your terms and with your choices.

Adding a second source of income can help pay for greater day-
to-day expenses. You'll have more money for necessities, as
well as savings and investments.
Rahul – “Thank you, bhaiya for giving me so much time
and valuable information. Now, I have started imagining
how my life would be after retirement and what things I
need to take care of before it.”

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Activities:
1) Check different loans you hold currently with the loan
percentage.
2) Check your interest area and how you can convert your
interest area to generate income.
3) Make a list of instruments that you understand and you
really think will be worth investing in.

Summary:
1) Insurance should be planned well ahead of time.
2) Emergency cover of 6-12 months should be maintained.
3) Investments should be done considering inflation in
mind.
4) Understand the risk-reward ratio before investing in any
instrument.
5) Investment analysis helps you to make changes in time
and choose the right investments.
6) Tax planning should be done with the purpose of tax
saving and wealth creation.
7) Multiple sources of income give you more stability as you
are not relying on only one source of income.

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Chapter 10: Life after Retirement
“Retirement means doing whatever I want to do.
It means choice.”
–Dianne Nahirny

Retiring young is everyone's dream, but for many people, it

remains a pipedream only because they don't work and
plan for it. Retirement planning should be done at a
younger age so that you can retire early and will have the
energy to enjoy the corpus you build over the years.
Retirement from work was usually considered a resting
phase of life, owing to old age and the limitations of leading
an active life. The world has changed in recent years, both
intellectually and technologically. With the passage of time,
we have made great development as a society. Retirement
is now recognised as a whole new chapter with a well-
planned opportunity to live life to the utmost. Retirement
is not the destination; it is the journey to what comes next.
Rohit Gupta

It is your chance to recreate yourself and live the second

part of your life with meaning.
I interviewed Datta Tule (Internet Marketer and
Entrepreneur) on his journey toward financial freedom. He
belonged to a farmers’ family where managing food twice a
day was a challenge in itself. When he was in the 6th class,
he started working to meet his family's daily needs. He was
an average student and seeing his academic performance,
his parents did not have many expectations from him. But
he had a very good habit of reading books. In one of the
books of Robert Kiyosaki “Cash flow Quadrants,” he read
that you need to be an investor and business owner to have
financial freedom and be able to retire young. This got into
his head and he started working towards it.
When he got his first job at Accenture, he was very happy.
But at the same time, he had a very clear mind that after 10
years he would retire from the job. During these 10 years,
he focused on his investments by increasing his financial
intelligence. He lost money in various quick-rich schemes
as well which he suggests people should avoid as he
mentions that there is no shortcut to success. While doing
his job, he kept his learning curve towards becoming an
entrepreneur and a business owner which helped him to
get financial freedom
Currently, he owns multiple businesses of cattle feed, a
digital agency, Internet marketing, etc. He is also an investor
and keeps investing towards his financial growth as it’s a must
according to him. He believes in diversification and
investments in different asset classes of real estate, gold,
stocks and mutual funds for the long term. He says, he will
be a lifelong learner and suggests people to learn from their
mistakes and not repeat them. He has immense discipline

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and a tough mindset of investing every month. He suggests

you should be ready to grab the opportunity whenever it
comes, maybe in equity or whatever you do. He believes,
his virtue of taking risks (without risk no major gains) and
clear vision of goals were the prime reasons he was able to
retire 2 years before he thought he would. He mentions
having a clear vision of goals in the next 1 year, 5 years, and
10 years is very important. He has created such wonderful
businesses that even if he does nothing for the next 5-10
years also, he has sufficient money for all his expenses.

“The goal in life is not to try and live forever, but

to create something that will be forever in
people’s hearts.”
-- Karon Waddell

Elders must embrace retirement as a life-changing

experience. After spending their entire lives completing
tasks, this is a significant shift from being excessively active
to excessively idle. At the same time, retirement allows
individuals to live their lives as they please, using the
important time they have available to pursue the interests
they have always desired. Willingness and intent,
combined with an equal degree of forethought, will make
this lovely stage of life worthwhile. After retirement, you
can start doing things that you like or love to do but its also
about doing those things that you were not able to do in
your working age; It might be farming or gardening,
spending time with your family, having a long vacation or
learning any new skill that you always wanted to, for a long
time. Due to medical advancements, the life expectancy of
people has increased as compared to the past. Life is a

