Hello, and welcome. This is Abhinav. And in this video, I’m covering some, tax considerations for people who are based in US, Indian expats based in US, and who, follow the fire strategy, financial independence retire early. So, basically, it’s a strategy where, a person wants to save and invest aggressively so that, he, you know, kind of, can survive on a very low or zero income, and retire early. Right?
So in that strategy, if you follow that strategy being a US resident and you plan to return back to India in some years, in this post, I’ve tried to just cover some of the tax considerations, some FEMA points, in that particular strategy that you can be mindful of. Right? So let us start. So just a disclaimer, I’m not a fire a fire expert. I’m not a financial adviser.
I’m not a US CPA. Right? My only focus in this video is tax and FEMAI aspects. Okay. Now the case that we are taking is a person who is a non USC or a GC.
Right? Person doesn’t have a US citizenship or a green card. He’s just there on the, say, h one b visa, and he’s planning to attain his number. Right? Particular number, they say that you have to attain this number so that, you know, then you can take a, like, a every year kind of a 4% withdrawal or something.
Right? So I’m not a FHIR expert. I don’t know about the FHIR methodology and all those things about the, you know, the modeling and everything. So so, basically, you are there in US working, you, your wife, and you plan to attain that number at a particular year, and then you plan to retire back to back to India. Right?
So, with that case, we we take these points. So first, I’ll discuss general points, then then I discuss certain specific actionables, while, you are living in US, and then when you return back to India. Right? Okay. So, one thing definitely is there, and if you are, planning for fire, then then you you wouldn’t be knowing this, that you would be investing in, like, 4 zero one k, traditional IRA, where where there is a, penalty for withdrawing early before 59.5.
So you need to have a buffer. When you return back to India, you need to have a buffer, between your retirement age. Like, for example, you’re retiring at, say, 45. Right? And your, the when you withdraw, it’s, the 401 k, you are only allowed at 59.5, and you would want to keep the 401 k till that time.
So so you need to plan for that buffer. Right? The funds for that buffer. So now there is a ratio between retirement accounts and nonretirement accounts that you need to keep. Right?
So retirement account is basically your mandatory contributions, to the 401 k, your contributions to the traditional IRA. Right? These are all retirement accounts where there is a penalty if you withdraw early. Right? There is a tax impact, and then there is a penalty.
Another, the the accounts are the nonretirement accounts, which is like stocks or ETFs, right, where there is no such penalty if you withdraw. But there is also no no such benefit in contributing. Right? So you need to be mindful of the ratio between the your investment in retirement accounts as well as non retirement accounts, considering that you will be using the funds in the non retirement accounts as a buffer between your retirement age and the age 59.5, after which you can use the 401 k or the traditional IRA funds from 59.5 to maybe your rest of the life. Right?
Okay. Now for you need to be mindful for so I’m what I’m trying to do is that just I’m trying to throw pointers at you, which you can, like, then maybe reevaluate in your you must be having your fire plan. So you can maybe think, you know, that, oh, I missed this point, and then you may, want to just think about that and consider that. Now if you have US denominated goals, for example, your child’s education in US, so there, you need to, you know, work out from your financial plan either to keep funds in US dedicatedly for that particular goal or because there is an estate tax impact that is there for a non citizen, nonvisited of 60,000, the threshold is very low. You may want to bring that money into an Indian RFC account after you become a resident.
If you do that, then the benefit is that the money is held in USD for maybe your child’s future education. The money is free, from any FEMA restriction, because the money you have earned as a nonresident working abroad. So it’s free from any FEMA restriction tomorrow if you want to invest anywhere else. There’s no FEMA restriction, and it’s free from estate tax also. Right?
So that is for US denominated goals. You can have that approach. Right? Now for retirement accounts, right, my request is my my suggestion would be to prefer 401 k or traditional IRA, staying away from Roth. Right?
Because the problem with Roth is that whereas for 401 k traditional IRA, there is a beneficial provision, which is section 89 a under the Indian Income Tax Act, which allows you a tax deferral, of any income from your 401 k till your withdrawal in US, which is, like, 59.5 and beyond. Whereas for Roth, that benefit may may not be there. So, you might have invested in Roth with the understanding, with the post tax money, and with that understanding that the funds will be tax free for you. Right? And especially if you have a fire mindset, you might be thinking that, okay, Roth money is, like, you know, it will not be free from it will be free from any tax liability.
