Portfolio Update : Jan-2021

Happy new year!!! Hope this year brings more joy to everyone. This is my portfolio update as of Jan-2021, its been a year since i started this blog so thanks for all the views/comments. In case you have not checked the previous post, please do checkout as i got an opportunity to write on freefincal. Most of the update will be similar.

Emergency Fund: i’am still accumulating for a big ticket purchase which hopefully i will purchase by this quarter and as said before i want to maintain atleast a year’s worth of salary as part of my emergency fund, as you might notice the XIRR has come down, this is mostly because the liquid funds now gives a return almost same as that of any savings account i.e 3-4%, anyway there is no point in looking at returns for an emergency fund. I just do it because i have been doing it for a while now. Overall XIRR of liquid + arbitrage funds as of today is around 5.56%. Please note that the below graph is only for liquid + arbitrage funds, the article on freefincal also considers my savings account and bank deposits as well.

Retirement: Nothing major here, just the regular investments, i did put in a lumpsum in November since our big ticket purchase was postponed, Since i will be having some more cashflow in Jan end i put in the lumpsum which i had kept for the big ticket purchase. Overall Equity MF XIRR as on today is 14.14%, yes the current bull run helped. Remember in April it was negative. The allocation and the corpus is higher than the expected one for the first time, which i’am obviously happy about, but there is no plans to re-balance it straight away.

Child’s Education: Here too the allocation and corpus is above what i expected at this stage, but there is no hurry to do the rebalance yet, i’am ok to wait till April where i may do the rebalance if required, lets see. Overall Equity MF XIRR as on today is 15.07%

See you in my next update for April-2021

My article on freefincal

If you are into personal finance then its hard to not come across an article by Pattu sir who runs freefincal, having been an old reader of freefincal and learned so much from him, it was great when i got an opportunity to write an article on his blog.

At the start of December he put up a FB post asking if anyone would be interested in writing an article for audit/review of their finances, I dropped an email if he would be interested if I wrote one, he graciously agreed, as someone who has never written anything for anyone, it was a nice opportunity.

So within a week i had the article ready and sent it to him, I did proof read it with a few people before sending it to him, so was happy when he accepted the article.

The idea of the article was to give a year over year update, as you know on my blog i just put an update for that particular quarter, so it was interesting to see how we did year over year.

Please checkout the article here https://freefincal.com/how-suhas-tracks-his-mf-investments-and-reviews-financial-goals/

Portfolio Update : Oct-2020

Another volatile 3 months in the market. I have been investing as usual… but… have started thinking few things over the past few months…one..should I start direct equity investments?.. two… should I keep my RSUs for some more time instead of selling almost immediately? I’m also planning on a major big ticket purchase by the end of the year, let me see how it goes. More on this in later blog posts.

So here is my portfolio update as of Oct-2020

E Emergency Fund: Funds are majorly in liquid funds and a bit in arbitrage fund. As you can see that XIRR has gone down quite a bit, this is due the low interest rates, I’am not too worried because this is one portfolio where i wont look at returns too much, my aim to get this to around 20%-25% of my overall net-worth. Now that i’am thinking about the big ticket purchase, need to see if I need to withdraw from this or not. XIRR is 5.76%

R Retirement: The equity allocation looks inline with my expectations, but then you also have to remember that the EPF interest for this year is yet to be received, so once that comes allocation will change. The equity corpus as well as the total corpus for the goal is still below what i expect it to be, but that is okay because my goal for now is to make sure that my other goal of kids education is on par. Equity XIRR is 9.00%

C Child’s Education: As you can see this goal is well on its expected lines and i’am happy about it, i increased my investment towards this goal to make sure that the total corpus is always above the expected lines. Equity XIRR is 10.41%

How do you track your portfolio?

Last month i shared this blog address on facebook group AIFW, i also shared the same on the reddit FIRE group and i got many questions on how do you generate those graphs, how do you track your portfolio etc.. so i thought let me put up a detailed post on this.

I started creating excel sheets to track the progress of my goals. Before making any such calculations we need to answer few questions and make certain assumptions

  • When do you need the money?
  • What is the current cost of the goal?
  • What is the inflation you expect for this goal?
  • What is the final corpus for the goal?
  • What are the asset classes you will invest for those goal?
  • What is the return expectations of the goal?
  • How will you re-balance across asset classes?
  • How much will you increase the investment each year?

