One of the main difference between a business person/entrepreneur and an employee is the opportunity they offer for the next generation. Let me explain that a little bit…
An employee starts his journey at a junior level and works his way up to a senior position and will retire between 55 to 60 yrs. An Entrepreneur will also start his journey with a lot of struggle and work his way up but can choose to retire early or never retire till health permits
While both of them have worked hard but the entrepreneur has created assets that will continue to generate income even in his old age and more importantly, he has created a strong base for the next generation to take over and make it bigger. But the next gen of an employee will have to start from the scratch again and go through all the struggle before they can attain financial freedom.
That is why it is important for all of us to create assets that could generate passive income even while you are not working like rent from commercial or residential property, dividends from stocks/mutual funds, Royalty etc which can then be passed on to the next generation.
For an employee, one of the biggest worry is retirement…while you should plan your retirement/financial freedom, you can gift this financial freedom to your next generation as well so that they will not have to worry about retirement planning and can live life to the fullest…
I mentioned about assets that generate passive income earlier which can be passed on to the next generation…. Here is one more/easier way to do it…
If your monthly expense is 50-75k today and you invest 2 cr. in a balanced fund which can give 10-12% annual return, you can withdraw 1 lakhs per month allowing your principle of 2 cr to grow at 4-6% annually. So, it’s safe to assume that a 2cr corpus today can take care of your financial needs and can get you financial freedom.
Let’s assume your child has 45-50 yrs before he/she retires. If we assume an inflation of 5%, considering a benchmark of 2 cr retirement fund today, the retirement fund needed for your child will be between 18 to 23 Cr.
So that’s our goal. If we plan for this now…your children will not have to go through the worry and struggle of retirement planning. Imagine if your parents had done this for you…wouldn’t your life be a little different? And it’s not the Will, it is the knowledge and opportunity…which they didn’t have…but you now have it and there is no running away…
So the obvious question…How do we accumulate such a huge corpus of around 20 Cr? That’s where we come in….Here is a sample illustration.
A 6 lakh invested with a fund which can generate a 14% annual returns… will become 22 Cr in 45 years. Now…if you don’t have 6 lakhs…start a monthly SIP of 6000 for 6 yrs and then leave that amount for 45 yrs…you will have your 22 Cr.
It’s that simple….you just need to spare 6K/month for 6 yrs and you would have taken care of your child’s retirement…they will not have to worry about it in their life time. Teach them to do the same and your future generations will remember you for a long time after you are gone….
I think this is one of the best gifts that you can give to your child .
Financial freedom is not just about the money…its about the freedom to do things you like, its gives you the freedom to work for yourself, travel the world, spend more time with family, do things that you love etc etc…
We can help you plan & invest for a lot of things like this…email or call to book an appointment for a discussion – Invest@smartserve.co / 9916804769
Happy Investing
Robin