If you invest from that mindset, but and you return back to India, then from the date that you return back to India, the earnings on that Roth may be is basically taxable in India. Right? So there are ways where if you still hold Roth money, you can still, kind of reduce your tax liability by taking certain, steps, but, principally speaking, the Roth money will be taxable. The earnings will be taxable. Right?
So you may want to prefer 401 k or traditional IRA for your diamond accounts. If you have invested in Roth, you can just stay put with your investment, but not invest any further. Right? I’m just saying evaluate on those aspects. What I’m saying is not that any particular thing I say is right or wrong.
It all depends on your personal financial situation, but these are just some pointers. And, also, it this video may be difficult for some of the users to understand because I will not be repeating lot of things which have already spoken in the previous videos. Right? For example, for estate tax, I already made a detailed video on the estate tax implications for a non citizen, nonresident. So you can check that video.
For 401 k taxation, I made separate video. For Roth taxation, I made separate video. You can check those videos also to get a better understanding. But here we have specific pointers from a fire perspective I’m doing. Right?
Okay. Now for estate tax, there is a there there is this risk that you are thinking that you want to return back to India, and you are saying that I’ll keep my money back in the US. But the problem is that anything above 60 k anything above 60k for a non citizen, non resident has a estate tax liability of anything above 60 60k, US IT’s property. Right? So that risk, you have to keep in mind, it’s a big risk, right, for any anyone who is planning to return from return back to India.
Even I will even say that even for a person who is living on a h one b visa in US, that person still qualifies because, again, there is no bright line test. There is, kind of it depends on facts and circumstances. But if you don’t have an intention to remain in US, there there is a risk that you can be treated as non citizen, non resident even in during your stay in US. Right? So I’m not taking up that particular thing for this video because, again, that’ll open up Pandora’s box for other, discussions.
Maybe in some other video, I’ll cover that thing. But there is an estate tax risk if you are not a US citizen. Above 60,000, whatever you have, can be exposed to 18 to 40% tax. So you need to have a very strong reasoning for keeping the money in USD or in the US after return to India. So, basically, we you need to have very clear reasoning if you want to keep the money in US on return to India.
Right? Okay. I actually had wanted to make another point here is on the currency risk. Yes. So one is the estate tax risk.
1 is the currency risk. That means if you want to retire back in India, your expenses will be in India, and you want to keep a big chunk of your money in the USD. See, forget about what the, you know, the the the kind of prediction that India Indian currency will always depreciate against the USD currency and all. Let us leave all these things for the pandits. Right?
The general rule and pundits also go wrong. Right? The biggest of the pundits go wrong. So we cannot predict the USD INR exchange rate after, say, 20 10, 20, 30 years. We don’t see we cannot fathom how the geopolitics and economies, you know, the things change.
Right? So it’s always advisable that if you have the the the intention to return back to India and spend a huge chunk of your portfolio, almost the entire portfolio in India, constrain that you’ll either not work or work for a very low salary or a kind of very low kind of consulting work or something. Right? So this portfolio that you have, the whatever investment portfolio that you have, you need to protect it from the currency risk also. So as a general rule, it is advisable to have it in the same currency in which you’ll be spending, which is INR.
Yes. Some portion you can keep in the US for, like, USD dominated goals or just to diversify. Right? So one is from a estate tax perspective, you need to have a very strong reasoning for keeping money in US considering the estate tax risk. Right?
Because for because to cover that, you’ll have to buy a term insurance in India. Right? That is one thing. 2nd, from a currency risk point of view, again, keeping money in USD. Even in an Indian RFC account, holding USD, you need to evaluate.
Right? If it’s for a diversification purpose, that’s why. But anything more than that, you need to have a very strong reason. Right? Just that blind thing that, you know, USD is a strong currency and will keep I don’t think that’s a right way to think.
You need to get a firm grip on asset allocation. If you don’t know asset allocation, please, you need to get a firm grip because, you know, you’re talking about next 30, 40 years of your life. Right? And this is the asset. You need to take out the emotions away from, you know, all the from your investing decisions.
