In my interactions with the millennials – I have come across two distinct sets of people. One, who are maxing on credit cards, spending on experiences and objects of desire besides travelling to places known and less known. The other set, live a relatively modest life and save to enable themselves to retire early. At least that’s what they are claiming for now.
The fired up set of people are those who are seeking financial independence to retire early. Publications are talking a lot about this set these days with headlines screaming of how people retire around 40. Most of us once settled in our career aim to retire early and have a life of our own. Reality bites at regular intervals only to make us realize that this ambition is now a shifting goal post. Or as a wisecrack put it – these are dreams induced by mind altering substances or liquids as the case might be. And perhaps that’s what brings us back to the grind. Children’s education, house, retirement nest egg, holidays, lifestyle and all that come with it costs money. A monthly pay-check or predictable sources of income fulfils most of these necessities and some luxuries.
I recently met a married couple with children and was pleasantly surprised to have a conversation in day time over nothing stronger than masala chai. They shared their views on retiring early and it was a thought through plan with deliverables like a project we spend time on in the board room. I talk about their profile because typically, the bachelor gang is one that dreams about retirement with pots of money and all the time to spend it or rather blow it.
Their mantra can be summarized as:
a. Start early
b. Save as much as you can
This is broadly the same advice my mother gave me when I started working. Every month save some money in a recurring deposit. That was my mother’s version of SIP. Some millennials tell me save a little every month and by the end of the year you will realize how little you have saved, which pushes them to get fired up if they really want to go places and retire early.
The interesting thing about this couple is they eschew all flashy objects of desire. They buy during discount sales, don’t have a wardrobe of clothes they never wear and don’t eat out too much. They are not exactly the Flintstones nor are they a typical younger set who spend lavishly.
They also have a note book where they track expenses. I have seen only my father maintain one so religiously – he even now writes down monthly expenditure and gives account of money taken. They also have a contingency fund planned. And, yes, they are on track for retiring early. And remember you retire from work and not from life.