I used the current bull run to reduce my mutual funds from 14 to 4!

Published: September 19, 2021 at 7:59 am

Last Updated on September 19, 2021 at 7:59 am

In this edition of the reader audit, we meet Shrawan, a computer science engineer working in IT since Sep 2012. He explains how he adopted a goal-based investing approach and utilised the current bull run for pruning his mutual fund portfolio.

I am grateful to readers for sharing intimate details about their financial lives for the benefit of readers. This is the 18th such reader audit. Previous editions are linked at the bottom of this article. If you would like to contribute to the DIY community in this manner, send your audits to freefincal AT Gmail. They will be published anonymously (such as this one) if you so desire. Please note: We welcome such articles from young earners who have just started their investing journey (see, for example, audits by Suhas and Avadhoot linked below). Now over to Shrawan.

Initially, I started my investment journey just with LIC, FD, RD etc.… Introduced to direct equity by one of my colleagues and started trading in Sep 2013. Those days I used to buy random stocks just based on news/broker recommendations. The 2013-14 bull run helped me to make good profits. Parallelly, I started learning about basic fundamental & technical analysis like moving average, RSI, etc.

I was unaware of asset allocation and almost 100% allocated to direct equity except for EPF & LIC. In 2016, I was added to the FB group( ‘Asan Ideas for Wealth’) and saw a couple of MF related posts and comments then slowly moved my direct equity to MF but again made a lot of mistakes like investing in multiple ELSS funds, all MF categories(LC, MC, SC). After the 2018-19 budget day, the mid/small cap stocks started falling, and by Dec 2018, I lost all my gains and was in some losses. In between, I traded in Option as well and lost few thousand.


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! 🔥

Then learned about risk management, asset allocation, goal-based investing with the help of Pattu Sir’s videos and our FB group. I watched almost all his videos and tried to read all the posts/comments in the same FB group. Still a lot many things to learn. Below are the details of how I am managing my finance now.

Basics:

1. Term Insurance: Done a few years back, but I have to increase the sum insured, will do it soon.

2. Health Insurance: Apart from Corporate insurance of 3L taken ICICI Family floater of 50L for Myself, Wife and 1.5yr old Son.

3. Emergency Fund: Current Emergency fund is equal to 12 months expenses, and it is parked as 20% in a Saving account and 80% in FD.

4. Goals: Currently Focusing on two Goals

I. Retirement: I am 32 yrs old with two dependents (Wife & Son). We are targeting Financial independence at the age of 45, in the worst case 50, post that I have some other plan. Initially messed up my investment with a lot of MF & wasn’t following Goal-Based investing, utilised this bull run to clean up my portfolio and reduced the MF count from 14 to 4 now.

  • Equity 50%
    • UTI Nifty 50 10%
    • UTI Nifty Next 50 4%
    • Direct Equity 20%
    • Mirae Asset HEF 8%
    • ABSL ELSS 8%
  • Debt 40%
    • EPF & VPF 23%
    • NPS 9%
    • Mirae Money Market Fund 8%
  • SGB 10%

Plan for the next couple of years: Will move the entire ELSS to index fund once the lock-in period is over and keep investing in other funds with the same allocation 50:40:10 (E:D: G).

2nd Goal (Kid’s Higher Education): My son is 1.5 yr old, investing as per below. Again, LIC is my early age mistake, but I continue with a 4%/annum return expectation.

  • Equity (Parag Parikh Flexi Cap) 50%
  • Debt 50%
    • LIC 12%
    • PPF 38%

Future Plans:

1. Will add one liquid/Money Market fund for proper rebalancing.

2. PPF will mature in 2029 and LIC in 2033 post that I will move this money to some liquid instrument.

Couple of points which I am following for both the goals:

1. Portfolio rebalancing: Till now, I have not done proper rebalancing. In the future, I will rebalance in case equity allocation moves to 45% or 55%.

2. Will slowly reduce equity allocation as the goal comes closer.

Assets: Apart from the assets mentioned above, I will be inheriting some Commercial, Residential & Agricultural land.

Liabilities: No liabilities to date. I have not taken any loans.

Earning: Doing ok for the primary source of income. For Secondary sources of income, even after putting in a lot of effort & time, there is not much progress. Hopefully, in the next 4-5 years, I should make some money out of it.

Saving: My saving rate (savings/income) is around 60%, targeting 75% by 2025.

Similar audits by other readers

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!
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 with 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!

Explore the site! Search among our 2000+ articles for information and insight!

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, 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 what 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 you 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 have all 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 and teach 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!
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 & it's 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 analysis 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)