An asset a rule based asset allocation, which is basically on an asset class level, like a risky assets versus non risky assets, and a geographical level, like between India and US. You need to have that asset allocation thing very clear in your mind and invest as per the asset allocation. Right? And I’m not in favor of this dynamic asset allocation, which changes as per the mood of the market and all. That is, I’ll not say anything about that.
But have a very clear rule based asset allocation. Take help of a financial adviser if you want. Right? But this, you need to get a firm grip on that how to rebalance your portfolio every year. Right?
And not get swayed by the and this will help you not get swayed by the, you know, market sentiments, markets crashing, markets going up, and all those things. Now, traditional IRA investment is helpful when you talk about asset allocation because when you return back to India, there’ll be no US India tax implication on the whatever, reshuffling that you do within the 401 k if you have made a section 89 a election in India. Right? So if you have made that election in the 1st year of your ROR and later on you do any kind of shuffling within the traditional IRA, no US tax implication, no India tax implication. That’s a big benefit.
Otherwise, for example, Roth you have, and Roth you do a shuffling. If there’s a cap realized capital gain that gets created, it will be taxable in India. Right? So you need to it will not be taxable in US, but it will be taxable in India. That is the advantage of traditional IRA in case of a kind of fire strategy, and that’s why I I would suggest maybe that traditional IRA is better than Roth if your plan is to return back to India.
Plan ahead for our NOR. Our NOR is a like, a golden window, which you get, between 0 to 3 years, you get depending upon your, stay outside India, the number of years outside India that you were. Depending upon the there’s a calculation that has to be done. And if you get the RNOR, maybe 2 years, 3 years at max you get, it’s a golden window to settle all your US investments without any tax reporting implications in India. So that’s the time you can, like, consolidate.
So if you’re returning back from US and you have lot of investments spread in lot of places, you have the 401 k definitely has to be able to keep. But Roth, HSA, other investments, or you can kind of decide and close depending upon the, implications, depending upon your situation without any tax or reporting implications. So you need to just plan ahead for taking the maximum benefit of this r naught. This r naught period also you can use to reset the cost basis towards the end of the r naught for the investments in US that you will continue so that to minimize your future tax liability in India on those investments. Right?
Okay. Now now as a general rule again, it’s a general rule. It’s subject to exceptions, but this is my view. This is my very strong view. Right?
That till you are a US resident, it’s advisable to keep investing in US till your US residency because because of the PFIC implications because of PFIC. Right? Again, PFIC, I have made a separate video you can check. So, basically, PFIC restricts your non US the India investment options. Right?
Ideally, when I’m a US resident, want to invest in India, I would not want to invest in shares because I am not a I’m not an expert in taking up the shares. Right? I want someone to manage my portfolio. Right? So, ideally, a better option would have been mutual funds or an ETF.
However, because of the PFIC imp the the punitive PFIC implications, those options are closed for me as a US resident. However, as a US resident, I can take exposure in, like, dedicated India funds or India ETFs in US, which have exposure to the Indian market, and I can benefit from them without impacting, under the PFIC, under the f t FTC, foreign tax credit. No FATCA implications if I keep investing in US. Otherwise, if you invest in India, then you have all the 8938 and FBAR reportings and all you have to make. No IRS reporting issues.
Right? Invest in India after return to India. So once you come back to India, once you have money in your bank accounts, then you can decide. Okay. At this time, these are these are the good performing ETFs or mutual funds that I want to invest.
Your choices are also much much more, right, which were restricted because of the PFIC implications in US. And don’t let anyone sell you the story, the India story, and, you know, ask you to invest in Indian kind of mutual funds or ETFs. No. Please first read about PFIC and then invest as a US resident in Indian funds. Better to keep investing in US.
At all times, please cover your basis, right, for certain things. So what generally, what happens is people are they are very, very obsessed with their fire number. Right? Achieving their fire number and making all the effort towards that. But it’s very important to keep some bases very covered, like the emergency fund, the insurance, upcoming any short term financial goals, you need to keep funds aside for that in liquid avenues, right, non risk, low risk avenues, and the net estate tax impact.
