Dear members,
You are the best, no where in the world can we get this kind of information.
I have been patiently reading as much as I can and started learning few things. Its better late than never.
Anyway here are my R2I plans and strategy. Please comment.
About me:
Me, Spouse + Kid (1 year) ( All USC )
R2I plan : 2008 ( Dont know exact month yet )
Current USA AAP:
Bank CDs : $95K ( Sold some Stock )
Stocks : $95K (Company Stock)
Vanguard : $35K (70 Stock: 30 Bonds)
Savings : $15K
401K : $60K
India AAP:
CDs + Savings : Rs 10 Lacs ( In father's account)
Bangalore Plot : Rs 40 Lacs
Other RE : Rs 20 Lacs (apt in home town + small plots )
Putting RE aside, if I liquidate everything I will probably get
around $325K.
Here is my game plan. I have extensively read RRKs articles and
got inspired by them. I want to invest $250K and use $75K for building Home and R2I expenses to settle down in BLR.
I want to split $250K and invest $125K in US and $125K in India.
Investmentplan in US:
Vanguard : $75K (Total StkMk, Total Bond, TotInter Bond)
Ameritrade : $12.5
I Bonds : $12.5
Savings (CD) : $25K ( The interest from here can be used while visiting US)
Investments in INDIA:
Stocks : $45K ( As RRK suggested, I want invest in all stocks in Nifty)
( RRK you have suggested how to invest Rs 5 Lacs in Nifty
( How would the same strategy work for $45K -Rs 18 lacs)
Bonds : $80K ( Tax saving + Post office + CDs )
I am planning to take up a job and I would probably earn around Rs 1 lac
per month. I am planning to continue to fund my Vanguard fund about $500 a month and fund india stock about Rs 10000 per month.
This way I can build wealth in both US and India and later when the kid
decides to run to US for education, I can fund it or if kid continues to stay in India, i will have sufficient funds in india.
For retirement we need to use the left over funds in US and India + Any new investments I make from India. ( I am still not sure how much can I save in India and how I can invest. I can think about it when I get there.
I will probably fund ppf and invest in RE when oppropriate.
Does anyone see a big ah-ah here. Please advice so I can appropriately plan. Thanks in advance and sorry for the elobarate post.
My R2I Plans :: please help review
My R2I Plans :: please help review
How many years away are you from retirement?
I am asuming you want to earmark all 250K for retirement and not toouch principal or any gains from this till retirement.
Will you have additional savings every year and approximately how much and for how many years?
Based on your risk psyche, years to retirement, asset base, etc, what would your desired AAP ratios be? What percentage in equities and what percentage in fixed income?
Answers to above would help determine how much to be invested where?
I am asuming you want to earmark all 250K for retirement and not toouch principal or any gains from this till retirement.
Will you have additional savings every year and approximately how much and for how many years?
Based on your risk psyche, years to retirement, asset base, etc, what would your desired AAP ratios be? What percentage in equities and what percentage in fixed income?
Answers to above would help determine how much to be invested where?
My R2I Plans :: please help review
Desi;28179How many years away are you from retirement?
I am asuming you want to earmark all 250K for retirement and not toouch principal or any gains from this till retirement.
Will you have additional savings every year and approximately how much and for how many years?
Based on your risk psyche, years to retirement, asset base, etc, what would your desired AAP ratios be? What percentage in equities and what percentage in fixed income?
Answers to above would help determine how much to be invested where?[/quote]
Hi Desi,
Thanks for your response, here are the detailed answers for your questions.
Retirement:
------------
I am 33, so I have about another 22 to 25 years ahead of me for retirment.
and I am planning to work in India till then.
Kids Education + Retirement Fund:
---------------------------------
No I dont want to earmark all 250K for retirment. I want to use it partly for my kids education which is 17-18 years away. I am not sure where he will go to school (US or India for BS or whatever his interest maybe). So I want to have funds at both places to support this.
So do you think I should break up this 250K to 4 pieces. 2 for retirement, 2 for kids education to invest both in US and India.
Job Savings:
-------------
Currently talking to my employer who is willing to send me to India for job, because I deal with india team a lot sitting here in US. So it makes sense for me to move. Talking to other people I could get about Rs22-25 lacs per year. I never worked in India, so I am not very much aware of the tax structures ( which I am learning.) So I will defenetely get about Rs 1 lac after tax. I could save atleast Rs 50K per month which I want to divert into investments. About 25K to vanguard and invest the rest in India.
