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I have recently got into my first job and would be able to save Rs 2,000- 3,000 every month. I can invest this amount for 15-20 years. Please suggest where should I invest this amount?
- Srikant
As you are investing for the first time, the road map should be very clear and straightforward. If your income is crossing the income tax threshold, you can save taxes by investing a maximum of Rs 1.5 lakh in a tax-saving fund. The amount you invest in a tax-saving fund will be deducted from your income for calculating taxes. So, if you are going to pay taxes, start investing Rs 2,000 to Rs 3,000 in a tax-saving fund. An investment in a tax-saving fund is locked in for a period of three years but you anyways have a horizon of 15 years. So, it won't matter. You would be getting a tax-break and tax saved is money earned.
If you don't have a taxable income, then invest the amount in one aggressive hybrid fund and do nothing. Just stay invested and keep investing every month regularly. There is another thing to keep in mind as you are getting started. We normally think in constant terms. If you are investing Rs 2,000 to 3,000 today, consider increasing your contribution as your income increases. Depending on your career path, you may get an increment of 8,10, or 20 per cent next year. At that time, do increase your investments accordingly. It is very important to do so. The magic of compounding works only to the extent that you have invested.
So, depending on your income level, choose either a tax-saving or aggressive hybrid fund and be regular with investing. Further, increase your investment amount as and when your income increases. And don't try to time the market. Just doing these simple things will do the job.
This article was originally published on November 04, 2019.
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