The Two Balconies of Dona Paula

My dear friend, come sit. Let me tell you about two houses that sit side-by-side in our beautiful Dona Paula. From my clinic window, I see their balconies every day. In one, sits Mr. and Mrs. Pereira, sipping their morning tea with a quiet worry. In the other, Mr. and Mrs. Desai enjoy the same sea breeze, but with a smile that reaches their eyes. Their story is the most important lesson your money will ever learn.

The Pension Trap

Mr. Pereira was a dedicated government officer. For 35 years, he believed in one golden truth: "A steady pension is the ultimate retirement goal." The day he retired, he felt secure. The monthly pension arrived, a fixed amount, like clockwork.

But, my friend, clocks tick, and time changes things. Five years into retirement, the Pereira's reality set in. Their pension was fixed, but the price of medicine, groceries, and even a simple fish thali was not. Every month was a careful calculation. Their world, once so large, began to shrink. The annual family gathering in Pune? Too expensive. Mrs. Pereira's desire to learn pottery? "Not in the budget, dear." Their balcony became a place to watch the world go by, not to enjoy it.

They saved for a rainy day, but forgot the monsoon of inflation lasts for 20 years of retirement.

The Neighbour's Secret: A Monthly Harvest

Now, look at the Desais. Mr. Desai ran a small travel agency. He had no grand pension. But he had a discipline. For 20 years, he invested a portion of his income into equity mutual funds. He wasn't chasing quick riches; he was planting a tree.

When he turned 60, he didn't cut the tree down. Instead, he did something brilliant. He set up a Systematic Withdrawal Plan—a SWP. It’s like his investment garden now gives him a regular, monthly harvest. A portion of the fruits, while the tree keeps growing.

Every month, a sum larger than the Pereira's pension flows into the Desai's account. And because it's drawn from growth, it often increases. Their balcony sees laughter. They take a short trip to Coorg. They help their granddaughter with her education. Their money is still working, so they can truly rest.

Your Financial Prescription

So, what is the lesson? It is not that a pension is bad. It is that depending solely on a fixed income in a rising-cost world is a slow financial fever. The cure is to create your own pension.

1. Start Early, Plant the Seed: Even if it's just ₹2000 a month, start a SIP in a good equity mutual fund. Let time and compounding do the heavy lifting.
2. Shift from Saving to Growing: A savings account protects money from you, but not from inflation. Investments protect your future from inflation.
3. Build Your SWP Garden: Plan for the day when your investments will switch from accumulation mode to giving you a monthly "harvest" through a Systematic Withdrawal Plan.
4. Never Stop Learning: Money rules change. Be curious. Talk to a fiduciary advisor, not just a salesman.
5. Your Freedom is the Goal: Every rupee you invest today is a future rupee of choice—the choice to say "yes" to life, health, and happiness.

A fixed pension pays your bills, but a created pension funds your life.