Four Indians buying tickets to freedom with F.U. Money

Unlike FIRE – Financial Independence and Retire Early – F.U. Money means you still work, but are no more living paycheck to paycheck for your long-term and short-term goals. It’s a corpus that can free you from the pressures of the corporate world, targets and deadlines, and helps you improve your work-life balance.

While for a regular retirement corpus, a 4% withdrawal rate (with corpus at 25-times annual expense) is ideal to sustain over 30 years of retirement period, the withdrawal rate can be even higher with the F.U. Money corpus, as the individual still continues to work in some form or the other.

We spoke to a few individuals who have already achieved their F.U. Money target and are now pursuing what they see as more fulfilling roles, as well as younger individuals targeting it.

Himanshu Pandya

Himanshu Pandya came to Mumbai in 2001 from Ahmedabad after doing his MBA in finance from Nirma University. He says he comes from a lower middle-class family.

When he came to Mumbai, he lived at the YMCA hostel, which he recalls was very cheap those days. “I just had to pay ₹2,600 per month on the accommodation,” Pandya recalls.

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Over the next two decades, he had a successful run in the corporate world, working with portfolio management services providers and asset management companies. However, he says he never felt at home in the corporate world. “I always felt a tug to do something of my own, in my area of expertise,” he says.

“Also, I felt that the corporate life came with a lot of fetters, where you could rarely work for the satisfaction of it; instead, you had your targets,” Pandya adds.

While all this was playing on his mind, he started saving and investing money towards down-payment of his first own house.

He says the experience of working towards buying his first house made him realize how disciplined investing can help attain one’s financial goals. “It was not just about saving money and putting it in a bank account, earning 3%-5%, but investing for superior returns, with reasonable risk,” Pandya says. Working in the investment management industry also helped him gain a deeper understanding.

Just two years into his career, Pandya purchased his house in Mumbai in 2003. After his marriage and the birth of his first child, he sold this house and bought a bigger one to accommodate his growing family. This was in 2006. He says over the next seven years, he worked towards becoming loan-free, and by 2013, he had paid off all of his home loan.

By then, he was 35. Pandya continued the same investing and saving discipline even after retiring his home loan, and by 2021, he says he had a large corpus to take care of his life expenses – the F.U. Money. He adds that his family’s aversion to unnecessary expenses played an important role in this journey.

The F.U. Money allowed Pandya to quit the corporate world and pursue his passion for helping others to achieve their financial goals.

“It has allowed to me to work with my own values, principles, without being too worried about corporate compulsions,” Pandya says.

On 30 June this year, he quit the corporate world and in July applied to the Securities and Exchange Board of India (Sebi) to be a registered investment adviser (RIA).

A special birthday card

How did his family react to his decision? He says his wife was one of the persons who encouraged him. “She used to see my interactions and the level of engagement with clients when I was in the corporate world. She’d often tell me: Leave this and you would blossom as an advisor.”

“I have made it a ritual that on my birthday every year, I send her a small Excel-sheet which has the family net-worth. “While she is not interested so much in numbers and finances, I make it a point that she knows that we are financially in a good space,” he says.

Salonee Sanghvi

After getting her Masters in Commerce from Mumbai’s Sydenham College of Commerce & Economics, Saghvi moved to Gurugram in 2004, starting her career with McKinsey. In a little over a year later, she was able to find her way back to her home city – Mumbai – through an opportunity to work at Rakesh Jhunjhunwala-owned RARE Enterprises as an equity analyst. Simultaneously, she began pursuing the Certified Financial Analyst (CFA) charter.

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There was not much she could do in terms of saving in those initial days. “When I was in Gurugram, I had to pay rent, along with the regular costs. So, there was little I could do to save and invest. But I did what I could,” she recalls. Rent amounted to 33% of Sanghvi’s monthly take-home pay.

Being back in Mumbai saved her the rent payments, allowing her to save and invest a lot more. However, Sanghvi was yet to consciously plan for an F.U. Money corpus. Gradually, as she started seeing her investments grow over the years, she started to think of F.U. Money.

Sanghvi’s investing journey began just around the beginning of 2004-2007 bull run in stock markets, which revealed the power of equity investing.

The thought of being in a place where she can quit her job and pursue her own passions started to play on her mind when she was in her 30s. By then, Sanghvi had already built a large corpus. She says she already had 15-20-times of her annual expenses at the time of quitting her job. She worked for another two years and in February, 2015, quit her job.

Not having a home loan or any other major expenses helped her to add significantly to her investments. She was able to invest 65%-70% of her income.

Travel? AI? Or quant investing?

Before deciding on what she wanted to do next, Sanghvi explored a few options. One of them was travel blogging, as she loves to travel. She even attended international conferences on travel blogging to understand it better.

Later, she co-founded a start-up to build investing and trading products using artificial intelligence (AI). After a lot of R&D in the beginning, Sanghvi and her team eventually decided not to pursue it further.

Sanghvi started a wealth management firm in 2018 – My Wealth Guide – which offers quant strategies to investors through smallcase. The firm also offers goal-based financial advice to clients.

