Observations after five years of managing money
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 CAGRProfit growth: 3/5/10 years (consistent): 15-20ROCE and ROE 3/5/10 years (consistent): above 20And I also consider long term charts and track records.And low-debt companies, of courseMy 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. 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! 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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. 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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. 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