How much is enough...for Bangalore?

[r2i_real]

This poll is similar to the one you must have seen in this forum, except that this is specifically for Bangalore.

Our r2i forum has members moving to many different cities in India and I think cost of living varies significantly from one city to another (e.g. Gurgaon and Bangalore). If there's interest among the members, we can have some stats/opinions specifically for potential R2Ies tragetting Bangalore.

Few points to keep in mind:


The amount of money should be sufficient to provide:

1. Financial independence. I define 'financial independence' as 'work at your own terms' i.e. no dependence on a monthly paycheck. If you don't get any salary/job income for a year or so, it doesn't cause any financial stress

2. a typical upper middle class, medium size home/apartment

3. school expense (in good schools) for 2 kids

4. all the material comforts a typical R2I expects to get (i.e. A/C at home, 24/7 water/electricity supply, good amenities in the place of residence, 1-2 mid size cars, maids etc.)

Thank you for your time.

[mn_op]

If you have a paid off house and big ticket items paid for, you should have 1 crore rupees of liquid assets to live a financially independent life.

1 Crore of assets, well invested, should bring about 8 lakhs per year and should be good enough to live an upper middle class life....for next 10 years or so.
The specter of inflation bothers everybody, however, investments in equities should beat the inflation (or the company that you invest in will cease to exist).

If your bets fail, then you will have to graduate to first middle class life and then to lower middle class life. If that does happen, you will have to sell you house (which would have appreciated astronomically) and move to a smaller town.

--------------------------
added later: On second thoughts, how much money an 'upper middle class' guy is supposed to spend to earn the label?

[r2i_real]

So far the opinion seems to be that one needs 3+ crores (i..e $750K - $1M USD/CAD) to 'semi-retire' in Bangalore....Hmmm, ok, I need to find a job :-)

[back2desh]

Not sure how much this poll will give you, from my perspective it depends on how simple or how luxurious one wants to live a life back in India, one could live with 1 Cr where as one could live with 3-5 crores, there are some who will not be satisfied with even 5 crores and for some there is no upper limit. If you are relatively young or in 35-40s I don't know if it is a good idea to retire as you still have the capacity to work (which will keep you busy, healthy and fit) or atleast do some good volunteering job to provide good service to the society/community since you already have good financial backup and live independently. Just my 2 cents thoughts!

Following story depicts that....
A group of alumni, highly established in their careers, got together to visit their old university professor. Conversation soon turned into complaints about stress in work and life.
Offering his guests coffee, the professor went to the kitchen and returned with a large pot of coffee and an assortment of cups - porcelain, plastic, glass, crystal, some plain looking, some expensive, some exquisite - telling them to help themselves to the coffee. When all the students had a cup of coffee in hand, the professor said: "If you noticed, all the nice looking expensive cups were taken up, leaving behind the plain and cheap ones.
While it is normal for you to want only the best for yourselves, that is the source of your problems and stress. Be assured that the cup itself adds no quality to the coffee. In most cases it is just more expensive and in some cases even hides what we drink. What all of you really wanted was coffee, not the cup, but you consciously went for the best cups... And then you began eyeing each other's cups.
Now consider this: Life is the coffee; the jobs, money and position in society are the cups. They are just tools to hold and contain Life, and the type of cup we have does not define, nor change the quality of Life we live.
Sometimes, by concentrating only on the cup, we fail to enjoy the coffee - do we?
"The happiest people don't have the best of everything. They just make the best of everything."

So far the opinion seems to be that one needs 3+ crores (i..e $750K - $1M USD/CAD) to 'semi-retire' in Bangalore....Hmmm, ok, I need to find a job :-)

[oasis138]

Not sure how much this poll will give you, from my perspective it depends on how simple or how luxurious one wants to live a life back in India, one could live with 1 Cr where as one could live with 3-5 crores, there are some who will not be satisfied with even 5 crores and for some there is no upper limit. If you are relatively young or in 35-40s I don't know if it is a good idea to retire as you still have the capacity to work (which will keep you busy, healthy and fit) or atleast do some good volunteering job to provide good service to the society/community since you already have good financial backup and live independently. Just my 2 cents thoughts!

