Thu. Feb 9th, 2023

If you are a sole earner of the family, before starting investing, the first thing you need to do is save at least 6 month worth of your salary into an FD or in high quality bonds or buy physical gold. This will protect you and your family from any unknowns and offer you some breathing space.

After you have achieved the above, plan an investment horizon (i.e. I like to stay invested for 5 years or 7 years or 30 years ( until retirement). Based on that you can start your SIP. For short term investment (5 years or less) go for government bonds which will offer higher returns then FD and act as a hedge against inflation.

If you want to keep investing for long term ( 7 years and above), start investing in index funds. I could start with large cap index funds such as Nifty 50 and as you experience in stock market as well as increased your earning potential; diversify into Mid Cap and small cap funds.

From my experience, it will be very tempting to invest in individual stocks as they seems to offer higher returns then index funds. It is not only risky but most probably you will loose your nerve in economy downturn and loose your hard earned money. Please stick with index fund and never stop your SIP’s under any condition.

Also other important point to note is as you have stated as a sole earner, please take a life insurance cover from a reputed company and in case your employee doesn’t provide you and your family with health insurance. Please take both. These two elements are the biggest risk for financial well-being of middle class families.

Good luck with your investment journey.

By admin

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