My Journey to Financial Independence: Savings and Investments by Age 40

I will turn 40 in two years, and reflecting on my journey, I feel it's important to share my personal experience with savings and investments. This piece aims to provide insights and motivate others who may be in similar situations.

Early Savings and Investment Habits

Growing up, I always had a fondness for money and was dedicated to saving. I first started saving when I was in my teenage years, though I lacked awareness of various investment modes. My father introduced me to Unit Linked Insurance Plans (ULIPs) for the first time, and I began a yearly investment of Rs 20,000, which grew to Rs 50,000 three years later. We also started contributing to Public Provident Funds (PPF) for a higher annual investment of Rs 1.5 lakhs.

Earning Years and Making Mistakes

While working with Tech Mahindra (TCS) for a period of time, I gained the opportunity to work onsite, where I saved a significant amount of money, about Rs 15 lakhs. Regrettably, I was still unfamiliar with mutual funds during this period. My family had wanted me to use this money to invest in a land plot or house in Zirakpur. However, I chose to redirect this money towards other expenses. I kept Rs 5 lakhs for my parents, Rs 5 lakhs for a gold purchase for my upcoming wedding, and the remaining Rs 5 lakhs for luxury items, including two iPhones, new shoes, and clothes.

Learning and Growth

Via a subsequent job change, my salary increased, but I continued to struggle with where to allocate my savings. It wasn't until I started studying investments, understanding compounding, and the amount needed before retirement that I realized I had not truly entered the world of investments. By the time I was 28 and married, I had managed to save around Rs 15 lakhs without being well-versed in the nuances of investments.

While I had an owned home in Delhi, I was responsible for supporting my parents, paying utility bills, and managing household expenses. I started to invest in mutual funds during this period and learned about diversification. An unfortunate mistake was made when I decided to invest in debentures, but from this, I gained valuable lessons.

Current Investment Portfolio

As of now, my total investment portfolio is approximately Rs 1 crore, broken down as follows:

Additionally, my father sold one of our houses in Dwarka to send my younger brother to America for higher studies and invested the remainder in mutual funds, which has grown to Rs 1 crore, and is now mine to manage.

My husband and I have no debt, own a car and two motorcycles, both purchased from the savings we've accumulated over the years.

Lessons Learned

Through my journey, I've learned the importance of diversification and the power of compounding. I've also realized the significance of staying informed and continuously learning about different investment modes. Even though I made mistakes in the past, I am confident that with each lesson, I am growing and becoming more knowledgeable in managing my finances.

Conclusion

Being 40 years old and sitting on a portfolio worth Rs 1 crore is a testament to the power of dedication and learning. I wish to share my story to inspire others to take control of their financial journey and strive for financial independence. Let's embrace our savings, make smart investment choices, and continue to grow our wealth.