My Name is Sunil, age 50, achieved financial freedom at 45 & here is my story. An interesting point to note is that I had Average grades in Academics, Average Income, Worked for 25 yr in Manufacturing Companies, NO OVERSEAS Assignment, and NO ESOP & still did very well on Financial with DISCIPLINE, CONSISTENCY, & Sincerity !! I hope this Inspires Readers who have a similar background. As this is my 30-year experience sharing my Mistakes and best practices, it’s a slightly long article. Please read it in full!
Editor’s note 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 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. Now, over to the reader.
My Family Background
Born in a Lower Middle class Maharashtrian family, my Father was a State Govt Officer & my Mom was a School Teacher….Both had Modest Salary, but Extraordinary VALUE System, both Very Honest in professional life, always tried to help others as much as they can for education. Stayed in Mumbai Suberb till my 12’th, did my Eng in Pune from a Pvt college ( BE yr 1995 in Chemical )
My Salary & Professional Journey
I graduated in 1995, didn’t have any Job in college placement, and worked hard to find a job on a Small scale, my first Salary was Rs 3,000 PM. I continued to work hard, got selected in Godrej in 1997, and my salary jumped to Rs 7,500 PM ! Continued till 2004 & last Salary was Rs 14,000 PM.
None of these numbers were really high even with those time Standards, but the important point is even in that time used to save 50% of my salary.
I moved to Bangalore in 2004 again to a manufacturing company, where my salary was approximately 4.5 Lakh PA (CTC). I continued with the same company till Yr 2020 ( 16 Yr !! ) & my last Salary was Rs 36 L PA (CTC) .
I got married in 2000, an arranged marriage. Still, I was lucky to have a supportive life partner who always trusted me in my decision. I give full credit to her for understanding & cooperation throughout the journey.
She had an MSC Computer science background. She was passionate about Teaching & she always worked as a Teacher for BCA/MCA. Her salary was approx 20,000 PA in 2006 & currently approx 1.25 L PM presently, again modest from Bangalore Standard perspective
Our Journey of Saving & Investments
With Good value system we both had, we always believed in having comfortable life but never ended in any extra High Unnecessary spending….right from 1995, our saving rate was 40% + of take-home salary
Our savings from 1995 till 2005 was mainly in PPF ( every year 1.5 L ), Post office, RD, FD as those time awareness & knowledge about equity was limited…also i had burned my fingures in direct equity due to Ad Hoc approach,various scams happening in mkt as well as volatility
From 2005 i became more disciplined investor with SIP, buying Blue chips ( those days Asian Paint, Britania, Colgate, Atlas Copco etc )…Small Qty ….made a good profit, sold very early !! But stayed with Equity for Long term…..The Demat account I opened in 2005 was ONE WAY Traffic….every month, immediately after salary, fixed money was moved to Dmat for investment & in last 20 Yr, i NEVER WITHDRAW any amount from this for any Spending !!
I kept reading about each & every possible information on Personal finance to improve my knowledge….Source of information ET Wealth, Outlook Money, Freefincal Articles, Subramoney, SafalNiveshak as well as followed few You tube channel in last 5 yrs……This helped me to Develop my OWN PERSPECTIVE, i never followed any advice blindly, always did my own analysis
Power of Compounding
My PPF account is running for 32 Yr, No Withdrawal, Tax Free Compounding
Between 2008 to 2020, i used to do VPF ( Voluntary EPF contribution of additional 50% of my Basic Salary ), a Huge TAX Free compounding ( of course Tax rule changed in Year 2021 but i was lucky to contribute early )….Again NEVER withdraw Money from EPFO, always ensure to Transfer EPFO after Job changes
Had Mutual fund SIP in various schemes based on knowledge at that time ( Large cap, ELSS, Small cap etc ). It was not a scientific approach, but with medium to long term holding it generated good returns & always Reinvested in Equity post-redemption
For short-term spending (son fees, Other Expenses, etc.), we had RD in the bank so that annual money accumulation could be used to pay those without disturbing our investments in mutual fund stocks.
We reached the first 1 CR Mark by age 40! Almost 20 Yr from the start of Job….but after this, every 3.5 years, the corpus is Doubling !! Power of Compounding & Power of Judicious Spending!
