How I Rebuilt My Finances After a Personal Tragedy

Published: February 17, 2024 at 6:00 am

In April 2023, 31-year-old Abhineeth shared his plans for achieving financial independence and buying/constructing a decent house for his family. In his second audit, he shares how he rebuilt his finances after a personal tragedy.

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.


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Hi everyone, this is my 2nd financial audit. A lot has happened in the last year. I lost my mother due to a surgery-related complication. My finances were off track for quite some time. Exhausted my emergency corpus due to the medical treatment. I have learnt the hard way the importance of health insurance. Even though I had enough money for the treatment as an emergency fund, due to the fear of high costs in corporate hospitals in the metro city, we decided to get the treatment in the town in which we live. Of course, the complication encountered could have occurred at any hospital.

After the incident, I purchased health insurance for all family members. As the emergency fund was exhausted, I surrendered my two LIC endowment policies. The surrender value was around 75% of my total premium paid, including the money back I received earlier after the completion of 5 years of one of my policies. The two policies were 11 & 7 years old. As the money was necessary, I insisted on surrendering the policies to get rid of those policies. Of course, the agent suggested a loan on the policy, but I refused.

My regular investments were stopped for a few months, but I have invested the missed contributions in the later months.

Emergency fund. My emergency fund is 7.6 times my monthly expenses, and I wish to build a 12X-24X emergency fund for a foolproof future.

Retirement fund. Equity portfolio consists of three funds: Nifty Index, Nifty Next 50 Index & Short term Debt funds. My target asset allocation is 75:25 (Equity: Debt) in this part with 70% Nifty & 30% Nifty Next 50, and due to the recent bull run in the market, my asset allocation skewed to 78:22. I rebalanced the portfolio to 75:25. My mutual fund portfolio consists of 45% of my total retirement corpus. I intend to increase the MF portfolio to 50% in the coming years. The XIRR of the MF portfolio is 19.5%. The MF portfolio is 1 year and 8 Months old.

My debt portfolio consists of State Government NPS and 55% of my total retirement portfolio. The XIRR of the NPS corpus is 8.6%. The NPS portfolio is 6 years and 3 Months old.

I try to increase my monthly contributions by 5% every year. As per my monthly contributions, I expect to achieve financial independence by 2044 if the market allows it to happen, even early, as my expected total portfolio returns only 9%. My present retirement portfolio return is 11.10%

Down payment for House construction/purchase. I intend to accumulate 40% of the down payment for future house purchase/construction. I use a combination of the Sensex index fund & Nifty next 50 fund at a 70:30 ratio as an equity portfolio. At present, my asset allocation is 45:55 (Equity: Debt). The XIRR of the MF portfolio is 15.3%

In the debt part, I use my PPF account, and recently, I rebalanced from equity to debt by 5% because of the Bull Run. Currently, I have accumulated 29% of the target corpus. The XIRR of PPF is 7.2%. I intend to gradually reduce my equity portfolio as the PPF account nears maturity. My total portfolio return for this goal is 9.8%.

My plan for 2024 is to stick to my existing goal-based investment plans and rebalance the portfolio whenever there is a bull run in the equity markets. I am trying to increase my MF retirement fund portfolio to 50%, but it might take 2-3 years at present, monthly contributions.

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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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, 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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