India GenNext ! - How to retire rich | Mandar Jamsandekar | TEDxCRCE

you good evening friends my topic today is saving and investments it's a bit illogical because right now we are in a festive month and right now everybody is in the mood of spending and what I'm going to talk about is saving so right now we are all surrounded with plenty of offers so we all have these offers on our smartphones as well as on our emails so every place where we socialize I also have two offers for you today my first four offer for you is I'm going to give you one crore 25 lakh rupees and what I want in return is 125 rupees how many of you would be ready for this offer please raise your hands please most of y'all right okay now for the second offer now in my second offer I am going to give you 125 rupees and in return you have to give me 1 crore 25 lakh rupees now how many for this offer nobody okay so today I am going to share an idea with you with which by a mere 125 rupees you can build a corpus of 1 crore 25 lakh rupees so it's a bit illogical but let's see how it proceeds ok so let's start with some stats now there's a recent report a survey which was published recently by HSBC this survey tells us that 65 percent of the working class if given a choice is aged between 40 and 45 they would like to go for retirement in the next 5 years and the reason as to why they would go for retirement is maximum percent of them 43 percent of them say that it is the work pressure due to which they would like to go for early retirement so it is the work stress the mental stress that they go through is the main reason a large number of them are also cited reasons as spending time with their family as to why they would like to go for early retirement and an equal large number of them have said that the this early retirement would give them an opportunity to pursue other interests that they have so basically worldwide people have seen early retirement as a chance of reinventing themselves and starting new getting into a new beginning and the global data as well suggests the same thing so if you look at global data in Argentina the 78% of people who have the same opinion in France it is 77% in China it is 75 and so is with UK so basically we all would like to retire early and we all would like to retire rich but then there is another there's a saying perception and reality are different things so this is perception now let's look at the reality the report also suggests the same report suggest that there are a few hurdles which are there in front of these pre retirees or people who are thinking of an early retirement and the main hurdles are 54% of them say that if they go for an early retirement then they may find it difficult to sustain they may find it difficult to survive they will go through financial stress or they'll struggle financially and therefore they may not opt for an early retirement a large number of people around 27% of them say that they have dependents so they have family members who are dependent on their income and therefore they may not early retirement not be the right choice for them and an equal number of him them say that due to debt that they have if the income stops then repaying that debt would become a bit difficult for them okay a report which was recently published by the Reserve Bank of India this tells us that Indians as they grow older they accumulate debt now this is something which is very serious 77 percent of Indians never ever think of retiring so is it that they love are they satisfied with it no they cannot they cannot think of retiring because they have they don't have that option if they retire then it would be difficult for them to survive and therefore they don't have an option they are going to work till the last day now if you look at this pie chart here this pie chart will tell you the seriousness of the issue seventy-seven percent of Indians do not plan for their retirement only 23 percent of them are planning or thinking of getting into a plan for their future so this is serious and this what makes it more serious is this report by NSA so this is a health care report the cost of health in India if you look at this report this report tells you that a large number of people do not go for medical advice because of one reason and that is financial constraint a large number of people go for medical treatment based on money that they have borrowed from friends relatives and others so this is very serious an important thing which we all need to consider here is life expectancy whenever we have to ever think about future we think only till the age of 60 there we forget that we are going to live more number of years the life expectancy in India in 1960 was 41 in 2015 it was 68 in the next 20 years the life expectancy in India is going to be 80 so therefore if you're going to think about the future then you need to think for those 20 more years that you're going to live and to it after retirement your expenses don't go down they go up in form of medical expenses okay so then everybody who's sitting here today in the next 30 years by so by 2050 we all will be reaching our retirement age of 60 and therefore this topic is the most important topic for all of us today now if you look at this slide in the next five to seven years there's going to be a population explosion India is going to be the number one country in the world in terms of population so we're going to or take China anytime between 2022 and 2024 everybody who's sitting here today by 2050 we all are gone towards going to go towards our retirement or maybe cross 60 so around 32 million Indians are going to reach that level and therefore this topic is very important so then what why is this why are these statistics showing us a grim picture now the first reason for this is so we all say have no doubt about it but our savings are in to assets where which do not match the inflation so what is inflation inflation is nothing but the general increase in price so your rupee is continuously developing so therefore you need the current inflation is around 5% so you need to be invested in asset classes which are growing more than 5% now if you look at this an expense of 20,000 today by 2050 is going to be a lakh of rupees what is the reason one reason that is inflation at your retirement you are going to require a corpus of 1.5 to 2 crores to sustain your further life right and the medical inflation today in India is the highest around 12 to 12.5 percent so the regular inflation is 5 percent but the medical inflation is 12.5 percent therefore this is very important the second reason as to why people go through problems is investment in household savings so like traditional it has been going on if you have got money what do you do with it invest in a fixed deposit but today the interest rates are going down and your fixed deposits are not able to generate wealth when compared to the inflation that