Shoba Narayan is the author of five books. As a journalist and columnist, she writes about health, relationships, travel, food and culture for global publications, winning a James Beard award and Pulitzer Fellowship. She has taught and lectured at universities in India (IIM-B and IISc) and abroad. She is the host and anchor of Bird Podcast: about birds and nature. She enjoys wine, studies Jung and is a gadget geek. Her lifelong mission is to get fit without exercising and lose weight without dieting.
How much net worth do you need to retire?
The recent Ambani wedding brought out a lot of conversations about spending, splurging, taste, excess, celebrity-chasing, and the whole ‘show-off’ culture that seems to be permeating India. I was among those who gawked at the emeralds and diamonds that were paraded out on social media by all the Ambani clan. Sure, even one of those gems could feed an entire village, but even those of us who felt outraged by the excess couldn’t stop watching.
As for me, and please don’t judge me here, watching all those flowers, jewellery, costumes and movie-set like décor prompted an urgent, perhaps unnecessary question in my head: do I have enough money to do a nice (not excessive, just nice) wedding for my children? Following that came another thought: how much does it cost to do a nice wedding? Of course, all this is relative depending on the city and the number of guests, but it all boils down to the eternal question that all of us earning adults face at some point. You know what I mean? The big net worth question.
When I was in the Columbia Journalism program in 1995, two professors invited a bunch of us students to their apartment for dinner. We were all in our 20s—hungry and ambitious. So about a dozen of us freshly minted journalism graduates sipped on martinis and took in the sweeping views of Manhattan from their apartment balcony. Our professors seemed the epitome of New York sophistication.
During the course of that evening, one student blurted out, “What’s the number?”
We all laughed because it was exactly the question we had wanted to ask.
“How much money would we need to live like you guys?”
“$7 million in the bank,” Ray said without hesitation. He was the editor-in-chief of Time magazine at that time.
I could hear my classmates inhaling. How were we going to save up $7 million on a media person’s salary of $15,000 a year? Freelancers like me who didn’t have green cards couldn’t aspire for even that much.
When people think about when to retire, often they think about net worth: about how much money you need to retire. How much money would you have to accumulate in order to safely stop earning, and yet preserve the lifestyle that you envisage? In other words, what’s your number? What’s the net worth you want?
Well, that question has many moving parts. In a previous column, I talked about calculations that we all make about retirement– about savings set aside for travel, medical expenses and splurges.
This column is about something slightly different, and if I may say so, somewhat spiritual. It is about contribution, courage, priorities and eventually about saying enough. Money, after all, should be your slave and not your master — at least that’s what our parents told us. Numerous studies show that money cannot buy happiness. More money doesn’t mean you will be happier. In fact, many times, it is the opposite. So if you are stuck in a job you hate at age 55, perhaps you should ask the question: why am I doing this? What happens if I quit?
At Nagarhole National Forest recently, I met a couple who did just that. They were in their thirties. We were on safari together and while waiting for a tiger to show up, we got talking. Ria and Nikhil were both chartered accountants from Delhi. They had worked at a multinational firm. Working from Home (WFH) during COVID-19 taught them how much they loved the freedom and agency that came with not reporting to an office. So they stopped. Since 2021, they said, they had not held a full-time job. Instead, they had become part of the gig economy and were happier for it.
“It’s amazing how little you need to be happy,” said Ria, and then outlined what they had done.
It could be a blueprint for how to lead a life of freedom. Sell everything non-essential to your life. Live near public transport and if possible, greenery — lakes, and parks. Choose a good community of folks that you might like to hang out with. Sell your car and try walking or cycling — it is good for your health and the environment. It will save you money and free you from tension. Value freedom over-accumulation of objects.
The couple were spending ten days in Nagarhole, something that would have been unthinkable if they needed to be at their offices in order to keep up with their home and car payments. Instead, they carried their computers in a backpack, paid for a good Wi-Fi connection, and worked on projects. They had traded savings for freedom, which in the end, is why we all earn anyway—to be free to do the things we want. Well, why not start now?
Downsize your lifestyle, and your expectations and make choices that are courageous and counter-intuitive. Do you really need that Rolex watch that you are saving up for? Do you really need that name-brand car that you are struggling for or do you merely want it because your colleague has it? What are things you do or buy because you want to keep up with the Agarwals?
Even though all of us may earn well, not all of us will end up millionaires. You could become one by consistent savings, by starting something that becomes a unicorn, or through a windfall from your parents or relatives after they have passed on. If you are self-made and don’t come from wealth, simply putting your money into good mutual funds and saving judiciously can lead to a lot of money in your lifetime. The question then becomes: are you a slave to the earnings cycle or can you become the master of your financial destiny? Saying enough may be one answer. Telling yourself that you don’t need to leave a huge inheritance for your kids may be the other answer.
When you scrimp and save for 40+ years, you may find that you are now sitting on a fortune that you never anticipated having. Your kids may be OK financially or they may be struggling – it matters not. Do you really want to dump big bucks in their laps? Or do you want them to forge their path just like you did?
Wealth is an equation, a status symbol, and a cushion. But in the end, it is also just a number. How much do you need to retire is among the most searched questions on the Internet, usually in times of inflation, transitions, or unemployment. How much do you need to retire and be happy is an equally important framework. Nobody can answer this except yourself. Others can give you some contours of the answer but not in its entirety.
Sometimes less is more. The legacy of a life well-lived– with frugality, thought and compassion—may be the best gift, not just for our children but for ourselves. For that, you need to say the magic word: enough. You will be amazed at how freeing it is.
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