My R2I (Hyderabad) diary - Rupali

[Rupali]

Can't start without thanking this forum and members like RRK & Desi, the knowledge/experience/support we have received is unbelievable and I would definitely credit 20% of our net-worth to this forum (I read indexing but forum gave the final push to start on Vanguard. More or less RRK's sample portfolio and we have 12-15% for last 5 years).

Profile:
Husband Wife (35, 35) + 2 kids (7 & 4)
Single IT Job (Wife quit after second child) in US & India
We are GC holder , Kids are US citizen
Financially comfortable (Kids education is funded, House funded, working on retirement)
US Stay : 10 years
Returned to : Hyderabad
Return Experience :Extremely Satisfying
R2A possibility : less than 5%


Basic reason for our return was not tied to family, social life or any particular financial target. Kids was one of the factors but we just felt more Indian at heart, feel more at home in India. Took transfer from same comparny, move package was great , one less thing to worry about. Since move was paid we got most of the stuff to India. A few things I can point out -

* Start decluttering as far in advance as possible.
* Carefully look at any particular brands, items, books, music you want to buy fresh and get to India. We got lots of books, toileteries, Ziplocks, Correlle, Stocked up on UGs, Basic Jeans/Ts etc. .
* You do get most of the stuff in India, It may be more expensive than USA. You cannot continue to get it from US for long term but haveing supply for 6-12 months helped us with transition.
* Electronics is not really worth it.

After coming here we had company provided flat for 2 months, party time. They supported us with lots of things like Getting PAN, Driving classes, House search, language classes (As a non-telugu, I learnt a bit of Telugu) , Gas connection etc.

* Plan for kids school, we got help from Company but if timing is not right (Dec-Jan) it may be hard to get admission. Second language could be tricky if children are not comfortable. Cultural Adjustment / Bullying might be an issue for children. Give them plenty of time/ attention.

* International schools are easier but more expensive, normal schools may be too tough for kids. We took 2-3 month trips for last 2 years and sent kids to some small school so they were not totally put in an alien environment. Specially taught Hindi. We got admission in DPS Hyderabad. Have been extremely satisfied. It has focus on studies and extra-caricular. Good facilities but not AC. Costs us close to 1L for 2 kids for an year (includes transport/food/books/uniform etc. ) International schools are almost double.

* If you are not able to get subsidised gas connection (HP/Indane etc. ) could get private like Super Gas (Costs double) but get it immediately.

* We are currently staying in a rented house. It is in a closed community. Love the security/convenience/environment. For 30K it is not too expensive compared to 3-4 bedroom flat. If your budget allows at least consider Closed Community inndependent Villas, may be costlier than Flats but in big picture still a bargain.

* We have a car & 2-wheeler which works well in crowded areas. I would strongly recommend getting comfortable with driving, drivers can be very unreliable and cost 3.5 to 5K. Maids are unreliable as well cost 2-4K for stay at home whole day. I have seen people spending > 10K on household help.

* Cost of living overall is mixed , some stuff is incredibly cheap like vegetables, basic food items, services etc.. Some things can be very expensive - If you go for a movies + Restaurant outing could easily spend 2K. Could have a meal in Kamath for 150-200 or go to Taj and spend 2-3K for family meal. Its upto your choices & resources. Fancier stuff like pacakaged fruit juice, cereals, cheeses, imported toileteries, shaving foam, brand name cloths etc. could be same cost as US or more.

* Beware of people from ICICI, Reliance Money, HSBC Premier, Bajaja Allianz or any such big org selling ULIP or any other financial products (NFOs, Endowment/cashback policies or any specialized Real Estate funds). Indian Financial Industry could be very tricky. Do not sign anything, invest anywhere without thorough research. You get invited to 5* hotels/ get gifts etc. in name of Wealth Management. High chance you are getting taken for a ride. Do ask for Rate of return and expenses for product offered. Ask them if returns are guaranteed or just example. Do as Link to website or brochure for what they are offering.

* Do expect untimeliness, lack of professionalism. Keep buffer in your plans and be ready to follow-up N times. Don't assume that if somebody said something it will be done.

We have been extremely satisfied so far. I will continue writing on different aspects of return. Feel free to ask questions I'll be glad to help as much as I can.

Regards,
Rupali

[gabbar007]

Congratulations, and thanks for sharing, very well written.

-g

[vishwa777]

Thanks Rupali. Congratulations and Happy for you that R2i experience has been a good one. You have provided useful information. Pls post more in the coming days.

[RV2I]

Thank you for sharing the experience! Congratulations and good luck!

[ILuvHyd]

I would strongly recommend getting comfortable with driving, drivers can be very unreliable and cost 3.5 to 5K. Maids are unreliable as well cost 2-4K for stay at home whole day. I have seen people spending > 10K on household help.[/quote]
Great post and keep posting. Go easy with the 2 wheeler for a while. You get exposed to lot of pollution and may not be a good thing during initial days of R2I.

