Reader Journey: “My financial goals are big, but here is why I am not worried!”

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“Reader story” is a series where we feature the money management journey of freefincal readers. This week Rakesh Gurbani explains how he got his life in order and is ready to take on his financial goals with confidence. You can access the full archive of all past posts. If you are interested in sharing your story, you can send me a mail.  Now over to Rakesh. Also, do not forget to check out the latest video (link below) on creating an “ideal” retirement plan!

What can you learn from this post? Most folks come to Freefincal to learn something and so do I. The purpose of this post is to tell you about my financial journey. The benefit you could derive is there is somebody who has the same stresses in life as you and some learning that may help you deal with stress and anxiety caused by the goals.

Who am I? My name is Rakesh Gurbani. I am 36 Years old, married and have a 7-year-old daughter. I live in Hyderabad & have been in the city for most of my life. I am just a science graduate with an MBA through distance education.

My journey I started working in 2003 with relatively lower pay but was focussed on learning. I did not take any leaves in the first 18 months of my working in night shifts(not even a single sick leave.) I wanted to learn so I picked up excel skills, how to communicate confidently via email, phone and face to face conversations, create and deliver effective presentations. I worked on small side projects & got promoted. In the meantime, I finished my MBA through distance education. I couldn’t save much in this period since I had to contribute to household expenses and took a personal loan to finance my MBA. The only savings I had was the mandatory PF deductions, one LIC Jeevan Anand policy[ yes, I bought it as well 🙁 ] and NSCs every financial year to save taxes.

I changed jobs in 2007, the skills I learnt helped me get a better job with better pay. I got married in 2008. I again had to take personal loans to finance my wedding expenses. I worked hard saved most of what I made and paid off the personal loans. In 2010, my world changed when my father suddenly passed away due to cardiac arrest. He was hospitalised for 19 days but could not be saved. Thankfully my employer’s group health insurance policy covered the hospitalisation bill. This was the first time I realized the importance of health insurance, I would have been in deep trouble if it wasn’t for the cashless hospitalization. However, there were expenses over and above that had to be met. My father only had traditional LIC policies, so whatever amount came from them, I started an annuity for my mother.

Post this episode, my salary was sufficient to meet our needs and we had to cut down on a lot of extra expenses like movies, eating out etc. I started tracking my household expenses diligently and made a note of every rupee we spent. At the end of every financial year, I entered all the expenses in a spreadsheet and compared it with the previous year. I still managed to save a bit a create an emergency fund. It was April 2011, when I got promoted, I decided to keep my expenses lower and save whatever surplus in my take-home salary in a mutual fund and took a term policy. My daughter was born in 2011, I paid the hospital bills using my own money and claimed it from the employer’s group policy. This event increased my expenses significantly. 

In 2011, I decided not to invest in NSCs any more due to taxation, returns and the hassle of going to the post office to redeem them. Instead, I started investing in PPF and increased investments in mutual funds. By 2012, I assumed that I can retire early with 1Cr savings. I thought if I can pay off my home loan early, save 1 crore, manage to have lower expenses then I can quit active working and retire early [how stupid of me.]

I came across personal financial blogs in 2015. Through one blog, I went to other blogs and used to spend almost 1 hour everyday just reading. I switched from Regular Plan to Direct Plan, started saving more with every promotion and salary hike. I have read books like you can be rich too: with goal based investing and gamechanger. I have gifted them to co-workers. I also discarded the stupid idea of early retirement thanks to the blog posts. I learnt frugality, taking care of my health and understood the importance of buying adequate life, health insurance & insuring my other assets. Through gamechanger, I found tools to find deals online on travel. As a family, we did our first overseas holiday this year, I saved a lot on tickets and hotel stay thanks to the tips in gamechanger.

Pattu’s Note:  Pranav Surya (co-author of Gamechanger) has written a deep-dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the ultimate travel guide pdf for ₹199 (instant download)

Although my goal is still big and far away, I don’t spend sleepless nights worrying about my financial future, big credit for this goes to people who selflessly write blog posts maintain Facebooks groups, put out Youtube videos. I would give a big credit of my personal finance knowledge and success to these selfless individuals. I would close this post by stating the following, for people who are early in their career and are overwhelmed by the amount of the goal:

  • Whatever your income may be, first save 40% and then spend the rest.
  • Strive to be debt free, it is always better to buy things that you can afford today. Always follow the thumb rule, necessities come first then comforts and last are luxuries.
  • Always have a ready cash pool of at least one year of expenses. This is your umbrella for any rainy day.
  • Diversify your savings, don’t invest heavily in one instrument. BTW, insurance is not savings it is a necessity and you need not be an expert to invest in equities.
  • Have children only if you can afford them. Also, your child’s education is not an expense. Quality education has huge long term dividends, it is the best inheritance you can give your children.

Thank you for reading this post, my best wishes on your financial journey.

Learn continuously, tweak your plans based on experience and be relentless in your pursuit.  Ohh! By the way, enjoy the journey as well.

Thank you, Rakesh for sharing your story.

Read all the stories!

The ideal retirement plan with income flooring

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About the Author M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the author and owner of freefincal.com.  He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management.  He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis. He conducts free money management sessions for corporates  and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
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You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingMy first book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.  It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantGamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a young earner

The ultimate guide to travel by Pranav Surya

Travel-Training-Kit-Cover This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step.  Get the pdf for ₹199 (instant download)

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