This year, so many have become first-time crorepatis or well-established crorepatis and have come forward to share their journey on freefincal in the reader story section. This is another such account.
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It is so wonderful to read these stories. All credit to their focus and discipline.
Yes, the bull market played a part, but let us not take anything away from their determined effort to enhance and secure their financial lives. If you wish to share your story of disciplined investing, you can send it to freefincal AT gmail dot com. You don’t need to be a crorepati or a lakhpati to send your journey. Process >>> Result.
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 and 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 also have a “mutual fund success stories” series. See, for example, how mutual funds helped me achieve financial independence. Now, over to the reader.
I have been an avid reader of Freefincal blogs, and most of the time, I draw inspiration from other people’s financial journeys. Today, I decided to share my story. Although this may not be the greatest story, it may relate to someone and help them get up and take charge of their financial future.
I am 42 years old, married happily with two kids. I started my career in 2004, immediately after post-graduation in Computer Science. I hail from Trivandrum, Kerala. Like most young people, my early years were quite unremarkable financially. My first job took me out of home for a modest ₹ 11,000 per month. Despite my low expenses, I struggled to save. The new irregular clothes, trips, and small contributions to my family took it all by the end of the month.
In 2006, my father asked me to look for opportunities outside the country because he worked in the Middle East. So I shifted to Dubai and luckily got a small job, managing several quick promotions that helped improve my salary.
I had a deeply affecting conversation with a colleague. Even though he belonged to a financially strong family, his first two years’ salary was all repaid to his parents for support. Inspired, I decided to do the same. Many friends advised against it, yet I kept doing it and handed almost the whole salary to my father regularly.
But to my wonder, he showed me after one year that he had been saving the money in a separate account. He even bought property worth ₹8 lakhs in my name and contributed some of his savings. A great lesson learned about savings and disciplined finances leading to wealth creation. My father then asked me to start two recurring deposits, reinforcing the savings habit.
I married in 2007, and my expenses increased as my wife joined me in Dubai. However, this did not stop me from continuing to strive in my career and getting certifications, followed by a transition into the IT security field. My salary was on the rise with every promotion, and I refrained from increasing my living standards with increased pay and instead saved more and more. By 2010, Using my savings and a small loan, I managed to buy a property worth ₹40 lakhs to create a possible future home in India.
In 2014, I took a loan and began constructing a house. However, my father advised me to invest the money elsewhere since we weren’t planning to return soon. Following his advice, I purchased another property for ₹50 lakhs. I planned to sell and use one of these properties to build the house.
My journey wasn’t without its mistakes. In 2007, I invested ₹75,000 in a Bajaj Allianz ULIP. Due to market uncertainties, I abandoned it after just one year (the 2008 Market crash). Five years later, I received ₹60,000, marking my first lesson in investment loss. This experience made the stock market feel like a forbidden territory. Later, I realised that I could have seen a decent profit if I had continued the investment for five years as planned.
The turning point came after demonetisation. Demonetisation marked the inflection point in my investment journey when real estate investments started losing their sheen. Unsatisfied with these options, I moved on to mutual fund investing. I started an SIP of ₹ 5,000 monthly in AB Frontline Equity Fund in April 2017. My bank manager helped me to start it. I started reading up on mutual funds through resources such as Freefincal and the ‘Asan Ideas for Wealth’ group on Facebook.
As time passed, I exited all my regular mutual funds and moved to direct funds. Gradually, I increased the amount I was investing through SIP, and today, I invest close to ₹50,000 every month in four funds: Nifty 50 Index, Small Cap, Mid Cap, and Flexi Cap—any extra money which comes my way, through bonus or other incomes. I keep on investing in additional units of the same funds.
Besides mutual funds, due to peer influences, I also used to try my luck with equity intraday trading, swing trading, MCX, and F&O, through which I lost around ₹ 8 lakhs. I made some equity investments in NRE mode in 2017. However, heavy transaction charges for the NRE PIS account ( brokerage 0.75% and 50Rs per day transaction for the PIS Account) kept me away, and I eventually focused only on mutual funds. But I kept all the holdings in my NRE account as they are.
In December 2019, I sat down to analyze my equity and MF investments, most of which had been done based on recommendations from friends and magazines. Seeing the potential, I decided to allocate some time for learning. I started taking investment and trading courses for the 2020 New Year resolution. The lockdown period gave me ample time to dive deep into this learning curve.
I developed a disciplined approach toward long-term investing and swing trading with strict exit and profit-booking strategies. This helped me grow my portfolio beyond my expectations. Some books that have significantly influenced my journey include “Trading in the Zone” and “The Disciplined Trader” by Mark Douglas, as well as “One Up On Wall Street” by Peter Lynch.
By 2021, I bought a flat in my hometown worth ₹90 lakhs using my savings. This purchase gave me significant relief and the freedom to focus more on my investments.
I learned Python coding through Udemy courses, which helped me start algo trading. I utilized AWS’s free tier subscriptions to run my algorithms. Starting with a small capital, I gradually began earning profits. I converted all quarterly profits into long-term equity investments and pledged those holdings to increase my trading capital.
Even though I actively trade and invest, I still believe my mutual fund portfolio will work wonders for my retirement corpus. My investments have grown to over ₹1.6 crore, consisting of direct equities and mutual funds.
Besides my core portfolio, I have created two mutual funds for my children-one for my daughter’s education and marriage and the other for my son’s needs. My portfolio has also given me tremendous peace of mind as far as retirement is concerned. I want to achieve FIRE, or financial independence and retire early and hence plan to work only seven more years till I am 50 years old.
Looking back, I’ve learned that building a decent portfolio is achievable with patience and consistency. It only takes 2-3 hours of studying the market each week to unleash its power for you and help build a sound financial future.
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.
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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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.
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