In this edition of the reader story, a reader who prefers anonymity explains why, despite making most mistakes in the book, his mutual fund portfolio is worth about six crores today.
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 to 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 have also started a new “mutual fund success stories” series. This is the first edition: How mutual funds helped me reach financial independence.
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This should be the shortest reader story to feature here. The fault is mine. Pattu sir asked me to expand the article, but I did not know how, or maybe I was reluctant. I usually write emails in telegraphic language using bullets. I want to follow the same here. I apologise to the readers for this.
- I started investing in mutual funds in 2004. My first fund was the Franklin India Prima Fund. My second fund was HDFC Top 200.
- Over the next 10 years, my mutual fund portfolio started growing in size because I used to ask my distributor stupid questions like, “Tell me the best performer”, “Which fund offers the highest dividend?”, “When is the next dividend?” (so that I could buy that fund!).
- My distributor warned me that I did not need that many funds, but I did not listen. I pestered him until he gave in.
- After 2013, with the introduction of direct plans, I had the freedom to buy as I pleased and purchased every NFO I thought was interesting.
- I chased after mutual fund star ratings.
- As Pattu Sir would say, I suffered from shiny object syndrome.
- I finally stopped in 2016 after a chance introduction to freefincal. I had 87 equity mutual funds! You name it, I had it. Dividend option, growth option, regular plan, direct plan, sector funds, Value Funds, ELSS, Mid cap, small cap, everything.
- I also had 15-16 debt mutual funds! Over these years, at least five funds would have faced credit events thanks to my greed for higher returns.
- It took me seven years to trim down my portfolio. I now hold 8 equity funds and four debt funds. Since my portfolio has also grown large over the years (a little over six crores), I cannot reduce the number further as that would be putting too much money in one fund.
- I recently aligned all my investments to my financial goals thanks to the freefincal robo advisor tool. It was a great relief when the tool told me I had achieved financial independence and could afford to retire (I am 52 now).
I feel so ashamed when I look back but grateful to have some reduced clutter and lucky to have built decent wealth.
I have worked only in India—no “onsite opportunities” in my field. My salary is neither too low nor too high (IMO!). And thanks to my parents, I have always been frugal. So, I always managed to invest a decent amount each month. Of course, I invested it all in too many funds, but thankfully, not in the wrong asset class.
I purchased mutual funds left and right, like buying snacks before a party in a supermarket. Yet I somehow managed to build wealth because:
- I never stopped investing. I never pulled out. Although I was stupid in my purchases, I had the sense to stay in the market at all times. That is the sure-shot way to benefit from bull runs, in my opinion.
- I was always investing more and more. Each year, I tried to increase my investment by as much as possible. I have ensured this increase was at least 10% over these years. I think this is key to building a big corpus.
My net worth has nothing to do with skill or intelligence. It was a mix of luck, discipline and stupidity. Thankfully, the first two factors offset the last. I thank Pattu Sir for creating the wonderful resources at freefincal and allowing me to share my journey.
Reader stories published earlier:
As regular readers may know, we publish a personal financial audit each December – this is the 2022 edition: Portfolio Audit 2022: 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.
- Twelveth 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
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
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 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.
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