I thought it would be fun to revisit this thread three years on. At the time, plenty were saying 10 crores is a sufficient retirement corpus for life (some even said 4 crores), and one guy said 30 to 40 crores and we all felt that was too much. After the inflationary bout of the last few years, I’m afraid I have to up my previous estimate (10 crores) to about 25.

Inflation is a real dog, huh - bark and bite both bad for us. I look forward to increasing my estimate again in a few years’ time….

Yaar tussi depress kar dete ho. My parents never even earned more than a crore cumulatively, have saved up a few lakhs for me and I still think I'm doing fine in life. Not enough to do nothing in life, but enough to pursue anything I want in life.

Saving 30-40 crore because you want 'legacy for your progeny' is focusing more on your legacy than your progeny. The human desire for legacy is merely a product of human ego - which seeks self-preservation even beyond the lifetime of this ethereal body. Trust me, your children will remember you more fondly if you spend time with them during their childhood and formative years, instead of being an absentee father who left them a 20 crore fortune when he died.

While I would love to agree, I don’t think I could in good conscience. The message is well written and impassioned, but:

- at a macro level, the “throw off your chains” speech has been done before, and engendered a whole social and economic movement which only brought more misery

- at an individual level, I don’t believe this perspective offers any suitable practical alternatives. We live in a world with ever scarcer resources and ever greater consumers. Our only ability to access a reasonable level of such resources (material or experiential) is through cash, whether earned by our (or others’) labour or inherited (and sadly inherited left town the day I was born). An individual stepping out of the rat race doesn’t make rent any cheaper or food more plentiful, when the rest of society just saunters along. It may be that one is ascetic and can live on very little, but that’s not a life I aspire to

- in terms of the family unit, the resource issue only gets more acute. Our children will have to compete harder to maintain the same lifestyle we now have. The benefit to their future lives of leaving them a legacy of some worth cannot be understated

All said, unless a further socialist revolution is around the corner (I hope not), or you’re less materialistic for yourself and your family than the average person (I am not), you’re going to have to inherit, strike it rich as an entrepreneur (i.e. earning wealth through someone else’s labour) or be that labour (and the “higher quality” labour you are - good work, resilient to long hours, good at office politics - the more you will earn and the closer retirement could be).

I think for most of us, at least in India, it is a life of trying to be high quality labour. Blessed is the ascetic with no kids. Cursed are the kids with parents who don’t care about their futures. Rail against it all you want, decry the life that causes it to be so, but that’s the cold, hard truth.

That simply leaves you with the question, do you want to be mediocre labour, earning a mediocre wage, working for longer and hoping this gives you an ongoing stab at ‘life’ (and tough luck if AI or something else kills your career along the way) OR take the pain for two decades to be high quality labour and leave with enough resource to be self sufficient as an individual, while providing a decent base for the family unit’s future (and tough luck if something kills you along the way or shortly after). No right choice but I, for one, lean towards the latter. And that brings me to all my retirement talk. Hope you don’t mind.

Coming back to the question - what do you think is a good corpus for retirement (defined: work optional, do what you want in life)? Me: I think 30 to 40 crores assuming you want to retire in mid-40s and leave a legacy for the progeny.

Why is retirement a milestone in your life? Is it some point at which you will not do any work you have done in the past and focus only on hobbies, charity, etc? The concept of 'retirement' is ingrained in our society as the only other alternative to slaving your life away. It's made to seem like there is only black and white, working in a job/law firm or retirement. Why are we so wedded to these notions, that actually focus attention on how your employer would like you to think of your life - either slaving or doing nothing at all (retirement). They want you to think of your life in this black and white, which then makes it painfully apparent to you how much money you need to pull off retirement, which forces you to work even harder in the hopes of getting there reasonably early, which is all great for the employer because they're only thinking of the multiples they'll make on the amount you need for your retirement objectives. The cycle goes on. Your employer will suck an entire chunk of 10-15 years, the best years of your life, if they you let them dangle that carrot of a retirement in front of you. It's easy to look at higher PQE pay and just console yourself it's just a few years more. Time will slip away from your hands like fine sand in the desert.

I just want to take a moment here to say that all of you who are contemplating how many years to 'complete freedom' and other stuff like that - life isn't black and white. Retirement isn't a promised land where everything in life is rosy and great. In between you have 15-20 years (optimistically) in which a majority of major life milestones will lie - love, death and self-development. You can't reverse what happens in those 15-20 years after you 'retire'. If you consider your life as a WIP project, do you want to write only 1 chapter (work) out of 10?

If you are (a) young, (b) aren't in danger of being out on the streets (c) and think you have marketable skills even if you don't know how yet, spend your available time and energy into figuring things out. Employment is a drug to dull your instincts. It's a bit like Huxley's Brave New World. Identifying the deficiencies of your mental constructs, which are primarily peer-ingrained, is the first step.