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magnificent gift from God. If you have a positive attitude

toward life, everything you experience and feel may be
wonderful and joyful. Everything is determined by your
mental process and mindset. As the expression goes, "age
is just a number." Although the official retirement age is 60,
you can still be young at heart after that age. To have a
comfortable life after retirement, let us discuss a few
strategies and investment instruments:

Three Bucket Strategy

In this strategy, you create three different buckets of
investment corpus. Each bucket has its own objective as
follows:
• Liquidity bucket - This bucket essentially ensures that
expenses for the next 1-2 years are taken care of. Returns
are secondary here, hence products like liquid funds,
auto-sweep fd’s are best suited here
• Medium-term basket - This basket will take care of the
second leg of your retirement. Once the liquidity bucket
is near exhaustion, the idea would be to gradually move
investments from this bucket to the liquidity bucket.
Ideally, 2-5 years of expenses can be held in this bucket.
The investment decisions of this bucket would solely
depend on how much you put in the liquidity bucket.
• Wealth creation bucket - After investing in the first two
buckets, the balance of the money would be invested here.
Essentially, investments would be made in equity to
generate higher long-term returns. As you age, the
propensity to consume will come down and at the same
time, expenses related to healthcare may go up. The
growth of the retirement corpus must be greater than the

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withdrawal rate in the initial years. So initially, the

retirement corpus will go up. As the expenses go up due
to inflation, a time will come when the retirement corpus
starts coming down. This will be the long-term
investment bucket that will be invested to generate
inflation-beating returns over the long term. This is an
important bucket to be focussed on with the other two
buckets. After retirement, you also need to survive for 20-
30 years.
All the 3 buckets have their own importance. So, do not
miss out on any of them as this might unnecessarily cause
trouble to you.
For the above buckets, you can consider the below-
mentioned schemes:

Senior Citizen Savings Scheme (SCSS)

SCSS is a government-backed savings instrument, launched
with the main aim of providing senior citizens in India a
regular income after they attain the age of 60 years. Some
of the main benefits of the scheme are:
• Tax benefits are provided.
• Safe to invest in the scheme.
• Premature withdrawal is allowed.
• The account can be transferred across the country
• High-interest rates are offered
SCSS gives guaranteed returns on a quarterly basis. The
maximum amount you can invest in an SCSS account is
₹30 lakhs. Investments up to ₹1.5 lakhs qualify for
deduction under section 80C. The interest earned is added
to your income and taxed as per the applicable slab. One
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can avail Senior Citizen Savings Scheme through certified

banks and post offices in India. For an investor of 60 years,
this can be the best instrument to meet the post-retirement
needs of an individual.

Pradhan Mantri Vaya Vandana Yojana

(PMVVY)
It was launched with the main aim of providing senior
citizens in India a regular income after they attain the age
of 60 years. This policy was introduced by the government
and run by LIC for providing pensions to people. You can
invest up to Rs. 15 lakhs in it. It offers pay-out options on a
monthly, quarterly, and half-yearly basis. The investment
is for ten years. At the end of 10 years, you get back the
purchase price. If anything, unfortunate happens before 10
years, the purchase price is given to the nominee. The
interest paid by the scheme is fully taxed as per your
applicable slab. There are no tax benefits or deductions
available with this scheme. This can be taken by LIC in
online or offline mode. It can be a good option for senior
citizens to do investments.

Annuity
An annuity is the monthly or annually guaranteed income
opted for, after paying a lump sum amount on an
immediate basis or over a period of time. This is done with
the intention of securing income, post-retirement. An
annuity is a contract between you and an insurance
company that requires the insurer to make payments to
you, either immediately or in the future. The annuity
payment is continued till the person insured is alive or up
to a fixed term. After the death of an insured person, the

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nominee gets the lump sum amount that was paid for the
annuity. Premium paid is tax deductible under sec 80C.
Annuity helps in getting guaranteed income for life. It is
hassle-free, has no maintenance, and is a frictionless
option. It is a safe plan as it is not market-linked. It helps
in leaving behind a lump sum amount for the next
generation. It has a plan which takes care of the spouse
through a joint-life option. If you are nearing retirement,
you may have a large savings amount that you may want to
invest with some fixed amount to be received each month.
Some annuity plans provide you with the option to invest
regularly and receive income at a later age for your
retirement. This enables you to invest small amounts,
thereby making it easy on your pocket. You should start
early investments for a guaranteed income for life,
especially during the post-retirement period. Pay-out from
an annuity plan is used to cover your day-to-day expenses
during retirement and to fulfill post-retirement dreams,
such as traveling, starting a venture, pursuing a hobby, and
much more.