is there right so fixed deposits is the first thing second is gold third is insurance all these asset classes are generating a return of 5 to 6% so what's the solution the solution is investing in equity and investing in mutual funds right but then why don't people do it people don't do it because of lack of awareness I don't have knowledge so when there's lack of awareness it's like this story the elephant and six blind men so then when you don't have knowledge you feel getting into the equity markets or getting into mutual fund investments is like gambling it's like speculation so will my money will be safe you have plenty of doubts that come to your mind and therefore you don't don't come here so then what is the solution the solution is only one thing and that is knowledge now if you look at this recent survey that was done by Aviva in in this survey they have got these two index the first index is the dream index means the number of Indians who are aware of their life goals and the second one is the plan index which means the number of Indians who are prepared for their future or who are prepared or equipped to achieve the goals now we all have read and we all have heard that dreamers are achievers right but in in our case in case of the Indians it's not so 61% of Indians dream how many achieve only 24 percent so this again is very serious okay so then why does this happen I believe this happens because of one reason and that is Indian mystery of life so what is the Indian mystery of life Indian mystery of life is till 25 we study so we complete our education then between 25 and 29 we start earning so I getting I get a job or maybe I start a business so I start earning small then between 29 and 32 I get married means what I'm increasing my expenses and later on between 32 and 38 then we have children so your expenses are going to rise further and when you are at the age of 40 your children start going to school and that is the time when you realize the importance of saving and by the age of 40 half of your life is already gone now you have to prepare for your retirement and you've got only 20 years to prepare right therefore it is very serious so then and to add to this to add to this India is young plus in day spending so in this in days young today the median age in India today is only 27 today I remember my childhood days when we used to wait for that one day throughout the year when we could officially go out with our parents for shopping so it used to be some festive period right but today we all have got smartphones and we all all our smartphones are loaded with those shopping apps and we tend to buy things which are not even required so maybe we shop everyday right so so then another important thing is changing lifestyle so every weekend we have to go out we go to malls we go to restaurants so the lifestyle also is changing so basically we are young and we are also spending and the most important thing is will act seriously related to saving an investment why because we feel that this is something meant for our parents so the day I become a parent I will also start it but by then it will already be very late okay so then what I did was when my son became 10 years old I took him to a bank we opened an account and every week I started taking him to the bank to deposit a mere a small amount of 125 rupees so every week we departed deposited 125 rupees at the end of one month I started in a sigh before him of 500 rupees so then he had a lot of questions why are you doing this what's going to happen so I told him that she your money is going to grow we are investing so how can it grow is it a sapling which is going to become a plant I said yes when you nurture it will flourish and one year later when this amount of 6,000 rupees became 6400 that was a WoW moment for him and I believe we all can give a moment to ourselves and our children by doing what by educating them educating of what what is right and what is not so therefore the solution on all the things that we have discussed three points the first one is start investing at an early age use the power of compounding and the third most important thing is start educating your children related to saving an investment right from the age of 10 so that when they grow up they will also be able to pass it on to their children so how does saving early help saving early helps in this way now if you look at this slide now there are three people who have started at three different time frames so the first person starts in saving and investing at the age of twenty rupees so 125 rupees every week 500 rupees a month started at the age of 20 till his retirement grows up to become 30 lakh rupees in till retirement now if you look at that the the last person who started investing at the age of 40 till his retirement his corpus grows to only three and a half lakh rupees a difference of ten times between 20 years so therefore this tells you that you have to start investing at an early age it could be as low as 125 rupees a week higher the better the second important thing is now if you look at this slide this tells you our goal of 1 crore 25 lakh rupees if you start at birth you will have to invest only 326 rupees if you start at the age of 10 you will have to invest only 850 rupees so on and so forth so till the time so if you think of starting at the age of 50 you will have to invest 62 thousand rupees per month to reach this target so what is easy easy is starting early and investing consistently that is what is important why does this happen this happens because of the power of compounding so if you look at this slide in the initial years you don't see your money growing but in the later years see you see your money growing by leaps and bounds so like they say the initial years the years when your patience is going to be tested but in the later years your patience is going to reward you handsomely that is how it is so now friends I want to know how many of you can save 125 rupees a week please raise your hands everybody wow that's a very great response that gives me a lot of energy I believe what we should be doing is we should be passing on this message not to our relatives but to our friends as well as our colleagues and anybody and everybody whom you meet pass it on to them if everybody does this we will not only build an India or will it will not only help people achieve financial freedom but it will also help us build the next generation which is strong financially and on a strong footing therefore I believe whatever we have discussed is truly logical thank you friends thank you very much [Applause]

Channel: TEDx Talks

Views: 423,327

Keywords: TEDxTalks, English, Business, Achievement, Career, Economics, Entrepreneurship, Finance, Future, Happiness, Ideas, Individualism, Investment, Personal growth, Shopping, Tolerance

Id: WCOlY8SsmOM

Length: 16min 54sec (1014 seconds)

Published: Tue Nov 28 2017