My Portfolio Review 2021: A 39 Minutes Meeting With A CFP That Boosted My Confidence To Be A DIY Investor

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My Portfolio Review 2021

In this article, I will talk about my 2nd portfolio review of 2021 and how a meeting with a CFA (Certified Financial Advisor) boosted my confidence to be a DIY (Do It Yourself) Investor.

Previously, I discussed an accident that happened in 2016 and changed my life. I also talked about how I started my investment journey from scratch and began using various investment products such as RD, FD, NSC, and various Mutual Funds. Additionally, I shared my thoughts on how a financial planning course shattered my preconceived notions about personal finance and led me to reorganize my planning.

I would request the readers to complete the previous articles about my journey so that they can understand how my thought process of investing changes over time.

How did I get the confidence to manage my finances by myself? How was my portfolio progress? So, let’s start.

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In realfinplan, we try to provide realistic, authentic, and free educational content, so that individuals can control their own finances by themselves. I will request the readers

With Planning I started To Achieve My Goals

Early 2021: 

I took a break from financial planning and enjoyed the birth of my daughter. I spent a lot of quality time with her. It was one of the best moments in my life. Everything started to feel good. My life took a different direction. I began to mature in various aspects of life. I believe that’s what responsibility does to you.

My goals so far from the last financial review:

  • Delivery of my child – successfully achieved 
  • Home decoration goal – almost achieving successfully
  • Home appliances goal – successfully achieved 
  • Vacation goal – sorted
  • Emergency fund – Still a long way to go. I was around 2X of my monthly expenses. Some emergency situation arrived and I had to spend from my emergency fund.
  • Other 3 long-term goals – long long way to go

The meeting that uplifted my confidence to do things by myself:

I was confused about what I was doing, and whether I was doing the right thing or not. So, I thought about reviewing my portfolio by a fee-only advisor after getting to know that it’s the best way. I talked with some of them (I think they were not the ones mentioned in freefincal article, I found some contacts online).

I shared my thought process with them. But they were more into imposing their thought process on me and they will do the plan after accessing my financial position. They were not giving a proper guidance so that I can do things on my own.

They wanted me to pay them first and then only they would nurture my incomplete knowledge. Payment wasn’t a factor for me. I was ready to pay to get knowledge. But I didn’t feel confident to work with them.

Also, none of my colleagues or friends thought about financial planning. So, I wasn’t able to share things with anyone.

At last, luckily I fixed a 39 mins video call with a CFA for free through Twitter. She was amazing. I told her about my journey, my confusion, my hurdles about goals, and my thought process.

She gave me some advice and told me that I was on the right path in many ways. I just needed to organize myself. She told me that I knew what I was doing. That’s the important part and I can consult with a fee-only advisor if I need to, but I must try it by myself as I have time to make some mistakes and learn from them and rectify myself while doing this.

She was so kind that she literally pointed out the following things and messaged me in twitter:

  • Took health Insurance
  • Took term insurance and thinking about taking one more of 50L
  • Taking emergency funds seriously
  • Thinking about fund overlapping for choosing funds for a particular goal
  • I prioritize my goals as per my needs and wants
  • I was thinking about child education goals since the child hasn’t seen the light of the world.
  • I was thinking about my retirement and tracking my expenses. I had already NPS by default for retirement with a great step-up SIP. I was thinking about opting for the LC50 auto choice in NPS. She told me it would benefit me if I felt comfortable with it.
  • My bias towards index Investing eliminates fund manager risk and AUM increases risk.
  • My discipline in Investing
  • My discipline for reviewing financial situation every year
  • I was almost debt-free. I had a personal loan (9% from an employer cooperative society) and I was about to repay the remaining amount 

These were the positives she saw in me. I felt so confident after the meeting. I thought that yeah I can do it. At least, I will try my best to do things by myself as per my needs and wants.

My Portfolio Review of 2021:

I have been fortunate enough to review my financial situation every year since 2018. Honestly, I wasn’t aware of this and yet I was doing it. That’s why I consider myself lucky as I was unknowingly reviewing my financial situation. Now, let’s get to my portfolio review:

Term Insurance

I had a term insurance of 5X from HDFC LIFE. Then I took another term insurance of 5X of my annual income. This time, it was from TATA AIA.

My RD matured

  • 70% of the matured amount – To invest lumpsum in a staggered way in 3 Equity mutual funds for Child Education
  • 15% of the matured amount – To invest in Direct stocks
  • 15% of the matured amount – To buy jewelry for my wife

My Goals Analysis:

Emergency Fund

  • Started SIP in ICICI Liquid Fund – The goal was to get it done as quickly as possible

Jewellery for Wife

  • Started SIP in Axis Ultra Short Term Bond Fund  
  • I met with some emergencies and again I had to use that 15% of the matured amount of that RD and some portion of my Emergency fund. So, I had to build the funds for these two goals again.

Vacations

  • Parag Parikh Tax Saver Fund + Axis Long Term Equity Fund (New investment stopped)
  • Why Equity for this goal? As this goal is away for about 3 years. Until my child becomes 4 years a vacation is not happening. Also as the lock-in period completes, I will move the funds to debt funds gradually.

Buy a Car

  • Started SIP in Canara Robeco Conservative Hybrid Fund
  • Again, started to build funds for this “want”.

Recurring goal (Insurance + Charity)

  • Started SIP in ABSL Low duration fund

Child Education Plan: Chose 3 funds for doing the lumpsum –

  1. Mirae Asset Tax Saver Fund
  2. Parag Parikh Long Term Equity Fund
  3. Axis Small Cap Fund  
  • Chose these three funds as there was just a little overlap among these 3 funds (thefundoo.com is a great website. I used this for checking overlap between funds)
  • Chose 6 months for staggered lumpsum
  • I stopped all the SIPs in these 3 funds as of then. I will start again when the lump sum is done.
  • For Calculations:
  • Post-tax Return Expectation – 12% (Before taking the course, I didn’t know the concept of having a return expectation)
  • Inflation – 10%

Marriage Goal

  • Started SIP in UTI Nifty Next 50 (NN50) Fund
  • For Calculations:
  • Post-tax Return expectations – 12%
  • Inflation – 7%

Retirement

  • SIP in UTI Nifty Index Fund
  • Regular Default NPS Contribution – For being a Central government employee
  • For Calculations:
  • Inflation – 7%
  • Post Tax Return expectations – 10% from NPS and 13% from equity MF

Still, I didn’t plan about my retirement much. I was stuck in child education planning as it was a daunting task for me. I knew if I could plan this properly, I would sort my retirement planning also. Why? Just because of the high inflation of Educational expenses. I was using 10% inflation for my calculation.

My NSC – I didn’t tag it with any goal. I kept it free as of then and maybe plan with it later in the year 2023 when it matures. 

My Direct Stock portfolio – I didn’t tag this too with any of my goals. It was still new and I didn’t have the confidence to tag this for Goal Based Investment Planning. Previously, I was investing through Upstox. This year I started to use Zerodha too for direct stocks investing. My stock portfolio is still an experiment as of now.

Read the Author’s journey here:

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