This has branched into an interesting discussion. What do folk think is a good number to retire on - say if you have a family of four and are happy not to live lavishly, but live in a metro and own your property (so no rental costs). 15 crores? 25 crores? A whole lot less?

The tough thing is to ensure that you leave a valuable legacy for the kids when you pass on (apart from the house).

My view is, once you factor in leaving something for the next generation (not simply consuming your savings during retirement), and adjusting for inflation - remember how much 1 lakh bought you 25 years ago! - you cannot retire on a corpus of less than 30 to 40 crores (after-tax, and leaving the house aside), if you are retiring in your mid-forties or slightly earlier and expect to live to, say, 80-85.

Maybe you could dial-down the work for smaller yearly cash-flow, rather than retire, but I don't think a trade-off like that is easily available (at least doing good quality work).

The 25x thumbrule is based on the Trinity Study, which indicated that a portfolio of 50% stocks (the S&P500 index) and 50% bonds would last at least 30 years if the person withdrew 4% of it in year 1 and then each year increased that amount to account for inflation. Do note that this is USA centric and based on an assumed retriement duration of 30 years. We simply dont have enough data to conclusively back test this for Indian investors.

For someone who is retiring early, the retirement duration will be much longer. You have also assumed a real return of 4% (Portfolio return - Inflation). It is commonly known that India underreports inflation data. Even if the numbers were true, specific expense items like education and healthcare typically see a much higher inflation. So a 4% real return may not be very likely.

Secondly, the x in 25x is your annual expenses at the time of retirement. But some exceptions aside, everyone desires relatively higher comfort as they get older. I may be able to backpack and live in hostels at 35, but may not be as enthusiastic about that proposal at 50. I may not have kids today, but will also need to bring them along to said resort in 2035. So we should assume that our annual expenses will also grow - and not just on account of retail inflation but also on account of lifestyle inflation.

Going forward, and assuming one has to pay for kids' education etc, a 25x corpus may not be enough. I am a firm believer in the 40x corpus in cases where you foresee no gainful employment post retirment and plan to live off your investments. That said, to each their own. I am a stranger ranting on an internet forum. This is clearly not financial advice.

The generally accepted retirement corpus is a 25X of your annual expenses.

It means you will be using 4% of your corpus every year. Its based on the assumption of a long term annualised 10% return on investment and 6% average retail inflation. If you do not agree on the assumptions here, you can recalculate your corpus using the same method.

In addition to the 25X, to be safe I plan to have 2X for contingency. It can be used in bad years when the above assumptions are not met and replenished in the years when the returns are better than the assumption.

I get you. It's quite ok.

One could save, save and save (like some have) only to die at 30, 35 or 40 with plenty of zeros in a bank account.

God knows SO many have died young in last yr especially.

Many set targets but work WELL past they like for lack of imagination anyway.
30L is not insignificant. If you want you can build on it.

You've lived well.
Good on you!

~30L

~3.7L SB
4.5L PPF
1L NPS
~1.7L SGB
~16L MF (slightly under a fifth in debt, rest equity)
~1.3 direct equity
~1L loaned out
~75k crypto

Happy to get any tips on present and future asset allocation!

Live at home, plus WFH has also accelerated savings in the second year.

My first rant on LI. (Discussion on money 🤑🤑)

I have been working for 10 years in tier one firms and I have only 30L in savings. Not proud of where I spent it all. In a way, don't regret it either. 20s was when I could have had most fun with money, and I did. I have zero debt though- no housing loan, no car loan. Even now, I am not inclined to save because I don't have an end goal. There are months I still live paycheck to paycheck (cos that 30l is not exactly liquid).

I know that as a professional, I can quit the law firm life anytime and still earn a living. May be my standard of living will drop. That's fine; I had hit that rock bottom in law school anyway, with zero pocket money to spend on discretionary stuff.

If ever I get rich, I will probably give it all away in any case. Right now I'm spending it all away, which has also the same effect, in a manner of speaking.

Savings is overrated. Live the life you want, without hurting anyone. Obviously, I'm going to look stupid in my 60s, when everyone else happily retires and I will still be struggling to make my ends meet.

250 Crs. New A3 at a tier - 1 firm.

Here's how:

A0 - made 18 lpa basic + 3000% bonus (basis a more equitable sharing of billables because of the hours I spent - they read this thread: https://www.legallyindia.com/convos/topic/171637-A-look-at-law-firms-hourly-billing-rates-and-the-proportion-of-it-that-trickles-down-to-the-associates-). Spent 10lpa and saved and invested the rest.

A1 - made 35 lpa basic + 2500% bonus (disappointed, the selfish Managing Partner kept all the money for herself) - Spent 11 lpa and put all the remaining money in FD.

