Returns Of The 50-Paisa Investment Philosophy

Krishnakumar M.K., 77, and wife Latha Sarathy M. C., 74, are living a life that many would envy. The couple, who have been married for 47 years, are financially secure, travel regularly, and find solace in each other’s company and their hobbies, some shared and others personal.

What’s helped the couple create this life is a combination of old-world financial prudence, years of making disciplined choices, a sense of satisfaction with what they have, and a modern-day zest for life.

The 50-Paisa Philosophy

Sitting comfortably in their south Bengaluru home after returning from their recent trip to Coorg, the couple shares how they achieved financial freedom.

They started their career with modest wages. Latha was in a low-paying government job and Krishnakumar was in private service. But even with their overall modest income, they started saving. Their philosophy—save 50 paisa of every rupee earned. That meant they saved 50 per cent of what they earned throughout their working lives.

Krishnakumar’s career spanned 38 years, including two years at the Archaeological Survey of India, followed by more than two decades at a private pharmaceutical marketing company and a subsequent six-year stint at an IT company.

Says Krishnakumar: “We are economical, but not stingy. We don’t spend on unwanted things. When there is a need we spend, otherwise we save. We don’t spend just like that to buy some cloth or a shirt for Rs 5,000. We never do it. We believe in saving money. First save and then spend from whatever is left.”

That discipline and consistency ensured they had enough to pursue their passions and live a comfortable life after retirement even though their investment choices were conservative. They only invested in bank fixed deposits (FDs) and post office schemes. During the initial phase of their lives, there were fewer investment options and equity investing was not so popular, but they stuck with that even after market investing picked up.

Says Krishnakumar: “We never invested in the markets and still don’t do because we don’t know anything about stocks and mutual funds.”

But that didn’t deter them from fulfilling their goals of children’s education and wedding and their own retirement. Both their son and daughter are married and live with their families in London and Mysuru, respectively.

Post Retirement Plan

Cash Flow: The couple funds their retirement years, including travel, from various sources, including Latha’s pension and Krishnakumar’s Employees’ Pension Scheme. Plus, there’s interest earned from their FDs and post office schemes. “It’s simple. We don’t touch the principal amount for our spending. We only use the interest portion and rentals. We also use that money to travel.”

They have an added income stream from the rent they receive. They live on the first floor of their Bengaluru house and have rented out the ground floor.

Health Insurance: Their health insurance is taken care of as Latha’s government job has made her eligible to get the Central Government Health Scheme (CGHS) for herself and her spouse. She is a retired gazetted officer. Fortunately, both are fit and have never had to use the cover.

On top of that, they have bought two health insurance policies for which they pay between Rs 40,000 and Rs 50,000 per annum for less than Rs 10 lakh coverage. “Whatever premium we pay is our contribution to needy people. If we don’t utilise it, it will be used for somebody who is in need. For us, it is like doing charity.”

Travel: They have been actively travelling together for over four decades. They have visited nearly 40 countries, including 20 in Europe, besides all the states in India. “Every year we usually take one domestic and one international trip,” shares Latha.

Her favourites are Switzerland for its snow-capped mountains, and Bhutan for its pristine beauty. “I also liked Spain, Paris, Las Vegas, and Venice, but I am fascinated by the snow in Switzerland,” she says.

Krishnakumar’s best memories have links to Amarnath, Adi Kailash, Khardung Pass, Nubra Valley, Pangong Lake, and Khajjiar, all in India. He also enjoys going on solo day trips. “I normally carry a bottle of water and a pound of bread. That’s all.”

On The Same Page

The biggest thing that worked in favour of the couple was that they never made unilateral decisions. “It was all on the basis of our mutual understanding, consent, and consensus. Even financial planning was transparent,” says Latha.

Their attitude towards life is similar. “Answers of 8 out of 10 questions will be similar whether you ask my wife or me, even if I am in the other room,” says Krishnakumar.

The couple doesn’t invest anymore and is happy with whatever they have. Says Krishnakumar: “We don’t want more money now. What we have and whatever we are getting is enough for our maintenance.”

They rank money 8 out of 10 in terms of their priorities in life. Latha says they have reached a point where they don’t want to double their money, but they want to double their experience and kindness. Though in case of any unexpected financial setback, they are both ready to cut back on travelling.

A Typical Day

Krishnakumar is the self-proclaimed timekeeper of the family. His typical day is tightly scheduled, starting with preparing morning coffee, exercising, meeting friends, reading the newspaper, an afternoon nap, and watching television and YouTube podcasts before ending the day. He also loves cooking Bisi Bele Bath and Puliyogare (tamarind rice), specialities of Karnataka, for friends at get-togethers.

Latha is a creative person who paints, stitches, and embroiders her sarees even now.

They spend their evenings together, bonding over games and movies. Clearly, they are enjoying their golden years, one Carrom board game and one Kannada movie at a time.

versha@outlookindia.com