Systematic withdrawal plan

A systematic withdrawal plan is a plan offered by mutual
funds to withdraw an amount from their investments
periodically. Here you can utilize the corpus created till
now. It can serve as a pension for each month. Here you
define a percentage of the amount that you require on a
month-on-month basis.
For Example: Raman wanted Rs 25000 every month for his
expenses. He invested Rs 50 lakhs in SWP and has defined
an SWP of 5% every month. So, every month he will receive

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Rs25000 as per his requirement. The amount kept in SWP

is also generating a return of 8% for him and he continues
this for the next 20 years. So, every month he will get Rs
25000 for his expenses and at the same, his capital will also
appreciate. In the next 20 years, he will be withdrawing Rs
60 lakhs against the investment of Rs 50 lakhs and still he
will be having a final corpus of 90 lakhs after 20 years.
A systematic withdrawal plan is the best way to keep getting
the required amount as a pension and still our capital keeps
increasing.

Policies paying retirement income

There are different policies currently in the market offering
pensions or an income after retirement. For these plans,
you have to invest some amounts from today for the next
10-20 years depending on when you want to start getting
income and pension. It also depends on the plan you are
opting for. And after the specified time, you start getting
the decided amount on a monthly basis. But a major thing
to consider is inflation before buying such policies.
Inflation is a big miss in these policies. As in these policies,
you get the same or similar type of amounts you have
invested today. Companies might give you that same
amount for a longer duration of just 30-35 years, but that
will not be sufficient.
For Example: You might require Rs. 30,000 per month for
basic expenses. Considering 7% inflation, this requirement
will double to Rs. 60000/month after 10 years and Rs.
1,20,000/ month after 20 years.

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Current Inflation Requirement Requirement

Requirement After 20 Yrs
After 10 years
30000/month 7% 60000 1,20,000

But, in these policies let us say if you invest Rs. 10,000 per
month for the next 10 years. After a few years, policy
companies start giving Rs. 8000-12000 for the next 25-35
years. However, this is way less than what is required. See
the below table for a better understanding.
Investment -> Rs 10000/month for 10 years
Amount Received after Rs 8000- Rs12000 / Month for 25-35
10 years -> years
Actual Requirement Rs 60000/ Shortfall of 48000-
after 10 years -> Month 52000 / Month
Actual Requirement Rs 120000 Shortfall of 48000-
after 20 years -> 52000 / Month

So, check wisely before going for such policies.

Rahul – “Bhaiya words are insufficient for thanking you.
You have told me to plan things for retirement and how life
should be after retirement. I am really grateful to you. I
wish everyone has a friend cum brother like you, who can
help them with finances, as this is the most important area
to look upon to get all the happiness we wanted for
ourselves and our family.”

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Activities:
1: Find out the current return percentage range of the
instruments discussed in this chapter.
2: Check the investments in respective products for EEE
benefit (For understanding EEE read EEE in chapter 2 of
finance concepts before proceeding).
3: As you are aware of interest rates and EEE benefits, now
create a plan for reaching the amount you require on
monthly basis towards your expenses.

Summary:
Risk capacity might be low after you are retired, depending
on your age to retire.
We have discussed the most used investment instruments
that can be considered after retirement.
Checking the minute details before buying anything for
pensions or regular income is very important.

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 Chapter 11: Conclusion
“If all you do is set goals and achieve them then
you have learned to be a doer. Happiness isn’t at
the end of the next goal. It is the journey of
aligning your choices to mould your character
into the type of person who lives their belief
system, then creates a life purpose that reflects
that same person.”
― Shannon L. Alder

You have the roadmap to plan your early retirement and for
being rich too. Even if you are not thinking of early
retirement, you might have got a proper plan to work on
your retirement goal. Methodologies discussed in this book
can give you a foundation for other financial goals as well.
Francis Bacon quoted, “Knowledge is power”. Yes,
knowledge gives you the power to understand what is right
and what is wrong, and how to behave in certain
circumstances, which may be based on learning from other
people’s experiences or yours. But I will say, that
implementing this knowledge into actions is the biggest
power. Only gaining knowledge here and there can make
you one of the world’s most knowledgeable people, but you
would be shattered when the bank account is looked upon.
We are striving hard day and night to make this world a
better place for our family and ourselves. But being
extreme in any department, be it savings or enjoying can
hurt us badly in the later stages of life. If you have only
saved without enjoying your life, you might feel disastrous
in the future thinking you have not enjoyed your youth. If
you have only enjoyed your youthful days, you might feel
Rohit Gupta

disastrous too as then you will not have the proper amount
to manage the necessities of life. Hence proper balance is
required in life to feel contended in the future.
“Financial life has extreme ends of investment and
enjoyment, inclination towards either side makes your
future life hell.”

