In this edition of the reader story, a reader who has been managing money for five years shares his observations and lessons. In our experience, when young earners come forward and share their experiences, it inspires others (even older investors) to do better, sometimes more than stories by accomplished investors.
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 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 have also started a new “mutual fund success stories” series. This is the first edition: How mutual funds helped me reach financial independence. Now, over to the reader.
I have been writing all expenses in a diary from my day 1 of personal finance – My Mother and other people in the family are very supportive – a collective effort. I write about even cyclical expenses (house repairs, painting, AC, phones, etc.), which greatly help corpus planning. However, one good thing I observed with this practice is that inflation is less than 5 per cent. I also track the corpus required based on this data.
Returns: Passionate direct stock investing has put me in the driver’s seat – Zerodha/Hdfc Sec/SHCIL (I have 3 portfolios)XIRR is above 20. My Excel sheet corpus tracker shows close to 25 cagr. I always research a lot (really passionate). Have strong criteria to filter stocks.
- Sales growth 3/5/10 years (consistent): 15 CAGR
- Profit growth: 3/5/10 years (consistent): 15-20
- ROCE and ROE 3/5/10 years (consistent): above 20
- And I also consider long term charts and track records.
- And low-debt companies, of course
My life started with the COVID crash. My father passed away in Feb 2020 and portfolio crashed nearly 50 percent (it did NOT affect me because of my spiritual nature :))From then on I started building my direct stocks portfolio. I invested heavily during the 2021-2023 sideways market.
My equity portfolio is only 10 per cent of the LIQUID networth, but it’s already a good chunk. I aim to NOT touch equity investments for life, wanting it to grow to that level after 20-25 years – where the dividends would be enough to cover all daily expenses. I have made a plan for that, too – it’s possible (if life/destiny allows me 😀😀)
Supplemental income (apart from corpus) helps a lot. Especially handling inflation. I am blessed to have a great and supportive family (currently myself, my Mother, Maternal uncle and grandfather, aged 91).
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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