Hi, this is Abhineeth. I am a 30-year-old working as an Engineer in the state government service. I joined this position in 2016, and this is my 7th year. This is how I aim to achieve financial independence and buy/construct a decent house for my family.
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. Now over to Abhineeth.
My initial investment journey. After joining the job in the tax planning phase, I decided to invest in PPF as, at that time, I was unaware of the ELSS schemes. As I was already in the National pension scheme to cover the balance amount of 1.5Lakh under the 80c section, I used the PPF account, and due to a friendly neighbour-uncle (LIC agent), I got an endowment policy of Rs.5 Lakh instead of a term insurance policy which I regret to this day.
I later learned that investing & insurance are two different things that should not be combined. I even started a 5-year Postal Recurring deposit of 5000 per month, assuming it was eligible for a tax deduction. After finding out that it was not eligible, I stuck to it, and it matured in 2021 with an interest income of around 7.6%.
In the initial years, even after reaching the 1.5L limit in the 80c section, I continued to invest my savings in PPF. I maxed it out after learning the compounding benefit we can achieve after 8-10 years of investing in PPF.
My father had taken a home loan, and the EMI of the loan used to be around 20k. After joining the job, I used to pay the EMI, but I found it to be a great burden to pay that EMI (it was around 43% of my take-home pay at that time); hence we prepaid the loan using part of my savings & few retirement benefit amount received by my father (he is also a retired engineer from the government sector).
In the initial days, I invested my savings without any goal. As I was a default member in the NPS scheme, I found out about the NPS Tier-2 scheme and started investing in it, as I was not aware of asset allocation, I invested in the moderate risk scheme with equity of around 50% and I played around the asset allocation even kept the equity allocation to 100% at one point of time.
2nd phase of my investment journey: During the covid lockdown, I thought of utilizing the abundant time available to learn about the stock market. Subsequently, I learned about mutual funds (Debt & Equity) and the importance of emergency funds, Term insurance, Medical insurance & goal-based investment strategy recommended by Pattu sir; I was fascinated by the level of detailed analysis provided by him in the field of personal finance.
Firstly I tried to build an emergency fund of about six months of monthly expenses and later increased it to 6 months of take-home pay. I use liquid funds & FD for this purpose. I took term insurance from a private insurer for about 15 times my annual income.
I have withdrawn my savings from my NPS tier 2 account and invested in mutual funds with 75:25 (Equity debt ratio) with Nifty 50 & Nifty Next 50 index funds for the equity component & Short term debt fund for the debt component.
I regularly invest 32% of my take-home pay in these funds in addition to my mandatory NPS contributions for retirement planning. My retirement portfolio is about three times my annual expenses, with 42% in equity. I intend to achieve 50% equity within 2-3 years and maintain it up to my 50th year, then gradually decrease it to 20% by my retirement age.
To achieve my 2nd goal of house construction, I am investing in a Sensex index fund & using my already present PPF account as a debt part. I have 20% of my target amount invested in these funds, and I intend to achieve the target by 2032, by which my PPF account matures. I have 41:58 (Equity: Debt ratio) for my house portfolio, and I intend to achieve 50:50 and maintain it for up to 5 years and then gradually reduce the equity part to 0 by 2032.
I thank pattu sir for allowing me to share my investment journey. He requests young earners like me to share their investing journey, and I hope this article might help a few others who are just starting their investing journey.
Reader stories published earlier:
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 and robo-advisory tool! 🔥
Use our Robo-advisory Excel Tool for a start-to-finish financial plan! ⇐ More than 1000 investors and advisors use this!
New Tool! => Track your mutual funds and stocks investments with this Google Sheet!
- Follow us on Google News.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Join our YouTube Community and explore more than 1000 videos!
- Have a question? Subscribe to our newsletter with this form.
- 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.
Get free money management solutions delivered to your mailbox! Subscribe to get posts via email!
Explore the site! Search among our 2000+ articles for information and insight!
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 nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or 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 3000 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 what 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 you 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!
Most investor problems can be traced to a lack of informed decision-making. We have all 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 and teach him several key ideas of decision making and money management is the narrative. What readers say!
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 for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or you buy the new 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 from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only 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
Published 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
This 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
This is an in-depth dive analysis 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)
