In this edition of the reader story, we meet a 30-year-old PSU employee who has learnt to manage money free from stress.
About this series: I am grateful to readers for sharing intimate details about their financial lives, which benefits us all. Some of the previous editions are linked at the bottom of this article. You can also access the full reader story archive.
Opinions expressed in reader stories do not necessarily 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 it is 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. You can publish them anonymously if you wish.
I am short of words to express my gratitude for you, good self, and freefincal. Of course, I duly acknowledge the role of ‘You can be rich too’ in my journey.
I am yet unsure whether I am at the right stage of my life for this. But a try won’t cost me much!
I am a 30-YO PSU servant from Kerala working in Delhi. As far as my brief investment journey is concerned, I only regret not recognising the power of compounding until age 29. Now, even when I am striving to double down to make up for it, I know I may not be able to match that!
The real winning, I believe, is the change in mindset regarding money rather than life.
Like any traditional Indian, I was exposed to so-called “risk-free” savings products like FDs and RDs, which only mattered when I joined service at the age of 25.
* I started PPF monthly for tax-saving purposes. (Today, when I look at it, it will mature as a tax-free corpus when I may need it for my daughter’s higher education, Elated!)
* My employer matches 12% EPF contribution, and I put 3k extra in VPF (which I still believe is right, again being tax-free on retirement post at least 20 years!)
* As Pattu sir always reminds us, I strongly believe it’s my time to pay back my love to my parents. Hence, a portion of my earnings is purely for their happiness only! Plus, I have ensured sufficient HEALTH INSURANCE sum assured for them both, as it is my dutiful daughter.
* Rest I accumulated as a corpus for my marriage and purchase of a house at 26 years of age (Though it does not sound like a wise financial decision, nor do I recommend it to anybody else, it made sense to me since I wanted to settle my parents with peace before getting married. I have seen ladies, despite being financially capable to support their families, unable to do so in a marital setup, which is the possibility I wanted to rule out.)
* Got married and had a daughter 3 years back. Started saving for her school fee, which has also outgrown the required amount.
Always been a minimal spender, which is about 2% of my earnings. Not because I am a miser, but because it genuinely makes me satisfied. Satisfaction is all I want too. Hence, saving has been pretty easy. Now the track has changed from savings to wealth creation. I got to imbibe that confidence in markets much later than I should have, I guess!
My current breakup of savings and investment (as a percentage of in-hand salary) follows the track as given:
A. PPF- 5% (for daughter’s higher education)
B. Largemidcap250 – 8.33% (again, for daughter’s higher education)
C. Monthly savings in fixed instruments – 12.5% (Daughter’s school fee, a bit higher side being in Delhi, though no stress regarding fee hike justifies it!)
D. 5% each in Nifty 50 and Multicap, 2.5% in Smallcap for retirement probable at above 55 years (Long runway and step up of 10% p.a has been calculated thoroughly to reach this portfolio, given my spending is very low!).
What gives me confidence?
* Emergency fund for 10-12 months.
* Medical expenses of my family are being taken care of completely by the employer.
* Parents are self- dependant (They never bought a house, probably that helped them to sit with sufficient liquid corpus plus govt pension for their living!).
My goals:
* Child education up to Graduation.
* Paying off the home loan in full.
* Retirement (Once the home loan gets paid, that 40% will also fund my retirement).
My asset allocation is a bit skewed since EPF contribution is on the higher side. But I wish to achieve that 50:50 by age 50. Till then, I firmly believe my equity portfolio will do its magic.
As a lady, my portfolio has gold only in the form of jewellery gifted at marriage. Unintended purchase; selling is not so welcome with the family. So that asset is dead, for sure!
The aforementioned mindset shift has given me the strength to see my job as a job, not a life. That mindset has convinced me that time is limited and money is unlimited, not vice versa. That mindset shift has gotten me to a track where I have a stress-free life, preparing for a stress-free retirement.
Wishing everyone calm vibes investing !!
Reader stories published earlier:
As regular readers may know, we publish a personal financial audit each December – this is the 2024 edition: Portfolio Audit 2024: The Annual Review of My Goal-Based Investments. We asked regular readers to share how they review their investments and track financial goals.
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. You can also publish them anonymously.
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Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over 13 years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), LinkedIn, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free, AUM-independent investment advice.Our flagship course!Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions!⇐More than 3,500 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.Increase your income by getting people to pay for your skills!⇐More than 800 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner seeking more clients through online visibility, or a salaried individual looking for a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you. (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos! Our book for kids: “Chinchu Gets a Superpower!” is now available!Both the boy and girl-version covers of "Chinchu Gets a superpower". Most investor problems can be traced to a lack of informed decision-making. We made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So, in this book, we meet Chinchu, who is about to turn 10. The narrative revolves around what he wants for his birthday and how his parents plan for it, as well as teaching him several key ideas of decision-making and money management. What readers say!Feedback from a young reader after reading Chinchu gets a Superpower!
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Published by CNBC TV18, this book is designed to help you ask the right questions and find the correct answers. Additionally, it comes with nine online calculators, allowing you to create custom solutions tailored to your lifestyle. Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantThis book is designed for young earners to get their basics right from the start! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.
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Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over 13 years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), LinkedIn, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free, AUM-independent investment advice.
Published by CNBC TV18, this book is designed to help you ask the right questions and find the correct answers. Additionally, it comes with nine online calculators, allowing you to create custom solutions tailored to your lifestyle. Get it now.
This book is designed for young earners to get their basics right from the start! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.
This is an in-depth exploration of vacation planning, including finding affordable flights, budget accommodations, and practical travel tips. It also examines the benefits of travelling slowly, both financially and psychologically, with links to relevant web pages and guidance at every step. Get the PDF for Rs 300 (instant download)