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A disciplined, systematic investment habit started at a young age is normally sufficient to meet modest goals without having to sacrifice a normal comfortable lifestyle, suggests Harsh Roongta.

The Guptas, who are in their early thirties, work in top multinationals and have a joint income exceeding Rs 50 lakh per annum.

They spend only Rs 15 lakh in a year (including rent) and save the balance.

Despite an eye-popping 70 per cent savings rate, their existing investment corpus was intriguingly small.

They explained that most of their earlier earnings had gone into paying off a family liability.

The Guptas were now in a tearing hurry to create enough assets to be financially independent in the next 10 years, hence the frugal lifestyle.

As a part of our structured life planning process, we asked them to imagine the kind of life they would want to live if resources were not a constraint.

It became clear they didn't like the extreme frugality they had forced upon themselves.

Unknowingly they were following the principles of extreme frugality and savings espoused by the Financially Independent Retire Early (FIRE) movement.

In an old movie, the actor playing the revolutionary Rajguru is teased by his fellow revolutionaries about his eagerness to lay down his life for the country.

He quips: "Ek baar desh kay liye mar jaon, phir chain say jeeonga (I will lead a contented life after I have martyred myself)."

While sacrificing one's life in the service of the nation is admirable, it is different for people like the Guptas who voluntarily lead ascetic lifestyles in their prime to retire early.

Such extreme frugality carries the risk of a backlash. A person who goes on a near starvation diet may lose weight initially.

But the craving for normal food will inevitably assert itself, causing the person to go on a binge.

Not only will he gain back the weight he had lost, he may put on extra. Abstinence, to be effective, must be sustainable.

Such an extreme approach can also lead to investment choices being skewed towards 'get rich quick' investment schemes like crypto currencies, derivatives, etc.

Such people are easy prey to social media influencers peddling these schemes.

Sometimes frugality may not even be required to meet life's goals.

Richa, 25, is the only child of a well-to-do couple. Having completed her MBA from a top US university, she wanted to work for a charitable foundation that would pay her only 60 per cent compared to the other offers she had.

At the same time, she wanted to achieve her financial goals with her own resources.

Our calculations showed that even with reasonable savings invested systematically in diversified investments over her working life, she would be able to meet all her goals, except for buying her own house.

Richa was content to depend on the possibility of a substantial inheritance from her parents to meet this goal by age 60.

Her financial planning goals fell into place after she took this one factor into account.

We worked with the Guptas to calculate the possibility that they would be able to achieve financial freedom, assuming a normal retirement age (60) for one of them.

All their goals looked achievable even after reducing the available monthly savings to account for a more comfortable lifestyle, and assuming a relatively lower risk-return profile.

Truth be told, a disciplined, systematic investment habit started at a young age is normally sufficient to meet modest goals without having to sacrifice a normal comfortable lifestyle.

Financial planning should not be like a long jail sentence with hard labour that allows you to enjoy life only after you have served your sentence.

Delayed gratification, at its extreme, is as bad, if not worse, than instant gratification.

Harsh Roongta, Fee-Only Investment Advisors LLP, a Sebi-registered investment advisor.