How we built a 1 Million USD portfolio through disciplined savings and investments

In this edition of the reader story, we meet a reader who has built a 1 Million USD portfolio through disciplined savings and investments.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.This year, so many have become first-time crorepatis or well-established crorepatis and have come forward to share their journey on freefincal. See for example: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. Now, over to the reader.Sep 2024: We are a family of 4: parents and two children. We both work in IT and are in our mid to late 40s. As life happened, I was late covering BASICS, goal-based planning, asset allocation & disciplined investments. Life ahead looks more sorted than a few years ago, with good progress against our goals: retirement, children’s college education and a house to reside in.I started working in IT since I was 21. Besides my savings, I took an education loan to pay for my higher education/MBA  & cleared the loan and was at 0 (net worth)when I was 28. For a reasonable period, till our mid to late 30s- we lived in the United States and saved more than we could if we were only in India. We moved back to India about a decade ago to better manage life and work. Every year, we have been saving between 15% to 65% of our net salary (including EPF/NPS contributions of self and employer); the savings rate was lower when we were in the US or when we had only one income or we when we purchased car/spend on children college education. Along the way- I invested in a LIC endowment policy, some mutual funds, and some stocks – in some random fashion- I sold those within a few months to years of investing as I moved back and forth between India, the US and India. I surrendered my LIC policy after paying 12 premiums. YearSavings rate201519%201645%201742%201815%201939%202052%202159%202265%202345%20241%By 37, our net worth was INR 1 Cr+, largely in FDs. I wasn’t clear on the way forward then; I was not sure if using FDs alone was right. In 2015-16, in a matter of few months, I invested in ~40+ schemes from SBI, ICICI, HDFC, Mirae, Canara Robeco, Franklin Templeton, and Edelweiss: picked up blue chip, large cap, mid cap, small, value, discovery, emerging (all flavours of ice cream) 5* funds from different AMCs, about 90% of net worth was in equity MFs.  I had difficulty putting up with notional losses of 15+ lakhs by Feb 2016 as markets tanked between Aug 2015 and Feb 2016, and I realized I needed some serious and good help. I paid a few financial advisors for ~2-hour sessions but was not convinced as one suggested I buy a house and another to invest through his platform (regular funds).Around that time, I joined Asan Ideas for Wealth in 2015 through one of my colleagues; I started following some threads and discussions- distinctly recall a few notions on ‘debt /constant maturity’ getting busted, read many, many freefincal articles: learnt about the sequence of returns & impact, importance of managing risk(than chasing returns not in our control) & the need to have money available in liquid and safe instruments as we near goal. Then I approached Ashal sir and, based on his input, partnered with a fee-only planner, I have been on this journey for the last 7+ years.  Current portfolio:Equity56%Debt38%Gold and silver5%Equity 56%= Direct equity India: 15%, Mutual funds:  Nifty 50, Nifty Bees, Nifty next, NPS-E: 22%, Direct equity US: 19%Gold is SGB, Slive is ETFDebt comprises of EPF(14%), Gratuity: 2%, FDs/constant maturity gilt/RBI bonds/tax-free bonds: 10%, arbitrage and liquid funds: 12%Life cover: 3 Cr for myself, 2 Cr for my wife; health cover: 15L  base policy &  1Cr top up life and health covers are besides what our employers offer.I bought two plots of land and invested in a house with my parents, who live in that house. I don’t count real estate in my net worth. Financial assets are largely equally split between my and my wife’s name Will is in placeNo loans; cars are cash down, both cars are ~10+ years; plan to purchase house cash down when we need one to own ( we prioritized children’s education goals over house and cars)It’s a unified portfolio of ~$1M against our four goals: retirement, house, two children’s college education – by some measure, we achieved our goals I can attest to many wise sayings- start early, savings rate is key, keep it simple (savings, index fund, FD/EPF/PPF), you need wealth to create wealth, wealth is created from income not from returns, health is wealth. However, I realized it’s difficult to apply others’ wisdom for various reasons. Not everyone may be able to apply all sound principles, but the more one puts these sayings into action, the higher are the chances of achieving results- and vice versa of health and wealth is true too.Then we get new ideas and redefine goals, say retirement in the US- “plans are nothing but planning is everything (Dwight D. Eisenhower)”, and the rat race continues…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! 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 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!Both the boy and girl-version covers of “Chinchu Gets a superpower”. Most investor problems can be traced to a lack of informed decision-making. 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! How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only! Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the 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 with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will 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 publicationsYou 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! 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