I lost six months’ income in F&O and ditched it for systematic investing

Published: July 15, 2023 at 6:00 am

In this edition of the reader story, we meet “RK”, who discusses how he lost six months’ income in F&O over a span of three months and then traded it for systematic investing.

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.

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.

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! 🔥

My introduction: I am RK(Friends and Colleagues address me like this). I am 26 years old, Happily Single😊. I have completed my B.E and M.Tech in different Top Tier colleges in Bengaluru, started my professional journey in a European-based Semiconductor Industry and continuing in the same.

My monthly expenses are hardly 5% of my income as I am staying with my parents(Own House), and my elder brother pays Electricity Bills, Internet Bills and other house maintenance charges. I am more interested in Personal Finance and will love to read related blogs. Gained more attraction during Covid Lockdown – Special Thanks to Spotify Podcasts such as ‘The Investor’s Podcast’, ‘Paisa Vaisa with Anupam Gupta’, ‘Money Control Podcast’, YouTube videos from Subramoney and Pattu Sir and witty comments along with financial advice to other people queries from Ashal Sir and Sayan Sircar of Asan Ideas for Wealth in Facebook, enhanced my interest in finance.

My liabilities are ZERO which is the biggest boon for me so far. No Credit Card Debt, No Emergency, No EMIs etc., As soon as I received my first salary, I checked for the ‘AIFW Checklist’ and ‘Freefincal Checklist’, and this is the current scenario.

a) Have Term Insurance of 3.25 crore(2.5 crores from Max Life and 75 lakhs from Kotak). Planning to double this once I get married.

b) Have Health Insurance of 18 lakhs(8 lakhs from Organization and 10 lakhs from Bajaj Allianz). Planning to double this once I get married.

c) Have Personal Accident Insurance of 20 lakhs(From Bajaj Allianz)

d) As monthly expenses are low, I haven’t set up a separate emergency fund. However, as a thumb rule, the savings account will always have 10-12 months’ expenses.

My Portfolio: Since the beginning, I have been heavily inclined to invest, which made me want to invest in anything and everything(Thank God I Didn’t explore Crypto). As usual in the investing journey, I started trading in F&O without knowing it(First mistake). This was during April 2021. I started purchasing random puts and calls from the Twitter “Gurus” recommendation every other day.

Some days were profitable, but most days were in loss. Brokerage costs were like salt in a wound. As part of a quarterly portfolio check, I was shocked when I saw the loss I had incurred. Because I had spent my ~6 months’ income in those three months. I stopped F&O immediately and started investing in direct stocks and mutual funds.

As all advisors say, Goal-Based Investing is better; I have marked my goals. However, I could not link the funds for the specific goals(Second mistake) I will be taking the help of Freefincal’s Fee-Based advisors in the next couple of months. Not explored PPF, Real Estate(Third Mistake???).

Currently, my assets are as below:

a) Equity : 3 Stocks would be purchased as SIP every 15 days. Rest ~10 stocks will be purchased when there is more than a 5% dip in the respective share price.

b) Mutual Funds : 4 Funds(1 Index Fund, 1 Technology Fund, 1 Focused Fund, 1 ELSS) would be purchased as SIP every month. A Balanced Advantage Fund would be purchased when its NAV is increasing every 5% or in every quarter, whichever comes first.

c) SGB: I have purchased 1 issue with 50 units.

d) EPF and VPF: Company gives EPF. I have asked the Company to deduct 10% Basic as part of VPF.

e) ESPP: I have opted for the Company’s Employee Stock Purchase Plan. Every month roughly 25% Basic would be deducted from payroll, and at the end of every six months, the stock would be purchased in our name with a 15% discount. This is US Stock.

f) Physical Gold: I have purchased 100 gms Gold Bar(Mom pressure!!!)

g) Fixed Deposits: Have one FD with 24 months’ monthly expenses. Also, have a daily minimum savings pot converted as FD in IndMoney. I started recently with no idea of how this is helpful(Fourth Mistake).

h) NPS: Started in Jan this year to save taxes(Fifth Mistake). However, later found that the company had Employer contributions, which can help save taxes(No??). The company deducts 10% of Basic from the payroll every month.

i) US Stocks: 1 Monthly Dividend Stock and 1 Quarterly Dividend Stock is purchased as SIP monthly from IndMoney. All dividends get reinvested. I stopped a couple of months because of some RBI regulation and 20% TCS havoc. Restarted it again this month.

Every year as the hike would be good and also bonus would be rewarded, the Direct Stocks SIP and the Mutual Funds SIP would be increased. Proportionately, VPF, ESPP and NPS will be increased yearly with no intervention of mine. However, I should take care of rebalancing my portfolio regularly.

Sometimes, a thought comes to my mind that I am over-investing(Sixth Mistake??). Still, when I look at the portfolio immediately after the thought, my goals come to mind, which makes me remember the following quote by Robert Kiyosaki -> “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”

Thanks for reading till the end of my financial journey. See you all in the next audit – July 2024!!! Hopefully, a couple of mistakes mentioned in this audit would be rectified. Happy Investing!!!

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.

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.
🔥Now Watch Let's Get Rich With Pattu தமிழில் (in Tamil)! 🔥
  • 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)