This time on reader stories we meet a 24-year-old budding lawyer who prefers the pseudonym Mr Rakmo Hurtak. He believes his investment strategy is ‘okay’ (for his age and circumstances) but has a curious problem.
He is not satisfied with “wealth creation” and needs a goal for his investments! This is of course fantastic as a goal-based approach is the simplest and most natural way to invest in auto-pilot.
The answer is also simple enough. Whether they like it or not, whether they want it or not financial independence after retirement is a mandatory goal for anyone gainfully employed.
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.
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! 🔥
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 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 our youngest reader story contributor, Mr Hurtak.
At the very outset, I would like to thank Mr Pattu for this unique opportunity of sharing my journey into the world of finance.
A DISCLAIMER: This is going to be a very lengthy and bulky piece. I do apologize for the length of this Article/Audit. But the bulk is to be expected and forgiven considering my profession. We lawyers unconditionally love the written word and are ever ready to swear on it.
MY BACKGROUND: Before we begin, I would like to share some background information that will help the readers better understand my current life situation.
I prefer to forage on the wild west of the internet under the pseudonym of Mr Hurtak. I have recently turned 24 years of age and am a fresh Law Graduate who has just begun to get the bitter-sweet taste of adult life (still unsure what it entails). I have not started earning a salary in the traditional sense of the term.
I am being paid a stipend which is actually equivalent to the Travelling/Daily expenditure incurred in the day-to-day routine. In other words, my earning capacity at this present moment is extremely limited. (For those who are unfamiliar with the legal fraternity; the legal profession, especially the litigation aspect therein, is considered as a noble profession instead of a job and thus my situation with regards to the payment is the industry normal).
Now, I am fortunate enough to have been blessed with extremely supportive parents (financially and otherwise) and they have continued to provide for and look after me and my well-being (again, financially and otherwise) to date. This allows me to use the entirety of my stipend amount (a grand sum total of Rs. 5000/- per month on an average) as I deem fit.
Again, I was fortunate enough to come across some great free resources (Books, YouTube, Blog-posts, etc.) relating to personal finance and investing. And considering my age and lucky situation (no one is dependent on me rather I am the one who is dependent on my parents), I decided to take a carefree but well-informed plunge into the pool of investing. Or at least so I believed!
I am 100% invested only in equities. I know Mr Pattu won’t be singing high praises about this asset allocation strategy; but then again, this is my personal audit and I do have a plan (I only have to properly figure it out).
LET’S START FROM THE VERY BEGINNING:- I started on my investment journey as a New Year resolution and opened a Demat Account with Upstox in the month of January 2021.
I started with a grand total of Rs. 1000/- (kept on adding money from time to time) and purchased some shares of Coal India, Karnataka Bank, ONGC, OIL, etc. I had read about the miracle of Dividends and the Snowball Effect that they have over the years and was solely focused on this single aspect.
However, as the days progressed, I soon realised that extreme patience is not one of my virtues and I made a conscious choice of shifting from the acclaimed Dividend Strategy.
THE PROGRESS AND LEARNINGS:-
After making the shift from Dividend Strategy, I became very much enthralled with the concept of Index Investing (for those interested in learning more, I would recommend the Little Book of Common Sense Investing by Mr John Bogle) and aimed my focus on the NIFTY BEES ETF. There was no plan or strategy involved. I was just dumping whatever free cash I had available with me into the said ETF.
However, as time progressed I started noticing the fear that was being built and spread across all the platforms. Every single so-called expert was harping that the markets were about to collapse and that the post-Covid rally has seen its golden days and that it was the best time to book profits and prevent future losses.
I am not ashamed to admit that I got influenced by all of the above. It was an experience that taught me a lot. Do your own study and build a solid plan leaving enough room for contingencies and stick with it till the very end. At the same time; make sure your plan is still relevant and depending upon the facts and circumstances, update the same as and when required.
However, that marked the end of my career as an exclusive Index Investor and I moved on to the third stage of my investing journey.
THE CURRENT PLAN:-
Having learnt the above lesson, I decided to prepare a proper plan. I realised that active investing (now inclusive of trading) is an extremely time-consuming process. I work on an average of about 12/14 hours a day and I simply did not have any time to spare or to even look at my portfolio during the market working hours.
Hence I decided to delegate the work and to personally focus on sharpening my legal acumen and earning more money rather than hoping and trying for more returns on a limited sum.
From the month of July 2021, I decided to take the help of the mutual fund industry.
My plan was simple. I had already invested about Rs. 35,000/- in direct stocks. I decided to bump up this figure to Rs. 60,000/- which was to be used for active stock picking and trading (60k was the sum total of my earned income up to the month of June 2021). On average, I was earning about Rs. 5000/- per month.
