Babaji, our driver, will retire this month. When he came to work for us as a 24-year old in 1999, his story was that of many migrants to Mumbai. He left behind a small patch of rain-fed land with poor yields, a family of brothers, sisters and a widowed mother. Babaji was not sure if he was rich or poor. He had land, but no income from it. He earned his income in the city, but struggled with his finances every month. That was until we decided to plan his finances.The first four years of his life in Mumbai were tough. He got married, but could not afford to set up home. His brother died in an accident. His sisters were married off. His mother looked after the farm and he sent money back to the family, living alone and frugally in Mumbai. Then we decided that Babaji needed retirement planning.His heart was in the village, and he had to go back. But he could not do that without ensuring that he would earn enough back in the village to support his family. He now had a wife and two sons to take care of. We first had to convince him that he should work for that dream and set some money aside. To someone who took most of the salary as advances, due to persistent cash crunch, that was a tall order. To incentivise him to save, we agreed to match his saving with our contribution and build a retirement corpus for him.He began with Rs 500 a month, 12 years ago. Someone who looked at his finances would think that he needed emergency funding first, debt investments next, and only a small portion in equity. My analysis was different. Here was a man who needed a sizeable corpus to take him back to his village. We had the benefit of time. So I took a 100% equity allocation. We simply began a systematic investment plan in a diversified equity fund, which had large, mid and small cap exposure. We not only wanted equity return, but also the benefit of a higher return from mid and small cap companies, and had to beat the index with a significant margin.Given Babaji’s dire liquidity needs, it was important to keep the investments away from his reach. We got him to put aside a small percentage of his Diwali bonus too. We also did not report the performance of his portfolio to him, nor did he ask us. All he knew was that some money was being kept aside. In the time we managed this money for him, there were two bear cycles in the markets, and two bull cycles. Despite that, Babaji’s money grew in value, due to the sheer power of time and equity returns.After a few years of saving, we decided to let Babaji enjoy some benefits of his savings. He could draw small amounts each year for a specific need. He bore a well to draw water for his fields, fenced his farm and renovated his village house. Unexpectedly, his mother took ill and Babaji’s retirement came unannounced. We did not have the time for niceties of portfolio rebalancing, but had to get his retirement corpus to work for him.Babaji’s sons were still in school. He needed a source of income since the earning from his farm might not be stable. We also agreed that the corpus should remain invested to meet long-term goals for his sons, but also generate some income. We decided that buying a light commercial vehicle would be a good idea. His village needed such services, and Babaji derived great pride and pleasure in driving and earning from it. We identified a second-hand vehicle in good condition.Babaji’s retirement corpus had grown to Rs 7.5 lakh. The contribution made by him over 12 years was about a lakh. We matched it. The equity markets and the magic of compounding took care of the rest. The name of the fund we chose is not important, as several equity funds returned over 20% over this long period of 12 years. Suffice it to say that the returns were earned by strategic and disciplined investing in an equity fund and not any luck from selection, timing, profit-booking or any such ill-advised jugglery. We decided to spend Rs 2.5 lakh on the vehicle and invest Rs 5 lakh in a balance fund. It would seem that a monthly income plan or a post office deposit would be a better idea. But the reality is that Babaji is not dependent on this corpus for all his income. He will have his transporter income, as well as income from his farm. He only needs some additional incomes to meet larger expenses. Therefore, we felt that if he drew on his corpus twice a year, for annual school fees and to meet Diwali expenses, he would be fine.Babaji would have enough when his sons went to college. We agreed that 30-35% of the money should be allocated to income assets, and the rest need to grow in equity. That is why a balance fund suited his needs.Babaji is a happy man, proud of his savings and investment strategies. He does not know much about markets but represents hope for me. Investments, markets and planning are not merely esoteric topics or gyan but offer real solutions to real problems. I am not a practising financial planner or adviser—I am only a teacher. Babaji makes me to believe that each one of us can make savings and investments work for us, and get the life of dignity and well being that we all strive for.The author is Managing Director, Centre for Investment Education and Learning