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Real Life Story: How to Increase Your Savings by 9200%

Most queries I’ve received on Safal Niveshak over the past ten months have been from young men, either newly married, or already with one child. And most of their questions have revolved around…

  • How do I start saving and investing money?
  • How do I plan for a well-structured financial life?
  • How do I meet my life goals?

While I have responded to these queries, here is the real life story of a close friend (let’s call him Ravi) who was in the same fix almost 9 years ago, how he has been progressing well towards his financial goals (at least what it seems as of now), and how he has grown his savings by a massive 9200% over four stages of his life.

Life Stage 1 (2003): Ravi got married
Fresh out of an MBA college, and fresh into his first job that did not pay much, Ravi got married to his long time love (notice his belief in ‘long-term’ here :-)).

Anyways, that was a start of a dream personal life, and a nightmarish financial life.

Ravi did not have any loan – home loan or credit card loan – on his head, yet his financial life wasn’t going in the right direction.

This was not because he was imprudent or rash with his money. The truth was that whatever he earned, was spent towards meeting his life’s daily needs – food, clothing shelter, travel…and of course, television, refrigerator, washing machine, mobile phone, eating out, and weekend movies (all ‘needs’ of a young and newly married).

In fact, after house rent (37% of his monthly income), his miscellaneous costs formed around 25% of his monthly income.

At the end of the month, what remained in his bank account was just 2% of his net take home salary.

In short, he was living paycheque to paycheque…just scraping through to the next month with peanuts in his bank account.

Here is how his income was spread in 2003…

Life Stage 2 (2004): Ravi had a child
The year 2004 brought a couple of good news for the family. First, it was the birth of a daughter, and then Ravi got a salary hike.

Given the bad economic phase of 2003 and early 2004, he had not got a salary hike for full 18 months since joining his job. So when good times returned by the end of 2004, he got a salary hike that almost multiplied his net take home by 1.5 times (a daughter indeed is a very lucky omen).

So the disposable income with the family increased dramatically…but so did all the expenses (food, electricity, telephone, shelter…all became expensive).

But a couple of good things happened here.

Before the salary hike, the family was spending first and saving later. In other words, Ravi saved whatever was left at the end of the month after meeting all his monthly expenses.

Good sense prevailed after the salary hike, and he started saving first – he allocated some money to start SIPs in a few mutual funds – and then used the rest to meet his household expenses.

Here is how his income was spread at the end of 2004…

As you can see from the chart above, the most notable number here is the one under ‘Savings’. It moved from just 2% of income in 2003 to 29% of income in 2004.

You might think that a large part of this increase in savings was due to the salary hike, which is true.

But more than that, the rise in savings was led by the ‘willingness’ of the family to save first and spend later.

They did not compromise on their lifestyle (they still spent money on entertainment, travel, and other material luxuries that they could afford), but this was only after they had taken care of their savings.

Since the family was bigger now, and there was a ‘need’ to own a house in a few years, a part of the monthly savings (almost 75%) went into a fixed deposit (that was specifically created for meeting the down-payment for the house).

Thanks to the increase in salary, Ravi was now in a position to gift his wife some money every month, and also bought some term insurance (as shown in the chart above).

As he explained to me, the reason he bought term insurance was this – given that he was the sole earning member of the family, he had to ensure that his family’s future was not compromised in case he died soon.

This I think was a very valid reason why he chose term insurance and not any worthless products sold under the garb of insurance.

Life Stage 3 (2006): Ravi bought a house
Helped by salary hikes and disciplined saving and investing for two years, Ravi now had enough money to pay for the down-payment of a house, which he bought in 2006.

He thought that house prices were high at that moment (in hindsight, he sees that purchase as a great decision as house prices have risen by almost two times since then), but still went ahead with the purchase…largely to bring some comfort and confidence in his life (the ‘roof on your head’ theory).

So while he was paying 20% of his salary as house rent in 2004, he started paying 26% of his salary as home loan EMI in 2006 (which was a reasonable proportion of income going towards EMI).

Apart from this, as you can see from the chart below, one other account was added to the household expenses – that of ‘education’. The daughter was now in pre-school and thus her education and other related costs now formed around 2% of the family’s monthly expenses.

Ravi also increased his term insurance cover to take care of his home loan liability, and also to cover the rise in his household expenses.

While his savings now dropped to 20% of income (from 29% in 2004), this was a comfortable setting as some of the previous savings were now diverted towards the home loan EMI.

Here is how his income was spread by the end of 2006…

Life Stage 4 (2011): Ravi quit his job
Tired of a corporate life, long hours of travel, and running a constant rat race, Ravi quit his job in 2011 to work towards his passion, a dream he had nurtured all these years.

However, despite having a roof over his head, and home loan repaid with the help of a large part of his past savings (and some help from his wife’s savings), he first thought it was foolish of him to leave a high paying job for an uncertain life (uncertain in the financial sense).

But this was till he saw this…

With a business earning in 2011 almost equal to his salary of 2007, Ravi was still able to save 146% more than what he was saving five years back!

