My 10-year financial journey – mistakes made and lessons learnt

Published: August 19, 2021 at 7:45 am

Last Updated on August 19, 2021 at 7:45 am

In this edition of the reader audit, we meet a 34-year-old with a family of six. He describes his mistakes over the last ten years and lessons learned from them in a candid essay. 

We feel proud and blessed that readers come forward to generously share details about their financial life to help and inspire fellow DIY investors. This is the 15th 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.

I would like to share some of the mistakes that I have made during my financial journey over the last ten years and how reading through freefincal and AIFW have helped me overcome those mistakes plan better for the future

I would want you to visualise my journey through the last ten years and hence would divide them into small blocks of years with the details below:

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! 🔥

2010 to 2012:  I will take 2010 as the starting point where I started my journey as a graduate hire in a software service provider. Coming from a very humble lower-middle-class background, getting a job of around 20,000 per month at that time was a big win for the family.

The job was in Bangalore, and my family stayed in Kolkata, so I could effectively support them with only 70% of my income. I was the sole earner in the family (my younger brother was studying, my father was a heart patient unable to travel for work, and my mother was a homemaker).

So, to have some regular monthly income was a great feeling within the family. But this was a short period of joy for us. My father was soon diagnosed with kidney failure and cancer in 2011. The bad news was that I did not have parental health insurance from my employer or outside (lack of knowledge). This resulted in family loans of a considerable amount. I lost my father in 2012 with my mother and younger brother as dependents (pursuing CA then). 

2013 to 2015:  I committed another mistake in this period by booking a flat in Kolkata. My family loans were still not repaid, and I went ahead with the process of booking a home to save some taxes. The EMI was 60% of my take home. Since my brother was getting some salary from his initial internship days, we did not feel any impact on the monthly expenses. But there were no substantial savings either. We could pay the EMI and the monthly expenses. A minimal amount was being kept aside for closing the family debt.

Not another mistake, I would say, but I took another loan around April 2014 for my post-graduation. It was an MBA from a prestigious private college, and hence the 1-year course fee was around 16 lacs. Since my brother had completed his internship and was working as a qualified CA, he could run the monthly expenses for that year along with the home loan EMI. He could also send some pocket money to me every month for that year. The EMI for education loan would start only after the course completion.

By April 2015, my portfolio has a liability of approximate 45 lacs on me (education, home loan and family debt combined). I got a campus placement of around 8.5 LPA, while my brother earned around the same amount annually. 

2015 – 2017:  As our salaries increased, our first goal was to clear the personal debt taken from family members. With two of us living in different cities and a considerable amount going in EMI (home and education loan), we could only save a few bucks every month. But these small savings in RDs/FDs helped close all the personal debt by the end of 2017. 

By the end of March 2017, the family income was around 25 LPA (me, my brother and my wife’s salary combined). We had cleared all the personal debt, but our home and education loans were still there with a monthly EMI of around 58,000. We started our first monthly SIP with minimal knowledge for 5000.

2018 – 2020: By the middle of 2018, we could also close the education loan through our RDs and FDs. My younger brother got married this year, and we spent some good money on this event. While we all enjoyed it, we should not have taken personal loans from family members for this one. The expenses should have been planned.

Another major event that happened this year and turned us upside down was the loss of our elder sister. We lost our sister while she was 35. She had two daughters of 12 and 13 years to look after. We thought of taking up the responsibility for the two girls and brought them along with us. We felt that it was in the children’s best interest to come with us rather than stay with my brother-in-law. He agreed to that too. 

So, end of 2018, we had the home loan and some personal loans (from family members) pending. Our family size increased. We were seven people in total (Our mother, me and my wife, my brother and his wife, and the two girls) staying in two different cities. A monthly SIP for 18,000 was in place for the family’s future needs.

By the end of 2019, we had repaid all the personal debt. The only thing left was a home loan (an EMI of around 23000 per month). At this point, my brother and I decided to separate the expenses and plan for our futures and families separately. 

My family now had five members (my mother, me and my wife, and my nieces), and we had a bank balance of around two lacs at that point. No monthly investments were made then. My brother has always supported me with 50% of the education fees for the nieces. I was staying in rent in a different city while my brother stayed in the flat we owned. Each of us paid 50 % of the EMI.

This was the time when I got serious about personal finance. I started exploring the internet and found freefincal and AIFW on Facebook. The pinned post helped me to plan for the health and term insurance to begin with. Slowly I accumulated the emergency fund too. I then put my goals in place – education for kids, marriage for kids, retirement, owning a home to be the major ones.

Later in 2020, my brother also planned to move to a different city for his job. We sold our home and closed the home loan.  At the end of 2020, I had no loans to worry for. I had sufficient health and term insurance for myself and my family. I had six months of an emergency fund with me. I wrote my goals, and there were instruments mapped to each of them to help me achieve them. 

2021 and today:  I was blessed with a baby daughter a few months back and have updated my goal sheet accordingly.  My entire net worth is nine times my annual expense. My retirement portfolio is 4.5 times my annual expense. 

My goals for child education (my nieces) are being achieved through recurring deposits while their marriage is mapped to Nifty 50 Index Funds. My retirement is mapped to EPF (40%), NPS (70%), PPF (20%) and an active mutual fund (10%).

The dream of having a home is mapped to some large cap direct equity stocks and Nifty 50 Index funds. The growth of my emergency fund is mapped to RDs along with all yearly payments to health/term insurance. The education of my youngest girl is mapped to a balanced fund both for her education and marriage. 

Below is a snapshot of my expenses and savings from my monthly take home.

  • I am setting aside 40% of my take-home in SIPs
  •  15% of my take-home in RDs
  • 3% of my take-home in PPF
  • 2% of my take-home in NPS – Self
  • My monthly expenses are 30% of my take home
  • I am left with 10% of my take-home for buying direct equity / extra unknown expenses every month.

Any increment or bonus would be distributed across these goals to reduce the timeline.

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!
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)