In this edition of the reader-story, “I believe many people in this group, especially those who are still learning about personal finance, may relate to my financial journey. This is not a story about extraordinary investment returns or a perfect financial plan. It is a story about financial mistakes, poor decisions, learning, recovery, and starting again.”
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.
Please note: We welcome articles like this 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.
Over the years, I made several financial mistakes. I helped friends and family during difficult times, took credit-card loans, made poor investment choices, and even lost 100% of some investments.
These mistakes cost me several lakhs of rupees. They taught me valuable lessons, but I learned those lessons at a very high price. Money can come and go, but lost time never returns.
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Unfortunately, I understood this only in my mid-40s.
Along the way, I also lost touch with some good friends who are still close to my heart because I could no longer trust them in the same way. That was another painful lesson: sometimes financial problems affect much more than just your bank balance.
This report is my honest assessment of my financial journey—my mistakes, my current financial position, my investment strategy, my liabilities, my strengths and weaknesses, and my progress toward financial independence.
My Background
I come from a lower-middle-class family, and I am the first person in my generation to earn a master’s degree. During school, I was a last-bench student. I did not study well, rarely passed monthly tests, and was not confident in English.
For a long time, I also lacked confidence when it came to money. I thought other people understood finance better than I did. I was often afraid to ask questions because I worried that people might laugh at me. That lack of confidence had a significant impact on my financial life.
Looking back, I now realise something very important:
Not knowing something is not the problem. Refusing to ask, learn, and improve is the real problem.
2008 — My First Property
I started working in 2007. Like many people with a typical middle-class mindset, one of my first major goals was to buy a home. In 2008, I purchased a landed property in my hometown, a Tier-3 town, for approximately ₹17 lakhs through a home loan.
At the time, buying property felt like the safest and most sensible financial decision.
2011 — My First Major Investment Mistake
An HDFC manager convinced me to buy a unit-linked insurance policy called HDFC Crest.
The structure appeared attractive to me at the time:
- Premium payment term: 5 years
- Maturity: 10 years
- Promised/illustrated minimum maturity amount: approximately ₹12 lakhs
I didn’t properly understand the product, its charges, risks, or whether it was suitable for my financial situation. I simply trusted the person selling it to me. That was my mistake.
2013 — Closing the Home Loan the Wrong Way
The interest rate on my housing loan increased significantly—from approximately 7.65% when I borrowed to 13.75%. I became worried about the increasing interest burden. I pledged my wife’s jewellery and used the money to close the housing loan. At the time, I felt relieved because the loan was gone. But looking back, this was not a financially healthy solution. I was solving one liability by creating another financial burden.
2014 — I Finally Started Asking Questions
At that time, I knew very little about investments. I often heard colleagues discussing investments during breaks, but I felt shy and hesitant to ask questions. I had an inferiority complex about my financial knowledge. So I stayed silent.
Looking back, that was a major mistake. Eventually, I decided to ask an elderly person whom I did not know for guidance. I told myself that even if he laughed at me, I would ignore it. My only objective was to understand what investing meant and how I could begin. That simple decision—to ask questions—became an important turning point.
LIC Money Back Policy
The person suggested that I buy an LIC Money Back policy. So I purchased one.
The broad details were:
- Premium payment term: 20 years
- Policy term: 25 years
- Annual premium: approximately ₹73,000 + Tax
- Premiums paid so far: 9 years
- Last premium date: 11 October 2033
- Maturity date: 11 October 2039
After purchasing this product, I felt that I finally understood investing. I believed I had made the right decision. I was proud of myself. Today, I know that buying a financial product and understanding investing are two completely different things.
2014 — Another HDFC Crest Policy
The HDFC manager influenced me once again, and I took another HDFC Crest policy.
This time, the annual premium was approximately ₹1 lakh.
Again:
- Premium payment term: 5 years
- Maturity: 10 years
- Minimum maturity amount: approximately ₹12 lakhs
I was making financial decisions based largely on trust rather than understanding.
2015 — Sukanya Samriddhi Yojana Changed My Thinking
A close friend introduced me to Sukanya Samriddhi Yojana (SSY).
This became an eye-opener in my investment journey. For the first time, I started thinking seriously about long-term savings. At that time, I did not always have enough money available. Sometimes I borrowed small amounts—₹10,000, ₹12,000 and similar amounts—to make my investments.