A2 - made 68 lpa basic + 1200% bonus (damn you C**id-19!!) - spent 12lpa and then invested the remaining in crypto (damn you Elon!!)

My investment choice is not financial advise (damn you SEBI!).

A viable FIRE corpus is typically a function of annual expenses at the time of retirement. It could be 30x/40x depending on one's risk appetite, x being annual expenses. It could be even lower if you choose to take up a low-stress job which covers annual expenses for a few years going forward.

I am focussed on achieving FI so that my decisions are all mine, and not driven by lack of financial resources. Whether I can/ will indeed RE is difficult to answer. I love my job. It is not very stressful. The money is good. The day I realise its affecting my health or is not letting me lead a fulfilling life (traveling/ trekking/ working out/ visting family) - I will revisit this.

The Dude - agree with your take on Mumbai rents. It does eat into your savings, and in the long term the compounding (or lack thereof) shows. I have lived on rent since I graduated. Across a range of houses, I have always had access to a terrace, balconies and the likes. Something that would be unaffordable in Mumbai.

In ACOL terms - its in the ball park of 6-7.5L - depending on how much I travel. Have had my fair share of domestic and international vacations since i started working. Strictly fixed and household expenses would be in the range of 5L.

To both PQE 5 and 7, everyone when they start out dreams of saving up like you and retiring early. But hardly anyone does retire - perhaps because they cannot sustain their lifestyle/family with a lesser salary or because they've become too addicted to the large monthly credits. Do you think retiring early is really possible for you? And if yes, would you take that chance and when?

Purely in terms of financial assets, LL.M may not be a good idea. It is an asset nevertheless in terms of experience you get and contacts you develop. I thoroughly enjoyed the originality in legal writing there, had an awesome time with friends and will remember for life the couple of vacations that I went for during the breaks. Don't think one can get those if one spends an equivalent amount independent of an LL.M.

1 - Yes. principal amount is closer to 17. If you would have asked me this question in the first week of May, the amount would have been 37. And that is why i would NOT recommend anyone putting any amount greater than what they are comfortable losing. I have a specific goal in mind and i research projects before investing which is why I feel comfortable with my portfolio

2 - I don't know about others but I do it and I attribute a lot of my net worth because my ability to identify areas of concern and to budget accordingly. I get it might be challenging for most people to do this daily but do it often and it becomes a habit when you dont even realise it. Even if it doesnt, having the app tracks all the electronic transactions (CC, DC, Wallet, UPI, NEFT/IMPS) automatically and still gives a relatively decent idea.

1. Started in Jan this year. I do my own research, follow YT and dollar cost average into large cap coins. I dabbled with leverage trading, but it's not worth the risk. It's definitely risky, and you should only put in what you're ready to lose. I used BitBNS and CoinDCX - two separate because BitBNS was giving me more INR - Crypto pairs, and CoinDCX because it has greater trading volumes. BitBNS also allows you to create a SIP like feature where you can average out the cost of crypto over the long term. It's called BitDroplet and i would recommend it for people dipping their feet in crypto

2. Honestly, I followed an aggressive equity portfolio (got into debt funds, and index funds only in the last two years) because i dont need the wealth. I would not recommend it for people who have daily expenses / financial obligations. My MF split currently is mostly mid caps and large caps, with some small cap funds, couple of ELSS funds, a liquid fund and an index fund. The allocation to each would honestly depend on your financial goals and risk appetite.

Hi my dudes. For the lucky ones who have saved around 1 Cr after 4 - 5 years of working - wanted to know just how many of you live in Mumbai (rent paying ! and not living with mom and dad). I'd be shocked to learn if you've been able to do this in Mumbai !!!!!! Its absolutely crazy (even after being a top tier one fee earner) to have saved up so much of cash (I'm even throwing in a high 20 % CAGR of net assets because of investments). Lets please disclose actual cost of living while presenting savings !!!

Ive been at SAM since graduating (2017 Batch) - and even after prudent savings - I have saved exactly 41 Lacs plus change (which is broken up into MFs, Stock (dividend paying), Cash, loans extended to friends, Tax saving instruments). And I've just made SA a few days back !

Hi. This is PQE 5 from #13.

1. When did you get into crypto? Is it safe for a small 4-5L bet since I have some spare cash lying around? Will be helpful if you could share details of the reliable platforms as well.

2. My portfolio has grown significantly in the past couple of years. All monthly and bonus receivables are now being redirected to equity MFs (mostly index). Anything else I should diversify into - considering I am aiming to reach 1.25 cr by 03/22 and 1.6 cr by 03/23 (PQE7)

May be it is high time we put together a financial advice forum catering to lawyers by lawyers.

