Why is Early Retirement Dream a Mirage?
When I was in Hindustan Petroleum, in the early days of my career, my salary was somewhere around Rs. 2000 per month. With a salary like this, I thought that if had Rs. 50 Lacs, I could retire easily. A decade later, when I came close to building a net worth of 50 Lacs, the goals posts had already moved.
By the time I reached my second goalpost, there were 3rd, 4th, 5th, and many more goalposts. It was a mirage of constantly moving goalposts. Then came a situation where retirement and money were two separate issues. Now I work because I have nothing better to do. In other words, I realized the best thing in life is to keep working.
For most of us out there, early retirement is a dream. People want to retire at the age of 45.
But why is it not possible?
Most of the money one makes is between the age of 40 to 50 years. Around 50-60% of money one makes is between those 10 years. When one is in the middle of money-making years, one cannot possibly stop working, or shall I say stop earning. If one is lucky to keep a high-paying job after 50 years of age, one makes more money. At that stage one does not mind some more money.
When one starts working, one decides “I want to make a certain amount of money in a certain number of years.” But once one moves forward, consumption increases, and lifestyle improves leading to higher costs. In addition, the responsibilities on one’s shoulders also increase. The family redefines the lifestyle and associated costs. The savings also must be viewed considering the macroeconomic situation of the economy one lives in. If it is an inflationary economy, any amount of money saved from salaries will fall short by the time one turns 75. If one lives in low inflation and low-interest rate economies one is forced to invest in risky investments that may tank any time. Hence, planning to work till you can, maybe at least till 60 years of age, and saving money is a good idea.
As far as my own experience is concerned, I have now realized that there are no goalposts. I don’t work for money anymore. I work for the larger purpose of reducing stress in the lives of people, improving productivity, and engaging the employees to drive growth in companies. The revenue growth of companies should add up to significant GDP growth and job creation.
I don’t want to retire. I want to continue working and adding value to people, businesses, and society.