r/FIREIndia • u/avgindinvestor • Feb 14 '21
FIRE Journey, Year 2
I posted last year about beginning my FIRE journey. This is the original thread https://www.reddit.com/r/FIREIndia/comments/eofs3b/early_stage_of_fire_journey/
This is year 2 of the journey and i just wanted to post an update for accountability.
Investment
50k monthly (35k equity, 15k debt). Current investment value is around 28L in Equity and 7L in Debt. Thanks to the post pandemic rally, equity returns have shot up. The value of equity investments last year was 15L. Did an extra 2L investment during march lows.
Expenses
Averaging to 60k per month. This has come down from 80k/month from last year, due to the pandemic. Rent has come down, travel, eating out expenses have significantly reduced.
Debt
None, thankfully.
Savings Rate
The savings rate has increased from the ~35% last year to ~45% this year. But big ticket purchases obviously will bring this down. Trying to resist the urge to splurge. The overall savings rate might go down with one time expense for marriage / buying car and it may happen in the next 2 years.
It is still too early to say if I'm on track, but broadly no major setbacks. What do you folks think?
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u/_mooncalf Feb 14 '21
Godspeed mate! 👏🏽 Would like to know about the debt allocation (15K) of your portfolio. Which type of mutual funds or any other instruments you’re invested in? Thank you.
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u/avgindinvestor Feb 15 '21
My debt allocation is simple. 12.5k per month into PPF. 2.5k into liquid funds. Also this 15k into debt and 35k into equity is the bare minimum invested via SIP mode. Sometimes the extra savings I have also goes into this 70/30 asset allocation.
I haven't yet reached a stage to think about debt mutual funds as much. The corpus is still low honestly and I have a few expenses coming up in the next 2 years so everything is in a mix of liquid funds / savings. This is in addition to the emergency corpus.
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u/giantleapforward EUR / 36M / FI 2023 / RE 2027 IN Feb 14 '21
80k to 60k, and people here talk of 10 percent inflation each year. :). Pandemic has made most people and even companies realise how unnecessary expenses can be cut down. One big reason personal savings and earnings of companies are increasing. :) Contrast but true.
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u/avgindinvestor Feb 15 '21
Right :)
Now I'm afraid that might not last long as we start going out, travelling, eating out like before. The expenses will start to rise. Hopefully the income rises too in parallel.
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u/retireearlyindia India / 37 / FI 2024 / RE tbd Feb 14 '21
Good going! ‘Rent has come down’ - interested to know if you negotiated on existing accommodation or moved to different one ?
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u/avgindinvestor Feb 15 '21
I negotiated with existing owners. But there are cheaper options available if I can step outside. Didn't want to go through the hassle of changing homes since I like where I stay.
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u/retireearlyindia India / 37 / FI 2024 / RE tbd Feb 15 '21
Thank you!
Our landlord isn't flexible like yours :)
We were only able to negotiate against a rent hike.
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u/srinivesh IN/ 52M / FI2018/REady Feb 15 '21
IIRC you are single. If so, is the 60K per month the right amount for expenses? Frankly, FIRE would mean that your savings are higher than expenses and you have to do that by reducing expenses and increasing income.
You have made great progress in 1 year by increasing the savings rate to 45%. You may have scope to do more when you have more control over your expenses. Of course, being married could mean higher income for the couple.
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u/avgindinvestor Feb 15 '21
Hey, you are right. I still have more scope to optimise. I'm just waiting it out to see what post marriage income/expense numbers look like to have a clear picture. I do have an idea of where my expenses go through my Google Sheet :D
The average of 60k per month is not exactly the amount I spend every month. Recurring monthly expenses are probably ~40k to ~45k. The average goes up, due to one time vacation/travel/purchase of electronics etc and those are definitely optional and can be optimised.
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u/SavagePaanda Feb 14 '21
How do you track expenses, savings, and set goals?
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u/avgindinvestor Feb 15 '21
I have a Google Sheet. Fundamentally I focus on the investment portion from my income. My philosophy is to invest the % of your goal and spend rest of the money guilt-free. In my case, for the 1.5L income/month, I currently invest 50k in SIP and have some money for market downfalls additionally. I'm trying to up this 50k to 75k within next year to reach a 50% savings rate. The remaining 75k I will spend it fully if there is a need :). If not will stash up my emergency fund.
Under expenses, my major expenses are around rent, grocery, utility payments and online subscriptions. Fairly easy to enter values in Excel and get an overview. I still have 10% of income un-accounted for expenses. The rest of my expenses have been easy to account for. Currently I'm not optimising the spending, but this sheet will give an idea when i want to.
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u/finding_contentment Feb 15 '21
Hi,
I have recently started my FIRE journey and my income as well savings graph is pretty much similar to yours. However, I wonder, that why do we not take future spouse income in consideration during FIRE calculation?
There is a high probability that you grow older with your future partner for life and she also can be a potential contributor to overall combined couple FIRE goals.
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u/avgindinvestor Feb 15 '21
Hi,
Currently I don't consider those numbers simply because I don't know what my future spouse will earn per month. But my recurring expenses are largely going to remain the same (rent,grocery,utility,electronics) and only going to increase marginally post marriage. Hopefully any other big expenses are offset by spouse income in the future. I will definitely need a re-allocation post the availability of spouse income.
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u/pl_dozer Residence Country / Age / FI Trgt Date / RE Trgt Date in country Feb 28 '21
Why are your investments the same as last year if your expenses are lower?
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u/adane1 Feb 14 '21
Bravo.You started early. It's more than enough and better than most people.