How I reached a Rs one crore portfolio in ten years

Published: October 2, 2024 at 6:00 am

This year, so many have become first-time crorepatis or well-established crorepatis and have come forward to share their journey on freefincal in the reader story section. This is one such account.
It is so wonderful to read these stories. All credit to their focus and discipline.
Yes, the bull market played a part, but let us not take anything away from their determined effort to enhance and secure their financial lives. If you wish to share your story of disciplined investing, you can send it to freefincal AT gmail dot com. You don’t need to be a crorepati or a lakhpati to send your journey. Process >>> Result.
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.

I am a Software Engineer working since Sep 2012.  I recently achieved a portfolio value of Rs. one crore after ten years of investing. This is my journey. I did not save much in the initial two years, till Dec 2014, my saving was around 1 lac in FD. In between, I tried Direct Equity/Options trading, made a few bucks in direct Equity in the 2013-14 bull run and lost some in options trading.


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Then, they started with the ELSS mutual fund in early 2015 and made the mistake of adding 3-4 ELSS funds. In 2016, I was added to the FB group (‘Asan Ideas for Wealth’) and started going through all the posts and comments, today also my favourite time pass is to read the posts & comments on this group.
I slowly moved my direct equity to MF but added multiple funds due to FOMO. In 2018-19, our FM introduced LTCG, and the market started falling, especially the mid & small cap. By then, I had lost almost all of my gains to date, but the good thing was I hadn’t stopped investing. So I started an investment journey in 2015, from then I invested almost every month till today except May-2017 to Apr-2018 as I could hardly save anything during this phase.
At the beginning of 2019, I learned about risk management, asset allocation and goal-based investing with the help of Pattu Sir’s videos and our beloved Ashal Jauhari (Admin of Asan Ideas for Wealth FB group). I started following asset allocation and goal-based investing and reduced my MF count to 4 post-COVID bull runs. Below are the allocation of my current corpus & details of how I am managing my finances currently:
Basics:
  1. Term Insurance: Done a few years back, but i might have to increase the sum insured, will do it soon.
  2. Health Insurance: Apart from Corporate insurance of 3L taken ICICI Family floater of 50L for Myself, my Wife and 4.5 yrs old Son.
  3. Emergency Fund: The current Emergency fund is equal to 12 months of expenses, which is around 9% of the total corpus, and below is the allocation:
    • Saving Account: 20%
    • FD: 80%
  4. Short Term Goal: 6% of total corpus for this goal, using FD&RD only for this Goal as it’s around 4.5 years away.
  5. Long Term Goals: Currently Focusing on two major Long Term Goals
I. Retirement: I am 35 years old with two dependents (Wife & Son). We are targeting Financial independence at age 45, in the worst case, 50, post that I have some other plan. Around 66% of the total corpus is for this goal currently. Below is the asset allocation I am following:
  • Equity 50%
    • UTI BSE Low Vol Index Fund  21%
    • NiftyBees  17%
    • Mirae Asset Midcap Fund  8%
    • NPS (Equity)   4%
  • Debt 40%
    • EPF & VPF 23%
    • NPS (Debt) 1%
    • Long Term Gilt Fund  16%
  • SGB 10%
Future Plan: We will keep investing in the same allocation (50:40:10); only problem is with SGB, as I am not sure whether we will get a new tranche or not. I’ll have to plan for another form of gold investment. 
II. 2nd Goal (Kid’s Higher Education): My son is 4.5 yr old, investing as per below. Again, LIC is my early age mistake, but I continue with a 4%/annum return expectation. Around 19% of the total corpus is for this goal.
  • Equity (Parag Parikh Flexi Cap) 50%
  • Debt 50%
    • LIC 14%
    • PPF 17%
    • FD/RD 19%

Future Plan: 

  • PPF will mature in 2029, and LIC in 2033 After that, I will move this money to some liquid instrument.
  • Portfolio rebalancing: Till now, I have done 2-3 rebalancing only(not proper, mostly through additional cash flow), but in future, I will rebalance in case equity allocation moves to 47% or 53%.
  • I will slowly reduce equity allocation as the goal comes closer.

5. Assets: Apart from the abovementioned assets, I will be inheriting some Residential & Agricultural land.
6. Liabilities: No liabilities to date. I have not taken any loans.
7. Earning:

  • Primary Source of Income: Getting average pay currently will keep the CAGR of 8-10% in future.
  • Secondary Source of Income: Started working on this way back in 2015-16 but now from the last 3 years there is minor progress, currently average monthly income is 15-20% of my total monthly expenses. I am ok with it and not in a hurry as my target is to make it equal monthly expenses by Dec-2030. It’s not passive income, it’s active income which I can continue after retirement from my current IT job at the age of 45.

8. Saving: My savings rate is around 65%, I tried increasing, but it does not look feasible. Will try to manage between 60 and 65%.
9. 1st Crore took around ten years. Below are my targets: Dec 2028   2Cr. Dec 2034   4Cr. Dec 2040   8Cr.

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.

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

Pattabiraman editor freefincalDr 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.
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