R2I Checklist: How much is enough?

The most frequent question we asked ourselves and the interwebs before deciding to move was “how much is enough“? Anyone who is planning the big move asks themselves, their friends, their online forum buddies and their Maker this very important question at least once. The problem is there is no right answer because the right amount is different for everyone!

The magic number for us was …………. whatever we had on hand! Disappointing, huh? Maybe you thought there would be a nice spreadsheet to look through or a thoughtful discussion on monthly expenses or at the very least a hard number. But the truth is that had we waited to hit a magic number with our bank balances we would never have made the move. You see, when you settle on a number a funny thing happens … that number is either so aspirational that you won’t reach it in the next 20 years or it suddenly starts to change every time you get near to hitting it (usually becoming larger and larger and until you can never hope to reach it in the next 20 years). What we settled on doing instead was looking at what we already had and then working backwards to evaluate what we could do with it. Some things related to money that were already in our favor before we seriously started considering a move back to India were –

I am an absolute squirrel when it comes to saving

I always have been! I had my first bank account at the Bank of Baroda when I turned sixteen courtesy of my very savvy grandpa. That started a saving habit that has never left me. So although my BoB account is no longer in existence, the lessons I learned about FIRST putting away something for a rainy day really helped us even after property prices tanked. I follow a simple rule … decide a fixed amount or percentage that should go into savings every month and automate that process so you don’t have a choice. Without any extra effort on my part, we were saving about $750-$1000 every month –  a very decent amount of money I think.

The spouse is an absolute lion when it comes to risk-taking

All my squirel-ish tendencies are beautifully balanced by hubby’s cast-iron stomach for risk-taking. He invested in stocks and also looked at properties in India that we could buy. We saw some exponential growth in some areas and has losses in others. But with investing you always win some and lose some and we ended up in the black! He also took the plunge and asked his organization if they would relocate him to India. They agreed and the pressure eased off us considerably in terms of having to find jobs or create an income stream right away.

We invested in real estate and learned a few lessons

The townhouse in the U.S. didn’t really work out as planned. But we didn’t let that setback color our other real estate decisions. We bought a house in Pune long before we even contemplated R2I with the intention of holding it long-term. The upshot was that we now have a source of passive monthly income along with the benefit of appreciation. And if we ever decide that we are done with renting, we can always go and live there ourselves.

We budgeted (in our heads at least)

Based on discussions about cost-of-living with several people who were already in India, we decided on an approximate amount we would spend on initial set-up of our new home (more on this in a separate post). We were very pessimistic when we did and ended up spending slightly less than earmarked. The rest we decided would either stay in USD or be sent to our Indian bank accounts to keep.

I don’t want to leave you without at least giving you a rough estimate of how much I think would be enough in an ideal-ish world. I would say a number between $50,000 and $75,000 would make you very comfortable if you own a house, don’t intend to live an ultra-lavish lifestyle and would like to take not more than three months to settle down before you find an income stream.