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“The problem with the Rat Race is - Even if you win the Race you still remain a RAT!!”
Yesterday I read the book 'Rich Dad Poor Dad' and I must say this is one of the best (in terms of direct benefit to me) books I had ever read.
I have the best two finance qualifications my country can offer. But still the book was a ‘great value add’ for me. Think what value it can add to people who have never studied finance or money as a subject.
It’s not what it says (I believe I knew most of it), but how simply it communicates it. And frankly it helped me clear thoughts in my minds. It revised some basic concepts that I knew but was not using.
The best think about the book was that it gave me my immediate next target (something that always drives me to excel but somehow after IIM & Reliance, I had been missing one such driver) – To get out of the RAT RACE.
Its not that I didn’t knew that I need to get out of the Rat Race but I was not clear about the timing. I had been impatient that I need to quit job and do what I really want to but was not clear when and how. I knew I need to accumulate money before quitting job but I didn’t know how much money. This book just helped me do that.
The answer is simple – You can quit when your money (or investments) earns enough to meet your expenses. And the money you need to accumulate is investments that can earn you enough to meet your expenses.
So, assuming your monthly expenses is 30,000 p.m. (3, 60,000 p.a.) and you expect to earn 20% p.a. on your investment (post tax). You need to save Rs. 18,00,000 (36,00,000/ 20%).
I believe this is not a big sum for today’s DINK (Double Income No Kid) families. Young professionals if they plan & save early can be out of the Rat Race by the age of 30 – 35. And then they have enough time & experience to try their hand on entrepreneurship or do what they really want to do.
But how many of us will really do this? Most of us will still go on and buy a Rs. 50,00,000 house, mistaking it to be an asset rather than a liability, with 20 year loan making sure that one is stuck in the Rat Race forever.
Do yourself a favor – read ‘Rich Dad Poor Dad’ by Robert T. Kiyoski
4 comments:
U can do that by buying shares of the ADAG group ..
Warm Regards
Vinay
yup...and by getting out after making listing gains..and before the sky falls;)
20% returns year after year, for 30 years i.e.
75(Life span)-45(retirement age)and that too with passive investment?!!
Pl tell me how ;)
Jokes apart, i read this book long ago, and fully agree with what u say. But do you have your grand PLAN ready?
yup 20% return year after year not not possible. (i used the return rate being offered by the market today).
But still in India 10% is easily possible. In that case u need to save say 36L. Which too is not difficult considering earning of DINK famalies today...isnt it?
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