Retire in India and live off interest payments?

Nick-H

The exchange rates are, indeed, a big missing factor in my figures. The GBP rate is dropping back into the seventies now --- but how on earth do I work out when/if it is better to keep the money in UK? I don't know .

I think we've got living expenses covered here for a while (vague, yes... Mrs N is my treasury manager ) so I'm really inclined to hope for better rates before bringing cash here.

But if it could have been making 15% (hypothetically) here then I'd end up better off?

I'd been disinclined to invest in gold, due to its high price just now, but you've reminded me that the inflation rate may be a good reason to do so.

__________________
.


Just one member of the IndiaMike Mod Team

capt_mahajan

Nick, 15 percent is not a figure I personally would work on. Bank rates are around 10 and very likely to drop with inflation moderating right now; the govt went in for overkill in view of the UP elections, I think. Anyway, I would work on 8/10
for the next year or so as bank interest.

Any more than this assumes a level of risk, whether stocks, mutual funds or real estate etc.

And this is pre tax.

My opinion; it is never possible to time any market, whether stock or foreign exchange. But it is possible to hedge and diversify, some here, some there.. so if the shit hits the fan, all of it doesnt hit all the fans at the same time

I also look at the risk. If I am talking of moving 50000 dollars, just as an example, I doubt whether I will win or lose more than 50000 rupees in the next 6/12 months or so (a one rupee exchange rate difference). It is not that I am actively trading, I am just moving the money. Ok, it may be a little more if I happen to bring it in at the absolute peak, or if larger changes like the last few months.
So to my thinking 50000 rupees or even 75 (with 50k usd involved) is not such a huge amount to worry about.

I would only look at a longer 5 year term picture, where would I want my money to be? And, can I move it back if required? If I cant, can I productively consume it here? If you are living here, you probably can.

In India, interest rates will not go down to the 2/4 percent range in a huge hurry, because I honestly dont see inflation approaching zero anytime soon.

kmalik

If Captain is right and the interest rates in India are on the decline, the exchange rates might well move towards where they were - particularly with with GBP which has not shown a broader weakness. The steep interest rates might well have influenced the demand for Rs. to increase - causing rise in value.

That said, I had also read an opinion (contrary to Captain's) that the Indian government was not able to control inflation with even high interest rates due to money supply coming in from abroad. If that is the case and inflation does not moderate, the government might well be inclined to keep the rates high (or higher).

That said, if I were investing in India, real estate might well be a major part of my portfolio there. Overall, Captain's diversification message is very good, and one I try to manage our investments by.

edwardseco

Yes Nick in this case you have a solid point (6 of one, half dozen of the other)so you do understand finance better than you think, Here I would balnce the issue with flexibility in that UK sterling is more convertible (exactly what you are doing). On the other side I always emphasize the direct relation between risk and return and would balance a portfolio between interest and equity funds..

Nick-H

Captain... If I was talking risk-free bank deposit I'd say 6% to 9% depending on how long we tie it up for. Our last fixed deposit was one year at 9%. Shortly after that some banks were offering 10%, but I haven't noticed any more ads recently, or looked at the rates online, so maybe its cooling down. From what you say, it is. We'll keep our 9% deposit!

I'd be hoping to get 10% to 15% from investments. A chunk of money with the bank investment people is doing that just now over the past six months --- but that has to be a long-term view. It may be 15% up this week: it may be 15% down next week! Hopefully, though, over three to five years it will perform adequately. That is our conservative (hopefuly) estimate.

OK, I'm not totally ignorant about such things, I just have to admit that it takes about 37 seconds for me to reach my brain hurts point, the trouble being that I really don't enjoy or have enthusiasm for the topic.

palomnik

These are jewels you guys are dropping here...

I'm planning on an eventual retirement in India. To manage money that's in US retirement accounts, it looks clearly to me that access to high speed internet would be useful, if not necessary, to manage my money, although frankly it was a luxury that I had felt I could do without in India. How available is it in smaller towns?

Also, I believe that I've seen somewhere on India Mike (I can't find it now) that you can open a US$ account with an Indian bank that's registered in the USA or UK, open a Rupee account in India with the same bank, and transfer the money between accounts with no delays and no fees. Is that true?

Many thanks for your advice, folks.

dzibead

palomnik - are you an NRI or a PIO? It might be virtually impossible to actually retire to India unless you are. What kind of visa would you expect to get that would allow you to retire in India? If you're a U.S. citizen, you could get a 10-year tourist visa, but you'd have to go in and out of the country every 180 days - that could get expensive and it doesn't sound very restful (or realistic) as a retirement plan. As a person on a tourist visa, you couldn't buy real property and wouldn't be eligible for any residency perks. If you have the money for frequent travel, maybe your retirement plans should just include an annual extended visit to India.

Nick-H

I used to think it was a pain, only being able to spend 6 months in India.

Now, after my first full year without a break here, I'm thinking that India in 6-month chunks with a 4-week break would be just perfect!

palomnik

Dzibead, I think the subject of residency has been beaten to death elsewhere in this forum. Yes, I plan on getting a ten year visa and leaving every six months. I expect to have enough to manage a biannual trip to Sri Lanka or maybe Thailand.

As for my questions ref. high speed internet and accounts with an Indian bank, can anybody advise?

Nick-H

(Indeed it has been done to death, but only because of the never-ending stream of people who don't accept the situation. Gets tedious for people like you who do know the facts, but bear with us; someone else who needs that info just might read it)

"broadband" here is defined as 256K and above. Not very broad, eh? But it is theoretically available up to 2Mb. If you are seriously rich and want real broadband, in the pre-ADSL meaning of the term, then fibre-optic lines are available too.

I'm talking Indian situation: I don't know about local Goan nuances.

When I was last in Kovalam (Kerala) last, there were signs in some ATMs encouraging tourists to open 6-month bank accounts. However, my attempts to do so in Chennai were fobbed off until I got a resident's permit --- which, of course, you cannot do with a tourist visa.

palomnik

Thanks, Nick, you're always right there with the information.

I don't know about Goa either, outside of the fact that I have no interest in living there. I still expect that a dollar account with an India based bank would be an advantage in drawing money. I'll keep you posted if you're interested.

As for internet, I'll have to roll with the punches.

Thanks again and cheers,

P.

barodian

In US, you can open Citibank and CitiNRI account. CitiNRI are only for NRI. You can link both of your account and transfer money, from one account to another. The CitiNRI account will be held in India in Rupees, while Citibank will be in the US and in Dollars.

You can have your retirement pension direct deposit into your account and withdraw from anywhere in the world with ATM access.

hindweb

what an irony, when Indians are dying to get to a western country, pack themselves in containers to get transported to west, here is a bunch of people wo wants to settle in India.

You guys are welcome.. you will be an asset to India with all your knowledge to shape this country to a better place.

__________________
http://dharma.indviews.com

Prashant.M

That's a nice thought. Nick is already doing his bit, but I have a sneaking suspicion that he is becoming more Indian than us . Of course I mean it in a good way.

__________________
Happiness is just a thought away

Nick-H

...My wife's worried about that too. particularly my aggressive driving