Liberate Mind: Family Edition

Where are you and where are you going?
LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Liberate Mind: Family Edition

Post by LiberateMind »

Hi Friends,

Starting a new journal , as I believe my mindset , finances, circumstance changed so much. The main focus on the journal would be like below.
  • Managing Family/Personal finances.
  • Improving quality of life/ options to enjoy life more.
  • Self development

Even though this is ERE forum, I would like to have some kind of public accountability on all aspects of my life instead of one. For the current year and 2019 the main focus would be the last two. Finance would be on auto mode, no major effort would be spend there. Every month I would like to explore the options to improve my life and try out few things. So onwards to goals.
Last edited by LiberateMind on Thu Oct 04, 2018 12:39 pm, edited 2 times in total.

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

OCTOBER - 2018 - P1

Post by LiberateMind »

Finance Goals:
Family:
  • Save 20% ( Should be from Jan-2019)
Goal: Should cover the expenses, tax saving investments, gifts and one big travel.[/list]
For the current year, it is negative owing to hospital expenses and big gifts. From 2019, contributions will be increased and hopefully not much hospital expenses.

Tracking only for personal:

Ratios to track.
  • Current Net worth/FI Net worth - Liquid.- 50.29%
  • Passive income/Actual Expenses ( Roll over for four years). - 10.34%
  • Forecast on reaching the FI Net worth – May -2022.
How to save cash?
  • Liquid funds
  • Seetu
  • Cash /Deposit in Bank.
I will be tracking only networth goal from now on for the individual finance. The Savings rate is bit skewed as I might save from the contribution to joint account as well. I have added another metric Passive Income/Actual Expenses this is for tracking only not to take any action. As my portfolio would PP. I would be concentrating on asset allocation. My bond allocation is always higher as my tax-advantaged accounts is marked as bond. I will strive to keep the remaining three portfolios Equal before concentrating on Bond.

Still trying to figure out where to upload pics securely for showing up the asset allocation. For now list format.

Cash 3%
Stock 42%
Gold 9%
Bond 46%

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

October 2018 - P2

Post by LiberateMind »

Quality of life
I would like to design a loosely coupled system as mentioned in the Jacobs book.So that my overall life quality improves. Most of my waking time is devoted to career, money and cooking stuff. I would like to slowly redesign my life to improve my health, spiritual thinking and mindfulness and other whole list of things I have been keeping tract of. So this part of the structure would be mainly for experimenting and seeing how i feel about it and how it affects.

So October goal for this would be to design a loosely coupled system for a holistic perspective of life instead of just finance alone. Right now experimenting without smart phone during work days. I will post the results and thoughts about it at the end of this month.

Self development
All my self development goals will be towards the health, till I reach a desirable level there. I am so ashamed to post the stats here. I will find some form of reporting to keep me on track. For October the goal would be to walk/stretch for 20 mins a day at-least. I will move on from there.
Last edited by LiberateMind on Thu Oct 04, 2018 12:37 pm, edited 1 time in total.

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

October 2018 - P3

Post by LiberateMind »

Thoughts to come back from Future

Business consideration:
I would like to consider the allocate part of my portfolio for future business, though its not in the cards right now.

Inflation consideration for retirement:
Unlike other developed countries, inflation is a real problem in Indian retirement scenario. Owing to that mainly, two things I would like to accomplish for my retirement
- Own home before retirement, this is to decrease the expenses primarily.
- I would like to convert my Liquid net worth to real estate after a certain threshold. Most of the real estate here yields the rental of 2-2.5%. During my retirement, I would want my 60% of my expenses covered by rentals (preferably commercial). Which is easily triple my networth now. The main advantage for that is the rental income keeps pace with inflation. Have to ponder bit more on this approach to include analyze with taxation and when to build the buildings.
- Threshold: Real estate networth<=Liquid Networth<= 2.5*Real-estate Networth.
This might be over conservative approach. This might change as I observe the market and uncover other opportunities or solutions to generate passive income, which paces with inflation.

wolf
Posts: 1102
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Liberate Mind: Family Edition

Post by wolf »

How much correlate Indian inflation with Indian (consumer) stocks? Would that be an alternative? What drives inflation in India?

...looking forward to read more about your ideas and journey towards more quality of life.

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Re: Liberate Mind: Family Edition

Post by LiberateMind »

@Wolf, Thanks for the suggestion. I have been writing and rewriting replies before coming here to post it. This post is to mainly to show the situation from my perspective. May be it includes fears, pre-concieved notions and such.

