In this edition of the reader story, we meet a 37-year-old who started late but has made up for it and is on course to achieve financial independence.
Opinions expressed in reader stories do not necessarily 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 it is necessary to convey the right meaning and 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. You can publish them anonymously if you wish.
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 also have a “mutual fund success stories” series. See, for example, how mutual funds helped me achieve financial independence. Now, over to the reader.
Firstly, heartfelt thanks to Pattu sir and the Freefincal team for creating a platform where investors like me can share our journeys. I am not sure if Pattu sir fully realises how deeply his wisdom and Freefincal’s content have influenced the financial lives of thousands of investors, including mine.
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Introduction:
I am 37 years old and live with my wife, our 7-year-old daughter, and my dependent parents. We both have reasonably well-paying jobs. Other than a simple 2-bedroom house that my parents built three decades ago in my hometown in a remote part of Tamil Nadu, we do not own any real estate. I currently live in a rented house in Bangalore and prefer this arrangement for the flexibility it offers if we ever need to move.
Income and early mistakes:
By luck and grace, I have always had a decent-paying job, but I did not save or invest much in my early years. My only meaningful contribution was to the mandatory EPF. Although I have always lived a frugal life, the surplus money I had was neither invested in myself nor earmarked for retirement. That remains a regret even today!
Start of the investment journey:
I began taking my long-term financial health seriously only towards the end of 2021. Except for the EPF balance, the corpus we have today has been built over roughly the last four years through disciplined investing. I am a DIY investor and have never missed a SIP. I regularly top up investments every few months, regardless of market sentiment or valuations. My fund choices are based primarily on the pedigree of the fund house and my risk profile, and I have never chased recent top performers.
So far, I have not redeemed from any fund, and my list of funds has remained almost unchanged because I believe every fund goes through cycles. Every six months, I review how much I am investing on an average, instead of focusing over fund-wise returns.
Currently, my equity allocation has delivered about 15% returns, but I am aware that this is due to a bull phase and that returns will likely moderate over time.
Goals and investments:
We have set ourselves fairly ambitious goals, and I know that achieving them will require continued discipline and some luck. Above all, we need to remain relevant in our careers so that cash flows stay stable over the coming years.
Goal 1: Child’s higher education
Target: ₹2 crores by 2035
Current corpus: 45 lakhs with a 60:40 equity:debt allocation
Monthly investment: 80,000
Instruments: A large-cap index fund, a flexi-cap fund, a mid-cap index fund, PPF (maxed every year to maintain asset allocation), and a short-term debt fund.
I try to keep equity around 60% at all times. I plan to move this corpus gradually to safer debt options/FDs at least a few years before 2035. We treat it as a non-negotiable 5–7 year and the most critical goal.
Goal 2: Retirement + potential home
Target: ₹10 crores by 2045, including provision for buying a home for ourselves to spend rest of our lives
Current corpus: 80 lakhs with 65:35 equity:debt allocation
Monthly investment: ₹1.1 lakh
Instruments: A large-cap index fund, a flexi-cap fund, a large-and-mid-cap fund, a mid-cap fund, a gilt fund, and EPF
As the corpus has grown, I recently added a large-and-mid-cap index fund for an additional layer of diversification and safety, even if it introduces some portfolio overlap.
Goal 3: Daughter’s marriage expenses
Separately, I invest ₹10,000 per month in a large-cap-biased flexi-cap fund towards my daughter’s future marriage expenses. With a horizon of 20+ years, I intend to keep this goal 100% in equity for now.
Gratitude and support:
I must acknowledge my wife’s contribution across all these goals. Her role is significant both financially and emotionally in this journey, and will continue to be so in the years ahead. She trusts my judgement, allows a substantial portion of our combined income to be directed towards investments, and helps keep our expenses under control. We do not explicitly cap spending, but we are simply not in the habit of spending unnecessarily.
For anyone wondering about the basics: yes, we have them in place. We maintain an emergency fund and have adequate life and health insurance, as well as term cover.
Hopes, challenges, and faith:
Not a day goes by without me praying to the Almighty to guide us in this journey, keep us grounded, and help us stay relevant in our jobs, since our salary is our only source of income. We do not take anything for granted and work hard, while trying to maintain a reasonable work–life balance. I hope to explore secondary income sources in the near future.
Like many urban families, we also deal with our share of health issues, and we continue to face them as best as we can.
