Reader Story: How I turned my life around & charted my own money course

In this reader story edition, Vinay Rai discusses how he got his finances in order and charted his own money course

Published: November 22, 2019 at 10:31 am

Last Updated on August 30, 2021 at 7:58 am

In this reader story edition, Vinay Rai discusses how he got his finances in order and charted his own money course. He has also shared a template for consolidating all personal and financial details of a family. “Reader Story” is a freefincal feature where readers share their financial journey. You can explore the full archive of past reader stories

Vinay Kumar Rai, a Mumbai resident, is a senior automation analyst at CitiusTech catering to Healthcare clients. Vinay loves to travel and read books on personal finance. He is a financial freedom seeker and wants to spread financial literacy.
======

Being carefree and making most out of life with ‘materialistic’ spending is what I had thought defines a good life. The yearning to spend was out of deprivation from things I wanted when I was growing up. Being brought up in a middle-class family, we were only provided with what was needed and never splurged beyond necessities. Hence as soon as I started earning, I used to spend my salary on things that made me happy like clothing’s, expensive gadgets & vacations without thinking about my future needs. As I didn’t have anyone to guide during college and after, so saving and investment was never in my plan like many millennials. I gave zero attention to my finances and committed several financial mistakes like buying an endowment policy with a very low death benefit, purchasing a property for tax saving purpose at a very young age without giving too much thought about future needs, putting all my money in RDs/FDs & no equity.

Moment of realization

Late last year in 2018, My wife and I decided to sell a property I had invested in and purchase a home that meets our requirement however we needed a good amount of money to fund pre-payment for a new home. I did not give too much thought about the feasibility and assessing our financial readiness to buy the new home and started looking for properties ignoring the fact that it wasn’t the right moment and we are not financially prepared for the biggest investment of our life. I ended up buying my dream home but had to take huge debt to finance the same and suddenly all the savings were going into paying the monthly vicious EMI leaving behind only few thousand and this was the moment of realization! I realized that if I don’t act now and continue in the same fashion, my spouse and I are going to end up broke.


Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥

The wakeup call led me to find ways of saving and investing which was primarily driven to save money to clear my debt. Just like anyone else, I started my Investing journey with zero planning and initially committed mistakes like investing in stocks and mutual funds suggested by friends and colleagues with zero knowledge about how the market works. I started investing in these instruments with no planning and strategies. I continued looking for ways to improve myself. As I read more & more, I realized that I have been blind to a concept called financial planning.

One of my many daily notifications on Google News landed me to one of the FreeFincal posts on automated SIP investments. What caught my attention was the suggestion by the author to stop the SIPs and manually invest every month to bring in discipline. This ignited the curiosity to understand the thought process and know more about the author. I started following the author and his post on FreeFincal religiously. Read most of his books on Financial planning/DIY Investing. Pattu sir is unique and trusts data more than anything else. While other YouTubers were busy increasing their subscribers base by selling best mutual funds with wrong expectation, he was focused on making people understand the importance of having financial fortitudes like life insurance, health insurance & emergency fund in place, investment process and basics of financial planning. Being disciplined and investing regularly with proper asset allocation and de-risking strategies is more important than investing a huge amount without any proper process. Not having any process is like throwing money away. You cannot just get rich by doing SIPs in mutual funds. If that’s so easy everyone in this world would be rich just by investing in mutual funds and stocks.

Undoing the damage – How FreeFincal helped me?             

Pattu Sir’s Personal Finance Checklist is a good way to assess your financial health. His re-assemble video series, how-to archives & Mutual fund FAQs book is the best way to learn & start. I had to redo everything from scratch and plan well beforehand to avoid a money-crunch situation in future. I corrected my mistakes by buying a term plan and health insurance with adequate cover for me and my wife, closed endowment plan, sold my old property to reduce my current debt, exited from all stocks & mutual fund investments. Luckily, I had not invested heavily into any asset class which helped me in restructuring my finances quickly. I am now investing as per my goals, have a realistic return expectation and achievable target. Since I am not skilled or have enough time to identify a decent stock, I am relying on mutual funds for long term goals with proper asset allocation.