This was thanks largely to the repayment of housing loan, and some prudent cuts in expenses on eating out, movies, telephone, and other miscellaneous stuff.

As you can see from the graph above, his monthly savings were around 47% of his monthly income in 2011, much-much more than it was any other time in the past!

So Ravi seems to be on the right track to his financial freedom.

What is more, he now gets to spend more time with his family and friends, and pursue his passions…while not worrying about money anymore.

His bank account may still seem inadequate, but his life is far, far richer.

That’s entirely because he chose to save and invest before he spent (and did this continuously for a long time), instead of the other way round.

“This is fiction, isn’t it?”
It’s good that you asked this question.

As I said at the start of this post, this is a real-life story.

You still don’t believe?

What if I say, “It’s my story!”

Would you believe now?

Indeed, the ‘Ravi’ in this story isn’t Ravi for real, it’s me…and what you read above is the story of my financial life and actions across different life stages.

(My wife might never read this post, but she remains the biggest hero of my life (for supporting me in all my decisions)…followed by my daughter (for being my lucky charm)…and my mind and stomach (for making me aware of my true being and then helping me reach a state from where I can share this story with you).

“Okay, but how do I increase MY savings by 9200%?”
Good you asked this question, as I forgot to answer this above.

9200% is the amount of increase in my savings between 2003 and 2011! 😉

The number for you might be different, but that isn’t the big idea here.

The big idea is that if you are at a life stage that resonates with any of my life stages shared above, know that you already have within you the power and intelligence to direct your financial life the way you want it to.

What you need to do is just this – earn, then save and invest, then spend…and do this with discipline for a number of years.

Just do it! I would love to see you beat that 9200% number. 🙂

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.


  1. Hi Vishal
    Your example shows that once a person has decided that he or she can take care of his finances, there is no stopping. And the effort (or rather the intent to become financially sound) is independent of amount of initial investment / savings.
    Your article can serve as an inspiration to those who are ready to manage their money (rather than being managed by it). And if I have your consent, I would like to share your article with readers of my blog too (Due credit would be given to safal niveshak)

    • Hi Dev, thanks for your comment! I will be very happy if this article can inspire and help even one person to take care of his/her finances.

      Indeed you can share the article on your website (just let me know the URL). Regards.

  2. phantom says:

    As usual, a good article. The main point being you have able to do a lot of things without big time sacrifices. Example buying a house and starting up. To me till this point of time these were mutually exclusive. But I guess, scaling down expectations and with some determination, you have shown it is possible to do both.

    Very insightful, inspiring and a new way of looking at personal cashflow. May be you can add some more points about renting and home buying. There’s a lot of discussions around that and may be your thoughts could give people some perspective.

  3. shankar says:

    Namaste Vishalji…
    That was a really good post, I just loved it..But at the very beginning itself I came to know that, that Ravi is none other than you..!!!
    It’s really great to look back at one’s own life…
    Though I do not fall into any of those life stages you mentioned, but I would definitely like to take up the challenge of beating your 9200% benchmark…:)
    You know why?? I can proudly say that I am a tribesman of Safal Niveshak and have a great mentor called Vishal Khandelwal..!!

  4. Ramesh says:

    A very well written piece……..will forward this to all my younger friends and relatives as it holds good lessons and is a perfect example…….

  5. Manish Sharma says:

    Hi Vishal, your latest post is really inspiring. It has given me some hope in my endeavor to attain some sort of financial freedom in future AND to manage my own money 10 years from now, hopefully!

  6. Fairy tales like this may prompt young and aspiring to take big loans and then quit their jobs. I hope you do not delete this post as this is also a true story of many IT professionals. Better safe than sorry.

    • Hi Rajesh, thanks for your comment! Not sure if that was a fairy tale as leaving the “comforts” of a job was an extremely tough decision. And I hope the young and aspiring would read the post carefully, because I left my job only after I’d repaid my home loan and had no other liability on my head.

  7. Mansoor says:

    Excellent short autobiography and lots of things to learn. One cannot emphasize enough on saving & investing wisely, it makes all the difference in the world. It is interesting to see in the chart above, you had always done saving at various part of your life, including when you had bought a home. Also, I am happy to read that you appreciate your partner for supporting, most people ignore. Congratulations for reaching from there to here, and all the best for the future.

    • Thanks for your comment, Mansoor! And nice to see you back in action 🙂 Before 2003, the savings were accidental (whatever was ‘left’ at the end of the month); however, starting 2004, it became a priority. In hindsight, I thank my stars for giving me that sense!

      • Mansoor says:

        I was never out of action :-), I have been reading all your posts, wasn’t commenting because I love to read over and over when you write about stocks, capital market etc, your views are different and interesting. Other topics are interesting too but I don’t have much to say.

  8. Patience and discipline is a virtue. You have benefited from both.
    Einstein said “Compounding is one of man’s best inventions” and if you have been investing in a PPF regularly you will vouch for that after say 10 years when decent amounts get credited as tax free interest income.
    The only wild card is inflation which in India (and possibly worldwide at different points in time) plays havoc.