AAP ratios:
-----------
I liked RRKs ideas of AAP
In US : Equities 65 to 70%, fixed income 30-35%
In India: Equitites 30 - 35 % fixed income 65 - 70%
125K in US will be about 300K+ in 17 years with $6000 additional each year at 6% ROI.
125K in India with additional Rs20K per month will get to about Rs 2Cr
in 17 years at 8% ROI.
Hopefuly these targets are achievable.
Thanks in advance.
My R2I Plans :: please help review
#1, thanks for your good words.
As an NRI, you dont have much option in opening a indian brokerage account to buy Nifty stocks. You may have to ask your father or some one to handle that part. You can do DCA and buy all nifty stocks in small qty regularly.
Since the brokerage is charged based on the transaction amount, you can even buy 1 stock every day and not pay lot of commission.
btw, you seem to mix the account types with asset types. Planning based on 401k, ameritrade etc.
For example, you should not earmark money for ameritrade, you should plan based on the assets. like ETFs. Then you use the right account type to buy those assets.
As an NRI, you dont have much option in opening a indian brokerage account to buy Nifty stocks. You may have to ask your father or some one to handle that part. You can do DCA and buy all nifty stocks in small qty regularly.
Since the brokerage is charged based on the transaction amount, you can even buy 1 stock every day and not pay lot of commission.
btw, you seem to mix the account types with asset types. Planning based on 401k, ameritrade etc.
For example, you should not earmark money for ameritrade, you should plan based on the assets. like ETFs. Then you use the right account type to buy those assets.
My R2I Plans :: please help review
Hi RRK,
My Plan is to invest in Nifty after I R2I, till then I will keep the money
in US. I think once you R2I you can open a brokerage account, right ?
I think I am getting ahead of myself. I should have put it this way
US AAP: $125K
Stocks : $70K
Bonds : $30K
Fixed Income : $25K
India AAP: $125K
Stocks : $45K
Bonds : $80K
Desi or RRK, any more comments on the AAP.
Ofcourse, everyone can also pitchin and share their thoughts too.
Am I missing anything?
-Thnx
My Plan is to invest in Nifty after I R2I, till then I will keep the money
in US. I think once you R2I you can open a brokerage account, right ?
I think I am getting ahead of myself. I should have put it this way
US AAP: $125K
Stocks : $70K
Bonds : $30K
Fixed Income : $25K
India AAP: $125K
Stocks : $45K
Bonds : $80K
Desi or RRK, any more comments on the AAP.
Ofcourse, everyone can also pitchin and share their thoughts too.
Am I missing anything?
-Thnx
My R2I Plans :: please help review
Your long term retirement plan is to retire in India - correct?
If that is the case, then you should not have anything in fixed income in USA.
The AAP examples of RRK that you have posted are probably for LIAs vs R2Is and not for US investments vs Indian Investments.
A 50:50 up to 65:35 (stocks : Fixed income/bonds) ratiois reasonable.
The fixed income portion should be invested in India, the equity portion in USA and India. It is this breakup that should decide how much money in USA and not just a random 50:50 breakup.
It is desirable to separate out money for children and have their own AAP.
Every year you should rebalance AAP and get perhaps 0.5% to 1% lighter in stocks and 0.5% to 1.0% higher in fixed income.
For children's education, this schedule of reducing equity exposure shouud be mananged so that as you are very close to needing money, your equity exposure should be zero percent.
If that is the case, then you should not have anything in fixed income in USA.
The AAP examples of RRK that you have posted are probably for LIAs vs R2Is and not for US investments vs Indian Investments.
A 50:50 up to 65:35 (stocks : Fixed income/bonds) ratiois reasonable.
The fixed income portion should be invested in India, the equity portion in USA and India. It is this breakup that should decide how much money in USA and not just a random 50:50 breakup.
It is desirable to separate out money for children and have their own AAP.
Every year you should rebalance AAP and get perhaps 0.5% to 1% lighter in stocks and 0.5% to 1.0% higher in fixed income.
For children's education, this schedule of reducing equity exposure shouud be mananged so that as you are very close to needing money, your equity exposure should be zero percent.
My R2I Plans :: please help review
Desi;28533Your long term retirement plan is to retire in India - correct?