So as I said, even as a US, living in US, you can be exposed to the estate tax risk. So at all times, have, you know, maybe, the estate tax impact covered by term insurance, pure term insurance in India. Have the beneficiaries updated in all your accounts at all times, and please keep your spouse updated of whatever you are doing on the the financial side of things. Right? You make you’re making so much effort, but also keep your spouse updated where my asset maybe an Excel sheet, which you can keep updating and sharing with your spouse where my assets are, where these investments are.
Right? So these are some general points. Now let us come to some specific actionables while you living in US. So while living in the US, your focus should be to maximize the investment corpus through US investments, not India investments. Right?
Because of all the issues that I said, PFIC, FATCA, FTC. Right? Maximize the investment corpus should be your main goal, right, through US investments. So for retirement portion, the retirement fund account portion, 401 k traditional IRA. Don’t look beyond that.
Try to maximize this. Don’t look at Roth. Don’t look at Roth conversions, backdoor Roth. No. For nonretirement, you can do pure the index ETFs, the Vanguard type ETFs.
Right? Low cost ETFs. So now in US, your plan should be to max out the 401 k or traditional IRA. In my view, again, I have done a comprehensive video on this. What, should I max out my 401 k even if I am planning to return back to India?
I’ve tried to cover both of the sides of the both arguments. Right? But my personal view is that, and I lean towards that, is that even if you may need to withdraw before 59.5, right, because of some eventuality in India that your fire plan does not go as you had planned and you need to withdraw 59 point before 59.5, still it I will suggest to max out your 401 k or traditional IRA given the benefits. Right? Okay.
Move 401 k to dish so if you have a 401 k, see if you can move to traditional IRA before returning because it will have give you wider investment choices and, maybe less on the fees. Right? And shift your accounts, your brokerage accounts, and all to, those brokers, or those institutions that serve, US non residents. Not all do. So, like, Fidelity does, Schwab does.
There are some that do, so you can move your accounts to those, brokers. Now, so that is like when you are living in the US. Now after moving to India, one strategy what you can do is that to move your non retirement account money, which is like the money in your stocks and maybe bonds, right, as per your asset allocation, whatever you decided. Right? So move your non retirement money to India ASAP ASAP on return within the r naught definitely within the r naught period.
Don’t let it go to r o r period because then it will have its India tax implications. Right? So maybe in the 1st year itself of your return, move it, move the funds to, India. What it will do is that it will reduce the estate tax risk on the portfolio. So your portfolio, whatever is the amount that has over 60,000, USD, will be exposed to 18 to 40% estate tax.
To the extent you move your non retirement account money to India, your estate tax risk will reduce. Right? Now there’s an exception to this. You can still keep a portion of this money in US for USD goals, But even better, I would suggest from an ST tax perspective, move the money to an Indian RFC account. You can have, like, a 1 year FD, which gives you 5%, and the money will be held in the USD, and you can open the RFC, you can open the RFC as an Indian resident.
You need to just be careful that you convert this money directly from the foreign account to the to the open a RFC account and transfer it. Once you transfer it to a resident account and then, transferring to a RFC may be difficult, right, because the nature of the money changes to a non reparable. So you need to just exercise care after becoming a resident, open the RFC, move that foreign money to the, RFC account, or you can opt for Irish domiciled ETFs. Right? Same ETFs like Vanguard has in US.
The Vanguard has the same, I Irish, unit where you can have the same, which are basically, the underlying investments are USD investments, and they are out of the estate tax net because they they are domiciled in Ireland. They are not domiciled in US. So they do not form as the US site use property. Right? So if you want to keep money in USD, better to keep it Indian RFC account or Irish domicile DTS.
From an estate tax perspective, your estate tax reduces risk reduces. Then very important thing, update w a b e n in all accounts. Right? As a noncitizen as a nonresident of US, when you update w8p, first of all, you also update the address. Add update address to Indian address, update w8ben.
That basically certifies that you are basically certifying to the US broker, that I’m an Indian resident. Do not withhold any tax on capital gains because capital gains to a non US resident is, exempt. And, also, for any dividend interest payout, you basically, when you certify your Indian residency, and you put the w eight b e n on file, they will not they will instead of 30% tax, they will dis they will, impose 25% under the India US DTA at reduced treaty rate, and they will not do any backup withholding. Right? If you don’t have a W8BN or SSN, there there is a mandatory 24% backup withholding implication that arises.
