Portfolio chaos: A teacher's quest from clutter to clarity

How Singh turned around his finances to secure his future with low-cost professional advice

- Aprajita Sharma

Vivek Singh, a 30-year-old assistant teacher from Lucknow, joined the Uttar Pradesh government in 2020 but overlooked contributing to the National Pension System (NPS), despite it being mandatory for government employees.

Focused on managing a home loan and investing in over ten mutual fund schemes, Singh delayed signing up, opting instead for a higher in-hand salary.

His decision, influenced by hopes of the old pension scheme (OPS) returning in some form, highlights the financial dilemmas faced by young government employees navigating between immediate needs and long-term security.

It is only when his financial advisor Ajay Pruthi explained to him about the drawbacks of not subscribing to it, he went ahead with it.

"I did know that the government too invests in NPS on my behalf if I am making my share of contributions. I could not take advantage of it for nearly 3 years," said Singh.

A government employee is supposed to contribute 14% of his basic pay and dearness allowance (DA) to NPS. The government matches the same contribution.

Singh's NPS account is likely to accumulate ₹3 crore after 30 years when he retires at a modest compound annual growth rate (CAGR) of 7%.

Portfolio chaos

Despite his enthusiasm for financial planning, Singh's journey was anything but structured.

Motivated by YouTube videos on wealth management, he dived into mutual fund investments and bought health and life insurance.

However, his portfolio lacked direction—his mutual funds were disorganized, his health insurance coverage fell short, and endowment plans further muddled his strategy.

Via YouTube, he learned about fixed fee Sebi-registered investment advisors (RIAs).

Seeking clarity amid the confusion of navigating the investment landscape, he approached RIA Pruthi for financial guidance in April 2023.