I completely agree with you on drivers and maids. It gets very costly. The situation might become worse. The reason is due to rising rents, lot of places where they used to live are being reconstructed resulting in steep rent increases for them. E.g. A single room in sections of Kukatpally,KPHB/Miyapur area where they live used to cost around Rs. 600 until recently. But the owners started to rebuild new houses in those spaces and the same room is now costing around Rs. 2000/- which the drivers and maids may not afford. Sometimes they commute from too far away places to save on rent and it is not convenient for them or us. Just my 2 cents.

[Rupali]

Thanks for kind words everybody.

Regarding 2 wheeler Yes it is scary sometimes, but it is mighty useful. We do not use it with kids though.

Will write few things about Finances -

401K - Mine rolled over as soon as I left my job. In process of moving everything to India during RNOR period. Husband's 401K stuck since he is working for same company.

Bank a/c / Brokerage/ Credit card in USA - Keeping one each and everything else closed for simplicity. Have subscribed to Credit Monitoring Service for some time.

Stock Options in USA - We were suggested (By KPMG) that taking care of taxes after RNOR is over is big mess so plan to get rid before that.

ESPP - Sell it immediately for short term profit to avoid too much exposure to same company.

Any other investments in USA - Just marking 401K for kids education, rest is moved to India ( In process). Took some time (gradual move) to make sure we want to continue in India and chances of move back are minimal.

Liquid Funds in India - Anything significant gets turned into LINKED FD (ICICI) before it goes to proper bucket. Leaving money in Savings for 3.5% interest is SIN.

RDS/FD - Did some recurring Deposits to take advantage of high interest rates (10% :-) so some of the savings/moved money gets channelled there.

PPF - Opened the a/c but mostly used PF contribution( For Husband) and ELSS (For me ) for 80C tax benefits.

NSC/POMIS/KVP - Have some legacy stuff lying around but at 8% it is not exciting.

Indian Market - SIP going into different Mutual Funds. No direct stock exposure yet.

GOLD - Trying to get systematic exposure to gold, not yet started.

Most of the Interest generating assets are in my name since I do not have a job so I'm in lower tax bracket.
We were careful while moving the assets since once they come to one person's name, it is not possible to move to other person without IT questioning it. Our money was in Joint a/c in US so we could move it either way.

Regards,
Rupali

[Akimohan]

Congratulations and Thanks for sharing your experience.
Just to get few more picture of your situation -
Did you have a house in USA..?
How old are your kids?

Thanks.

[hellome]

Liquid Funds in India - Anything significant gets turned into LINKED FD (ICICI) before it goes to proper bucket. Leaving money in Savings for 3.5% interest is SIN.

RDS/FD - Did some recurring Deposits to take advantage of high interest rates (10% :-) so some of the savings/moved money gets channelled there.

PPF - Opened the a/c but mostly used PF contribution( For Husband) and ELSS (For me ) for 80C tax benefits.

NSC/POMIS/KVP - Have some legacy stuff lying around but at 8% it is not exciting.

Most of the Interest generating assets are in my name since I do not have a job so I'm in lower tax bracket.
We were careful while moving the assets since once they come to one person's name, it is not possible to move to other person without IT questioning it. Our money was in Joint a/c in US so we could move it either way.

Regards,
Rupali[/quote]

congratulations and goodluck Rupali!

A few clarifications..

1. NRE deposits give hardly 2.5 % interest - Simple savings account works out better :) .. So, the linked FD in ICICI that you are talking about - is it a LOCAL account?

2. You said you did some deposits to take advantage of 10% interest - Again, are these local deposits - (how did you do it with the NRI status before ? Or did you do it after becoming a resident Indian?)

3. NSC / PPF - again, can NRI's make deposits on this? Or are you again talking about local status here..

4. Is it not possible to move assets from the husband's to the wife's name (for example) without being questioned?

Thanks in advance..

[ILuvHyd]

Will write few things about Finances - [/quote]
Very good, informative post and thanks for sharing.

[Rupali]

Hellome, I'll try to clarify.

1- Yes Sir, I'm a resident now so I'm talking about local account.
2- 10% RDS, did it after becoming resident.
3- NSC/PPF local again
4- In India there is no Married Filing Jointly. So both Husband & Wife file as Individuals. Hence IT does not allow Wife or Husband to trasfer assets/Income to Non-Earning Spouse's/children's to reduce tax liability. Income of spouse/children is clubbed with Higher Income Earner based on certain rules. IT dept can defintely question you if you make a big FD in wife's/children's name from your assets and she does not pay interest. You could do that with Parents though.

http://finance.indiamart.com/taxation/income_tax/spouse.html

Also if you are interested in high return debt instruments you could possibly invest in Fixed Maturity Plans/Debt Interval Funds for returns in range of 9%. You could also consider Arbitrage Funds.

---You may be liable for tax in USA/Country of residence. (Same as NRE a/c)
---NRIs are legally allowed to invest.
---There may be some locking period depending on chosen plan. There are plenty of Debt Interval Funds with monthly and quarterly withdrawal windows.

http://www.valueresearchonline.com/funds/typecomp.asp?type=1&objective=21&submit2.x=9&submit2.y=8

REgards,
Rupali