In this edition of the reader story, Dr Aakash shares his investment journey while studying medicine.
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 proper 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 have also started a new “mutual fund success stories” series. This is the first edition: How mutual funds helped me reach financial independence.
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Hi, I’m Aakash, an MBBS graduate from Tamil Nadu. This might be a long post, but I want to share my experience, at least with myself. I’m currently 24 years old. My family is very conservative concerning savings. My mother works as a postmaster, so our savings are mostly limited to Postal Life Insurance schemes, RD, and gold.
My parents’ savings rate of more than 60% amazed me. Partly, my brother and I studied in our matriculation schools with scholarships from 6th standard to 12th standard (only 4k book fees for the top 10 students in each standard), and we cleared the NEET exam without any coaching centre and got into government medical colleges (1.2 lakhs fees for four years apart from hostel fees), which greatly added to our savings. My brother is currently in his 3rd year of study.
I have been an avid book reader since my school days. “Rich Dad Poor Dad” and “The Psychology of Money” were the primary reasons for my interest in the capital market. During the COVID-19 pandemic, I had much free time, so I watched videos by CA Rachna Ranade, Zerodha Varsity lessons, and more. After gathering information from various sources, I decided that mutual funds would be my ideal investment option.
Although I am interested in stocks, I cannot afford to dedicate time to them due to my ongoing studies, which will continue until at least 2031. I invested my Internship stipend in mutual funds, but it was pretty challenging to convince my parents. This was due to the common belief among our relatives and friends that share markets only resulted in losses; however, I eventually managed to convince them.
After securing their support, I focused on diversifying my investment portfolio. I opted for a 100% equity allocation and distributed my investment as follows:
- UTI Nifty 50 Index: 25%
- Nippon Midcap 150 Index: 15%
- Kotak Nasdaq 100 Index: 15%
- Parag Parikh Flexicap: 10%
- Axis Growth: 10%
- Nippon Small Cap: 15%
- 3 IT sector funds: 10% (SBI, ICICI, TATA)
My thought process is that this is meaningful diversification. Once, I came across freefincal posts and lost interest in this blog. I found the author too pessimistic. I don’t like the website. I started investing in May 2022; my last investment was in March 2023. The time horizon significant is here. I made my investments during a sideways market. The bull run started right after my last investment and has continued until now. So, any mistakes I made have not shown any manifestations thus far.
By August 2023, my profits had exceeded 20%, which I didn’t expect. I’m concerned about the rapid increase, as anything that can rise that fast can fall just as quickly. During my free time, while preparing for my postgraduate entrance examinations, I revisited FREEFINCAL. This time, I felt I found a Gem in Finfluencers. I slowly started to learn about asset allocation, notably different asset allocations for varying goals with different time horizons.
I started rebalancing in August 2023. I don’t know how to make sectoral calls. So, I redeemed IT sector funds at a 20% profit. Future investments in the NASDAQ 100 may not be possible. I sold when NASDAQ was around 16000 (bought at 11000). Now, seeing the current levels of 20000, I laugh at myself.
Redeeming Midcap and Smallcap funds was a bit tougher for me. Both funds were at more than 50% profit. I redeemed them around the middle of JAN 2024, a month before the SEBI stress test. The reason is that holding those funds was like riding at 100kmph for a 50km distance. I am more comfortable riding at 60-70kmph for the same 50km distance (Large cap and Flexi cap funds). I believe it’s better to start early and be comfortable with that rather than ride faster. By the end of JAN 2024, my equity-to-debt allocation was 45:55. Currently, it stands at 52:48.
Current Allocation
- UTI NIFTY INDEX 22.5%
- PARAG PARIKH FLEXICAP 18.3%
- HDFC FLEXICAP 10.9%
- PPFAS ARBITRAGE 18.6%
- PPFAS LIQUID FUND 29.5%.
I am not giving XIRR too much importance. In a bull market like the current one, XIRR will be high; it can even be negative in a bear market. Boasting about notional XIRR is a useless thing. Currently, I am investing in 2 active funds. I don’t think I will continue with PPFAS Flexicap for the next 30 years. I will continue till as far as I am comfortable or till I have a conviction. I will switch to a simple NIFTY50 index fund for the equity component when uncomfortable.
I am about to start my postgraduate studies at AIIMS. At present, I do not have specific financial goals as of now. That’s a little bit worrying for me to start Goal-based investing. As I don’t have clear goals, I don’t have a clear corpus. My current monthly expenses are low even if I start investing for retirement. Therefore, I plan to split my monthly stipend into three parts:
- 25% for my expenses
- 35% for building an emergency fund and meeting short-term goals.
- 40% for unidentified long-term goals, in a 60:40 ratio in existing funds. Once I have specific financial goals, I will adjust my investment strategy accordingly, as I am currently focusing on my career growth. My parent’s investment in my PPF account is also included.
Ending with my favourite quote from the anime Attack on Titan,
“I don’t know which option you should choose. I could never advise you on that… No matter what kind of wisdom dictates you the option you pick, no one will be able to tell if it’s right or wrong until you arrive to some sort of outcome from your choice.” The only thing we’re allowed to do is believe that we won’t regret the choice we made.
Reader stories published earlier:
As regular readers may know, we publish a personal financial audit each December – this is the 2022 edition: Portfolio Audit 2022: 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
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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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 ten 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 investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 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 is!! 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.
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