So to to to negate that risk, update W8BN promptly in your all your investment accounts back in US. Okay. Withdraw from nonretirement accounts within r naught. Right? No in US, India tax implication.
Right? So whatever nonretirement accounts that you have, basically, the basically, the intention is that we withdraw it, within the r naught to simplify, and there is no US India tax implication of the nonretirement account money, the stocks. Right? Because capital gains under the US tax law, it is exempt. India, also, it is exempt because it is within r naught.
That money that you have, basically taken out, you can invest in India in low risk avenues. Why low risk avenues? Because this is the money that you’re going to use as a buffer between this time, that you’re withdrawing to the time where, the 409 401 a, becomes accessible, which is, like, 60 and beyond. Right? 59.5 and beyond.
So you need to have a buffer, this money as a buffer so you can keep it in, say, low risk avenues and especially in avenues that generate capital gain. Right? So one is the FD type avenues where every year the interest will get taxed on an accrual basis. Another avenue is like ETA for mutual funds or shares, where when you withdraw only that, then the capital gain gets generated. So you can basically defer the you can time your withdrawal in such a way that you can defer the tax liability.
Right? So then if you have invested in Roth or HSA or others other, things, my, suggestion would be to consider withdrawing fully prior to r naught. This is again an aggressive it can be an considered to be an aggressive mood a move, because of the US tax implications. But considering that this money will be taxable the earnings will be taxable in India after you are in ROR. Maybe, this can be you can just have a trade off between the the tax liability US tax liability, that you have within the r naught vis a vis the the tax liability that will arise if you keep it after, like, an ROR.
So consider that trade off, and, also, there is this thing about, you know, simplifying the whole thing. Right? That, you don’t want to keep too many accounts open, so take a decision of the Roth or HSA. If you want to continue, maybe HSA, you can continue till 65 because then there is no 20% penalty. And Roth, also, you can continue till 59.5, then there is no kind of, penalty on the earnings.
So, again, decide. For investments kept back in US, now once you are nearing the end of the RNOR, the strategy that you have to do is that for the investments that you’ve kept back in the US, you need to reset the cost basis around the end of the RNOR. This again will help you reduce your future tax liability in India on the money that you have to keep in US, like the traditional IRA that you have to that you have to keep in US or even the Roth that you are keeping in the US, because you want to keep it till 59.5, whichever accounts or even stocks that you are wanting to keep in US, try to reset the cost. For stocks, there may be a capital gains implication, but for for a traditional IRA, Roth IRA, there will be not any capital gain implication, so you can keep them back in the US. But towards the end of the r north, you can reset the cost basis and can opt for slightly higher risk in retirement accounts.
Now what you can again do is that for the non retirement account money, which is now your India money for the for the expenses still maybe 59.5, you can you have to keep it low risk avenues. Maybe this money, which is back in the US, you can slightly take a higher kind of aggressive stance with respect to the asset allocation and to compensate for the low risk in the India portfolio. But don’t go for too high a risk because that money is also very, very important, and you cannot have an exposure higher than what is your risk profile. Right? So just take care of that.
Now for 401 k or traditional IRA, you make a section 60 you have to make a section 89 a election in the 1st year of ROR. And after you make that election, feel free to adjust the asset allocation within the 4 zero one k or the traditional IRA, with no India US tax implications. So this is a big positive. Every year, relook at your asset allocation. For at least 401 k, you can just feel free to change it without any US India tax implication.
Okay. Now after age 59.5, now instead of yearly withdrawal from the 4 zero one k so when I’m saying 401 k, it’s basically traditional IRA. So instead of yearly withdraw because we have converted 401 k to the traditional IRA. Instead of yearly withdrawal, from the, IRA, what what you can do is that you can withdraw in a few big chunks. In a in a like, a few years, you can withdraw in a few big chunks instead of every year withdrawing.
Now what it will do is that it will save you from the US tax filing because every year when you withdraw, then you may have to file a US tax return. Right? So this will save you from the US tax filing and also the estate tax kind of a complication. That means, the money will not remain in the US. It basically, the estate tax reduces to the extent you move it to India.