Inflation rates in india:

Image

Consumer index

Image


I am bit reluctant to invest in stock market over 15% of my overall portfolio. There are many reasons for it,
- The financials of the companies are vague at best. Its not entirely reliable. Eg., Scams related to Ramalinga Raju + Satyam& Harshad Metha.
- Dividend yield is not very reliable. At most I get 1% return from the dividends. I don’t want to touch the principal during my withdrawal period. Comparatively my tax advantaged accounts yield 7-8% yield.
- Lack of role models who has done it already , as no one in my personal circle invests mainly in stock market. Few do trading or mutual funds but not for long term wealth or dividend investing.
- I don’t want to put too much energy and research into an area where it’s totally not in my control with.

What drives inflation in India?
 Increasing necessities.. Eg., Water – 15-20 years ago we didn’t buy water or purify it. We got it from the rivers or corporation or well and just drank it. We did not face any health issues due to this. Now that is no longer the option. We have to purify the water due to pollutants and not having the same sweet ground water as the water tables have gone down.
 Competition for the same product population. ( Eg., Rent in the area nearby office four years ago for a 2BHK is 12K , now its 40K. For the same resources, we have to compete with more number of people. )
 Taxes.. Taxes.. There is an increase in tax on everything we buy, around 8-20% even though the tax is less than many other countries, it do add up.
 Medical Inflation- The medical inflation has gone up. I don’t have any data to back it up. It’s more of a personal experience. Eg., Doctor fee during 10 years ago is along Rs.100 per session now its around Rs.500.
 Easy credit. When we were kids, my parents don’t have that much easy credit as now. Home loan is the only loan with most people can get. Right now personal loans , car loans are a norm. So it does drive up certain prices up.
 Black Money. This mainly drives the real estate prices unrealistically as this is one of the main asset class to hide money. Even though reforms are coming, yet to see how effective it is.

So thats long, I am mainly looking for opportunities outside the stock market. Right now invested some money in my dad business and getting 12% return for the loan. Any thoughts or suggestions are welcome.

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Re: Liberate Mind: Family Edition

Post by LiberateMind »

Quiet a long time before posting.The main deterrent is I am not that into saving hard anymore.

What happened?
- In November , we met with a minor accident. Spent the entirety of November and December in filing paper work , getting reimbursement and paying for it.
- Went twice on the offical trip (Dec & Feb). Enjoyed both of it.
- Restructured the finances a bit , so less emphasis on personal and more emphasis on family.
- Trying different things on the self development side. Like stopped reading fiction books and no smart phone for a while. Designing days like Ben. Franklin days. Walking 20 mins. Designing life in paper. Time logging. All those stuff.

Recently I was listening to Robin Sharma's videos and he asked a question what are the 5 things you will take bullet for ?

That got me thinking.
1. For the values i hold in my life.
2. In place of a loved one or to protect a loved one.
3. For the benefit of the mankind.
4..
5...

This got me thinking if I am willing to take bullet for it ( at least mentally :) ) then why am i not living for it.

So there you go in succinct what am I about in my absence.

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Re: Liberate Mind: Family Edition

Post by LiberateMind »

May 2019 Review:

Finance

Family:
Expenses: 36995.
Average Expenses for the year : 46199.

Personal Finance:
Current Net worth/FR Net worth.- 19.10% (Adjusted)
Passive income /Actual Expenses ( Roll over for 12 month). - 52.01%
Forecast on reaching the FR Net worth – Apr-2027.

  • Passive income is high due to the credit of interest on the tax saving accounts on Apr-2019 most likely will tamper down as the years go by.
  • Paid off the personal loan which has been dragging on and on.. :)
  • Though not calculating very strictly my savings rate hover above 72% for all the months in 2019.. :D
  • Formulated a loan agreement (5 year tenure) with the parents for their business and getting monthly EMI for the same. So will have increased passive income from that end to the tune of 3K for the current year. As the years go the interest will get decreased.
  • Started investing on a 300K seetu for a year , so bulk of my cash portion would be residing over there.
  • Owning a home is the next big financial target and its easily twice my net worth now. :lol: .I will have to formulate a plan yet. My parents are most likely to stay with us during their old age. So I want to have a big home, which can accommodate my parents, kids and us.I will evaluate how to achieve this goal , so that my life is not affected drastically. I would prefer to pay 30% of the home investment in cash at least remaining in loan shared with the husband.
Fellow forumites, how do you save cash for home downpayment ? The investment time zone is between 3-5 years. I dont want to concentrate fully on downpayment savings, but would like to set aside half of my monthly savings in there.

Any thoughts or suggestions?
Last edited by LiberateMind on Sun Jun 02, 2019 5:32 am, edited 2 times in total.