Answers could be as follows for say goal for kids

  • When do you need the money? – <When the kid turns 17, for marriage could be 25-26>
  • What is the current cost of the goal? – <Do some research and get the current cost>
  • What is the inflation you expect for this goal? – <For education around 10% is what i assumed, but you could do some research and come to a number>
  • What is the current cost of the goal? – <Use future value calculator like this one and come to a number>
  • What are the asset classes you will invest for the goal? -<Equity and Debt, you could use gold for marriage if you need>
  • What is the return expectations of this goal? – <I assumed 10% for equity and 6% for debt>
  • How will you re-balance across asset classes? -< In my assumptions i do a monthly reduction of equity starting from 85%, but practically you can re-balance once a year>
  • How much will you increase the investment each year? – < this is crucial i assumed around 6-7% every year, i,e around 0.5% per month approximately>

Once you have the above answered you can fill up the below columns

Once you fill this up and play around with the required monthly amount to get the final corpus, you will know what is your desired corpus value at the end of a particular month. Now all you need to do is every month tabulate the corpus you have accumulated and compare with where you should be. What i plot in my blog post every quarter(jan, apr, jul) is this progress, this gives me a sense if i’am on track or not and make any course corrections if needed.

Pattu sir youtube channel has some great videos on how to do it yourself, you could follow those as well. You could start with what he has shown below and then modify them according to your needs and comfort.

Apart from this I track the returns of my funds on a day a day basis via a python script, the script can be found in the github page here https://github.com/srbharadwaj/portfolio_tracker

For you to use this, you need to have the transactions in a csv format, this would require some effort, but hey you do need to put in some effort to get some value out of the tool right 🙂 i’am trying to integrate the transactions from Kuvera to this tool, that will take some time though. Meanwhile do give the tool a try and let me know.

Portfolio Update : Jul-2020

Its been another crazy 3 months in the market, the sharp fall and the rise so far has been very surprising.

So here is my portfolio update as of Jul-2020

EEmergency Fund: Majority of the emergency funds are in liquid funds now. XIRR is 6.12%

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RRetirement: I increased the investments slightly over the past few months and its bounced back after the fall in March/April. XIRR has turned positive after being negative the last few months. Equity XIRR is 5.87%

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CChild’s Education: For the debt part i’am using PPF, since this was the start of a new financial year, i invested the maximum amount in PPF. I’am expecting some lumpsum in the next few months and planning to push that into equity systematically. Equity XIRR is 9.29%

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Portfolio Update : Apr-2020

O.M.G, what an extraordinary 3 months it has been, its as if suddenly the world has turned upside down!!!

Three months back who would have thought we would be in this situation right now, i dont think i need to reiterate what all has been going around in the world, obviously at this stage health is far more important than what has been going on in the financial world.

But still since this is my finance blog, i would like to share what has been going on with my finances over the last 3 months, so here is my portfolio update as of today

Emergency Fund: Moved some of my funds which were in debt fund space to liquid funds, given the situation i thought it would be better to have some cash around and some in liquid fund, obviously the bond defaults hurt a bit, but thats ok, i have a slightly bigger chunk as my emergency fund, to give you a perspective, my emergency fund is approximately 10 months of my take home salary, though its decent, i would like to keep adding to it. XIRR is 6.51%

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Retirement: Well what to say other than the fact that it has taken a big hit, this is my worst draw-down period and in a way i’am happy that it has come early in my investing cycle not at a later part, this crash once again proves that a right allocation with a goal in my mind will give you enough comfort through these troubling times, i wish i had some extra cash, but i did get my bonus this quarter so for the month of Feb/Mar i increased my investment by about 14-15%, over the next 1-2 years i would like to keep increasing my investments. Equity XIRR is -4.75% , yes its negative 😦

Child’s Education: Just like retirement this too has taken a hit, i did increase the allocation towards equity a bit more, because for me even this goal is slightly more important than the retirement goal, so even though i’am lagging in both the goals i would like to fix this goal first and give it more priority than retirement. Equity XIRR is 3.18%

Portfolio update : Jan-2020

This is my portfolio update as of Jan-2020, as i stated in my previous post, i would like to share my portfolio progress every quarter to see where i’am currently compared to where i need to be, as said before sharing this gives me a sense of accountability and acts like a dairy of sorts with respect to my portfolio, so lets dive in

Emergency Fund: As of today i have close to an year’s worth of take home pay. It’s not entirely an emergency fund, its kind of pseudo emergency fund, what i mean is that this fund is kept aside for both emergency as well as any cash/expense related which are not necessarily emergency I contribute a small amount to this regularly every month, but i’am planning to put a lump-sum instead of doing it every month, let me see if its possible. XIRR is around 8.32% This is the portfolio growth overtime, as you can see i have made a lot of withdrawals and additions along the way, one of the goals for the coming years is to not withdraw much 🙂 undefined This is the XIRR progressundefined