So instead of doing a yearly kind of a withdrawal, maybe 3, 4 years, spread the withdrawals in 3, 4 years and take the money back in India and invest in India in low risk avenues as per, your financial situation. But you need to but if your fire, plan goes very good, you don’t need, like, the the 401 k or the traditional IRA amount. Right, but still, there is you need to be mindful of the RMT requirements, required minimum distribution. From, I think, 872 onwards, you need to start taking required minimum distributions. If you don’t take them, there are, I think, penalties, in US.
Right? So then very, very, very important is that, okay, from ROR, whatever US assets you have, investments, So your brokerage account is there, your shares, your if if they are there, 401 k, Roth, HSE, whatever you are keeping after ROR, that needs to be disclosed in the Indian tax return. Income as well as assets need to come very clearly in the in the Indian tax return after ROR. If you don’t do, then there are severe penalties under, Indian Black Money Act, which even extends to prosecution. Right?
There’s a flat 10 lakh penalty. Now there is a new development in finance act 2024, which says that if it is less than 20 lakhs, we will not impose penalty. But most likely, it will be more than 20 lakhs in your case. Then there is a flat 10 lakh penalty, plus it can go up to prosecution. So you need to be very careful on proper disclosure in schedule, FSI and FA, every year.
And understand this, and very very important thing I want to say, is that this requirement extends to even if you don’t have any income in India. Right? For example, you are, like, not working in India, you don’t have any income, still the under section 139 of income tax act, you need to file a tax return in India and disclose the in incomes, foreign incomes, and assets, back in the US in schedule FSI and FE. Otherwise, the penalties get attracted. Some other points some few points I have.
Sorry for the long video, but you keep you can keep a US bank account active. There’s no problem with that. FEMA allows that. You can keep some funds back in US. Right?
Within the estate tax threshold, it is allowed under FEMA. Why you should do never ever bring all the money in India. Right? Keep at least some money back in the US. That money is free from any FEMRA restrictions.
Suppose you come back, and I’ve said in previous videos also, suppose you come back to India and you decide that you want to do a start up, and your start up starts performing well, and you want to open, say, a US LLC, to obtain to, you know, for the US operations, for, like, a presence in US, you ins generally, if you want to do that, there is a very complex, FEMA, overseas investment tools that you need to comply with for that investment in India, which has a lot of reporting requirements. As compared to that, if you have money back in the US, or if you have money in the Indian RFC account that you use, it will be free from any FEMA restrictions under section 64 of FEMA. So this is a very big benefit. You want to do anything with that money. Right?
India is not concerned. Right? India will not question it under FEMA. Right? So that’s a big positive.
Now some alternative options for traditional IRA. Right? 1 is traditional IRA, generally, one option is most preferred option is that you want to keep it till 59.5, but some alternative options is, which you can evaluate, is taking substantial equal payments, which is rule 20 70 72 p. Right? Substantial equal payments from your r IRA.
Now there are 3 methods, and these are complicated methods. Now if you do that, then there is no penalty. You can take those withdrawals. There is no penalty. And even as per my, view under the India US DTA, the impact can be that the money is only taxable in India, not in the US.
Right? So that, again, benefit is there. But, again, check with your financial adviser whether that strategy is a good approach, or the better approach is to keep the money where the money grows tax deferred and money compounds, for the till 59.5, whether that approach is better. So look at both the approaches. Another thing what some people do is that they they are willing to they don’t want the kind of, the complications with respect to India reporting in all the years of the 4 zero one k and all.
They they take that approach of doing a full withdrawal within the r naught, right, which has they take a hit of the taxing the 10% pen tax is anyways there, but they take the hit of the, 10% penalty in US, but they want to streamline everything. Right? They want to streamline everything within the r naught and then invest afresh in India. Right? So if that is your approach, then you can also evaluate that.
Okay. One very, very important thing I want to say is that so some just general points. No matter who which financial adviser you recruit or, you know, the best financial adviser that you recruit or the best kind of, you know, someone else doing it for you, you are your best financial planner. And this is what I’m seeing from my kind of years of experience. You know, the the the how you know about your life, your situation, your plans, you and your spouse, the you cannot communicate the same thing to your financial planner and expect him to do to that same level as you can do.