Having allotted all of my previous earnings towards direct shares; all my future income was to go the Mutual Fund route till time immemorial. Therefore, regardless of the market conditions, I decided to invest Rs. 1000/- on every Friday that the market was open in Parag Parikh Flexi Cap Fund and till date stuck with the plan. That accounted for Rs. 4,000/- a month. The remaining Rs. 1,000/- was to be used in case the market dipped by a lot. To date, I have purchased about 450 units at an average price of Rs. 50 each.
This was also around the same time that my stipend saw an increase to Rs. 6,500/- per month. Therefore, I started to invest in yet another fund viz. the Navi Nifty 50 Index Fund (chosen for low expense ratio and the minimum lump sum investment amount of Rs. 500/-). In this fund also, I adopted the same strategy of buying units worth Rs. 500/- on every working Friday and the balance, if any, in case the market took a turn for the worse. To date, I have purchased about 410 units at an average price of Rs. 11 each.
MY CRYPTO JOURNEY:-
This was put to bed in a short and sweet manner. Invested Rs. 4,400/- in Crypto-Currency. A small and varied stake in select few Cryptos such as Bitcoin, Mana, DogeCoin, Shiba Inu, XRP and Ripple. Took out about Rs. 5,500/- from the entire episode (around Rs. 1,000/- in pure profit after deducting the fees/charges).
I won’t recommend going this route. Nothing against Crypto as an asset class. It is just that I am not comfortable with the extreme volatility. There came a time when I could literally experience the uncontrolled rush that this constant volatility was providing and I came to realise that if continued on this path, I would lose my control and instead of investing/trading, I would even start gambling. I am out!
CONCLUSION:-
Over the last year of my investment journey, I have realised that I lack patience. However, what I lack in patience, I more than make up for with discipline and determination.
I would request Mr Pattu to help me with one crucial aspect that I have purposely avoided in this Audit/Article. I have finally arrived at a plan (whether the same is ideal or not will depend on the future). However, I have failed to arrive at the purpose for the same. I cannot contend myself saying that I am undertaking this Investment Journey only for Wealth Creation. I do not have any specific goals in mind. If Mr Pattu can direct and counsel me regarding the same and how to continue on the path of investing in the absence of a goal-based strategy; I would be eternally grateful.
Signing off; Mr Hurtak.
Editor’s Note: We have recommended that Mr Hurtak tag his investments to “financial independence”. Several adjustments are necessary for his portfolio (lesser equity for instance!) but those can come in due course as he has started early.
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.
- First audit: How Suhas tracks his MF investments and reviews financial goals.
- Second audit: How Avadhoot Joshi evaluates his investment portfolio.
- Third audit: How a single mom is on track to financial freedom
- Fourth audit: How Gowtham started goal-based investing & took control of his money
- Fifth audit: Why my financial independence & early retirement plans were postponed by four years
- Sixth audit: How Abhisek funded his marriage & is on track to financial freedom.
- Seventh audit: How Rohit’s early struggles defined his investment journey
- Eighth audit: Why my investments are still on track despite job loss and lower-income
- Ninth audit: How a retirement planning calculation scared me to take action
- Tenth audit: I made several investment mistakes but have turned my life around.
- Eleventh audit: My net worth doubled in the last financial year thanks to patient investing!
- Twelveth audit: My financial journey: from novice to goal-based investor.
- Thirteenth audit: My journey: from a negative net worth to goal-based investing.
- Fourteenth audit: From Fixed Deposits to Goal-based investing in MFs.
- Fifteenth audit: My 10-year financial journey – mistakes made and lessons learnt.
- Sixteenth audit (part 1): How I achieved financial independence without mutual funds or stocks.
- Sixteenth audit (part 2): Lessons from my financial independence journey and future investment plans.
- Seventeenth audit: How I plan to achieve financial independence and move to my native place
- Eighteenth audit: I used the current bull run to reduce my mutual funds from 14 to 4!
- Nineteenth audit: How a conservative investor created his financial plan
- Twentieth audit: I plan to achieve financial independence by 46; this is my master plan
- Twenty-first audit: I have made many investment mistakes but am on course to financial independence by 45.
- Twenty-second audit: I felt worthless six years ago but have achieved financial stability today
- Twenty-third audit: My financial journey was directionless until age 40: this is how I made up for lost time
- Twenty-fourth audit: Why I increased equity MF investments by 275% and reduced PPF contributions.
- Twenty-fifth audit: How I track financial goals without worrying about returns
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.
🔥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.
- 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
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.
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!
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
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published 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
This 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
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)