How we plan to achieve a retirement corpus 50 times our annual expenses

Published: January 22, 2022 at 7:00 am

Last Updated on January 22, 2022 at 10:07 am

In this edition of the reader story, we meet a young couple who prefers anonymity. They share their money management journey and how they wish to achieve a retirement corpus 50 times annual expenses.

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 to 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.

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Please note: We welcome such articles from young earners who have just started their investing journey. 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 author.

Context: my wife and I both work in tech. Our financial goals are a) retirement corpus so one of us can quit and start something b) we have a baby coming in June and want to ensure there is enough corpus for education, etc.

How did I start managing money?

We graduated from B-school seven years ago. The first four years were majorly spent repaying the education loan. My wife didn’t have a loan, and she started saving early in her post office FDs.

My savings for the first four years were limited to ELSS, epf and ppf. It was only after the loan was repaid that I seriously started investing. My net worth (in stock units) went up in the bull run, and I’ve been plain lucky.

We have separate term life insurance policies of 3.25Cr each. Health insurance from our employer of 10Lacs, personal health insurance of 5 lacs, and a cancer cover.

We have an emergency fund that covers six months. I want to take it to 12 months.

Our portfolio is tracked at an individual level and an overall level.

We don’t spend lavishly, try and save 70% of our income, and our current networth is ~24X our annual expenses.

Overall, 67% is market-linked, 25% is fixed income, and 5% is gold.

Breakdown of the 67% of market-linked: 50% is in the form of stock units of our employer, 6% is in the form of momentum smallcases, 7% is in the form of mutual funds, and 4% is in direct equity.

Breaking down fixed income, 15% is in Post office FDs, 2% is in PPF, 8% is in EPF.

All the gold is purchased through gold bonds.

Performance-wise, the company stock units that constitute 50% of our networth has gone up ~80% in the last year in value. Momentum smallcases have given an XIRR of ~50%. Direct stocks have gone up 20% in the past year. Mutual funds have an XIRR of 17.5%.

We plan to take the corpus to around 50X our annual expenses, and that’s when one of us quits (most likely, I will). I want to give entrepreneurship a chance. We don’t have any plans to buy a house.

Why do we not want to buy a house?

a) We live in the NCR region in a rented house. The yield of the apartment we’ve rented is ~3%. We feel that buying a house will lock the money in an asset class, reducing the pace of achieving our goals. We’ve included the annual rent in our annual expenses while computing the corpus to be safe.

b) No emotional reason to buy a house. Both our parents have 2-3 apartments across NCR and home town. They live in one and enjoy passive income from the other apartments.

c) At some stage, we would want to move cities/countries and have that flexibility and not tie our money to real estate.

We might consider buying real estate when the stock units from our company reach a sizeable amount, and we want to sell those.


1) Trust in experts. I started my career as a prop trader at 21. I realised early on that trading is not my cup of tea. Therefore I didn’t invest in direct equity—just mutual funds. In 2020, I started investing heavily in paid momentum smallcases because I felt the markets were inflated but didn’t want to miss out on the rally. This has served me well so far.

2) when in doubt, do nothing. I saw my net worth dip by ~50% in the covid fall. Thankfully my trading experience came in handy, and I didn’t panic. We didn’t need to liquidate anything and added more in March/Apr 2020 in some blue-chip companies.

3) Measurement and tracking: I set up an exhaustive tracker on google sheets to track all our investments in one place. The link I used is below. You can’t take corrective action if you can’t measure it. This has helped me get a bird’s eye view of our financial health.

4) Get a financial planner: I got serious about this in early 2020 after we got a financial plan made through a fee-only planner. My employer provides a financial planner, and that was the starting point. It helped structure my thoughts and set me up on this path. Honestly, I wasn’t very happy with the output from the financial planner, but that’s what pushed me to make my trackers and plans using their framework.

Finally, it’s a whole lot of luck. I’m very thankful to the market gods for the bull run, to my employer for the salary, stock units, and work, to my spouse for being financially prudent with her earnings and finally, both our parents for being financially independent 🙂

Reader stories published earlier

As regular readers may know, we publish a personal financial audit each December – this is the 2020 edition: How my retirement portfolio performed in 2020. 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(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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