Zero to Investing on r/IndiaInvestments Wiki

Getting Started

Mon, 01 Jan 0001 00:00:00 +0000

Getting Started

Intro : Level Zero 😊

https://tenor.com/view/po-level-zero-kung-fu-panda-fail-gif-11786422

You’re at level zero, if you’ve basic idea about bank accounts, or maybe some idea about FD, have heard about SIP stuff, and that is it.

Otherwise, we’d assume you’re a well-earning professional, protected by parents. Who are also likely to not have great ideas about money management.

These are some common ideas you probably hold dear

Buy your house first
Real estate is the best investment
FDs are the best, even better if you invest in FD in your spouse’s name ,to save tax
Gold is the best hedge against inflation, it always goes up

A Basic Question ❓

Let’s start with the most basic question.

Part Two - Defensive Setup

Mon, 01 Jan 0001 00:00:00 +0000

Part Two - Defensive Setup

Now that we want to park the money into a more flexible instrument, we can proceed to next options. You focus on what can go wrong and take care of it first.

Part 2A is Health Insurance.

Take a decent amount of health insurance (more correctly called Sickness Insurance, since what it means is that when you get sick and get admitted in a hospital, then you get part or all of the medical expenditure you did).

Part Three - Spending Pattern

Mon, 01 Jan 0001 00:00:00 +0000

Part Three - Spending Pattern

Work done till now:

Start a mutual fund account with one/two AMCs and put money in the liquid fund.
Got health insurance.
Got life insurance.

Now to the question of how to go forward about the monthly fixed/variable salaries.

The most basic rule of Saving/Investing is Earn more, spend less. If you are not doing that, no investment plan is going to get you off the ground. You are digging a hole faster than it can be filled.

Part Four - How to Invest

Mon, 01 Jan 0001 00:00:00 +0000

Part Four - How to Invest

How to go about putting the money which has been allocated for savings/investing?

How to decide how much to put where?

We will create two categories or my preferential term Baskets (or Buckets).

Basket 1: Money which can be needed in next 5-7 years

Basket 2: Money which is needed after 5-7 years.

Why 5 years? Because that is the cycle of our national elections! Just kidding. It is just an arbitrary number but 5-7 years is a reasonable. If you like 7 years, keep it 7. Say if you like India (5 letters), keep it 5 years and if you like Bharata (7 letters), then keep it 7 years.