In this edition of the reader story, Abhineeth shared his 3rd financial audit with us. In April 2023, then 31, he shared his plans for achieving financial independence and buying/constructing a decent house for his family. In his second audit, he shared how he rebuilt his finances after a personal tragedy.
Opinions published in reader stories need not represent the views of freefincal or its editors. We must appreciate multiple solutions to the money management puzzle and empathise with diverse views. Articles are typically not checked for grammar unless necessary to convey the right meaning and preserve the tone and emotions of the writers.
If you would like to contribute to the DIY community in this manner, send your audits to freefincal AT Gmail dot com. They can be published anonymously if you so desire.
Please note: We welcome such articles from young earners who have just started investing. See, for example, this piece by a 29-year-old: How I track financial goals without worrying about returns. We also have a “mutual fund success stories” series. See, for example, how mutual funds helped me achieve financial independence. Now, over to the reader.
Hi friends, I am Abhineeth, and this is my 3rd financial audit. 2024 was a memorable year for me as I married in November 2024. As for any other Indian marriage, there was no budget control. As I am not interested in liquidating my long term investments, I took a personal loan from SBI with a 12.1% fixed interest rate (29k EMI). I know taking out a loan for this purpose is not prudent, but I am obliged to family pressure.
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Even the personal loan could not stop the depletion of my emergency fund. Now, I am rebuilding my emergency fund, which is < 2 months of monthly expenses, and I wish to maintain at least 6 months of Emergency fund.
I have discussed my financial goals and investment routine with my partner. She does not understand the stock market dynamics; I am also no expert, but I am trying to learn daily.
Due to the personal loan EMI, I had to reduce my investment amounts, and I chose to reduce much of my investment in funds targeted for House construction as it can be postponed for a few years. I had to reduce the investment amount even in my retirement fund, i.e., I have invested 20% less in 2024 compared to 2023.
Previously, I used to get spooked by sudden market downturns, but now I only watch out for my goal-wise asset allocation and act when the asset allocation changes above 3%. In 2024, I had rebalanced 2 times, i.e., in September (Equity to Debt) and December (Debt to Equity).
The following represents the status of my portfolio, and the XIRR of my total portfolio is 10.2%. X – Present annual expenses.
Retirement
- State Govt NPS Tier-1 Value: 2.28 X, XIRR 8.80%
- SBI Nifty 50 index fund Value: 1.21 X, XIRR 14.00%
- SBI Nifty Next 50 index fund Value: 0.48 X, XIRR: 21.40%
- SBI short-term debt fund Value: 0.58 X, XIRR: 7.60%
- Total 4.55 X, XIRR: 10.60%
My NPS contribution is a mandatory deduction; hence, I have no control over it; regarding my mutual fund portfolio, I try to maintain a 75:25 equity: debt ratio as I have nearly 29 years to retirement. I will reduce the equity allocation gradually in the last 10 years. In the equity part, I maintain a 70:30 (N50:NN50) ratio, and I rebalance whenever there is a major shift in the equity markets.
House construction/purchase goal
- HDFC Sensex Value: 1.16 X, XIRR: 13.5%
- Axis Nifty Next 50 Value: 0.46 X, XIRR: 20.4%
- PPF Value: 2.00 X. XIRR: 7.2%
- Axis Liquid fund Value: 0.03 X, XIRR: 6.4%
- HDFC Liquid fund Value: 0.08 X, XIRR: 5.7%
- Total 3.72 X, XIRR: 9.60%
I maintain a 45:55 (Equity: Debt) ratio in this portfolio and rebalance whenever necessary. The liquid funds are part of that rebalance. I will only invest the liquid funds into my PPF account in the next financial year. This goal is nearly 7-10 years away; hence, I would gradually reduce my equity allocation by 5% yearly.
As the market is under turbulence, the XIRR is low, but as my return expectation is lower and these are my long-term goals, I do not have any problem with it, and when the bull market starts, it will again change.
Reader stories published earlier:
As regular readers may know, we publish a personal financial audit each December – this is the 2023 edition: Portfolio Audit 2023: The Annual Review of My Goal-Based Investments. We asked regular readers to share how they review their investments and track financial goals.
- First audit: How Suhas tracks his MF investments and reviews financial goals.
- Second audit: How Avadhoot Joshi evaluates his investment portfolio.
- Third audit: How a single mom is on track to financial freedom
- Fourth audit: How Gowtham started goal-based investing & took control of his money
- Fifth audit: Why my financial independence & early retirement plans were postponed by four years
- Sixth audit: How Abhisek funded his marriage & is on track to financial freedom.
- Seventh audit: How Rohit’s early struggles defined his investment journey
- Eighth audit: Why my investments are still on track despite job loss and lower income.
- Ninth audit: How a retirement planning calculation scared me to take action
- Tenth audit: I made several investment mistakes but have turned my life around.
