My Portfolio Rewind 2023
My Portfolio Rewind 2023
The start of many dreams!
I turned 29 last year.
I started investing my own money seriously when I was 26 and got my first salary from my first job at one of India’s largest private banks.
You might assume that being in finance prompted me to start early, however, my tryst with investing and personal finance started a couple of years prior to that.
The year was 2017 (and I was 23).
AMFI (Association of Mutual Funds in India), a non-profit entity, after existing for 22 years, had finally managed to come out with a banger campaign - “Mutual Funds Sahi Hai”.
(one of their first ads aired on TVC, which I still remember watching during IPL)
It was this ad that prompted me to transfer all my mother’s money from post offices to mutual funds.
Since I have been dabbling with mutual funds for over 6 years now, I felt it was the right moment to start sharing my learnings over the years.
These are all going to be housed under this new newsletter “Personal Finance by Basak”.
Let’s go!
WTF is Portfolio Rewind?
Portfolio Rewind is my version of a portfolio audit or review.
For now, you can ignore the fancy name and think of it as a reflection on how I managed my money since the start of the year.
While I will not reveal my exact portfolio values (obvious!), I will be very transparent about everything else.
Why am I doing this?
Selfish reason: Almost every other day, my spouse and I have a friendly banter on who’s investing philosophy is better - usually measured by the XIRR in our respective mutual fund platform (she’s been winning since the last two years). This review should be a safe place to document and re-affirm my beliefs and not get swayed by temptation (by looking at her portfolio).
Selfless reason: If at least one person reads this and gets motivated to start their investing journey, it’ll all be worth it.
Necessary disclaimer
This is a “personal” portfolio review. No part of this should be considered investment advice. My current portfolio is the reflection of a young earner, so investments and asset allocation may reflect my high risk appetite. YMMV!
Let’s start with the basics!
For any portfolio to work, our basics must be taken care of first.
Health insurance
Term (Life) insurance
Emergency Fund
Legacy planning
I’m assuming some of my readers are well-versed with some of these; so because I want to respect your time, here’s a quick snapshot of these buckets:
For those of who are still curious, you can continue reading a short description of these below:
Health Insurance
While most salaried folks rely on their company-provided health insurance (and trust me, my company provides one of the best ones), it is ALWAYS better to opt for your own.
I personally know someone who got diagnosed with cancer in the short two-month period he was between jobs. Talk about luck!
I have a base cover of ₹15L with HDFC Optima Restore1 and a Super Top Up plan of ₹20L with myHealth Medisure Super Top-up.
A few additional notes and thoughts:
These plans are family floater plans, which for my case, covers my wife and I.
I started with a ₹10L base cover, which has increased to ₹15L this year due to addition of their no-claim bonus. Note that this will be capped to ₹20L (100% of sum insured)
I sometimes wonder if a ₹35-40L cover is enough for hospitalisation in an expensive city like Mumbai. If you have any thoughts on this, please drop them in the comments.
For this year, the annual premiums paid were ₹22,656 (for the base) and ₹3,894 for the Super Top Up, which comes to a monthly spend of ₹2212.
Term Insurance
To put it simply, a term insurance is a pure-insurance product (unlike most LIC policies sold by your uncle) which offers a good amount of insurance cover with very low premiums.
I have a cover of ₹1.5 crore from ICICI Prudential iProtect Smart with a monthly premium of ₹998 (fixed) till the age of 55.
Please note that Portfolio Rewind is merely going to be a summary of my Portfolio and a dedicated post on insurance to explain all of this will come soon. Stay tuned! 🙂
Emergency Fund
While there are tons of advice out there on how much and where to stash your emergency fund - as you’d quickly realise reading this, I prefer to keep things really simple:
All of my emergency fund is in a bank account, easily accessible any time via UPI or debit card.
I would love to have six months of runway (salary credit or monthly expenses multiplied by six), however, I only have been maintaining one-two months of runway (this is bad!)
Legacy Planning
I haven’t thought much about writing a will (since I do not have any dependents), however:
I’ve made sure that my wife has access to my entire portfolio and all nominations are in place.
In case of any unfortunate incident, my term plan is more than enough to cover all my current liabilities.
I only have one parent who is not dependent on me. No kids yet.
My Portfolio
A financial portfolio can consist of financial assets (think FDs in banks, stock markets, post office schemes, company deposits etc.) or physical assets (think real estate, gold, silver etc.).
I do not have any physical assets to my name. I live on rent and do not hold any gold or silver as an investment.
My financial assets include mutual funds, my employee provident fund (EPF) and short-term money saved in banks.
Mutual Funds
As of 2023, my mutual funds are primarily in equity. Within equity, they are present in only two funds:
UTI Nifty 50 Index Fund (Direct Growth)
UTI Nifty Next 50 Index Fund (Direct Growth)
The rationale for this would require a separate post altogether, which is also going to follow.