165

MF: 90
Stocks: 30
Crypto: 25 (diversified, but largely holding ETH (35%) and ADA (45%))
Cash: 20

My strategy:
INVESTING
1. Read up and learn about benefits of investing, and different asset classes
2. Diversify your risks
3. Listen to / follow smart people online (YT, Twitter)
4. Read pink papers from day 1, it will augment your investment skills
5. Make immediate term, mid-term and long term financial goals, and allocate your investments according to the goals. rough rule - the longer the time horizon, the more risk you can take.

SPENDING
1. Make sure you set aside funds for investing and funds for necessary expenses (rent, food, transportation). Whatever is left should be what you should spend on. While it is tougher for younger lawyers, the more you develop this habit, the more your wealth will multiply. A good way to do it is to have two accounts, and setting up an automated transfer on a particular date to a savings account that is only used for investment / emergency funds.
2. Keep track of your expenses. Download apps like Expensify or MoneyView. The impact of a visual graph showing your expenses creates a significant impact on one's spending habits
3. Enjoy a little - Don't be a miser, and enjoy sometimes. you work hard, and you must reward yourself once in a while.

The above are just some tips that I followed, and it is not necessary they may work for you.

250.
350-400 is where I quit this rat race & move in-house (even at lower pay).

Some of my US returned engineer & banker friends have planned retirement at 400. I will continue work in a less toxic environment. I've earned well at a Tier 1. I've spent on a happy life on all my wants and needs - gadgets, car, wedding, travel, family, etc.

It's important to live a good & enjoyable life. I'm against pinching pennies for future & missing out happiness today. Being a miser takes one a step closer to being miser-able!

You are sadly mistaken.Agree with you that Zia and Cyril are definitely power elites. So are CEOs of big corporates and CEOs of bulge bracket funds like Sanjay Nayar and Amit Chandra.These are all power elites in India.But certainly, the dozens of equity partners in the top firms are no elite but very much common man in Bombay.There are just too many people who have money like that but not the influence of power elites.Your equity partner is very much aam admi like corporate senior Vps even they earn a lot more due to various reasons and of course our tax laws.

7 PQE - PA1 in a Tier 1 firm

Liquid Assets: 25L - Equity MFs, 8L - Direct Equity, 1 BTC (Worth 28L at the time of writing), 4.5 lakhs in FDs

This could have been much higher if I had not bought a house for my parents. The EMIs on that eat 20% of my monthly retainer... And spent lesser money on a big-fat Indian wedding.

Hey, thanks for your comment, has pqe 11. How does one offset this need to live a high profile life? I think as a person I am not someone who needs an expensive car or fancy vacations. But this client facing need to be seen as wealthy, how do I deal with that? Could you please help out? What do you think you did differently which has helped you out?

I am starting my career soon and would be grateful for any advice.

The stats above are really well collected and organised, really appreciate the effort. Owing to their nature, they are very mechanical and don’t give an insight on actual life in a law firm. I work with a top law firm in India and hold an experience of 11 years.

I have collected around ₹5 crores in liquidity. This is because I made some good and wise investments. I also have some knowledge on how to spend the money. Me ex wife who had an experience of 13 years in the same firm doesn’t even have ₹1.5 crore. And that’s 90% of the people in law firm. Law firms are factories of privilege. When you’ll come here, you’d get enough money and you’ll think you’ll accumulate a lot of it but it does not really stay. You’ll have to have a high profile life and clients to survive in the industry and you’ll need to spend what you make. If you’re a partner and you go to meet your high profile client who doesn’t know shit about your law firm or you, in a swift dzire, he’s gonna judge you then and there and might not go ahead with you. I have a lot of money but I have no friends because you need to spend on materialistic pleasures to have friends in and across law firms.

Even if you are the brattiest south bombay / south Delhi kid who gets the highest bonus every time, you would have got 2.5 - 2.7 cr in gross income. Subtract tax and expenses. Only way you can have 3.5 cr is crypto lottery / trades better than Berkshire / inheritance / viral YouTuber

A0 - zero/negative to 5L
A1 - zero / negative to 10L
A2 - zero to 20L
A3 - 5L to 35L
SA1 - 10L to 60L
SA2 - 10L to 80L
PA1 - 20L to 120L
PA2 - 30L to 150L
PA3/ Counsel - 50L to 170L
AP1 - 70L to 200L
AP2 - 70L to 250L
AP3 - 100L to 280L
AP4 - 100L to 350L
EP - 150L to 500L+
EP for > 5 years - 20 - 50 cr

For Blr discount these figures by 5-10%
For tier 2 firms discount by 10-20%
For tier 3 firms and below discount by 20-40%

For US LLM subtract 50-85L + year not worked
For UK LLM subtract 25-30L + year not worked
For EU / Asia LLM subtract 15-20L + year not worked

Before 2010 batch who invested more than 50% in real estate: add zero
Before 2010 who invested more than 50% in equities: add 20-25% of overall figure
Before 2010 who didn’t invest at all / had EMIs to pay: subtract 20-25% of overall figure