At least I am in the same camp, who believes in early retirement and financial independence. My heart and mind always said there is no point working until the age of 58-60, when the life expectancy is so unpredictable. Then, when are we going to spend time on ourselves or spend at least last few years with family or friends ?
With above thought in mind, I decided to plan my investments accordingly. But I was clueless where to invest for good returns. Then I did some research on various options, particularly FDs and Bonds. Today I am 49 and until last year my most of the investments were in properties and equity. While I continue to hold the properties, I shifted a significant portion of equity profits and liquid money to fixed income options. For me the investment journey of fixed income started at the end of 2022.
In my research, I realized there is no such thing called “risk free”. Its just that some carry high risk and some low. While bank FDs promised 6-8% pre tax returns, a good A/AA rated bonds were giving anywhere between 8-11% pre tax. Of course there are lower rated bonds which offer higher returns, but I was not interested.
As I mentioned there is no such thing called risk free, one may go for traditional govt schemes if you need absolute low risk for your investment, but then returns are not that great. At the end I was okay with some small risk but with a guarantee, so rather going for traditional govt schemes, I opted long tenure FDs (5 years) and Bonds (10 years) which are backed by the state government guarantee. Never put all eggs in one basket applies here as well. So I ensured maximum exposure to each state government is not more than 10lakhs.
So far so good. FDs are giving me 8% and will continue for next 5 years. Bonds are giving me 9-10% and will continue for next 10 years. I am always in search of new bond offerings that are guaranteed by the state government.
Today I am happy that my fixed monthly returns are higher than my monthly expenditure (I am not worried even if I resign from the job ).
Please do share your stories too.
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