Eventually, I started investing ₹1.5 lakh per year.
At that time, I felt proud that I was investing regularly. But I was missing something very important. I was investing while simultaneously accumulating expensive debt. I did not understand the contradiction.
2016 — Discovering PPF While Increasing My Debt
Because I had started investing in SSY through the post office, I visited the India Post website to see whether there were similar products.
That was how I discovered PPF. I started investing in PPF from 2016 onward. Again, I began investing ₹1.5 lakh per year. On the surface, everything looked good. I was investing in SSY. I was investing in PPF. I was building long-term savings.
But underneath that, something was going badly wrong. My credit-card dues and personal loans were gradually increasing. I never properly tracked my income and expenses. I kept using credit cards and paid only the minimum amount due.
I did not understand how quickly interest on outstanding credit-card balances and other loans could accumulate.
This is probably one of the most important lessons from my entire journey:
Investing while carrying expensive consumer debt doesn’t necessarily create wealth.
I did not understand that at the time.
2017 — Debt Started Controlling My Life
By this stage, my monthly EMIs, outstanding loans, and credit-card payments were becoming overwhelming.
My financial decisions were no longer improving my life. They were beginning to control it. My quality of life gradually deteriorated. I had too many commitments and too little understanding of my actual financial position.
2018 — My Financial Crisis
By 2018, I had become extremely worried. I started asking myself: Why is almost my entire salary going toward loans and EMIs?
Instead of stepping back and fixing the underlying problem, I made another major decision. I decided to buy a second property in my hometown for more than ₹40 lakhs. Today, that decision is difficult for me to explain.
I was already struggling with debt, yet I took on another major financial commitment. I managed to pay the housing EMI for approximately 3 months. After that, I could not continue. Bank officers eventually visited my home.
Only then did my parents learn about my financial struggles. Until that point, I had not properly discussed the situation with my parents or my wife. I wouldn’t say I deliberately hid everything from them. The truth is, I didn’t fully understand how serious my financial situation was.
My financial literacy was simply too poor. My family strongly criticised me for my poor planning—and they were right.
I asked my aged parents for help. If they couldn’t support me, I had mentally prepared to either sell the house or eventually let the bank take possession.
Fortunately, my parents supported me by paying the monthly housing-loan EMI. That support was extremely important. It also made me realise how serious my financial mistakes had become.
2019 — I Finally Started Learning
By 2019, I had understood that I had made many financial mistakes. But a lot of time had already been lost. My focus shifted toward catching up and closing the gap in my financial knowledge. I started searching for reliable financial education.
That was when I discovered Freefincal.com & Asan Ideas for Wealth (Facebook Community).
Reading the articles there was both shocking and eye-opening.
I realized how much time I had wasted simply because I had not understood basic personal finance earlier I started investing in mutual funds with ₹5,000 per month I could not comfortably afford it at that time, but I wanted to test the waters. Mutual funds were completely new to me.
More importantly, I had finally started learning.
2020 — A Difficult Year
My father passed away in 2020. At the same time, I was again struggling to pay the monthly housing loan. A few months later, something unexpected happened.
I received a special bonus equivalent to approximately 6 months of salary for my contribution to a project.
That bonus gave me an opportunity to finally close the remaining housing loan.
To cover the balance amount required, I surrendered the 2 HDFC Crest policies I had purchased earlier.
The redemption amounts shocked me. After investing approximately ₹5 lakhs over the 10 years, I received:
- First policy: approximately ₹1.80 lakhs
- Second policy: approximately ₹1.13 lakhs
The experience was painful. It felt like years of saving had been wasted.
I was angry with myself. But eventually, I accepted an important reality:
The money was already gone. Continuing to regret it would not bring it back.
The only thing I could control was what I did next. So I moved on.
2021 — Housing Loan Closed
In 2021, I finally closed the housing loan. It was a major milestone But I still had other debts and financial responsibilities. I had solved one major problem, but the journey was far from over.
2023 — Purchased a Freefincal Goal-based portfolio management plan and learned the concept. Purchased Robo robo-advisory template, and the retirement calculation figure literally scared me, and my sleep got disturbed for many days.
