Minimalism, Index Funds, and Staying Calm: My Investing Journey at 28

Published on / By M. Pattabiraman Twitter: @pattufreefincal

Published: December 18, 2024 at 6:00 am

Back when I was still in college, I stumbled onto Freefincal. I’d open one article, and the next thing I knew, I’d have 20 tabs open—each leading me deeper into this endless maze of personal finance. It was a strange obsession for someone who had zero money to their name.

I read, I learned, and ironically, I advised. School friends starting their engineering jobs came to me for guidance, and I helped them set up their SIPs while my portfolio sat empty. (Mine was a 5-year course in a different field, while most school friends had 4-year engineering degrees) It was a weird feeling—like being a coach who had never played the game.

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 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. 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 also have a “mutual fund success stories” series. See, for example, how mutual funds helped me achieve financial independence. Now, over to the reader.

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Once I graduated and started earning, things changed. My first step was investing in Niftybees. Simple, clean, and manageable. I had always been drawn to index funds—the low-cost structure, the “don’t chase the hot hand” philosophy. It seemed obvious to me: picking funds based on last year’s performance was a fool’s game.

I made some mistakes, too. I delayed getting health insurance longer than I should have (fixed that now) and skipped term insurance entirely—no dependents(unmarried), no urgency. I’m currently 28 and might get term insurance shortly.

Building the Portfolio

From the beginning, I wanted to avoid the common traps: the FOMO, the “hot” mutual funds, and the clutter of too many investments. Fund houses like Axis and Quant were the talk of the town at different points, only to fade into the background when their performance slipped. I wasn’t interested in that race.

So, I started with a simple, minimalist portfolio:

Niftybees – 40%

Motilal Oswal S&P 500 – 40%

Savings/FD/Liquid Funds – 20%

Then came Zerodha’s Nifty Largemidcap 250. I spent a lot of time thinking it through. I didn’t want to be the guy juggling 15 funds with a few thousand scattered in each. But this fund made sense—it struck a balance between the Nifty 100 and Midcap 150, with a reset baked into it.

I didn’t sell my Niftybees, but I redirected my new SIPs:

Zerodha Nifty Largemidcap 250 – 40%

Motilal Oswal S&P 500 – 40%

Fixed Income – 20%

I aim to maintain a 50-50 split between Indian and U.S. markets, knowing it gives me a broad, balanced exposure. At age 28, my current corpus is 7x of my annual expenses, and I’m quite proud of it.

I strongly believe in not doing something for the sake of doing it. For example, having a 10% allocation to gold. That’s not going to do anything for my portfolio except adding one more fund. In my mind either something should have 25-30% allocation or it should stay out. 5-10% allocation is just a waste of time and attention span. Maybe my views will change as I grow older or when my portfolio becomes significantly big but for now I want to keep it as simple and minimalist as possible.

I also don’t invest in direct equity because of two reasons. First, I don’t believe I can consistently beat the index returns. Secondly, even if I could, it would take a lot of my time and attention, and I wouldn’t be comfortable doing it on more than 10-15% of my overall portfolio. So again, even if I somehow beat the index by 5-8% on a satellite portfolio, which is 10% of my overall portfolio, it won’t make much of a difference. It won’t affect my wealth or financial status significantly. So, I avoid it altogether.

The Calm Before the (Inevitable) Storm

So far, the markets have been kind. I was around during the Corona crash, but my portfolio was tiny—there wasn’t much to lose. I haven’t yet faced a real gut-check moment, like watching 40-60% of my investments evaporate. I think I’m prepared to stay calm, stick to the process, to trust what I’ve built.

But honestly? We’ll see. When the storm hits, as it eventually will, I hope to keep my nerve.

Reader stories published earlier:

As regular readers may know, we publish a personal financial audit each December – this is the 2023 edition: Portfolio Audit 2023: The Annual Review of My Goal-Based Investments. 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.