Peace of mind via Passive Incomes(Retire Early)

Hi All, here are few tips that may be useful to setup a passive income, completely from scratch. Passive incomes helps to overcome financial uncertainties in our lives.They should also set you free(retire) by the age of 50. I feel everyone should be able to retire by their early 50s!. My tips are purely based on assured incomes, and not on investments like stock markets, where in theory, you can get rich very quickly, but can also lose your entire savings by small mistakes. Wish you all the very best on your early retirements! 

1. RENTALS: Apartments in good locations are easy to rent out rather than a independent house.  If you  can, purchase a brand new apartment. After 15-20 years,  the maintenance costs on your apartment may go up because of things like plumbing,  leakage etc. It is best to sell an apartment around 20 years or earlier with accrued appreciation, unless your flat is in a prime rental location, where occasional maintenance can be covered comfortably by high rates if rents. All these should be for investments in terms of long term rental income only. For your own home, if the rates are feasible,  investing in a independent house will be better than investment in apartments due to the long term appreciation.  Also,  an independent villa do not require monthly maintenance payments,  a sure thing to help you once you retire.

2. Recurring Deposits: Please start a Recurring Deposit in your nearest post office.  Post office deposits have better interest rates than most banks. RD investments can be used for emergencies in future. Start an RD for a small amount like a 1000 rs per month in post office or a bank even if your income is small. Even if you unable to pay for a month, nobody will harass you like in the case of a bank loan.

3. Fixed Deposits: Invest in Fixed deposits and continue to do so till you have around 30 lakhs of this type of investment. This means you have atleast 15000 of monthly income interms of FD alone. Please make sure you only invest FDs in Nationalized or Regularized banks only. It is because there are many other financial institutions in India, which can't be trusted with our investments in this mode. They may promise you more interest rates than nationalized or regularised banks, but you may end up losing your invested amount from them due to many unforeseen or undisclosed conditions.

4. LIC: LIC has schemes like if you invest one lakh you will get 500 rupee monthly income.  Those are good in the sense that their rates won't go down in future unlike bank interest rates. And LIC being from government,  it is quite reliable. 

5. SIPs: Once you reach this stage and also you have paid all your loans, systematic investments in shares and SIPS is a good idea.

6. Personal Vehicles: I am very dependend on my cars for mobility and I can see it is a major cost factor. Do not buy big luxury cars which require a fortune to maintain like Mercedes  benz or a BMW. Buy easy to maintain brands like Toyotas,Hondas, Suzukis or Tatas in India! Think of your retirement when you plan your next car after you cross 40 years of age. Personally I am against buying new vehicles, as after 1 or 2 years, the value of the vehicle can be half what you paid for! So, it is prudent to buy a vehicle 3-5 years old at a reasonable rate. Also older vehicles(from 2007 to 2012 era) are much easier to repair in a local workshop, as they are simpler in design.

7. A working spouse: It helps a lot,  if your spouse can help your family budget.  Don't  feel sad if your spouse is not working. You can find many online jobs after the covid situation, which require very minimal skills. I am referring to jobs like software testing,  documentation jobs, content creation etc. It helps a lot if there is a second earning member in the family, however small that income is. Think of a situation,  where you are in between jobs, or taking a break from your career due to illness or due to other reasons. 

8. A small farm: Invest in a small plot of land/farm. Do not buy near cities where the land rates are high. Buy a land around 30 kms away from your primary home so that it can reached at a maximum of one hour of driving. Just basic farm activities like planting seeds, removing weeds etc keep you healthy. Many of the tasks in a farm needs bending,  which in turn keep you flexible. This way you can save on Gym memberships. Also it can give you fresh vegetables , coconut and fruits which can really save lot of money as well as add to your family health. In my own farm, currently I do bananas and coconuts. Coconut we sell and get a decent income from it. Banana is for internal consumption and also I distributes among my friends. Last year I planted many varieties of fruits. It can help in your own old age, as fruits can really help you stay healthy. I hope, I can start poultry like chickens, cows etc in coming years and these can ensure cach flow to your family, as they have high demands in one's local. Having a constant cash flow is really important in our later years as there can be many expenses unseen at first or at younger years like medications.