Sunday, February 17, 2013

Out of the Box


I fail to see why retired people want to stay in Mumbai. 

No doubt it is a city with a very different culture than the rest of the country. An open and businesslike culture provides great opportunities to those who want to give their best shot. Over the years it has become a melting pot of the best talent from around the country descending on Mumbai and building institutions in all spheres of life which are recognized as leaders not only in India, but even in the rest of the world. But that is where all the good things end.

Somehow it is this characteristic and the fact that the planners could not envision the implication of this open culture has created a wave of negative effects on life in this city. Yesterday we met an expat friend who has been to Mumbai only one month ago, excitedly told us about taking his teen boys out for a safari today. The look on our face gave away what we felt of his idea and his next question was "There are animals there, aren't there?". This is probably the biggest negative for life in this city. No wonder there are Malls in Mumbai that have survived while they have a hard time in places like Ahmedabad, the so-called land of rising economy. Apart from no leisure activities, the roads, the public transportation system, the pollution, the weather, the rising cost of essential services make life extremely costly, if not difficult to live in Mumbai. And it is only getting worse. The new BMC taxes means that the maintenance bill for most of the dwellings (legal that is) will go up by almost twice. In some cases, they will go up by 3 times or four times or even more. It is probably the right place only for the ones who want to make a lot of money.

Given that a retired person is not making any income from any professional or business activity, one fails to understand why would you want to pay the unreasonably high municipal taxes from the income from your savings when you can live peacefully, in a nice clean environment in a B-town (like Pune or even village where one originated from) where the municipal taxes would be a fraction of that in Mumbai. 

Ideally, every retired person should try and ensure that they choose a location to live which maximizes the value they get for every penny that they spend. And paying the unreasonably high municipal taxes in mumbai or the costly services does not make any sense. Ideally a retired person should either rent or sell off the property in mumbai, take the capital and use part of it to buy a nice row house in a b-town or a village somewhere near their native place and enjoy the pollution free atmosphere during their sunset years. Invest the left over capital so that it beats inflation (I have provided some inputs in my earlier post Life @ 70 to do that) and use the income for purposes of going around the world or doing things that one always wanted to do but never had the time. Personally, I would move off to the hills when I am close to that stage in life when I don't have to be in a place like Mumbai to practice my talent and enjoy the serene beauty of nature and the weather that comes with being at a height when you are close to the equator.

And this is pretty much how senior citizens and retired people do in other developed countries. How many retired people have you heard off in America who live in New York or in London or in Frankfurt. They would all move away to distant suburbs (in case of Mumbai though there isn't one!) or quaint small little towns and spend the rest of their years in the peace and quiet of nature. If they have any property in New York or London or Frankfurt, they would probably rent it out and spend the rest of their retired life with a sense of financial security that the rent from it will always enable them to enjoy a quality of life that they have become used to. 

It is time our smart senior citizens and retired people thought "out of the box" and opted for a retirement plan that gave them the best "life" for money.