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.
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.
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.
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- 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.
- Twelfth 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
- Sixty-third audit: My financial journey: How I missed the Compounding Bus!
- Sixty-fourth audit: My MF investment journey: From thematic funds to a 3-fund portfolio
- Sixty-fifth audit: From Debt to ₹1 Crore Liquid Net Worth: My Journey of Financial Awareness.
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.