2023 — A Professional Financial Roadmap
By 2023, I had gradually increased my mutual-fund investments.
I knew I had made many mistakes in the past.
One useful resource I found on Freefincal.com encouraged readers to seek guidance from SEBI-registered financial advisors.
I decided to engage one.
Following the advisor’s roadmap, I temporarily stopped my SIPs and focused on closing my remaining debts because the interest rates were high.
This was a major change in my thinking.
Previously, I had believed:
“Investing is always better than doing nothing.”
I learned that sometimes the best financial investment is:
Paying off expensive debt.
I strictly followed the financial roadmap.
I also reviewed my protection needs.
I took term insurance coverage of approximately ₹6 crore.
For health insurance, I arranged:
- ₹25 lakh base family health cover
- ₹90 lakh super top-up
This was another important lesson:
Building wealth without protecting the family against financial catastrophe is incomplete financial planning.
2026 — Finally Loan-Free In 2026, I finally became loan-free. The feeling is difficult to describe.
After years of EMIs, credit cards, personal loans, housing loans and financial stress, seeing my liabilities come down to zero was deeply satisfying.
For the first time, I felt that my salary belonged to me. Not to the banks. Not to credit-card companies. Not to old financial mistakes.
My Emergency Fund
Now, at 46, I have started building my emergency fund. I currently have approximately three months of expenses saved. My target is to build at least one year of emergency savings.
I have decided that my emergency fund comes first. I will restart my regular SIP investments after reaching my emergency-fund target. This is not because I have stopped believing in investing. It is because I now understand the importance of having liquidity.
My Current Asset Allocation
My approximate current asset allocation is:
| Asset Class | Allocation |
|---|---|
| PF | 54% |
| Real Estate | 26% |
| Fixed Savings — PPF & SSY | 7% |
| Equities — Mutual Funds, Indian & US Stocks | 7% |
| Gold | 3% |
| Emergency Fund | 2% |
| Total | 99% |
The figures are approximate and rounded, so the total may not equal exactly 100%.
This allocation also highlights something important. My portfolio is currently heavily weighted toward PF (unavoidable) and real estate. My equity allocation is still relatively small.
So the next stage of my financial journey will focus on gradually building a diversified equity portfolio while maintaining adequate liquidity and risk protection.
Lessons I Want Others to Learn
- Start investing early
Compounding needs time. I lost many years because I did not understand investing. You do not need to be rich to start. You need to start learning.
- Track everything
Track:
- Income
- Expenses
- Debt
- EMIs
- Credit-card balances
- Investments
- Insurance
- Savings
- Net worth
If you do not know where your money is going, you cannot manage it.
- Do not invest while ignoring expensive debt
I made this mistake repeatedly.
Saving ₹1.5 lakh in a financial product while simultaneously carrying high-interest debt was not smart financial planning.
First, understand the interest you are paying.
- Never buy a financial product you don’t understand
I purchased multiple insurance/investment products because someone I trusted recommended them.
I did not properly understand:
- Charges
- Returns
- Risks
- Liquidity
- Alternatives
- Opportunity cost
Trust is not a substitute for understanding.
- Don’t be afraid to restart
Perhaps the most important lesson I learned is this:
You can make serious financial mistakes and still rebuild your financial life.
I cannot recover the money I lost. I cannot recover the years I wasted. But I can make sure that the next decade is different.
Final Thoughts
If you’re reading this and are currently in debt, have made bad investments, lost money, or feel you started investing too late, I hope my story encourages you.
I was in that position I made many mistakes. I lost money. I accumulated debt I made financial decisions without understanding them. I wasted years.
But I eventually started learning, and slowly corrected my mistakes. Today, I am loan-free and rebuilding my financial future. I cannot change my past. But I can change what I do from today onward. That is the purpose of this audit: not to show how successful I am. Not to compare myself with anyone else.
But to create a record of where I started, what I learned, and whether I actually improved.
My biggest financial lesson is simple:
Financial literacy is not about knowing which investment will make you rich.
It is about understanding your money well enough to avoid decisions that can permanently damage your financial future.
I learned that lesson late.
I hope someone reading this learns it early.
Read more stories: reader story archive.
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About The Author
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 14 years of experience publishing news analysis, research and financial product development.
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