My Mistakes OR what should have been done different
While i was aware about equity since 1995, i didn’t had a Long term view, ended up in too many different schemes, not so good direct equity etc….those reduced opportunity of substantial Gain over long time…..No Regrets as those helped me to learn, but Others should learn from my mistake.
Building Portfolio is Science & Art, takes time to Develop….also doing mistakes is part of Journey, teaches for betterment, Luckily None of the mistakes were Fatal which wiped us, small lossess is Fees paid for better learning & process improvement !
Had purchased real estate for Investment & Rental income, Not a Good idea as ended up in very small appreciation…..Having 1 House to Stay is Enough, never buy real estate with hope to generate wealth as yield is not high, hidden cost of Home Loan Interest, Taxes, Headache to manage tenant etc
Our Current Corpus & Other Financial aspects
if we consider our annual Expenses as EX, our current Liquid assets are = 55 EX ( means we can survive 55 Yr at current Expenses )
Portfolio Distribution is 50% Debt ( EPF, PPF, High yield Govt Bonds of 8% & FD ( can be liquidated in few Mins ) as well as Gold ETF ), 50% in Equity ( Mainly Direct Plan Index Funds, Mutual funds & selective Stocks ), Doing rebalancing at Regular Intervals.
Since 2020 i stopped working & devoting my time for my own Family financial, i am better knowledged for equity ( as compared to 10 yr ago ) & do RULE Based Trading & investment
Health Insurance : Having 10 L Family Floater, holding policy for 15 Yr, but had a pathetic experience this year for first claim for wife, so buy from Good Reputed firm, be aware of your policy, take help of Bima Lokpal if your Genuine claim is rejected
Life Insurance : had purchased 2 Term plan for total 1.5 Cr till age 45, stopped now as no more required
Portfolio Distribution – What Worked in our favour
Being an AGGRESSIVE SAVER right from First Salary…..irrespective of your salary, Live in your own means, save a lot, continue to Save even after Salary or income increases
Diversified Saving, following distribution can help
Suppose your monthly saving budget is 100, distribute following
20% : Bank FD/RD
20% : PPF / EPF
10% : Gold ETF ( No physical), works as Hedge & historical return of 9% CAGR on long term, Lower Taxation for Long term gain
Balance 50% in Equity as following
20% : Select 2 Large & Mid cap Index fund which invest in Different portfolio , No overlap, BUY DIRECT Plans only
15% : Midcap Index Fund
15% : Large Cap Momentum fund, over 5+ Yr Horizon it will outperform Nifty
Few Stocks for Trading purpose
HEALTH, RELATIONSHIP & HAPPINESS
While we all want Wealthy, equally important is GOOD Health, Good Relationship with Family & being Happy.
I got diabetes in my early 30s which is my Biggest Regret in life, but that made me more disciplined for Exercise, food….living a Healthy life with good Health….i request everyone to ensure regular Moderate Exercise ( Walk, Jog, Yoga, Go to office Gym, Play with your kids )
Do have a Good Family tie up…we try to win our Office colleagues & boss goodwill but ignore family…..do ensure to have Good Family tie with Parents, Spouse & Close relatives & close friends….they are going to Stand with us forever in our Tough time unconditionally.
Also, Do discuss your Key investment with your Spouse & Parents…Help your parents to invest Properly, as a Family it helps to Grow Big.
Write your key information about the Bank, Demat, and Policy on a piece of paper / Password Excel, update from time to time & give access to your Spouse & one Trusted Family member. In today’s Digital world, with lot of login & passwords, information is scattered; make it Structured so that it can be used if there is emergency
We also strongly believe in GIVING back to Society, we are associated with 4 Trustworthy NGO who work for Education of Unprevilaged & students from Rural area ( Vidyadaan Sahayak Mandal, Thane https://vsmthane.org/ ) , Pune Blid School for Girls ( https://www.puneblindschool.
There is nothing more that makes me Happy than giving back !!
I end this long article with my favourite Quotes.
Spending is very, very easy, but no one becomes Rich by Spending. Be Judicious SpenderRichness is Not What You Wear. Richness is What you Afford, Stay Humble & Stay Happy.
You can share your comments and ask questions, if any, to sunilswagh1ATgmailDOTcom. I don’t give advice, service or recommendation, but I can hear your points.
Reader stories published earlier:
As regular readers may know, we publish a personal financial audit each December – this is the 2023 edition: Portfolio Audit 2023: 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
- 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
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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