My Financial Plan

Hi, I am Rajan Dhawan, 38, married to a dentist and father of a 5-year-old son. My parents are also living with me.

I am working as a District Manager in a government-backed e-Governance project. I am earning 60,000 per month. 

I have some dreams like any man of the middle class, such as purchasing a new house and traveling to new locations. I believe long-term passive income from investments is the best way to achieve my dreams. 

Life is not all about achieving dreams, but life is also about fulfilling some responsibilities. My major responsibilities are making sure my son gets a good education, saving up for his future wedding and taking care of my dependent parents.

I was never serious about money as life was going well. That all changed when my father got two heart attacks within a short time span. The treatment took a big chunk of our savings and we were suddenly faced with financial insecurity.

At that moment I realized my biggest personal finance mistake of not having health & life insurance. 60k monthly salary & 3-4 lakh savings is never going to be enough to cover any medical care needed for any person in my family. 

And, what if, something would happen to me? Who will take care of my family? That thought made me numb. 

I took one medical insurance policy for my parents, and one for me, my wife & my son. I also took 1 crore term insurance for myself as I am the sole bread earner in the family. 

It gave me a sense of relief of confronting any unforeseen health & life emergencies.

I also discovered that a fixed deposit won’t reach my long-term financial goals. I can probably beat inflation with fixed deposits but wealth creation is not possible. 

I read blogs, watched youtube videos, and spoke with a few so-called traditional financial advisors. 

I called my known LIC agent and asked if he can suggest to me some investment options apart from my regular LIC plans going on. He advised me to invest in ULIP where he promised a handsome annual return along with life cover.

But I was not satisfied with his promises as nothing was on paper and he didn’t provide any historical information about the returns he was promising. 

I searched further and I saw a wide range of investment options that baffled me completely. Every investment option has its own nature to fulfill a specific type of investment goal. 

We need to specify our goals before starting the investment. I divided the various investment options into different categories

  • Up to 2 month expense – Savings account 
  • Easy investment options (that most of us know) – FD, Gold, Post office schemes 
  • Emergency fund – FD, liquid funds
  • Short-term goals (up to 1 year) – RD 
  • Government options – Sukanaya Smariddhi Yojna, Kisaan Vikaas Patra, Bonds 
  • Investment options for Retirement corpus – NPS, PPF, and EPF
  • Popular For Wealth creation – stocks, mutual funds 
  • Famous but complex – Real estate, Cryptocurrency 
  • Complex and less famous  index funds, ETFs, debt funds, and Crypto, debentures, SGBs

I decided to first learn investing diligently and then start my investment journey. At the same time, InvestingExpert is born. 

I started following investment experts like Pranjal Kamra, and Safalniveshak to learn more about investing in the right way and implement them in my life. I share the learnings that I implement in my life with you on InvestingExpert.

Here are some of my findings that would definitely help you in your investing journey –

PS – The above list is purely based on the value I get from their content. I don’t go for their blog traffic or no. of followers they have. 

I start with understanding how the stock market works. I searched for best Demat accounts and opened a few accounts to get first-hand experience. Currently, I have a Demat account with Zerodha & Upstox.

How I Am Implementing The Learnings In My Personal Finance

The first step in financial planning was to know the current flow of my finance. My total monthly income, expenses, and remaining savings for investment.  

The next step was to divide my expenses into different categories of fixed and variable. We can reduce variable expenses to increase our savings. 

Let me show you my stats.

#1. My Monthly Income 

I am the sole earner in my family because my wife quit her job during her pregnancy and has no plans to resume her work until my son Amiraj turns 7. So 2 more years to wait.

My income sources are – 

My salaryRs. 60,000
FD Interest (4 lakh)Rs. 2000
Freelance work 10,000
Total Rs 72, 000
Stock Dividend3000 (yearly) 

PS: I am not adding capital gain from stocks & trading profits as they are still neither fixed nor in a range on monthly basis. 

#2. Monthly Expenses 

I have no running EMIs liability for now and no plan to start any in next 2 years. 

  • Grocery and milk – Rs. 10,000
  • Vegetables and fruit – Rs. 3,000
  • Electricity Bill – Rs. 5,000
  • Diesel & Petrol – 6,000
  • Son’s school fee – Rs. 4,000
  • Mobile/broadband – 1000
  • Food & outing – 2000
  • Misc. expenses – Rs. 5,000

My total monthly expenses are – Rs. 36,000

My monthly savings after deducting all the expenses are Rs. 36,000

Monthly income – monthly expenses

Monthly Savings: 72000 – 36000 = 36000

#3. My Current Assets

  • Fixed Depostis – Rs.  4 lakh 
  • Stocks – Rs. 2 lakh 
  • PPF – Rs 2 lakh 
  • Crypto – Rs. 50k 
  • Gold – Rs 5 lakh 
  • My paternal home worth Rs. 20 lakh
  • Father’s shop worth Rs. 10 lakh
  • Total assets – Rs. 43,50,000 lakh

#4. My Current Goals

Long-term goals 

  • My son’s higher education (after 10 years) – Rs. 50 lakh to 1 crore 
  • Building my house in the next 10-12 years – Rs. 2 crore
  • My son’s marriage – 1 crore

Short-term goals

  • One week Goa trip with the family at this year’s end – Rs. 70K
  • Two weeks Thailand tour with family next year – Rs. 2 lakh 
  • Getting a new car after around 2 years – 15 lakh

Income goals

I am actively working on InvestingExpert & take freelance projects along with my regular job. My next year’s goal is to replace my current job with the InvestingExpert. 

In the next 3 to 5 years I am looking InvestingExpert as a passive source of income for me. 

Strategy to Invest My Savings to Achieve My Current Goals

  • RD for my travel plans – 10k 
  • RD for car down payment – 10k 
  • Stock/Mutual funds for long-term goals – 12k 
  • Cryptocurrency – 4K 

Last words

I am not an investment expert or a certified investment advisor but I am diligently following investment experts. I implement the learning in my life & share it on my blog InvestingExpert. 

You can follow me on Twitter if you want something new every day.