ATTAINING FINANCIAL NIRVANA

 ATTAINING FINANCIAL NIRVANA

I have been asked a very logical but an innocent question that when should the investor who has been investing with the goal of retirement planning, consider that he is on his way to financial freedom.
Should it be a landmark in the Corpus, should it be some percentage gain in,form of cagr or annual return or what.
Assuming that investor has constructed a proper portfolio with equity as the stronghold and fixed income schemes to support as a buoyant measure...
There will come critical level after a few years which can be approximately 5 to 7 years that one's portfolio will mostly remain in the green round the year despite the market taking a nosedive or  staying sideways which means neutral.
This stage will happen because in the previous span of 7 years one would have invested in a systematic manner and thereby gaining the advantage of rupee cost averaging and since normally it has been seen that in a 7 year period there is one cycle of bull and bear.
Beyond this as the investor will move on he or she will find that the return on his investments are becoming  more or less equal to a his monthly take home salary.
This fact he will judge for himself and if he does not touch his investments these gains will keep increasing.
Beyond this a stage would come when the annual rise in his portfolio would be much more then the annual take home salary.
This stage of course will definitely take more than a decade to come irrespective of the amount that one puts in.
 But it will definitely be a very satisfying and even an exhilarating stage a corresponding stage of what one may call a financial Nirvana.
When a person has reached the stage where the net corpus is beyond the above mentioned critical limit and  if he withdraws from it for his family needs the sum will never diminish.
If a person has been investing consistently along with his earning from profession then there will be lot of changes that will come into his nature.
First will be the change of equanimity: in so many years he would have seen the market rise up and come down almost everyday and every week so he becomes used to it. Even at 10 to 15% fall will not disturb him .
Second change that will come into his nature is of keeping on the fixed path and becoming lethargic to look into other popular avenues of investment. This should be taken as a good sign because historically the investments which are boring are the ones which give immense Returns.
Third change that comes into the person is a calmness settles into his nature. Since he is contented financially he starts pursuing his hobbies & looking after his family and also starts the exercise of discovering himself.
Somewhere along the stage he will find it necessary to give up his profession and concentrate more on himself and the people around him.
This is the stage where he can consider himself financially independent and having attained the stage of Financial Nirvana.