“Dreamers think about a dream life, Doers create

a dream life.”

Whoever you are, young or old, working or homemaker, in

a job or in business, employed or unemployed, married or
unmarried, male or female, whatever situation you might
be in today, just take charge of your life, take action on
whatever you have understood from this book, and start
your journey towards a better life. Fear of failure is the
biggest failure in someone’s life as it stops you from taking
action or makes you always be in procrastination mode.
You might think if I fail what will happen? Any which ways
if you are not planning your life, you are planning for a
substandard life or a life of misery and I can definitely tell
you, if you start taking action then definitely your life will
be better than what it would have been if left unplanned.
You might think that I am already very late. You might have
heard a quote “It’s better late than never”. Start working on
your goals and put the things into action and your life might
change as this is the difference between doers and
knowledge takers.

“You must gain control over your money or the

lack of it will forever control you.”
-- Dave Ramsey

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Saving and investing is a habit, more sooner it’s realized

and inculcated, the better your life will be. Financial
education is the rarest commodity. Your financial life is no
less than a road fighter video game we used to play in
childhood. In the game you need to drive a car. The goal is
to reach the finish line in different stages without running
out of time and hitting other cars. Similarly, imagine your
financial life as a road fighter game where you are having
different financial goals and the goal here is to finish all the
financial goals and reach the finish line of retirement.
Just like the road fighter game, here also time to reach any
of the financial goals is limited as you have a defined
timeline for child graduation, child marriage , retirement
planning and other goals.
In a road fighter game, you avoid hitting other cars. Here
you need to avoid financial mistakes as financial mistakes
might cause a big downslide making you start your
financial journey again from start. Financial mistakes may
be investing in many quick rich schemes, buying stocks just
because someone told you so and various other financial
mistakes that you would have done. In-game you might get
various chances to restart and play it again. But in life,
finances play a very important role. Financial mistakes can
destroy the hardships of investments done till now. So,
taking all the steps wisely is very important. You go to a
doctor when you fall ill. You go to school and college when
you require formal education.
Similarly, when you are stuck in finances or want a
specialised solution on loans/ investments/ insurance/
optimizing finances you should not hesitate to go to a
finance doctor as he can be a specialist who will solve your
queries in a few minutes just like experts in different other

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Rohit Gupta

fields. From my experience I can tell you clearly, small

changes in anyone’s financial plan can create big changes
for a better future for themselves and their families.
If you want to get your money multifold by :
1) Getting your current inflow of money managed.
2) Learning money management to be self confident and
independent.
You can reach out to us on [email protected]

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 Retire Early and Rich

If you still have problems doing or taking action – you can

connect with us on

Facebook Page –
https://www.facebook.com/ProsperWithRohit

Facebook Group –
https://www.facebook.com/groups/wealthsecretsbyrohit

Instagram:
https://www.instagram.com/prosperwithrohit/

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Rohit Gupta

Linkedin:
https://www.linkedin.com/in/prosperwithrohit

Website: www.prosperwithrohit.com

YouTube: https://prosperwithrohit.click/Youtube

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 Retire Early and Rich

Spotify:
https://spotifyanchor-web.app.link/e/IPZJszmx0wb

Email: [email protected]

139
 Epilogue
The prelude of the book reproduced a picture of the truth
that exists in India with a roving truth that exists in urban
India. There has been a myriad of irreversible financial
crises amongst the once-upon-a-time well-to-do families. I
believe that all this can be avoided. Awareness of proper
financial insulation should be spread far and wide and we
can start with ourselves.
A financial plan serves as a guide as you travel through life.
It essentially assists you in gaining control of your income,
expenses, and investments, allowing you to manage your
money and reach your goals. It gives meaning to your
ambitions or dreams. Financial planning enables you to
better understand your goals, including why you need to
reach them and how they affect other elements of your life
and finances. Planning advises you to keep an eye on
inflation. A financial plan serves as a guide as you travel
through life. Essentially, it allows you to be in. Assistance
with financial planning. It also includes considerations for
the end of life and beyond. An estate plan developed as part
of your overall financial strategy will assist you in ensuring
that dependent children are cared for using the assets you
have acquired.

“Millions wish for financial freedom, but only

those that make it a priority have millions.”
Oscar Auliq-Ice