Although I’ve only recently started working full-time, I’ve been involved in investing for quite some time, including earning passive income through freelancing. Back in my college days, I dabbled in both stocks and cryptocurrency. The crypto market was booming between 2015–2017, and I got caught up in the excitement. However, as we all know, the market crashed significantly over time. Given the volatility and unpredictability of cryptocurrencies, I wouldn’t recommend investing your hard-earned money there anymore. Instead, I’ll share a few safer and more reliable options where I have personally invested, and where you might consider putting your money.
1. Stock Market
I allocate about 9–10% of my monthly income to invest in stocks. Every month, I either buy new stocks or average down on my existing positions. The key is consistency. Even if you can only invest a small amount—say Rs. 1000 each month—starting early and being consistent can lead to significant growth over time.
Tip: To minimize brokerage fees, I recommend opening an online trading and demat account with Zerodha, which offers the lowest brokerage rates.
2. Public Provident Fund (PPF)
I started my PPF account earlier this year with the intention of holding it for the long term—15+ years. This is a great low-risk investment with a fixed interest rate of around 8%, which I use to grow my savings steadily. I invest about 3% of my monthly income into PPF. It’s not meant for retirement, but rather to benefit from the compound interest and secure my future.
Tip: To earn interest for any given month, ensure that you deposit funds on or before the 5th of the month. If you deposit after the 5th, you’ll miss out on interest for that month and it will be credited the next month.
3. Recurring Deposits (RD)
I don’t invest in RDs regularly, but when I do, I typically start an RD with Rs. 1000 as the principal and contribute Rs. 500 each month. The interest rate for RDs is generally higher for a 2–3 year tenure, which is why I prefer this option when I have some extra savings.
Tip: You’ll earn the highest interest rates with an RD if you lock it in for 2–3 years.
4. Mutual Funds
I’ve been a bit hesitant to invest in mutual funds until now, but I’m planning to start this month. Mutual funds are a great option for those who aren’t well-versed in the stock market, as they allow you to invest in a diversified portfolio without actively managing it. I plan to allocate around 3–4% of my monthly salary to mutual funds.
Tip: When investing in mutual funds, I suggest using a platform like Coin, which allows unlimited free investments in direct mutual funds (avoiding intermediary commissions). Make sure to research and pick good quality funds for optimal returns.
5. Liquid Cash/Emergency Fund
I always keep some liquid cash aside as an emergency fund. This fund is not meant for health emergencies but for unexpected expenses like an impulse shopping spree, a weekend getaway, or unplanned personal costs. Having a liquid cash cushion ensures that I’m never caught off-guard by unexpected bills or opportunities.
Tip: You should aim to set aside at least a small portion of your monthly income in a savings account or a liquid fund for unforeseen events—whether it's an adventure trip, a new pair of jeans, or just a rainy day.
Key Takeaways:
- Stock Market: Invest consistently, even small amounts, and consider platforms like Zerodha for low brokerage fees.
- PPF: A great long-term savings tool with a fixed interest rate, perfect for growing wealth over 15+ years.
- Recurring Deposit: Ideal for short-term savings (2–3 years) with higher interest rates.
- Mutual Funds: A safer option for beginners looking for diversification with minimal effort.
- Emergency Fund: Always keep some funds aside for unexpected situations, whether it’s for leisure or emergencies.
Final Thought: Remember, investment decisions should always be based on your income and financial goals. Diversifying your investments into different forms is a good strategy for building wealth over time.
Hope this helps! Best of luck with your investments. 🚀
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