Last Updated on December 29, 2021 at 6:33 pm
As regular readers may know, we publish an annual personal finance audit every December – our 2021 audit was posted a few days ago. Since last year regular readers have been sharing their investment journey and portfolio reviews. Suhas was among the first to do this. He has most graciously agreed to share an update of his finances with us.
If you have not yet read the first part (linked below), we urge you to read that and then head back here. It inspires all of us to track our portfolios better. In the second edition, Suhas illustrates how important it is to redo the goal planning calculations each year and why he increased his retirement corpus target by 13% despite a networth doubling since Dec 2019.
About this series: I am grateful to readers for sharing intimate details about their financial lives for the benefit of readers. Some of the previous editions are linked at the bottom of this article. You can also access the full reader story archive.
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 to preserve the tone and emotions of the writers.
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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 their investing journey. See, for example, this piece by a 29-year old: How I track financial goals without worrying about returns.
We have also started a new “mutual fund success stories” series. This is the first edition: How mutual funds helped me reach financial independence.
About the author: Suhas Bharadwaj is a Software Engineer by profession. He is interested in sports and personal finance. Follow his portfolio updates in his blog DudduKaasu.
Hello all, I hope you all are doing fine. If you remember, I wrote about my personal finance audit/review last year. Here we are after a year. Let’s see where we stand. Before that, I want to let you know that I try to review/update every quarter on my blog(DudduKaasu), but thanks to Pattu sir for giving me another opportunity to write a yearly review.
Networth: Like last time, let’s look at the big picture, the networth and its progress
- Equity consists of equity mutual funds, direct equity and RSUs.
- Locked Fixed Income is debt with long term lock-in. It consists of EPF and PPF.
- Liquid Fixed Income is debt without lock-in. It consists of liquid funds, arbitrage funds, bank accounts.
Again like last year this year, too, the major jump in the networth is due to gains rather than investments, thanks to the continued bull run.
Note: In my last post, I had put the 2020 NW value at 150 when it was 143.4. It was a wrong calculation on my part.
Emergency Corpus
Over the last 12 months, I had to pull out from this corpus for a big-ticket item and some for a house renovation, I have topped it up a bit, and it contains slightly less than a year’s worth of salary now.
Kid’s Education Corpus
I continued to invest for this goal over the last year, no change in the strategy for the same, still has only a single hybrid fund and PPF as the debt portion of the fund.
Again, the allocation has got pretty high than what I would like it to be, but I will rebalance only in April, which is my usual time for rebalancing. Also, I am contemplating adding a debt fund to this goal, will take that call in April.
What is the kid’s fund worth today? The current corpus should cover around ~4 years of education in a private engineering college today, aiming to accumulate enough for a UG and PG if possible.
Note: In my last post, I had put the 2020 value at 249 when it was 250.3. It was a wrong calculation on my part.
Retirement Corpus
I continued to invest for this goal over the last year, the only change in strategy was to add another debt fund to supplement EPF as part of the debt portfolio. There was a choice to either increase my EPF contribution by opting for VPF or choose a debt fund. I zeroed in on a gilt fund to give me flexibility, which EPF cannot provide. Currently, the gilt fund is 2.3% of the entire portfolio and will slowly ramp this up.
Another big change is that I increased my target corpus by around ~13%. Over the last year or so, I have noticed that my expenses have gone up more than I expected them to be. Not sure if its due to inflation or due to some lifestyle changes or something else, I have not delved too much into it yet, but just recalculating everything with the current expenses showed that I had to increase the target corpus by ~13% from last year, it also lands the corpus into a nice round figure.
This brings its own challenges, like the amount required to meet the target is also big now. As of today, I can manage because my current corpus is greater than the ‘expected’ corpus at this stage, but going forward, I can see that it could get tougher. Let’s see how I can manage it.
The current allocation is 70% equity; I will try to rebalance this by Jan or Feb.
What is the retirement corpus worth today? The current corpus is around 14 times my current annual expenses. The aim is to reach 40 times current expenses, but personally, my kid’s education is a higher priority for me, so I’m ok to delay this goal if required.
Note: In my last post, I had put the 2020 value at 138 when actually it was 139.2. It was a wrong calculation on my part.
Reader stories published earlier
As regular readers may know, we publish a personal financial audit each December – this is the 2020 edition: How my retirement portfolio performed in 2020. 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!
- 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
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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