However, Sanghvi says it was initially important for her to explore a few options, before discovering her true calling. “Due to the corpus that I had built, I didn’t have any stress or any clock ticking over my head, that rushed me to find my next gig to support myself,” she says.

Shashank Bharadwaj

Shashank Bharadwaj is a Bangalore-based marketing and communications professional. He says he comes from a middle-class background, and almost everyone in his family aim to work until the conventional retirement age of 60, and even more if possible, by way of extensions.

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He says early on in his life, he felt that he doesn’t want to be part of the rat race. This got him into thinking about achieving a certain sense of financial freedom that allows him to have more control over how he wants to spend his time.

Bharadwaj has been consciously working towards this goal right from his graduation. He graduated in 2018, and started working immediately. As soon as he got his first paycheck, he started investing. He started saving 10% of his salary in a systematic investment plan (SIP) in an equity-linked saving scheme (ELSS). Shashank’s mother had an account in FundsIndia, which he used to learn and understand about investing, SIPs, mutual funds, etc.

He started with a monthly SIP of ₹1,850, which was 10% of his first salary, besides investing in Atal Pension Yojana (APY) and the National Pension Scheme (NPS).

Over the four years, as he grew in his career, he has increased his allocation. Right now, he is investing 50% of his income towards F.U. Money. He also tries to spend as little as possible. As he lives with his parents in Bangalore, he doesn’t have to pay any rent. While his friends travel four-five times a year, he tries to keep his vacation plans with them to two times a year.

Apart from his F.U. Money corpus, he is also investing towards other goals like buying a house and a car. He is also putting aside some sum towards a contingency fund that can take care of his six months’ worth of expenses.

Bharadwaj also has a stock portfolio, which he uses for short-term trading. He maintains the original capital and regularly shifts the additional gains to mutual funds towards his F.U. Money and other goals.

From FIRE to FU

Early on, Shashank was just focused on early retirement – Financial Independence and Retire Early (FIRE) — but after talking with his seniors and one of his clients, he realized that he needed to change his mindset.

“They asked me what would you do after retiring early. That’s when I started thinking on the lines of building a corpus, not necessarily to retire early, but work on my own terms and have freedom to pursue my passion or any other pursuits that I may want to follow in future,” he says.

He says it is no more about retiring early for him, but about reducing dependency on the job. “As the new generation comes into the workforce, retirement ages can fall. They are much sharper than our generation. So, competitive intensity and pressures at workplaces are only going to rise,” he points out.

Shashank is single now. He says while he has not given a deep thought to how having a family might affect his F.U. Money goal, he is certain that he would keep aside 50% of his income towards building the F.U. corpus, no matter what.

“I can use my increments and other surpluses, bonuses, etc., towards other goals,” he says.

Kunal Udeshi

Mumbai-based Kunal Udeshi works at one of the Big-4 accounting firms. He was around 26-27 when he met Nitesh Buddhadev, founder of Nimit Consultancy to help with his financial planning.

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“Initially, Nitesh was confident that we would reach a corpus of ₹10-11 crore when I reach the age of 45. But, at that point of time, I felt ₹11 crore was a big number, as I was investing ₹20,000- ₹25,000 every month. Now, I am investing about ₹1.25 lakh. In the span of last four years, just my principal accumulated to almost ₹55 lakh and with my returns, it is almost ₹75 lakh.”

“Now, that habit has got built in. Every month, almost 30%-35% of salary goes into a dedicated mutual fund. Every year, Nitesh tells me to try and increase my investment by 10%-20%, so that we reach ₹1.5 lakh to ₹1.6 lakh of investments per month, so it will be easy to achieve my target corpus,” Kunal says.

Separately, he uses his bonuses to make lumpsum investments in mutual funds.

What made Kunal think of building an F.U. Money corpus? He says he doesn’t want to be still working in a Big-4 firm in his 50s and 60s. Instead, he is thinking of transitioning into a financial advisor role for big companies or a financial observer role for a private equity (PE) firm. Large PE firms need financial observers on the board of their investee companies to oversee the company’s affairs.

“By then, I would have gained enough experience, which would help me to switch to such a role. This would be purely a professional role, and not dependent on a salary,” he says.

Long and short of it

Nitesh says that Kunal needed ₹1.7 lakh of monthly investments to reach his F.U. corpus target of ₹11 core. “We are still short by ₹30,000- ₹40,000, but we should be able to soon reach these levels, and then, even increase it to cover up for past years,” he says.

At the same time, Nitesh says Kunal also has some short-term goals like family vacation, buying an SUV, etc. So, he wants him to be able to do that also. “It is about finding the right balance,” Nitesh says. Not having a home loan or needing to pay rent, has allowed Kunal commit large sums towards F.U. Money corpus.

How you can build your F.U. corpus?

• First, you need to figure out the level of F.U. corpus you’d need. You can take help of a financial advisor to figure this out.
• Once you know your corpus target, start investing in a disciplined manner. Your financial advisor should be able to tell you the monthly mutual fund SIP needed to reach your F.U. Money corpus.
• Usually, reaching such corpus involves large sums of investments, which are likely to be a significant part of your salary. So, manage your expenses to save and invest more in your early years.

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