My journey: from negative net worth to goal-based investing

Published: August 7, 2021 at 8:16 am

Last Updated on August 7, 2021 at 8:16 am

In this edition of the reader audit, we consider the financial journey of a 34-year-old male (who prefers anonymity) working in the private sector. This is how he moved from negative net worth to goal-based investing. 

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 13th 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 could be published anonymously if you so desire.

Despite a steady monthly salary, I had a negative net worth when I married 6 years back. It was not that I spent a lot on buying unnecessary stuff. Most of my salary was repaying my education loan,  loans I had taken to support my brother’s business, buying a bike for commute, personal loans to fund part of wedding expenses and honeymoon, renovating our old house. While these loans might not look like sound financial decisions now, they were necessary and had to be done during that time. 

Throughout my growing days, some debt was a constant part of our family finances. Hence, I did not worry about them as long as the EMIs were within my repaying capacity and just ensured I did not borrow more than I could repay. I was practically living paycheck to paycheck and did not find it a problem until my wife had a tough discussion with me on planning our finances better. Even though she didn’t know much about financial planning, this pushed me to figure out things myself.

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The first thing I did was borrow interest-free money from friends/family to close out my loans. Whatever EMI I was paying for these loans, I paid the same amount to friends/family, but zero interest reduced the tenure. 

I opened a PPF account as I was told it was EEE and started putting in a minimal amount every month.

I also dabbled with mutual funds and started investing tiny amounts monthly without any goals in place. I kept increasing the investments here as and when I had more money without any direction.

  • I surrendered my LIC policy and used the cash in the above 3.
  • Increased my contribution to VPF to 5% of salary.

Once I repaid all my debt, I invested in a plot of land. The initial plan was to construct and let it out, but after checking the construction cost, maintenance, and estimated occupancy, I dropped the construction plan for now. I’m just retaining the plot for capital appreciation.

Goal-based Investing

After some directionless investing for a couple of years, I decided to get help from a financial planning agency. Once I got a basic structure from them, I realigned my assets to the goals, but there was not much information on rebalancing and tracking these goals in the future. I also started learning about personal finance through freefincal and Subra Sir’s articles and videos. The quarterly reviews with the planning agency dint add a lot of value, and armed with the new learnings, I decided to take things on my own.

The current state of affairs


  • Emergency Fund – I have put aside 10 months’ worth of expense + EMI in liquid funds.
  • Health Insurance – Apart from the insurance provided by my employer, I’ve taken a family floater totalling 20L coverage. I’ll be adding a super top-up plan also to this shortly.
  • Life Insurance – I have a couple of term insurance for a total sum of 2.5cr.


I target 2x monthly expenses at the current value to last for 30 years after 2040, assuming an inflation rate of 6%. Since this monthly target is significantly more than my monthly expense now, I believe I have enough margin of safety built-in here. Find below my current asset allocation – 

Retirement Portfolio
EquityAxis BlueChip Fund70%
PP Long Term Equity
UTI Nifty Next 50
Listed Esops + Direct Equity


  • 25% of my monthly salary goes as SIPs into the 3 equity mutual funds and SSY and NPS. Apart from the SIPs, if I have additional money after expenses are covered, I invest them in this portfolio at the same allocation.
  • I’m dabbling with Direct equity to build a dividend portfolio. I’ve shortlisted (without a lot of analysis) around 15 stocks which are mostly large-cap and buy on dips if I have additional money.
  • Listed Esops are also significant. But I regularly move money out of this and put that in equity mutual fund/direct equity.
  • EPF is sizeable because of accumulation, but the current contribution is limited to a minimum of Rs 1800.
  • I know NPS is not ideal, but I still have it. 
  • SSY is in this portfolio since I don’t think it’ll be helpful for children’s education as it will become liquid only when the daughter is 21 years old.
  • I don’t have a liquid debt component. So for rebalancing when equities go down, I’m just going to put additional or unassigned money into equities.
  • I will have to step up my SIPs by 10% each year to hit my target in 2040.

Children Education + Wedding

I have two daughters and plan to save for their UG, PG, and wedding. I didn’t want to create 6 different portfolios and hence going with a unified portfolio approach. Find below the timeline for the various milestones –



Since I have a single portfolio for all these goals, I’ll need to ensure that at least 5 years before a milestone, I’ll need the corresponding value in liquid assets. While I have forecasted these on excel, and it looks doable, I’m still unsure how they will pan out with market fluctuations.

But I’m ok with that! I’ll also be prioritizing UG expenditure over PG/Wedding. So if education inflation goes above my expectation or the child chooses a course/institution above my estimated UG budget, I’ll still spend but will have to make the child fund part of her PG/Wedding.

My current asset allocation

Children Portfolio
EquityMirae Large Cap70%
PP Long Term Equity
HDFC Mid Cap
DebtHDFC Corp Bond30%


  • 20% of my current salary goes as SIPs into the above assets. 
  • I have a few other funds (which were started a few years back with lock-in) tagged to this goal but have been actively moving them to these funds whenever possible to reduce clutter.
  • I will have to step up my SIPs by 7% each year till 2040 post which there will be no further additional investment.

Unassigned Assets

Land – I bought a plot a couple of years back and paying 20% of my salary as EMI. When I sell it, I’ll assign it to either of the above goals depending on the need. That’ll help me reduce step up or achieve the target corpus ahead of time.

Vested but unlisted Esops – I have vested but unlisted Esops of around 10 months salary, and another 12 months worth will get vested in the coming year. Since these are unlisted and illiquid, I’m not sure how much of these I’ll realize as cash. So as and when this becomes liquid, I’ll tag it to any of the above goals.

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.

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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.
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