Employee Provident Fund (EPF)
While most salaried folks are aware of EPF, I also invest in VPF (Voluntary Provident Fund). As the name suggests, I “voluntarily” invest more money (which is auto-deducted from my salary) into my EPF.
Why do I do this?
To max out my 80C tax break (₹1,50,000 per year)
To have an exposure to debt
I do not want to invest in another mutual fund (ELSS) just to save taxes
Savings account
While both of the above are for long-term goals, personally, I’ve discovered that I’m more comfortable with purpose-driven savings. So for short-term goals (with a duration between 3 to 12 months), I used to invest in liquid funds.
However, there were two problems with that:
I had to separately maintain a tracker for what I’m saving for
I found myself withdrawing the money for purposes which were not planned (like a discretionary expense)
Then I discovered that there are some apps (like Fi Money and Jupiter) which allow you to create “Jars” or “Pots”. Think of it like mini savings accounts within your main savings account - so you can always demarcate them by a “purpose”.
Most of my insurances have an annual renewal cycle (health, vehicles etc) - it may get difficult for me to pay them at once if I don’t save for it every month. Hence, as you see in the screenshot, I allocate ₹3,000 every month to this “Pot”.
..and that’s it!
That’s all there is to my portfolio. I do not hold any stocks or crypto.
Asset Allocation
Considering my age and my risk appetite (high), a significant portion of my portfolio is in equity. Like I mentioned earlier, I do not have any exposure to gold or crypto (the volatility of past returns for these asset classes do not inspire me).
Within equity, I have equal exposure to Nifty 50 and Nifty Next 50 only. These are mutual funds which invest in the Top 100 stocks of Nifty.
Within debt, I have some mixed exposure:
Growth in Portfolio
One of the main tenets of your financial journey is not to marvel at the asset allocation or the portfolio size or the XIRR, but to keep growing it. You can grow your portfolio in two ways mostly:
Increase your income (and thereby increase your savings)
Reduce your expenses (and thereby increase your savings)
Here’s how mine looks:
Disclaimer: Please do not make any judgements based on these figures. It may not be sustainable (or suitable) for everyone - however, as long as they are in line with the growth of your income (either via salary or business), it should be a positive indicator.
Portfolio Performance
I guess I saved the best for last, eh?
Since I have not yet formulated a way to measure the performance of my entire portfolio together, I thought it’s best to share the individual performance of the major portions of my portfolio:
This is obviously too good to be true (as market is at it’s all time high anyway) and my expectations are much lower.
Like I mentioned, my theory for being comfortable with this portfolio and not get swayed by wife’s XIRR (her equity mutual fund portion stands at 29.72%) is a story for another day.
Goals for Portfolio Rewind 2024
Hope you enjoyed reading this! For folks, please treat this post as it is - a mere fresh attempt at someone documenting their financial “freedom” journey.
As this post is entirely inspired by Mr. Pattabiraman, who’s blog “freefincal” guided (and still does) my DIY Finance journey, I want to aspire to write portfolio audits the way he intends them to be, so here’s a few questions that I plan to have an answer to, in Portfolio Rewind 2024:
My current portfolio reflects the personality of someone who knows the “importance” of saving for the future, but is yet to be clear about this “goals”. If you’re not clear about your “goals”, you may not know “how much” to save; are you on track? Or are you falling short? I plan to have an answer to this next year.
What is my target or intended asset allocation? If you’re not clear about this, you may not be able to “re-balance” your portfolio to maintain the asset allocation - for example, in a bull (rising) market, my equity portion may increase to 80% (from the current 71.5%) - Am I okay with that?
Having said this, I’m happy with this humble start - and it should also inspire you with the fact that it’s okay to not know or understand everything at the start. It may take a day or two to put all of this in an Excel sheet, but trust me, it should be worth it.
If you’re a beginner and you need help, feel free to reach out at the co-ordinates below. If you’re a pro and you have feedback on this, please feel free to share that as well!
While Portfolio Rewind is going to be published once every year, I plan to share some aspect of “personal finance”, once every month - so if you want to be a part of that, click the subscribe button above!
That’s it for now.
P.S. I love feedback. If you want me to cover a particular topic, want your brand to get featured, write a guest post or simply want to say hi, do reach out to me at anirudha@bankonbasak.com or LinkedIN or Twitter. Meanwhile, please like this post and share it around?
All views and opinions shared in this article and throughout this blog solely represent that of the author and not his employer. All information shared here will contain source links to establish that the author is not sharing any material non-public information to his readers. His opinion or remarks on any news or topic are based on the assumption that the source is genuine; thus he is not liable for any information that may turn out to be incorrect. This blog is purely for educational purposes and no part of it should be treated as investment advice. Using any portion of the article without context and proper authorisation will ensue legal action.
I buy my health and term insurance from Ditto, an online insurance platform, hence the links will lead to that platform. It is not sponsored. Even if you do not end up buying your insurance via their platform, the material on their website is top-notch and easy to understand.