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Retirement and wealth creation go hand in hand

I’m sure many of you have read stock market folklore like, “If you bought Rs 10,000 worth of Wipro shares several years ago, the value today would be around Rs 600 crore,” or “The Sensex has multiplied more than 100 times in the last 30 years.”

I recently thought of asking my parents what they were doing when they could have sorted their retirement by simply putting Rs 10,000 into Wipro shares. Imagine having planned your retirement when the Sensex had just begun its journey at about 100 points, way before the relatively stratospheric 27,000 that we find ourselves in today. Forget about my parents – even I wouldn’t need to work for a living if they’d planned their retirement solely by investing in Wipro.

Is it fair to make these comparisons in hindsight? In 1980, Wipro didn’t even make software – it was a vegetable oil company. Back in 1980, there were no 24-hour business news channels or real-time market websites, and there was no BigDecisions.com. We didn’t know so we didn’t act. There wasn’t as much literature on stock markets and Warren Buffett hadn’t even made his first billion in 1980.

These are all perfectly plausible answers, and yet I shudder when I think how I’ll respond if my kids ask me in 2040, with the Nifty hovering close to 100,000, how I’ve planned my retirement. “What did you do when the Nifty was at 9,000 way back in 2016?”

I could say, “Oh yes, I remember 2016. I invested when the Nifty was closer to 9,000, but in December 2015, I heard China was supposed to have this crushing recession. Lo and behold, the Nifty had crashed to 6,700 by February 2016, and I really couldn’t sleep at night, so I bailed.”

And that’s that, here we are, my money is in the bank and I didn’t even check back on the Nifty after that 30% loss on capital. Playing out this hypothetical dialogue in my head makes me cringe – I definitely don’t want to have this conversation in the future.

So what has all this to do with retirement? Well, my limited point is that when you think of investing and retirement, think not only about fending for yourself, but also leaving an inheritance for your family. To borrow from the tagline of a reputed Swiss watchmaker, “You never really own equities, you merely look after them for the next generation.”

Far too many investors view retirement planning as securing one lakh rupees a month so they can fend for themselves when they’re old and feeble. There are quite a few depressing ads doing rounds depicting an elderly couple making a big deal of going on vacation with their own money after retirement. I say depressing because we should look at retirement planning not just as an exercise in sustenance, but also a gift to descendants.

And even if it is about fending for oneself to a certain extent, please plan to live until 100 and take a royal vacation every six months. Don’t just quote stock market lore and forward it to Facebook or WhatsApp groups – go on and live the dream. To do that, invest in equities today, invest regularly and learn to forget about them.

Don’t focus on day-to-day news that serves no purpose other than to derail your plans. Instead, focus on wealth creation, which happens through patience and the Swiss watch approach – the goal of creating wealth for the next generation.

*Mutual fund investments are subject to market risks, read all scheme related documents carefully.

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