I am seeing a lot of young people are showing that their Networth is so and so much and thus they can retire as soon as possible. That is actually a good thing because they are trying to be financially free and thus can work on their terms.
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But the problem is the inflation is not what is portrayed by the government or by the news agencies. The real inflation is much more than the official figure. For example if the official figure is 6%, the real would be 8 to 9%. The main culprit here is the school and hospital expenses.
The schools are increasing their fees by 10 to 15% every year and thus it is becoming quite a major chunk of salary gone into the schooling. For example, the median per year fees of school in Bangalore is above 1 Lakh for the year and it's gonna go up from here. The bigger the name, the bigger the campus the bigger the fees. And parents have to send their children's in good school because of the competition or society pressure. And then there are other classes which you have to spend extra.
Next is hospital fees. With advancement of Healthcare, the fees are increasing rapidly. Previously what would have been cured at home, is now generally requires a good doctor visit and if he cannot find something he will ask the patient to get admit. Then there are tons of the scans and checks done to find out the root cause of the issue. And till that time your bills would have been quite a high. If you don't have insurance then gone case, and if you have insurance the hospital would try to do much more thing so thar they can send a hefty bill to the insurance companies.
So next time if someone says that they are financially free and retired, just ask them what is the inflation they have counted. If they have counted for 9% inflation, then it's great otherwise they have to rethink their retirement corpus.
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