The Two Balconies of Panaji

My dear friend, come sit with me. Let me tell you a story about two houses on my street. It’s a story I see reflected in the eyes of so many families across our beautiful India.

The Pension Trap

In the blue house lived Uncle Mohan and Aunty Shanta. They were government servants, proud and diligent. For 35 years, they served, dreaming of a peaceful retirement. Their plan was simple: the pension would come, and life would be comfortable.

The pension did come. It was a fixed amount, a faithful old friend. But this friend never grew. Meanwhile, the prices of groceries, medicines, and electricity bills… they never stopped climbing. Every month, Uncle Mohan would sit at his table, his calculator clicking nervously. The numbers were getting tighter. The peace they dreamed of was being replaced by a quiet, constant worry.

They had traded their active years for a fixed income, only to find it was shrinking in the hands of time.

The Neighbour's Secret Garden

Next door, in the yellow house, lived the Shetty family. Mr. Shetty was also retired, but his days were different. He wasn't waiting for a single cheque. He had planted a secret garden years ago.

While working, he had consistently invested in equity mutual funds. He didn't touch the big tree—the corpus. Instead, he set up a Systematic Withdrawal Plan (SWP). It was like a magical tap from his garden. Every month, a fixed amount, slightly more than Uncle Mohan's pension, would automatically flow into his bank account.

The magic? The garden kept growing! The remaining money in the mutual funds continued to work, often growing faster than what he was taking out. His income wasn't fixed; it had the potential to increase. He wasn't just spending his savings; his savings were working harder than he ever did.

The Lesson for Every Family

Uncle Mohan had one source of water—a well that was slowly drying up. Mr. Shetty had a flowing river, fed by a spring that renewed itself.

The difference wasn't luck. It was a simple, powerful choice made years earlier.

Here is what you must do to build your own financial river:

• Start Early, Stay Consistent: Don't wait for a "right time." A small, regular investment in good equity mutual funds is like planting a sapling that will become a mighty tree.
• Think Beyond the Salary: Your job provides for today. Your investments must provide for your future freedom. A pension is a back-up, not the main plan.
• Understand the Power of SWP: It is not a complex rocket science. It is a simple tool that converts your investment corpus into a regular, predictable monthly income, while the rest of your money continues to grow.
• Respect Inflation: That 100 rupees today will not buy the same things in 10 years. Your income in retirement must be able to fight this silent thief.

A pension is a single rope; an SWP is a rope you are weaving every day, making it stronger for the future.