When I started my FIRE journey, I only started saving for and investing in mutual funds as that’s the advice r/FIRE tends to throw. Nothing against them and I’m eternally thankful their advice and passion. Without getting into the community I doubt I would have the confidence to take the plunge.

When I started off back in 2018, I had most of my assets in PPF and Mutual funds. Over the next few years I learnt about other assets and why it’s important to diversify. To be completely honest when the market went down 20-25% back in March 2020 I would have lost my mind had I not already diversified my portfolio. Back then I had my emergency fund in liquid mutual funds, some RDs, some Fixed deposits. So even if the market fell significantly, it didn’t hurt me as I already had a backup. Astute readers would also know that I bulked up my emergency fund beginning of pandemic. If the pandemic were to occur in 2018 instead of 2020, things would have been different.

The financial community helped me be a financial literate. And here’s a huge thank you to the community.

While I’ve started diversifying since end of 2018 when I first read about it, I’ve still not been able to build a well diversified portfolio. I get excited about one asset class and whatever little money I can save goes into that asset class.

Here’s my current diversification.

I’ve added LIC into asset as well since it’s an investment asset insurance which my parents made me buy when I first started earning. It’s the only asset that I regret. You can read about my thoughts on insurance linked investments and how wasteful they are on this blog. I’m also currently heavy into gold. I would like to bring it down to 5% but I’m not too worried about it since most of the gold in my portfolio is inheritance. I’ve also managed to reduce my crypto holdings as I was at 15% of my portfolio in crypto holding majorly in BTC, ETH and XRP. XRP going down significantly due to regulatory issues in the US also has a contributing factor 🤐

As of today the RD and FD investments are zero as I just made a huge down payment for a real estate investment. I still do have 3 months worth of expenses including my EMI in my liquid debt fund. I don’t plan to have more than three months of expenses in emergency fund. I have already reasoned out why in my last post.

Another reason to not have anything in cash is because cash is trash. I’m sure you must have heard about this from various finance bros but this has never been truer than before. Due to inflation and currency devaluation, 1L of cash today would be worth less in a couple of years. Essentially purchasing power goes down. With investments we want to increase our purchasing power and not reduce. This fundamental realisation also enabled me making the RE investment. I was holding a large cash without the money working for me.

My end goal is going to be to not have more than 5% in any of the assets. I will have to work more to get other assets up to the level of my REI. That’s a tough challenge. But let’s go!