40 Is The New 60: Rethinking Retirement And Financial Planning Post-40, explain Sarthak Ahuja

At the Outlook Money '40after40' event held in Mumbai, Sarthak Ahuja, director of NIAMH Ventures, investment banker, and business educator, shared his perspectives on the evolving dynamics of careers, retirement, and financial opportunities for individuals over 40. The session highlighted how shifting economic trends and personal aspirations are reshaping the traditional notion of retirement.

Early Retirement: A New Reality

“40 is the new 60,” Ahuja began, pointing out a growing trend in which professionals in their early 40s are considering retirement or significant career shifts. This shift is not just anecdotal; data and surveys consistently show that many people feel their careers peak around 40. Ahuja observed a noticeable rise in middle—and senior-level managers, particularly those aged 42 to 45, registering their businesses, often due to uncertainties in corporate stability.

Many professionals fear becoming obsolete or too costly for their companies, especially as younger, more affordable talent enters the workforce willing to work longer hours. This apprehension is accelerating the timeline for retirement, forcing individuals to think critically about how their money works for them after 40.

Ahuja highlighted India's economic structure to underline potential business opportunities. With 60 per cent of India's gross domestic product (GDP) driven by private consumption, there’s a significant shift from necessity-based spending to discretionary spending. As India’s per capita income crosses crucial thresholds, discretionary spending—on fashion, gadgets, travel, and more—is booming. This creates ample opportunities for entrepreneurs to cater to the growing demand for premium products and services.

Opportunities In Discretionary Spending

Ahuja detailed how the rise in discretionary spending is reshaping the business landscape. For instance, the number of people earning over a lakh per month has surged to 15 crore, with the rich demographic growing fivefold in the past seven years. This wealth increase has driven a trend towards premiumization, where businesses focus on offering high-end products and services rather than mass-market goods.

Travel is a prime example of this shift. Over 10 per cent of India’s population flew domestically last year, while five per cent took international flights. This surge in travel reflects a broader trend of increased spending on experiences and luxury items. Ahuja cited the example of a friend from Udaipur, whose family business is highly profitable. Yet he travels to metropolitan cities just to shop for premium brands unavailable in his hometown. This gap highlights opportunities for businesses to bring premium products to tier-2 and tier-3 cities.

Tapping Into Untapped Markets

Ahuja encouraged attendees to consider entrepreneurial ventures targeting these emerging affluent demographics, especially in smaller cities where access to luxury goods and services remains limited. For instance, Madhya Pradesh, particularly Indore, is experiencing significant economic growth, making it a ripe market for new businesses.

The speaker also highlighted key product categories poised for substantial growth in the coming years. Topping the list is the fashion and apparel industry, followed closely by footwear, jewelry, watches, and consumer electronics. Entrepreneurs are encouraged to focus on these sectors to capitalize on their high growth potential.

A simple yet effective business model Ahuja discussed involves identifying popular fashion brands trending on social media, sourcing their products in bulk, and listing them locally. This model has proven successful in various markets. For instance, certain international fashion brands, despite not officially shipping to specific countries, have their products available through localized websites run by third-party sellers. This allows local consumers to purchase trendy items without dealing with international shipping constraints.

Conversely, Indian ethnic wear brands have found a lucrative market overseas. By collaborating with international pop-up stores that curate Indian designs, these brands cater to the diaspora, adding a reasonable margin to cover shipping and customs costs while providing local convenience. These pop-ups typically buy in bulk from Indian designers, securing a retailer margin, while customers benefit from easier returns and faster delivery.

Ahuja touched upon emerging fashion trends, particularly the influence of Western social media on Indian markets. For example, split-toe shoes (also known as Tabi shoes) are currently trending in the U.S. and are expected to gain popularity among Gen Z in India within the next two years. This delay in trend adoption presents an opportunity for entrepreneurs to introduce such styles early in the Indian market, capitalizing on their growing appeal.

Moreover, Ahuja emphasized the role of arbitrage opportunities in e-commerce. By identifying trending products in Western markets, entrepreneurs can anticipate future demand in India, thanks to the lag in trend adoption. For example, athleisure brands that gain traction internationally can be introduced to Indian consumers ahead of the curve, allowing businesses to establish a foothold before the market becomes saturated.

Also, Ahuja underscored the importance of localizing global trends. Entrepreneurs can leverage the popularity of international products by offering them in their local markets, often at competitive prices. This strategy not only caters to consumer demand but also bypasses the hurdles of international shipping and customs, offering a seamless shopping experience.