- Eleventh audit: My net worth doubled in the last financial year, thanks to patient investing!
- Update: How I achieved investing nirvana.
- Twelveth audit: My financial journey: from novice to goal-based investor.
- Thirteenth audit: My journey: from a negative net worth to goal-based investing.
- Fourteenth audit: From Fixed Deposits to Goal-based investing in MFs.
- Fifteenth audit: My 10-year financial journey – mistakes made and lessons learnt.
- Sixteenth audit (part 1): How I achieved financial independence without mutual funds or stocks.
- Sixteenth audit (part 2): Lessons from my financial independence journey and future investment plans.
- Seventeenth audit: How I plan to achieve financial independence and move to my native place
- Eighteenth audit: I used the current bull run to reduce my mutual funds from 14 to 4!
- Nineteenth audit: How a conservative investor created his financial plan
- Twentieth audit: I plan to achieve financial independence by 46; this is my master plan
- Twenty-first audit: I have made many investment mistakes but am on course to financial independence by 45.
- Twenty-second audit: I felt worthless six years ago but have achieved financial stability today
- Twenty-third audit: My financial journey was directionless until age 40: this is how I made up for lost time
- Twenty-fourth audit: Why I increased equity MF investments by 275% and reduced PPF contributions.
- Twenty-fifth audit: How I track financial goals without worrying about returns
- Twenty-sixth audit: I am 24 and started investing 1Y ago, but what am I investing for?
- Twenty-seventh audit: How we plan to achieve a retirement corpus 50 times our annual expenses.
- Twenty-eighth audit: I thought equity investing was a gamble, but now I aim to hold 60% equity for retirement
- Twenty-ninth audit: My journey: From 5 lakhs in debt to building a corpus worth six years in retirement
- Thirtieth audit: My investment journey: From random purchases to a goal-based portfolio
- Thirty-first audit: My investment journey: from product-driven to process-driven
- Thirty-second audit: How a young couple is trying to balance travelling and investing
- Thirty-third audit: My journey: From Rs. 30 bank balance to financial independence
- Thirty-fourth audit: Our journey: From scratch to a net worth of 18 times annual expenses.
- Thirty-fifth audit: From a net worth of Rs. 6000 to auto-pilot goal-based investing
- Thirty-sixth audit: How I retired from corporate bondage at 46, two years ago!
- Thirty-seventh audit: How I learnt to keep it simple and build a net worth 19 times my annual expenses
- Thirty-eighth audit: How Abhineeth plans to achieve financial independence and build a house.
- Thirty-ninth audit: How Sahil plans to achieve financial independence by efficient tracking
- Fortieth audit: My Journey to a Ten Crore Portfolio
- Forty-first audit: Burdened with debt for several years, I am now aggressively investing in equity
- Forty-second audit: From Engineer to Librarian after Financial Independence and Early Retirement (FIRE)
- Forty-third audit: I lost six months’ income in F&O and ditched it for systematic investing
- Forty-fourth audit: My retirement plan to handle the harsh realities of the IT industry
- Forty-fifth audit: My investment journey: mistakes, 10 years of MF investing and recovery
- Forty-sixth audit: My MF portfolio is worth six crores despite multiple mistakes
- Forty-seventh audit: Saving, Investing, and Running Marathons: My 25-year Journey to Financial Independence
- Forty-eighth audit: Never Too Late to Start: How I Became Financially Savvy at 40
- Forty-ninth audit: My Investment Journey to a net worth 29 times my annual expenses
- Fiftieth audit: How I audit my portfolio without tracking returns
- Fifty-first audit: Financial Lessons Learned During and After a PhD
- Fifty-second audit: Investment & Financial journey of a 23 year old
- Fifty-third audit: The system I use to draw income and spend after retirement securely
- Fifty-fourth audit: From Start-Up Employee to Millionaire: A Success Story of Resilience and Smart Investing
- Fifty-fifth audit: 25-Year-Old Software Engineer’s Investment Journey: From Stocks to Mutual Funds and Beyond
- Fifty-sixth audit: Crossing the Million Mark: Our Journey to the First Crore
- Fifty-seventh audit: Navigating Market Volatility: How an IT Professional Transformed His Investment Approach for Retirement
- Fifty-eighth audit: How Sahil achieved a 10X retirement corpus by efficient portfolio tracking
- FIfty-ninth audit: How I achieved financial freedom by 45 without onsite assignments or ESOPs
- Sixtieth audit: Building Wealth on a Government Salary: Lessons Learned
- Sixty-first audit: Minimalism, Index Funds, and Staying Calm: My Investing Journey at 28
- Sixty-second audit: Building Wealth and Breaking Barriers: How Swati Took Control of Her Financial Future
These published audits have had a compounding effect on readers. If you would like to contribute to the DIY community in this manner, send your audits to freefincal AT Gmail. They could be published anonymously if you so desire.
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