Financial freedom is the option to earn money, without even doing anything: D Muthukrishnan

Meet D Muthukrishnan, one of Chennai’s leading certified financial planners. He started his mutual fund distribution business in 2007. Around 2017, he stopped accepting new clients. “I wanted to focus, and still do, on my existing clients and make sure I do them full justice,” he says.

Moneycontrol asked Muthukrishnan what his idea about financial freedom is.

The freedom to not work and still be happy 

“The option to do whatever, which includes even doing nothing, is financial freedom for me. It means earning the privilege to never earn again,” says Muthukrishnan.

He believes in a zero- debt policy. This, he says, helps people achieve financial freedom faster. Having the liberty of leading a life on your terms -- whether to do business, work for someone or retire and not do anything at all -- is when you have attained financial freedom, he says.

“The choice to homeschool your children or send them abroad, because you can afford to do both, makes you feel financially secure,” says Muthukrishnan.

Home loans can kill your dreams

Muthukrishnan says the biggest mistake most people make is to get a home loan in their 20s and 30s. “I did the same, but if I could go back in the past, I would undo it,” he says.

Since EMIs (Equal Monthly Instalments) become such a large chunk of the monthly expenses, going for a home loan takes away the dreams an individual sees in his 20s.

“A person taking a home loan sacrifices 25 years of his life by repaying that debt,” says Muthukrishnan.

Although Muthukrishnan does not believe in taking a home loan, if he has a choice, he acknowledges that home loans, per se, aren’t bad. As an investor, Muthukrishnan doesn’t suggest home loans.

In fact, he tells us that last year he bought his second home. And he did that without a home loan.

Leverage is a burden

“One of the biggest mistakes I have made is borrowing and investing. I would not recommend it to anyone,” he says.

Muthukrishnan recollects that he had invested some borrowed money in junk companies. This, he recounts, has been one of his life’s biggest mistakes.

Now, Muthukrishnan counts himself as financially free. “I do have responsibilities but I have sufficient passive income to be able to stop working today and afford the same lifestyle,” he says.

An equity investor

Although, like all other financial planners, Muthukrishnan also practises asset allocation, when it comes to managing his own money, he is out- and-out an equity investor.

“A savings bank account and a fixed deposit with a scheduled commercial bank is sufficient to create an emergency fund,” he tells us, giving us a glimpse of his own portfolio.

His investment mantra 

“Save more. Saving more and earlier helps you compound your money and create wealth. This is a path to attain financial freedom early.”

- Have no debt

- To achieve financial independence, decrease your debt and increase your income

- Have an emergency fund of two years, so that you don’t have to be afraid of your boss