when to take the leap?
im having ~45L corpus, age <25, salary ~2L/month
i read that if i take 1/100th of my corpus as an SWP, it’ll never reduce from the principal
although i have a decent job, im seriously considering living at 40k/month and try building a startup
i do understand this is a personal decision but anything else that i should be careful of?
whats the usual safe spot?
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Take a 25-30hr/week corporate job in Bangalore in some GCC. Ample of them pay 2L+/month. if you're starting up, you're already set to hustle. Just dedicate 4-6hrs/day to office MAX, take ALL your leaves, be a middle performer - far far away from any limelight.
Focus on your own work. Once the startup gains traction - say you raise a preseed/seed, quit.
I've seen people building crypto/other startups while working full time at Eternal. It's just about how to manage time .
don't leave your job and do you really want to build a startup or you are in fomo or not doing it
see start ups are great but do you have the correct idea and a plan to execute it ?
I am also 25 and have only 50k salary and have 15 lakh loan and I next goal is to get 1 lakh per month salary
if you want to stop working at 40 then stay in job and sav as much as possible and invest wisely
I also have the fomo of not doing business and doing trading but I have decided to stick with the software engineer easy money
That 45lac is too little.. you might have significant pressure which you may or may not be able to handle.. .. Don't leave the job till it becomes 2cr..meanwhile keep working on the startup in a non aggressive fashion.. Unless it is so. E thing which is very time-bound kind of thing and you already have some big pocket investors waiting for you with around 10-20cr of funding.. Otherwise it might be painful.. Plus remember don't take everything too serious.. Life happens.. Good luck. Hope you get a big future.
thanks for this, it gives me good context on risk appetite which is what im kinda worried off.
Maths is not accurate here. When you mention 1% monthly that equates to ~13% yearly swp. Even if you keep the corpus in equity, it's very prudent of you to believe it will give 13% every year and it's not a very safe withdrawal rate. Especially if you're venturing out on your own, there's always the chance that you would like to fall back on the principal amount if you're in need of capital.
yes, but at the same time, even if i assume a super conservative 8% return rate. In five years, it might go to 20-25L
point is- if it gives me five years to try having a shot at what i like, why not?
Yes that is true. If you're treating this as a temporary solution then it's fine. But do ensure you have everything covered which might be offered at a job like health insurance (10l-15l), life insurance etc. Also ensure that you will be covered atleast a few years beyond what you're planning. Let's say if you give yourself 5 years and if you don't crack it within that time you will enter the workstream again, there's no guarantee that you will get a job immediately, so keep another couple of years worth of runway planned. Also when doing these calculations, keep a track of inflation. What costs 40k today might be 60k 5years later, keeping the inflation rate at 7%.
Things to introspect: Once you started earning 2L/month will you be able to survive 40k/month? Status of your startup plans? Do your parents need your financial support?
My suggestion is 45L corpus is not enough and SWP doesn't work with this small amount of corpus for young people. Work on your startup while you are still in job, build more corpus and once you decide to leave job (with proper plan) build your startup in 6months/max 1 year or else go back to Job.
Even now, i save most of the money, usual expenditure ~40k max 45k/month
almost no impulse purchases
My suggestion would be you should invest a good amount in stocks with good dividend. You will get 2 benefits 1st your invested amount will increase with increase in the share price plus you will get dividend money in your bank account every year.
Let me give you an examples of hindustan zinc ( best stock for dividend income). Every year they give minimum of Rs40-50 dividend. Currently stock is at Rs415 approx which means you can buy 10k stock. Which means you will get 5 lakh in dividends. The more stock you buy the more dividend money you will get.
Benefits -
1- every year you will get money for usage without touching your amount. 2- If you suddenly need money in case of emergency you directly sell the share of the amount you need and the remaining amount stay invested. 3- your invested amount will increase with increase in share.
If you buy 1 lakh shares then you will not have to work anymore in life.
thank, will look into this
Please think at a deeper level what a dividend implies.
Dividend means the company does not know how to utilise the money it is generating.
Such a company is a stagnant company.
Such a company will be run by ppl who don't know how to grow, and don't care.
They have enough dividend seeking shareholders.
And one cannot invest everything into a dividend giving company. A portfolio has to be a mix of growth and dividend.
Dividends can be stopped by the company at any time due to any reason. E.g. Mining is not unlimited, and can hit many issues : regulations, govt rules, etc.
Older ppl prefer dividend as they need the cashflow and cannot afford a growth company to hit profitability.
Also, Dividend is taxed at your slab rate.
27 here, similar salary, corpus around 1cr here 🙌 Not sure about investing more. But I have a word for you brother.
please please, invest on yourself hugely, if you are earning. Please !
Invest huge on some sport(even with a personal coach), master a musical instrument, read (philosophy, entrepreneurship, self awareness, biographies, history, relationships, arts, sciences, environment , religion alllll ), visit countries, see cultures, develop yourself with fearlessness, not just with confidence.
25 shoots upto 35, in a wink. And you are no more at the prime for that then. You won't be able to do all these at the best then. But yes, you may earn more than! Please please enrich and invest on yourself first, make yourself as best as you can . I assure the other aspects would come crawling, without even an effort !
additional info: parents dont have a job but they have some savings ~30L, this is the only thing concerning me right now