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Re: Liberate Mind: Family Edition

Post by LiberateMind »

Personal Development :

Finally i have developed my web of goals, it required quiet some iteratations. It might get reviewed in future, for now I am happy with the outcome.

Image


Few of the things on the personal development end:
  • Primary goal: Walking for 20 mins daily during the evening. Doing it for half of the days. I am finding it difficult to formulate a routine for that during travel to parents/ in-laws place or outside. Again some slag, once returned home.
  • Mediate 20 mins immediately after waking up. Doing it on and off. Not tracking. Definitely improves my mindset.
  • Journal ling at the end of the day. Reflection. On and off again.
  • Doing weekly planning. Using GTD. Not using perfectly, but when in use can definitely see the benefits.

Quality of life/Options to enjoy life more:

I gave myself permission to spend on travel and books. Right now joined a library called justbooks where they door deliver and collect the books from you again. It is costly, but have wide variety of non-fiction to read through.

First book read is Ben. Franklins auto biography. Enjoyed it till 80% after that names are lost on me once he started the war campigning and political career seriously.

Goals of JUNE:
  1. Walk 20 mins daily.
  • Read quality writings only.. Complete the book How to read and return.
  • Follow GTD religiously on all weeks.

avanishk
Posts: 46
Joined: Tue Oct 15, 2019 5:52 am

Re: October 2018 - P2

Post by avanishk »

LiberateMind wrote:
Thu Oct 04, 2018 12:31 pm
Self development
All my self development goals will be towards the health, till I reach a desirable level there. I am so ashamed to post the stats here. I will find some form of reporting to keep me on track. For October the goal would be to walk/stretch for 20 mins a day at-least. I will move on from there.
When it comes to sticking to health goals, finding an accountability partner would help a lot. It could be in form of another colleague or family member with similar goals or becoming a part of local running groups in your area. Being a part of local running group has helped me a great deal in terms of remaining motivated as well as sharing/receiving quality tips.

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fiby41
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Location: India
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Re: Liberate Mind: Family Edition

Post by fiby41 »

LiberateMind wrote:
Fri Oct 12, 2018 10:59 pm
Taxes.. Taxes.. There is an increase in tax on everything we buy, around 8-20% even though the tax is less than many other countries, it do add up.
According to my understanding taxes are deflationary. They take away excess spending power from people. Reducing corporate tax to 21% is what they did the previous month to 'stimulate the economy.'

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Re: Liberate Mind: Family Edition

Post by LiberateMind »

@fiby41

Thank you for posting. Are taxes really deflationary? Taxes just transfers the money from people to government. Then again government spends it on supposedly for improvement of society!! It is what it is. All I can do is take the decisions on how it will affect me.

@avanishk,

For me personally metrics helped rather than accountability partner. Its difficult for me to separate emotions from people. I rather have things black and white than getting judged based on the values of other.

Mostly stopped posting , as my value system moved more towards family, society and health. Finances is in the background of my life now. Life is going along. I am still trying to start a family and planned for an IVF in the upcoming months after one failed cycle. Joys of late marriage. So that consumed lot of money and kind of threw me off track in the finance end. That along with other things. So to increase the success in this cycle I picked up my courage ( really needed as they fire people back and forth for no clear reasons atleast invisible to me ) requested for a parttime arrangement for the months of Apr-July.

Thanks to Jacob my life is more resilient (or have more choices) now because of his book and these forums.Without having the financial stability and understanding that I can manage even without the job I could not have done it. :)

ertyu
Posts: 2893
Joined: Sun Nov 13, 2016 2:31 am

Re: Liberate Mind: Family Edition

Post by ertyu »

Taxes are inflationary/expansionary. If you (an individual person or family) get an additional $1 in income, on average, you will save some and spend some. So, a $1 increase in income would result in, on average, say, a $0.9 increase in spending. However, if the gvt takes that dollar in taxes, and then turns around and spends it, it would spend the full dollar. So, in a country with a non-negative savings rate, taxation followed by spending is more expansionary compared to no taxation.

RoamingFrancis
Posts: 593
Joined: Wed Oct 30, 2019 11:43 am

Re: Liberate Mind: Family Edition

Post by RoamingFrancis »

Just found this journal today. As a young and single person, I'm interested to see how having a family changes your path towards ERE. Will be following with interest.

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Re: Liberate Mind: Family Edition

Post by LiberateMind »

@RomaingFrancis, Thanks for posting.I do hope my ramblings add some value to the community, as i am going to increase my spending.

@ertyu, Understood!

I always have moving targets in my life. Guess that is how it is going to be in future as well. When I started this journey I was single and hoping to achieve the FI as an individual. That part is mostly done.