My request is have a adviser, have a a CA, have a have a CPA, take advice from them, take perspectives from them, but the important thing is that you have to own this. Right? You cannot give it to someone. Right? This is basically a very big decision of this fire strategy, or the fire decision is a big decision, right, which can go wrong also.
So it should not be that if some you give it to someone and then you blame him or her that it went wrong. No. You have to take full ownership of that. What, basically, you can do is, first of all, get hold of MS Excel. Right?
You can have your entire plan, all the calculations in MS Excel. Right? And MS Excel is like an ocean. Right? So, basically, entire company’s plans, right, financial plans run on MS Excel.
MS can be run on MS Excel. So it’s not a kind of a small tool. You just have to upscale yourself in m x MS Excel, and there are a lot of tools. And then there are so many helpful forums. Like in Reddit, they have fire forums and, basically, increase your financial knowledge, upscale yourself in MS Excel.
Basically, you don’t want to depend on someone else for, you know, awareness on these. Other people can give you perspectives. You talk to people, take their perspectives, talk to consultants, but they should give you perspectives. Right? You have to learn yourself.
Right? So you have to do the real work. You cannot outsource it. Right? Now make a scenario list of what can go wrong because there are several things that can go wrong.
Right? So make a list of what all can go wrong in this plan and, maybe a 2 column list. And against each scenario, you need to have a plan for what course of action. Like, if you know about business continuity planning or in so I work in internal audit and risk management, so it’s something like we create a risk register. Right?
When we have an understanding of a a particular process, you we create a first risk register that what are the risks to make a list of the risks, what can go wrong, and what will be the plan of action that you will take. To that extent of detailing, you’ll have to do. Okay. Last and 2, just a bit of a non tax related points is that what my view is that see, fire is definitely thing. I’ve I’ve not looked into fire very deeply.
My my thinking is that the plan should be to continue working in India on something meaningful. Right? So, generally, what happens is that we end up choosing our careers based on what people tell us and our whatever education we did, and, you know, sometimes it becomes robotic and everything. My thinking is that we should be the plan should be to migrate, in an effortless way into something that, where, basically, you don’t you don’t have to think, you know, of choosing whatever you want to do just because of money. Right?
So plan to continue working in India on something meaningful, and so your planning has to be also with respect to that. You don’t want to just end up, you know, firing and then not being clear on what I need to do back in India. So you need to one is the planning for the money aspect. One is the planning with respect to your skills, with respect to what you want to create. Right?
So, so when I was writing the, you know, this the pointers, so I said I created something like DWSM. This is something what I have created. My my thought processes is DIVORKING on actually, it’s d w d s m. Die working on doing something meaningful. Right?
So and what my my example and what I follow is, like, Abdul Kalam sir. So he died while he was giving a speech. Right? Even at the time of his death, he was, like, he was at that stage, and he was giving a speech. So so our aim should be to, like, create even a small legacy for someone.
Right? That should be the aim, and it’s like what Steve Jobs said. You know, make a dent in the universe. Right? So if you’ve not, listened to his speech, just listen once.
Steve Jobs’ speech, like, make a dent in the universe. That should be. So money is one part of the entire equation. It should not be the entire equation. So fire versus DWDSM is something which you can think of.
And last or the final point, is that you please plan for fire, but don’t get too obsessed by it. And if please also do enjoy do enjoy the small joys of this daily life that offers the time with your children, time with your spouse. Right? Don’t get too obsessively into work because some things, sometimes, right, this time that is right now that you have with your kids, especially if your kids are small, this time will never ever come again. And then even if you’re if you’ve done your fire properly and you are you know, you may regret that I did not spend this much time.
So, again, it’s some not financially related, but it’s a very important thing. In midst of all the planning that you do, aggressive planning that you do, you also need to just think on those. So with those, some philosophical, things, I end this post. Do share your thoughts, feedback. See, I have just, maybe made this post with very little understanding that I have on the fire aspects.
I’ve tried to majorly cover the tags and the fema pointers, but do please share in the comments. Lot of, you know, pointers that, you know, maybe I have not covered, and you can add in the comments which can be useful for others. Right. So thank you so much for watching this video. Thank you so much.