If that is the case, then you should not have anything in fixed income in USA.
The AAP examples of RRK that you have posted are probably for LIAs vs R2Is and not for US investments vs Indian Investments.
A 50:50 up to 65:35 (stocks : Fixed income/bonds) ratiois reasonable.
The fixed income portion should be invested in India, the equity portion in USA and India. It is this breakup that should decide how much money in USA and not just a random 50:50 breakup.
It is desirable to separate out money for children and have their own AAP.
Every year you should rebalance AAP and get perhaps 0.5% to 1% lighter in stocks and 0.5% to 1.0% higher in fixed income.
For children's education, this schedule of reducing equity exposure shouud be mananged so that as you are very close to needing money, your equity exposure should be zero percent.
yes final plan is to retire in india.
thankyou all for your wise suggestions.
I will plan accordingly.
-bb
My R2I Plans :: please help review
Some follow up questions.
I read the article by RRK about "Taking advantage of non working spouse" and I have some comments or question on that.
I understand that being USCs we have to file jointly while filing US taxes, but in India, we can file individually.
so my question is,
If I break up my AAP into 4 accounts (2 in US an 2 in INDIA)
Myself: 1 Retirement Account in US , 1 Retirement Account in INDIA
Non working Spouse : 1 kids account in US and 1 Kids account in INDIA.
(When I say account, it is diversified into Stk, Bnd and Cash CDs).
Major chunk of AAP will be in the Kids Edu Accounts initially so CGs will be more in spouse accounts.
If spouse's Worldwide CGs is more than 1 lac then spouse needs to file IT in India, otherwise we will save taxes in INDIA for the spouse portion , Correct ? or if its less than 1 lac is it included in my Tax filings ?
In USA , ofcourse we will file jointly.
So will I benefit tax wise by splitting accounts between me and non working spouse ?
Currently we have joint account ?
Thanks in advance,
BB
I read the article by RRK about "Taking advantage of non working spouse" and I have some comments or question on that.
I understand that being USCs we have to file jointly while filing US taxes, but in India, we can file individually.
so my question is,
If I break up my AAP into 4 accounts (2 in US an 2 in INDIA)
Myself: 1 Retirement Account in US , 1 Retirement Account in INDIA
Non working Spouse : 1 kids account in US and 1 Kids account in INDIA.
(When I say account, it is diversified into Stk, Bnd and Cash CDs).
Major chunk of AAP will be in the Kids Edu Accounts initially so CGs will be more in spouse accounts.
If spouse's Worldwide CGs is more than 1 lac then spouse needs to file IT in India, otherwise we will save taxes in INDIA for the spouse portion , Correct ? or if its less than 1 lac is it included in my Tax filings ?
In USA , ofcourse we will file jointly.
So will I benefit tax wise by splitting accounts between me and non working spouse ?
Currently we have joint account ?
Thanks in advance,
BB
My R2I Plans :: please help review
Desi;28533Your long term retirement plan is to retire in India - correct?
If that is the case, then you should not have anything in fixed income in USA.
[/quote]
A question for my own understanding:
1. Why should the investor keep his/her entire fixed income in India?
2. Is this decision based on higher rates for fixed income in India or lower taxes in India or some other reason?
tx
My R2I Plans :: please help review
All my questions reg non working spouse are answered in the following thread.
http://www.r2iclubforums.com/clubvb/showthread.php?t=2204
BUMMER !!!
Looks like we cannot open an account on non working spouse name and take tax advantage. But one thing I dont understand is if a spouse stops working after R2I and he/she transfers money from US bank to India account, is it OK to file taxes seperately and take tax advantage. But then how can we prove that this money came from Spouse job. Should we show some pay checks to prove that, dont you think this is ridiculous.
Any one any guesses how this is dealt in India ?
Any Indian tax gurus in this forum.
thanks,
BB
http://www.r2iclubforums.com/clubvb/showthread.php?t=2204
BUMMER !!!
Looks like we cannot open an account on non working spouse name and take tax advantage. But one thing I dont understand is if a spouse stops working after R2I and he/she transfers money from US bank to India account, is it OK to file taxes seperately and take tax advantage. But then how can we prove that this money came from Spouse job. Should we show some pay checks to prove that, dont you think this is ridiculous.
Any one any guesses how this is dealt in India ?
Any Indian tax gurus in this forum.
thanks,
BB