Preparing for the FIRE Journey Insights from a Delhi based CA
Introduction
In this article, we explore the financial journey of Manoj Maheshwari, a 44-year-old chartered accountant based in Delhi. Maheshwari has been diligently saving and investing towards his Financial Independence, Retire Early (FIRE) goal, which he has set at ₹12 crore. In this article, we’ll dive into Maheshwari’s investment strategies, asset mix, and his plans to achieve FIRE.
Investment Strategies of Manoj Maheshwari
Hands-on Investing Approach
- Maheshwari prefers monthly lumpsum investments in mutual funds, as opposed to systematic investment plans (SIPs).
- He is conscious of the cost of investing and aims to reduce this by making all his fresh investments in direct plans of mutual funds.
- He plans to increase his exposure to low-cost passive funds.
Asset Mix
- Currently, Maheshwari’s portfolio is split 50:50 between equity and debt and he plans to shift this to a 70:30 ratio.
- His equity portfolio mainly consists of mutual funds, with 15% allocated to direct stock holdings.
Investment in Passive Funds
- Maheshwari intends to invest more in passive funds like Exchange-Traded Funds (ETFs) and index funds, which typically have lower expense ratios.
- He prefers factor-based passive funds that use quantitative and qualitative filters for portfolio creation, such as momentum, value, and growth.
Stock Picking Approach
- Maheshwari keeps his stock picking approach simple by monitoring the top holdings of his watch-listed mutual funds.
- He invests directly in large-cap and large-sized mid-cap stocks, saving on mutual fund expense ratios.
- Maheshwari prefers to buy stocks directly as there is a lot of information available about such stocks, enabling him to analyze and track them efficiently.
Lumpsum Investing
- Maheshwari prefers lumpsum investing and takes advantage of corrections or dips in funds to make investments.
- He distributes his investments across funds and invests every month as soon as his salary hits his account.
- Lumpsum investing gives him flexibility in allocating his funds across different schemes.
Maheshwari’s Financial Independence, Retire Early (FIRE) Plan
Monthly Investments and Savings Rate
- Maheshwari maintains a savings rate of 45-50%, enabling him to make substantial monthly investments.
- Living in a joint family helps him keep overall expenses low.
Goals for FIRE
- Maheshwari’s FIRE goal does not mean quitting work altogether but having the freedom to pursue his passions.
- Besides day-to-day expenses, his FIRE corpus will cover his son’s higher education and marriage costs.
- Travel is another priority for Maheshwari, as he wants to explore international destinations while he’s still healthy.
- He is also provisioning for any emergency or medical needs.
Summary
Manoj Maheshwari, a Delhi-based CA, has adopted various strategies to achieve his FIRE goal. He follows a hands-on approach to investing, prefers lumpsum investments, and is conscious of costs. He plans to increase his exposure to low-cost passive funds and has a simple stock picking approach. Maheshwari’s FIRE plan includes provisions for his son’s education, marriage expenses, travel, and emergencies. By saving and investing diligently, Maheshwari aims to achieve financial independence and retire early.
Note: Although the original article did not require an extension, we expanded it to better cover the points in detail while maintaining readability and coherence.
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