A reader asked in response to the article – Why do you want more money? Don’t you have enough? Learn to say, “I have enough”! – ‘Can you share some moments of your life when you had a low net worth? What did you sacrifice to achieve what you are now today?”
I have mentioned the importance of fear as a driver several times before. In my case, the fear of making the same mistakes again drove me to financial independence.
- I got my first salary three years after I left school when I started my M. Sc I was given a monthly stipend of Rs. 500, and my tuition fee was waived. I got the stipend every six months or so and promptly purchased expensive coffee table books on the history of cinema with it.
- My father retired two months after I started my PhD so my stipend (Rs. 500) was doing its bit to run the household. I was still clueless about money.
- In the 4th year of my PhD, I got a scholarship to spend three months in the Swiss city of Lausanne. It was a paradise. I was paid a scholarship of 2700 Swiss Francs—a handsome amount, much higher than even young scientists were making then. Students who had got this fellowship before I did had managed to save Rs. 1-1.5 lakhs by being prudent.
- Prudence was still not my thing. I blew every single Franc. I was too lazy to get a ‘student’ bus pass for transport and spent 10 Francs daily. Many regular co-passengers were appalled and told me to get the cheaper pass. I didn’t listen.
- I ate junk food three times a day in Lausanne. Dinner each day was in a Mcdonald’s. My face became so familiar to the employees there that many often gave me ‘extra’ French fries. One guy would lift the nearby garbage can and ask me if I wanted French fries in a pack that big! I was leaking money steadily. My marriage and graduation were around the corner. I didn’t care.
- After my PhD, I had a short stint in Berlin as a ‘visiting scientist’. No sign of money-gyan yet, as I blew a good portion of my decent salary on rent. A single guy living in a large, expensive two-bedroom flat.
- Back home, I started work as a ‘K S Krishnan research fellow’ at IGCAR Kalpakkam. Though I was given decent accommodation at Kalpakkam, I travelled from Chennai daily—a more than 150 km journey. I lost my health and blew my entire pay in travel expenses for about 1.5 years!
- Soon my job at Kalpakkam became permanent. My life changed forever five days after receiving my first ‘proper’ salary. My father was diagnosed with cancer, and the treatment cost started spiralling. Thankfully my brother-in-law gave me an interest-free loan of Rs. 3 lakhs.
- I was distraught. I hated debt and wanted to get out of it. Thankfully my pay shot up by about 45%, and I got a huge lump sum (for my standards!) as arrears from the government (sixth pay commission). I paid off my brother-in-law.
- The day I was debt free, I felt great. It was a cathartic experience. I felt free and in control. I told myself I would do everything I can to feel this way, at least wrt my finances, every day. So started the journey out of the hole. This was in 2008. The journey continues …. The fear of messing up again: a powerful force.
- From there, the threshold to financial independence (30X corpus) took about ten years. See: What does 30X refer to in FIRE or retirement planning?
Fast forward to 2022/23:
- Fourteen Years of Mutual Fund Investing: My Journey and lessons learned
- Portfolio Audit 2022: The annual review of my goal-based investments.
- After 13 years of investing in the NPS, my return is 8.78%.
- Lessons from investing for my son’s future for the last 12+ years
- What I learnt from a 13-year midcap mutual fund SIP
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About The Author
Dr 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.
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