Retirement: I have setup an asset allocation strategy for my retirement, but that works well in an excel spreadsheet, but in reality its a lot different, but the goal is to kind of match what the excel says. What is shown below is the equity allocation that i desire to have at a given point of time and the actual equity allocation that i currently have, as you can see my desired allocation is 65.2%, but my current allocation is 55.7% , ideally this would mean i have to pull some amount from debt and put it in equity, but because my debt is fully in PF I cannot easily remove from PF and put it to equity mutual funds, so all i can do is try and increase my investments towards the equity portion, so far its been going ok.undefined What you see below is the ‘desired equity corpus’ vs the ‘actual equity corpus’, as well as the ‘desired total corpus’ vs the ‘actual total corpus’, obviously all the numbers are normalized numbers and not the actual numbers, the equity corpus is around 16% less than the desired equity corpus, but the overall total corpus is only around 2% less than the desired total corpus, Equity XIRR is 9.62%undefinedundefined

Child’s Education: Just like retirement for this as well i have tried to create an asset allocation strategy, for this goal too, i invest every month, desired equity allocation is 75%, but currently i have 71% , yup i need to increase here as wellundefinedThe equity corpus has tapered off post Sep-18, that is mostly due to the overall market fall but also the fact that some of the funds that i have are laggards, i also made few mistakes along the way to try and combine short term goal like school fees along with this, which i should have not done in the first place, the shortfall in required corpus is close to 30%, I will try to fix this in the Feb-Apr quarter and increase my investment as well. This is high priority right now. Equity XIRR is 12.12%undefinedundefined

So lots to do in 2020, hopefully will clean up my portfolio quickly and it will simply go into auto-pilot mode from 2021 onwards. See you in my next update for April-2020

Why this website/blog?

I have been serious about saving money only from 2012 onwards, every month a percentage of amount used to go for saving, but the problem was there was no sense of purpose for those savings/investment.
It’s only after going through many blog posts from subra sir/pattu sir and various other blog posts, videos, podcasts and understanding the numbers behind them that I realized that it’s very important to assign a goal to every rupee that you save, once you have identified the goals the next step is to have a proper allocation to each of those goals, this helps in minimising the risks that are involved , so I started this exercise from 2017 onwards, there was a lot of juggling done around that time on my investments to make it goal oriented, this was also the time where I moved many regular funds to direct funds.
Because of that exercise, today I feel slightly more confident about my current finances and the sense of direction that it is pointed towards. It is in no way perfect, but at least i feel its better than what it was before.
Now it’s only human nature that you get distracted and lose focus along the way, that’s the reason to start this blog ..to give myself a sense of accountability .. so going forward I would like to put up my progress on a quarterly basis and give a brief about what I plan to do or what not to do.

Broadly speaking I have 3 goals that I track – emergency, retirement, kids education.

Emergency – currently it has approximately an year worth of salary, it’s spread around debt/liquid/arbitrage funds, I do contribute into it every month but it’s a bit random, I do pull out from the corpus occasionally for re-balancing and stuff like that but it’s immediately topped up, goal is to increase this corpus year over year

Kids education – Investing in this regularly, equity contains an aggressive hybrid fund and fixed income or debt portion contains PPF

Retirement – Investing in this regularly, equity contains a basket of funds and fixed income or debt portion contains EPF

I have a bunch of excel sheets where I keep track of the investments, it’s transactions and progress, also I have a python script which calculates the XIRR at both individual fund level as well as at a portfolio level.

Next month I will update these graphs and talk a bit more about it.

What does the blog name mean?

For some the blog name may seems puzzling, what exactly does that mean?

I come from the southern part of India from a beautiful state Karnataka which speaks the beautiful language Kannada and it is my mother tongue.

So in my mother tongue, money/cash is called with many terms such as

  • ‘ haNa ‘ ‘ ಹಣ ‘
  • ‘ duDDu ‘ ‘ ದುಡ್ಡು ‘
  • ‘ kaasu ‘ ‘ ಕಾಸು ‘
  • ‘ paise ‘ ‘ ಪೈಸೆ ‘
  • ‘ rokka ‘ ‘ ರೊಕ್ಕ’
  • ‘ dhana ‘ ‘ ಧನ ‘
  • ‘ kaanchaaNa ‘ ‘ ಕಾಂಚಾಣ

In conversational usage we generally say

Avaru yeno duddu kaasina vichara maathanadutidare (ಅವರು ಏನು ದುಡ್ಡು ಕಾಸಿನ ವಿಚಾರ ಮಾತನಾಡುತ್ತಿದ್ದಾರೆ)

which roughly translates to

“They are discussing some money matters”.

Basically the blog name means money matters , so lets discuss some duddu-kaasu 🙂

Welcome

Hello..Namaskara…

I needed a place to put my thoughts and progress on my money related goals, so having a blog kind of gives some accountability to me

Let me see how disciplined I’m in getting the things done, if you find this journey interesting then why don’t you follow along.

Let’s get the ball rolling…