Reader Story: My Mutual Fund Journey

Published: April 26, 2019 at 11:14 am

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This week on reader story, Shashank Bisen talks about his mutual fund investing journey. Reader story is a series where freefincal readers talk about how they have managed money over the years and how their approach and attitude has changed. You can access the full archive of all past posts. If you are interested in sharing your story, you can send me a mail.

Part1: Getting introduced to mutual funds: It all started in Feb 2016, when I turned 30. My wife and I talked about extending our family and having adequate funds to support it along with my retirement.  I always knew saving is necessary but how much should I save was a difficult question. Till now I use to save money in PPF and Tax saving Fixed Deposit. Then one day my head of Engineering Puneet Tanwar took a session in office telling is experience about the importance of saving and how mutual funds can give an edge in it.

Part2: Search for mutual funds: After the session, I spend a few days in trying to understand about Mutual funds and ways to invest in it. I was sure that I didn’t want to spend too much time in this as I was not sure if I had an appetite to take risk and time to manage and analyses which fund to choose.

During my exploration, I came across multiple sites like FundsIndia, Goalwise, Scripbox and few others. I tried registering to them and explore the options. The most prompt among them was Goalwise, I remember getting a call from them in few mins after registering for a call back from Swapnil (one of the founding members for Goalwise) introducing things like the different type of mutual funds like debt and equity funds. Along with that he also shared an excel sheet which asked my details of expenditure and helped me with calculating my retirement corpus, which was five crores 20 years down the line and made me realise that I am saving too less for my future.

In further interaction, he introduced me to their risk assessment calculator and automatic rebalancing logic used by them to balance risk, at first everything seems to be what I was looking for, so I thought of going ahead with them, and hence I started a SIP with them from April 2015.

Part3: Getting introduced to Asan Ideas for Wealth

After nearly two years one day again I was having lunch with my Puneet Tanwar (Head Of Engineering), and we started discussing mutual funds and our experience so far in it, and he asked me if Goalwise is proving me direct or regular mutual funds and I had no idea what he was talking about. Later I went to his desk, and he found out they were providing me Regular mutual funds, and he showed me a difference in the expense of regular and direct mutual funds.

Later in the evening, he sent me links for freefincal to read and then added me to Asan Ideas for Wealth Facebook group. Meanwhile, whenever I had time I use to go through the blogs, and it seems like I can connect more through it, the best part was whatever question came across my mind after reading a blog was answered in another blog and it seems like I found someone who has the same thought process as I have.

Though I was not much active on Facebook, I used to check AIFW Facebook group once a day and started found out that I am not alone who is confused about saving and, it gave confidence that though I am a little late in understating the financial terms but not too late either.

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Step4: Finally getting introduced to Direct Funds After being an active reader of both Freefincal and AIFW. I decided that the best way for me to plan my retirement in to save half of my monthly income and that too into direct funds. Hence from May onwards I started exploring few direct funds and invested in them for a few months through Kuvera after stopping all my active SIP’s through Goalwise.

Step5: Learning about index funds After a few months, I still had the same question before starting with Goalwise I always wanted things to be as simple as possible and didn’t want to run around researching which mutual fund is the best one and which among my portfolio is not performing well and needs to be removed.

The one day I came across Pattu sir’s bog on investing in index funds which gave me answers to my above questions.

And then from past 20 months the moment I receive my salary I invest half of in it the below funds and then invest the remaining after paying all my credit card bills (I live my entire month on credit cards, but I make sure I use them very wisely)

  • UTI NIFTY 50 (50%)
  • UTI NIFTY NEXT 50 (25%)
  • PPFAS (25%)
  • For Debt Part (as per my current assessment my EPF fulfil my needs)

And after a year of stopping my SIP from Goalwise, I have switched my funds (both debt and equity) to the funds mentioned above.

I maintain a balance of 4x of my monthly expenditure in my wife’s Kotak Mahindra bank account and use my annual bonus and stocks (after selling them) to plan out my next year family trips and rest as FD for an emergency.

I know I still need to go through a long journey and need to be prepared for the future, but I believe I am on the right track towards it.

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Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman 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.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com

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