Finance, Saving Money

Those Weren’t Mistakes!

“Sometimes it’s the mistakes that turn out to be the
best parts of life,” 
― Carrie RyanThe Dead-Tossed Waves

[ Day 67 of 2000 ]

Confession time! Every time I see a blog post or an article about someone who is in their 30s and already retired, I feel a pang of jealousy. I know, our case is not so bad. We will be done by 42. However, I still feel like we should have done better. We have always lived our life fairly frugally – Not as frugally as we could, but compared to our income. We have always been paid very well. Why did we have to work for so long? We should have retired already.

It is not like we don’t know the answer to that question. In case you are new here, we moved into the US just 4 years back. Whatever we saved up before that, and invested intelligently, will be just around $60,000 when we trasfer it here.. The cost of living, and hence the pays, are way lower in India. We have made several times that in the past 4 years alone. (See the top of the side panel for our current status, updated every Monday)

More than once, we have tried to imagine how life would have been different if we had moved here 10 years before we did. We did have a chance to do that, and had opted not to.

We could retire today if we were ready to go back to India. However, we have decided that having to work for another 5 years is a price we are willing to pay to live here.

Would we have retired already had we only moved here 10 years earlier? That is one thing BusyDad and I don’t really agree about. He thinks that we would have been retired. I think we would not have known the value of saving money. Living in India did teach us a lot.

We learnt about the value of money

We have seen the kind of work people are ready to do for money, and the meagre payment that they get for it. We had someone cook for us every single day of the month for less than 50 dollars (a month!). To rent the 800 sq ft apartment we lived in, it would have cost us 6 times as much. And a cook’s job was one of the best paying jobs for someone who was ready to be in domestic service. We now realize that if we don’t have enough, it could get ugly.

We now recognize the value of education

In a country like India where there is no concept of minimum wage, and human beings are in abundance, the only thing that differentiated us from all of those paid poorly was education. It is hard to see that here – you get paid well if you are really good at whatever you do. But I have been convinced that specialized knowledge gives you a way better chance at life. Hope I can get GBoy to buy into that!

We understand inflation

We have seen enough inflation to really understand how buying power of money can go down drastically. Had we lived here throughout, we would have chalked up any difference towards lifestyle inflation. It creeps up so slowly here, and it is really difficult to anticipate how things are going to be 30, 40, 50 years from now. We know of a couple (in India) who retired because they had saved up more than anyone else, and are now struggling just because inflation ate it all up.

We have seen the magic of compounding

Before we invested in real estate, we saved up all our money in Fixed Deposits – which is the equivalent of CDs here. The rate of interest would be anywhere between 7-11%. Since it carried zero risk, we used them a lot. Although the buying power was coming down due to inflation, we could see how fast our absolute amount could double.

We have learnt to take calculated risks

When we bought our two condos in India, there was nothing – just an idea of them going to be built. And it was the 2008 -2009 time period  There have been people who lost money because the builders went bankrupt. We didn’t, luckily. We still make good money (in Indian terms. $600 per month ) from renting them both out. Right now, we invest everything in stocks, nothing in bonds. We want our money to grow as fast as it can. While we both are employed, we can afford to take the risk.

We learnt to live frugally 

May be this point should have gone first. Right now, we see every single person around us spending money. It wasn’t like that in India. A lot of people pay attention to every single expense. A lot of people actually stick to budgets. It was not just fashionable to be frugal, it was a way of life. I am not claiming that we live frugally now. We don’t. Right now, even though we only spend about $40,000 a year (plus mortgage), there is a huge part of that I can cut out. Without blinking my eye. And that is just because we understood early on how little you really need.

If you are wondering where I am going with this, my point is that every life experience teaches you something. Whether you actually reailize it or not. So if you are regretting past mistakes, or decisions, stop that and start using those lessons now.

If we had not lived in India during the initial part of our adult life, we wouldn’t have learnt how to live our life the way we do now. I can actually imagine me blowing off hard earned money on frivolous stuff. I am glad I don’t.

If you remember one thing from this post, it should be this- Start making changes now. Your past mistakes? They weren’t really mistakes. They were just chances for you to learn a lesson. And you will realize that you did learn it if you only stop and think about it. There is no point wasting time on regretting or wondering about past decisions. Your future starts NOW!

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About BusyMom

Mom, Software Engineer, Dreamer - Can't wait to be less busy! . Please leave me any feedback you can think of. I am still learning and anything you can tell me about making this blog better is very much appreciated. .
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20 thoughts on “Those Weren’t Mistakes!

  1. Hi Busy Mom, it is funny how mistakes (“life’s tuition’) shapes the way we run are lives. I agree there is no point wasting time on regretting or wondering about past decisions. You and your husband are doing so good to retire at 42 congrats!

    1. I know. But I just wish we could do it earlier… 🙂

      There are mutual funds, but not true index funds. Just index like funds. Still heavily managed, and the associated fees are higher. It still yields good, but not great. We invested just before the market crashed, managed to not sell before it recovered. But we needed the money because we were suddenly paying off two mortgages at 11% interest We broke even.

      Didn’t invest after that. We were trying to pay off those mortgages. And then we moved here. We still haven’t payed them off. The rents are paying them.

      1. Very interesting. Maybe you guys should create a startup that does index funds for India :).

        11 percent interest :0. Such a difference two countries make.

        It’s interesting such a large country of incredibly intelligent and hardworking people doesn’t beat the US stock market. India’s growth rate is 3x ours most years, so why isn’t the index growing as much? Are smaller stocks benefiting more from the growth in India than in the US?

        1. We are still paying 11 percent interest on our two mortgages there (not much left). We have the money to pay it off, but have to go there to do it. Not happening soon.

          Indexes grow well. It is just that there is no index fund, and they take ridiculous entry and exit fee, and huge expense ratios. What India lacks is Vanguard. Don’t know if things have changed. I am talking about a decade back.

  2. Lovely! You got me to thinking about my Indian friends. They are incredibly smart, hard working, and a joy to be around. I have noticed though, that they look at my frugal, early-retirement schemes with a bit of skepticism. My observation is my Indian friends (most all of them IT engineers) love nice cars and nice houses. They feel obligated to pay the entire bill for their kids’ college tuition and don’t let them hold part time jobs in high school. Again, I’m only generalizing based on the small sample I’ve observed here in Minnesota, but it seems early retirement and frugality are foreign concepts to the Indian community here – they want to succeed and that means big money and big symbols of that success. It would seem the “American Way” is having an influence!

    1. You also described most of them I know as well. We would be doing the same if we had not lived there after college. I understand their way of thinking too.

      In India, parents usually pay for their children’s education. It is something I struggle with too. I feel like I should be paying for GBoy’s college. That was part of my upbringing.

      About cars – the cars cost the same there, and salaries are way lower. Most of them could never buy the car they own now otherwise. Consciously or unconsciously, they think they have made it when they have the best home and cars.

      None of us have seen anyone retire early. Not working is not acceptable in Indian culture. Plus many of them also probably have visa issues and cannot leave their jobs even if they could afford to.

    1. Thanks! We don’t feel like we are frugal. I guess we are too busy to spend anything 🙂
      I am sure 42 will feel early in a few years. Right now, it is still too far away. 5 more years to go!

    1. That tracking bar keeps me motivated. It has been easier not to spend money unnecessarily after I started that.

      We will probably help GBoy with college a bit. Haven’t decided how much. It is something we struggle with. If we only worked a little longer before we retire, we can pay for it. But should we? Hard decision!

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