Having that leverage helps me to negotiate for things in life from a strong position. Like asking for Work from home or part time or being choosy about the stuff I work on or not working late nights unless REALLY required etc., In personal life as well, have become a bit of anti fragile with respect to finance.

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Re: Liberate Mind: Family Edition

Post by LiberateMind »

Family:
Right now I am living with my husband in a 2 BHK. My parents will be moving in with us in the next two years.I will be having a toddler then. So all my future plans should include supporting older and younger generation. Finding a place where we can be a multi-generational family and having space for everyone is important. So what this means, increased spending on monthly basis, medical expenses, maid for house keeping. Having a family with me will eliminate the day care and provide some form sanity in my life as I plan to work for few more years.
DH will be supporting his family, including spending some big money for his parent family home and monthly support. His brother and his family is staying with his parents. So by default, they would also be benefiting from those contributions.He will be supporting for parental medical expenses for his family as well. About 30% of the income would be spent over there. Same goes for my case as well, as supporting our parents and having them not to worry about anything is very important for our value system. I don't expect my children to do the same for me. :)

Life style:
I was able to settle into a routine in my life which pretty much looks like below. Some days i am able to concentrate, some days not.For week day hammered it out. Weekend yet to optimize.
Wake up : 5:30 -6:00 AM
Ready & Walk : 6:00 - 7:00 AM
Cooking and Getting ready for office : 7:00 - 9:30 AM
Mediate & Breakfast : 9:30 - 10:30 AM
Office hours : 10:30 AM - 7:00 PM
Relax & Dinner : 7:00 PM- 11:00 PM ( Husband reaches home pretty late.. so the late night)

Even though my life has good amount of exercise and work , social connections are lacking very much as I am mostly working my day and in the current locality I don't have friends as the mentality differs so much..

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Re: Liberate Mind: Family Edition

Post by LiberateMind »

Finance:
Definitely not going to be ERE style. I want to have a good lifestyle without worrying money. It means increasing spending in few areas and rethinking my career i.e., build a business or change jobs to increase income or go part time. Going part time will help me to cover my expenses , allowing the networth to grow. Yet to find a middle ground. I am restarting with Finance 101. So target for next five years

1. Emergency Fund : 200K ( To help us during the medical expenses and during maternity leave).
2. Term insurance for me and my husband : Around 100K per year for 5 years . ( To help our parents and future children from lifes uncertainies).
3. Buying a car. Mostly to increase quality of life, to avoid wait times and disturbances while travelling as family.
4. Travel along with parents. 300K ( This would be a once in life time experience for them, I want to do it while they are able).

Most of the list over here is expenses, we are maxing out our PPF and my default asset allocation is permanent portfolio. Hoping to save around 50% of my income in all cases. We keep our finances separate, but as days go by most likely we will merge it. Right now, we are sending equal amount to a joint account and do the expenses and tax saving from there. Remaining salary is our own to spend or save. Most likely for saving.

This is going be a fat FIRE or FIRE with family in Asia. Hopefully this offers a different perspective. Thoughts/ Advice are welcome.

LiberateMind
Posts: 197
Joined: Fri Oct 26, 2012 8:18 pm

Re: Liberate Mind: Family Edition

Post by LiberateMind »

Hi All,

Back from hiatus. Lot has happened in the last few months. I have resigned from my job and the last day is in the first week of December. I would like to thank Jacob and this community, without them I would not have reached this position (say more anti-fragile). Reading 2Birds1Stone journal provided the inspiration to go for it. Thank you 2B1S.

The break is mainly to start the family and experimenting career options. Max planned for 3 years. Lots of discussions (or arguments) happened around this. It is difficult to leave a job with high median salary without any options lined up. It created a havoc in my mind , as I have always been independent and earning my way after college.

One best thing is my networth will provide a barebone expenses for myself @ 4% , so if worst comes worst would be able to survive with that. Most of my assets are tied with non-cashflow generating assets , even though it has appreciated a bit from my investment.

basuragomi
Posts: 418
Joined: Tue Oct 15, 2019 3:13 pm

Re: Liberate Mind: Family Edition

Post by basuragomi »

Congratulations on quitting! Are you planning to keep separate finances with your partner? I'm interested in seeing how your definition of good lifestyle changes as you experience all the newfound free time - seems like the most common outcome is that a good lifestyle and barebone expenses are closer together than most people think.

wolf
Posts: 1102
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Liberate Mind: Family Edition

Post by wolf »

Hi LiberateMind. Congratulations on quitting! From what I read on your journal you are very well prepared for the life you want in the next x years. I just looked it up, when you first posted here. It's almost eight years, and what you achieved since then. Wow! Wish you all the best and would be great if you give us an update in the future.

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