How Dr Aakash Navigates Financial Investments

In this edition of the reader story, Dr Aakash shares his investment journey while studying medicine.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 proper 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. Hi, I’m Aakash, an MBBS graduate from Tamil Nadu. This might be a long post, but I want to share my experience, at least with myself. I’m currently 24 years old. My family is very conservative concerning savings. My mother works as a postmaster, so our savings are mostly limited to Postal Life Insurance schemes, RD, and gold. My parents’ savings rate of more than 60% amazed me. Partly, my brother and I studied in our matriculation schools with scholarships from 6th standard to 12th standard (only 4k book fees for the top 10 students in each standard), and we cleared the NEET exam without any coaching centre and got into government medical colleges (1.2 lakhs fees for four years apart from hostel fees), which greatly added to our savings. My brother is currently in his 3rd year of study.I have been an avid book reader since my school days. “Rich Dad Poor Dad” and “The Psychology of Money” were the primary reasons for my interest in the capital market. During the COVID-19 pandemic, I had much free time, so I watched videos by CA Rachna Ranade, Zerodha Varsity lessons, and more. After gathering information from various sources, I decided that mutual funds would be my ideal investment option. Although I am interested in stocks, I cannot afford to dedicate time to them due to my ongoing studies, which will continue until at least 2031. I invested my Internship stipend in mutual funds, but it was pretty challenging to convince my parents. This was due to the common belief among our relatives and friends that share markets only resulted in losses; however, I eventually managed to convince them.After securing their support, I focused on diversifying my investment portfolio. I opted for a 100% equity allocation and distributed my investment as follows:UTI Nifty 50 Index: 25%Nippon Midcap 150 Index: 15%Kotak Nasdaq 100 Index: 15%Parag Parikh Flexicap: 10%Axis Growth: 10%Nippon Small Cap: 15%3 IT sector funds: 10% (SBI, ICICI, TATA)My thought process is that this is meaningful diversification. Once, I came across freefincal posts and lost interest in this blog. I found the author too pessimistic. I don’t like the website.  I started investing in May 2022; my last investment was in March 2023. The time horizon significant is here. I made my investments during a sideways market. The bull run started right after my last investment and has continued until now. So, any mistakes I made have not shown any manifestations thus far.By August 2023, my profits had exceeded 20%, which I didn’t expect. I’m concerned about the rapid increase, as anything that can rise that fast can fall just as quickly. During my free time, while preparing for my postgraduate entrance examinations, I revisited FREEFINCAL. This time, I felt I found a Gem in Finfluencers. I slowly started to learn about asset allocation, notably different asset allocations for varying goals with different time horizons. I started rebalancing in August 2023. I don’t know how to make sectoral calls. So, I redeemed IT sector funds at a 20% profit. Future investments in the NASDAQ 100 may not be possible. I sold when NASDAQ was around 16000 (bought at 11000). Now, seeing the current levels of 20000, I laugh at myself.Redeeming Midcap and Smallcap funds was a bit tougher for me. Both funds were at more than 50% profit. I redeemed them around the middle of JAN 2024, a month before the SEBI stress test. The reason is that holding those funds was like riding at 100kmph for a 50km distance. I am more comfortable riding at 60-70kmph for the same 50km distance (Large cap and Flexi cap funds). I believe it’s better to start early and be comfortable with that rather than ride faster. By the end of JAN 2024, my equity-to-debt allocation was 45:55. Currently, it stands at 52:48.Current Allocation UTI NIFTY INDEX 22.5%PARAG PARIKH FLEXICAP 18.3%HDFC FLEXICAP 10.9%PPFAS ARBITRAGE 18.6%PPFAS LIQUID FUND 29.5%. I am not giving XIRR too much importance. In a bull market like the current one, XIRR will be high; it can even be negative in a bear market. Boasting about notional XIRR is a useless thing. Currently, I am investing in 2 active funds.  I don’t think I will continue with PPFAS Flexicap for the next 30 years. I will continue till as far as I am comfortable or till I have a conviction. I will switch to a simple NIFTY50 index fund for the equity component when uncomfortable.I am about to start my postgraduate studies at AIIMS. At present, I do not have specific financial goals as of now. That’s a little bit worrying for me to start Goal-based investing. As I don’t have clear goals, I don’t have a clear corpus.  My current monthly expenses are low even if I start investing for retirement. Therefore, I plan to split my monthly stipend into three parts: 25% for my expenses  35% for building an emergency fund and meeting short-term goals. 40% for unidentified long-term goals, in a 60:40 ratio in existing funds. Once I have specific financial goals, I will adjust my investment strategy accordingly, as I am currently focusing on my career growth. My parent’s investment in my PPF account is also included. Ending with my favourite quote from the anime Attack on Titan,“I don’t know which option you should choose. I could never advise you on that… No matter what kind of wisdom dictates you the option you pick, no one will be able to tell if it’s right or wrong until you arrive to some sort of outcome from your choice.” The only thing we’re allowed to do is believe that we won’t regret the choice we made.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. Do share this article with your friends using the buttons below. 🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users! Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 1,000 investors and advisors use this! New Tool! => Track your mutual funds and stock investments with this Google Sheet! We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.Follow Freefincal on Google NewsSubscribe to the freefincal Youtube Channel.Follow freefincal on WhatsApp Podcast: Let’s Get RICH With PATTU! Every single Indian CAN grow their wealth! Listen to the Let’s Get Rich with Pattu Podcast You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.Let’s Get RICH With PATTU podcast on YouTube. 🔥Now Watch Let’s Get Rich With Pattu தமிழில் (in Tamil)! 🔥Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincalHave a question? Subscribe to our newsletter using the form below.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. Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!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 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. Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 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 the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! 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We 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, as well as teaching him several key ideas of decision-making and money management, is the narrative. What readers say!Feedback from a young reader after reading Chinchu gets a Superpower!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! 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