Change for good – Journey matters in investing

Along with changes in my financial portfolio, I also adopted discipline in my saving and spending habits. Essential rules like ‘live within one’s own means’ and saving as much as possible and channel it into financial asset class to build long-term wealth should be followed. With this change, I can save more and spend thriftily. Luckily, I am blessed to have a partner who thinks alike and so we are totally compatible when it comes to financial discipline. Now, we save close to 53% of our salary and aiming to increase it above 60% in the next couple of years. Being a DIY investor, my equity investments are in low volatile direct mutual funds for long-term goals along with PPF as debt component and arbitrage for rebalancing once a year. However, I would like to get a second opinion from a fee-only financial advisor in future.

My only regret is I started saving and investing at the age of 28 (I started earning when I was 21, I lost 7 years of compounding). However, I and my wife are still very young, and all the goals are within reach. I strongly feel I will be able to achieve all my goals before the target date. Patience and behavioural control are key in investing. Like Pattu Sir says – “Invest like your rear end is on fire and think like a rich to be rich”.

I religiously follow FreeFincal (blog & YouTube channel) and would like to express my gratitude to Pattu Sir. A special callout to my wife and all who helped taught and pushed me in being an informed investor.

Things I learnt in the process:

  • No asset class is risk-free including bank FDs. Not taking risk is also a risk
  • Save first & spend later
  • Just saving is not enough, start investing
  • Chalk out your Financial goal and invest accordingly
  • Do not follow herd mentality – You need to chalk out your own money course
  • Asset allocation, rebalancing, de-risk & exit strategies are what differentiates going-to-be-crorepatis & others left on the way
  • Delay any purchases which you can, sleeping over it gives you more clarity
  • Diversification is utmost important however remember, it will reduce your returns in exchange for providing protection against risk
  • Managing risk is more important than chasing return
  • Returns are by-products, one cannot eat with returns
  • Selecting a product category is more important than the product itself & many more
  • Once you understand liquidity, you will never invest in real estate

Things I did for better management:

  • Created a consolidated document with all personal and financial details of my family. This is the template of the document.
  • Shortlisted few good cashless hospitals close to my residence
  • Track all my investment per goal in an excel sheet
  • I use ValueResearch portfolio to review my equity investments against personal benchmark
  • Created an investment mandate document to chalk out my investment plans, strategies & thought process
  • All physical personal/financial/insurance/loan documents are sorted and placed in different folders also soft copies are shared with family members in case of emergency

Few blogs I follow:

  • FreeFincal
  • JagoInvestor – Manish’s book on Financial Planning ‘How to be your own Financial Planner in 10 steps’ is a must-read one
  • Moneykraft for basics of mutual funds
  • Edu-Form posts are also good
  • BasuNivesh
Do share this article with your friends using the buttons below.

🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
Follow Freefincal on Google News
Follow Freefincal on Google News
Subscribe to the freefincal Youtube Channel. Subscribe button courtesy: Vecteezy.
Subscribe to the freefincal Youtube Channel.
Follow freefincal on WhatsApp Channel
Follow freefincal on WhatsApp
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! 
Listen to the Lets Get Rich with Pattu Podcast
Listen to the Let's Get Rich with Pattu Podcast
You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.
Lets Get RICH With PATTU podcast on YouTube
Let's Get RICH With PATTU podcast on YouTube.

  • Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
  • Have a question? Subscribe to our newsletter using the form below.
  • Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!

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.
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.
Our new course!  Increase your income by getting people to pay for your skills! More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both the boy and girl-version covers of "Chinchu Gets a superpower".
Most investor problems can be traced to a lack of informed decision-making. We made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So, in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it, as well as teaching him several key ideas of decision-making and money management, is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)