Following story depicts that....
A group of alumni, highly established in their careers, got together to visit their old university professor. Conversation soon turned into complaints about stress in work and life.
Offering his guests coffee, the professor went to the kitchen and returned with a large pot of coffee and an assortment of cups - porcelain, plastic, glass, crystal, some plain looking, some expensive, some exquisite - telling them to help themselves to the coffee. When all the students had a cup of coffee in hand, the professor said: "If you noticed, all the nice looking expensive cups were taken up, leaving behind the plain and cheap ones.
While it is normal for you to want only the best for yourselves, that is the source of your problems and stress. Be assured that the cup itself adds no quality to the coffee. In most cases it is just more expensive and in some cases even hides what we drink. What all of you really wanted was coffee, not the cup, but you consciously went for the best cups... And then you began eyeing each other's cups.
Now consider this: Life is the coffee; the jobs, money and position in society are the cups. They are just tools to hold and contain Life, and the type of cup we have does not define, nor change the quality of Life we live.
Sometimes, by concentrating only on the cup, we fail to enjoy the coffee - do we?
"The happiest people don't have the best of everything. They just make the best of everything."

Not to hijack the thread but really liked what you said " If you are relatively young or in 35-40s I don't know if it is a good idea to retire as you still have the capacity to work (which will keep you busy, healthy and fit)"

I am just amazed when people talk about retireing in their 30's...i do hope they have something meaningful planned out post retirement for reasons mentioned above.

Finally you always see this image on being on a boat on an island with white sands - thats retirement...well let me tell you i have taken 3-4 days vacations doing just that and after 3rd or 4th day i cant wait to get plugged right back into the human network!@

[PeterGriffin]

Too much philosophy on this thread for a practical question.

Let's say a person has a paid off house/apt. The person has a family of 4 and wants to live a upper middle-class life. How much money would the person need for monthly maintenance? This should include school fees for kids (upper tier schools), food, maids, travel etc.
All of the above is assuming that the person doesn't work for now.
So, lets say this person moves back to India with $250K, how much money would the person get monthly, in terms of interest/dividends generated from investing the money in India?

[MrLong]

OP,

You might want to reword your question on the poll, to assume that if you had a paid off House OR Rent only, Car, and Furnishings.

-M

[mn_op]

I am just amazed when people talk about retireing in their 30's...i do hope they have something meaningful planned out post retirement for reasons mentioned above.

I think when people talk about retirement while in their 30's aren't thinking about staying at home 24x7. What they mean is whether they can explore new avenues and take risky decisions without directly impacting their families....and how much it would take to keep a family reasonably happy and well fed.

I harbor same ambitions and so I can relate.

Cost of essentials (grocery, milk, clothes, transportation, moderate vacations, schools) doesn't vary much from family to family as long as they are in same economical strata.

Anybody who wants to find out cost of living is a financially aware guy and not the one who splurges the money that he doesn't have. These are people who spend time looking around deals for vacations...i.e. they want to spend on vacations but still keep check on how much they are going to spend.

Peopel who ask for such advises aren't the ones who have millions of dollars in assets. They are typically salaried people who have managed to save off between 50 lakhs to 3 crores by keeping their expenses low. These are not the ones who fly to Europe to get a bespoke suite stitched...but rather people who quit buying shirts at Walmart and Target.

Additionally, you can very well expect these R2Iers to make every efforts to emulate their neighbors once back in India. If their neighbors haggle with the Merchant of Bhindis, they will do it too.

Member Gacchu came up with a fine spreadsheet and I use that often to guage the income levels needed to sustain in India.
I would expect that most of us will have expenses within 20% of his.

It is important to know the difference between Middle class, upper middle class, rich, wealthy and super-wealthy and while we will have some expenses that befit super wealthy, they will be offset by some of our lower middle class habits.
e.g. one may take a vacation to sunny florida once in a while but will be happy eating daal-roti at home on most of the days.

I will stick to my guess that Rs 1 crore is more than enough to live a very good life if you don't have to buy house in Bangalore and don't expect to make money anytime soon.

Again, let me repeat, a very good life for a person who dares to ask such a question and not for those bollywood NRIs.

[mn_op]

So, lets say this person moves back to India with $250K, how much money would the person get monthly, in terms of interest/dividends generated from investing the money in India?

It is best to assume returns that beat inflation by a narrow margin....so it should be around 10%.

[laks0]

It is best to assume returns that beat inflation by a narrow margin....so it should be around 10%.

10% monthly :35: