Issue 7: A Passage to India?

Issue #7 - March 10, 2010
http://www.financial-freedom-guide.com/

As I wrote in the previous issue of this newsletter, I am investigating ways of lowering living expenses in general - and housing expenses in particular. One totally out-of-the-box way to do this is to move to another country with lower cost of living - such as India. Here is my report. But first, a brief announcement:

Mastermind Group Forming in Acton

Cost of Living

On my recent trip to India I asked a couple of relatives about their living expenses. These are affluent families living in urban India. They have at least one car, mobile phones, cable TV, broadband Internet and access to first-class medical care. A maid-servant comes daily and takes care of necessities such as sweeping and mopping the floor and washing the dishes & clothes. They live very comfortable lives by any standards, and it costs a fraction of typical living costs in the US.
Their answers ranged from Rs.15,000 to Rs. 30,000 per month. Currently the Rupee, the currency of India, is trading at about 46 to the dollar. (This link will give you the current exchange rate of INR, which is the global trading symbol for the Indian Rupee, to the USD or US Dollar.) Thus their living expenses translate to $350 to $700 per month.
Then there is housing expenses. A good rule of thumb for rents in Pune (which is about 100 miles inland from Mumbai) are Rs. 10 per sq.ft. Thus a decent sized flat of 1,000 sq.ft. will cost you about Rs. 10,000 per month or a little over $200. Mumbai is much more expensive, and you should expect to pay 2 to 3 times that, or $600 per month. Thus you can live a very comfortable life in India for $600 to $1000 per month or so.

Ascendent India

In the last 2 decades India has come a long way in terms of economic development. Now mobile phones are broadband Internet connections are ubiquitous. Everywhere you go you are bombarded by ads for real estate, mobile phone plans and consumer electronics (TVs, microwave ovens and such). Oh yes and how can I forget training courses of all kinds - from JAVA certification to learning to dance the salsa! There is a definite energy of growth and more importantly for me, dissatisfaction. There are even groups forming for homeschooling! A couple of years ago I gave a talk about homeschooling, and the place was packed. All of this gives me hope for India's future.

Many Negatives

There are many negatives to living in India of course. Air pollution - especially vehicular pollution in the cities - is awful. The extreme poverty is not something I can get used to. The infrastructure has been improving over the years, but still leaves a lot to be desired. The cultural amenities I take for granted in the US - free public libraries, museums - are missing.
It costs so much less to live comfortably in India precisely because the general standard of living is lower. As it starts going up, it will start costing more to live there. This is already happening in the bustling high economic growth areas of Mumbai. There are areas right in Pune where I fully expect to get a sticker-shock if ads on Craigslist are any indication!

More Ideas to Explore

I am writing about India because I have first-hand knowledge about living there. I do not think the story is going to be much different for the rest of the middle-tier countries around the world. I am not talking about the pits of the world. I wouldn't want to move to most countries in Africa - or Bangladesh or Burma or North Korea for that matter. The negatives far outweigh the positives in my judgment. On the other hand you will have your own ideas about what you need for a great life, and you just may find it in Africa! I have an American friend who is moving to Ecuador of all places.
This is where the Know Thyself bit comes in. Depending on your core values, moving to India could be heaven or it could be hell! For example, if spiritual education or transcendence or enlightenment is one of your central values, India has a lot to offer. If it is the study of languages, India is the place to be. Contemporary acappella music? Not so much!
There is a lot of information available on the Internet about traveling overseas, for adventures of varying lengths. I came across a site called Expat Exchange that specializes in longer term stays. If I was to get serious about going abroad for months at a time, I would start with a website like that.

Coming Up

In the next issue I will write about another out-of-the-box idea for radically reducing your housing expenses. And this one is right in my backyard. Stay tuned...

Update on My Progress

And here is my latest personal financial update:

• I earned $549 last month. $500 of it came from the rental property and the rest from dividends. This marks the first time I am recording the income from the rental property, now that the property is fixed up and filled up! My running average of passive income over the last 3 months is $344.78.
• Our basic living expenses are $6000 per month. We are working on bringing this number down.
• Thus our passive income was 5.75% of our current basic living expenses.

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Thanks and I will see you again in a month.

Your Financial Freedom Guide,
Manoj Padki
Copyright © 2010 by Manoj Padki

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