    • Thanks for your comment Sudhir! Indeed persistently high inflation is a big demon, the danger of which is not realized by most investors till it hits them. I believe inflation is one of the biggest risk that any investor faces (not government, not corruption, not GDP growth…but inflation). And that is why having a good proportion of good quality equity (stocks or MFs) in a long term portfolio is such a necessity.

  9. vikrant says:

    i read half the story and knew that its you. and thought i will tell you that after i complete the post, later found that you revealed the secrets 🙂

  10. That was truly inspiring story Vishal, with a little discipline in financial life there can be wonders, you are the true example. And, as some people already mentioned, when I was half through the article, I was sure its the story of Vishal, and I had a smile on my face when I saw you revealed the secret at the end.

    You have been a great financial mentor to me, Thanks much!

  11. Rupesh Soni says:

    Hi Vishal

    really appreciate your efforts to educate and inspire people for the savings and investment. After reading your article my thinking is changing altogether and now moving from earn-spend-saving model to earn-saving-spend.


  12. Hi vishal,

    By reading the first stage itself I taught it’s your story. Mine is also a similar one in stage 2.

  13. Thanks vishal !

    I just came across a book Rich Dad Poor Dad, in that kiyosaki made focus on paying to yourself first after the paycheck. The same think i am seeing here as you explain to save first.

  14. Amit Goyal says:

    Hi Vishal, I am a little confused. I hope you will read my query patiently and then answer. The Great “Jim Rogers” and “George Soros” opened the “Quantum Fund” and delivered 4200% (42 times) returns over the next 10 years. You are claiming that in the period starting from 2003 to 2011 (7-8 years), you have generated a return of 9200% (92 times). Does this mean that you have actually converted your each and every initial 1 lakh rupees into 92 lakh rupees in a time period of just 7-8 years, does this also include the value of your home? If I am understanding it correctly, then it is definitely a very very big achievement !! Great, Congrats, and keep up the good work !! 🙂

    Amit Goyal.

    • Hey Amit, how I wish I could do that! 🙂

      But if you read my post again, it’s my savings – money that I save every month – that I have increased by 9,200%. These are not my investment returns. 🙂


      • Amit Goyal says:

        Thank you Vishal Ji for the prompt reply. Now I have understood what you meant to convey. Well you are doing something even bigger than what they have done. Even I feel that there are not many people in India or even in the whole world who are working tirelessly for improving the financial conditions of the majority of Indians. Most of the professionals in the financial world are happy to do unethical things to earn their commissions and incentives. Keep up the good work. The world needs more people like you. 🙂


        Amit Goyal.

  15. Ramesh Bhanu says:

    Hi Vishal,

    9200% is really mind boggling and to be very honest ‘cant be real to be true’ type.
    But I trust you and I know that you are man of numbers. So it has to be true and no calculation mistake 🙂

    If possible can you share your portfolio with us? That will help us to cross verify the ‘Value Investing Theme’ in Indian Markets. If you feel that you can not then at least give us partial information ( like few stocks from each sectors)



  16. Sameer Hirani says:

    Hi Vishal,

    One good thing about your financials in 2003-2004 is that you kept track of your expenses (as shown in the pie chart).
    Just out of university and low salary it is difficult to save but than having a track of the expenses is the first step twoards saving….

  17. Mayuresh says:

    So the trick to increasing savings by 9200% is to start low. That is the only reason that number looks inflated. However, I liked the rest of the article. Also love the fact that you managed to reach almost 50% savings to earnings ratio AFTER quitting your job and starting out on your own. Very inspiring

  18. Hi Vishal,

    So inspiring and one of the best personal Financial Advise i heard for a long time now.

    Thanks for the Nice and Excellent Explanation.


  19. bharat shah says:

    inspiring post. however i guess the reason of 9200% increase in saving is due to increase of your income at the fast rate. of course your focus on saving should have help the same. and the bull phase of 2003-2007 along with your profession (as stock analyst) should have made solid foundation for housing loan margin money arrangement and prepaying easy even thereafter. otherwise preaching ‘ income-saving =expense’ is not easy for nominal increment salary job in inflationary India , i think.

  20. Hi Vishal,
    After reading this very inspirational post I think you just may be our very own Indian ‘Mr. Money Mustache’
    Looking forward to reading the rest of your articles.

  21. Very inspiring article Vishal.I read your blog regularly and its chose to follow your dreams is really good. I am also at this kind of crossroad in my life.will surely take wise decision.
    Thanks a lot again.


  22. Faisal Faizan says:

    Hi Vishal,

    I new from the beginning this friend of yours is none other than you 🙂 . The notion came from reading another post from you earlier in which you mentioned saving 25 lacs. The more I progressed through the article the more my conviction became stronger its you. Jokes apart, you have been a pleasure to read all these months. Thanks for sharing your knowledge to small retail investors like us who want to attain financial freedom and invest for long term.

  23. I would certainly like to beat your 9200% 😉

  24. arundhati says:

    thank you for such an inspiring article.
    while i do believe in saving first and spending later. I believe both saving and investing must be kept different.
    what i get confused with is what percent of my salary can i save, what percent should i invest. Can you suggest on same?


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