Once again, sincere thanks to Pattu sir and the Freefincal team for this opportunity. I closely follow Freefincal and draw a lot of inspiration from the journeys shared by other readers. My best wishes to everyone reading this—may your goals and wishes come true, and may you find the strength and clarity to stay the course in your own financial journey.
Reader stories published earlier:
As regular readers may know, we publish a personal financial audit each December – this is the 2024 edition: Portfolio Audit 2024: The Annual Review of My Goal-Based Investments. 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!
- Update: How I achieved investing nirvana.
- Twelfth 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
- Twenty-sixth audit: I am 24 and started investing 1Y ago, but what am I investing for?
- Twenty-seventh audit: How we plan to achieve a retirement corpus 50 times our annual expenses.
- Twenty-eighth audit: I thought equity investing was a gamble, but now I aim to hold 60% equity for retirement
- Twenty-ninth audit: My journey: From 5 lakhs in debt to building a corpus worth six years in retirement
- Thirtieth audit: My investment journey: From random purchases to a goal-based portfolio
- Thirty-first audit: My investment journey: from product-driven to process-driven
- Thirty-second audit: How a young couple is trying to balance travelling and investing
- Thirty-third audit: My journey: From Rs. 30 bank balance to financial independence
- Thirty-fourth audit: Our journey: From scratch to a net worth of 18 times annual expenses.
- Thirty-fifth audit: From a net worth of Rs. 6000 to auto-pilot goal-based investing
- Thirty-sixth audit: How I retired from corporate bondage at 46, two years ago!
- Thirty-seventh audit: How I learnt to keep it simple and build a net worth 19 times my annual expenses
- Thirty-eighth audit: How Abhineeth plans to achieve financial independence and build a house.
- Thirty-ninth audit: How Sahil plans to achieve financial independence by efficient tracking
- Fortieth audit: My Journey to a Ten Crore Portfolio
- Forty-first audit: Burdened with debt for several years, I am now aggressively investing in equity
- Forty-second audit: From Engineer to Librarian after Financial Independence and Early Retirement (FIRE)
- Forty-third audit: I lost six months’ income in F&O and ditched it for systematic investing
- Forty-fourth audit: My retirement plan to handle the harsh realities of the IT industry
- Forty-fifth audit: My investment journey: mistakes, 10 years of MF investing and recovery
- Forty-sixth audit: My MF portfolio is worth six crores despite multiple mistakes
- Forty-seventh audit: Saving, Investing, and Running Marathons: My 25-year Journey to Financial Independence
- Forty-eighth audit: Never Too Late to Start: How I Became Financially Savvy at 40
- Forty-ninth audit: My Investment Journey to a net worth 29 times my annual expenses
- Fiftieth audit: How I audit my portfolio without tracking returns
- Fifty-first audit: Financial Lessons Learned During and After a PhD
- Fifty-second audit: Investment & Financial journey of a 23 year old
- Fifty-third audit: The system I use to draw income and spend after retirement securely
- Fifty-fourth audit: From Start-Up Employee to Millionaire: A Success Story of Resilience and Smart Investing
- Fifty-fifth audit: 25-Year-Old Software Engineer’s Investment Journey: From Stocks to Mutual Funds and Beyond
- Fifty-sixth audit: Crossing the Million Mark: Our Journey to the First Crore
- Fifty-seventh audit: Navigating Market Volatility: How an IT Professional Transformed His Investment Approach for Retirement
- Fifty-eighth audit: How Sahil achieved a 10X retirement corpus by efficient portfolio tracking
- Fifty-ninth audit: How I achieved financial freedom by 45 without onsite assignments or ESOPs
- Sixtieth audit: Building Wealth on a Government Salary: Lessons Learned
- Sixty-first audit: Minimalism, Index Funds, and Staying Calm: My Investing Journey at 28
- Sixty-second audit: Building Wealth and Breaking Barriers: How Swati Took Control of Her Financial Future
- Sixty-third audit: My financial journey: How I missed the Compounding Bus!
- Sixty-fourth audit: My MF investment journey: From thematic funds to a 3-fund portfolio
- Sixty-fifth audit: From Debt to ₹1 Crore Liquid Net Worth: My Journey of Financial Awareness.
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. You can also publish them anonymously.
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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 13 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, AUM-independent investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,500 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!! 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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