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.

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