Garima Chabbra

POSTED BY garima Chabbra ON May 25, 2012 6:36 pm COMMENTS (10)

Hello ,

I am 25 Years old and have recently finished my higher education. I want to start investing for the first time now, but I am a little clueless. I understand things theoretically but practically no experience.
I am unmarried, soon to be married next year. I am working on contractual basis so dont have any epf and stuff.
My monthly salary is Rs 42,000.

I live with my parents and currently dont have any loans, emi or expenditure per se.
I want to utilise this period of less responsibility to invest well. I don’t have any particular goals in mind like buying a car or buying a house per se.

Here is what I am thinking.
Starting with investment of Rs 10,000 p.m.
Go for a basic term insurance with LIC. (waiting for them to go online !)
Go for a PPF in SBI for Rs 2000 per month.
Go for equity upto Rs 5000 pm. SIP in mutual funds.
Gold etfs of about Rs 2000 pm.
and yeah thats about it.

1. do you think i should increase the money as i have no responsibilities right now ?
2. I dont know any other better form to invest in debt apart from ppf. Is there anything else I should consider?
3. how to go about sip ? as in whats the first step. ? just start with fundsindia or moneysights?
4. should I diversify right now in large and mid cap/small cap ?
5. Should I invest in a tax saving instrument ?
5. should I invest in gold etfs per month ?

Thanks in advance ,
any help would be much appreciated.
thanks ,
Garima Chabbra

10 replies on this article “Garima Chabbra”

  1. garima Chabbra says:

    @Ramesh thanks for the amazing links. Your suggestions were though provoking. My parents are kind of dependant on me as I am the only child but I think I will mull over it again whether to buy insurance.
    Thanks for the tax saving suggestion. I was myself thinking of the same but wasn’t sure. I will look into some combination of a diversified fund and tax saver from something like HDFC and the other alternatives.
    @deepakgudla thanks for the advice I will definitely look into the book and articles.
    @3sharad thanks for the advice. Tax saver Mutual funds really stirred some thoughts. And you are right about the small and mid caps.. I will definitely gain more knowledge into it.
    @ashal jauhari thanks for showing interst, Yeah I Am gonna keep the job and its gonna be full time . Also I want to keep investing for long term.
    @anurag : that’s really a gem of a statement. That’s exactly what I was thinking with less responsibility we get the advantage of investing more. So If I may ask which mutual fund/funds did you finally narrow it down to ?
    @Manish Chauhan: thanks for the great gem of a advice. I have been following your blog for a really long time. I am looking forward to reading your book very soon. I have been following other finance literature like outlook, et wealth,blogs etc . Uptill I keep gaining more knowledge I thought I should start with barebones plan atleast.
    I was kind of thinking myself to go for balanced fund. RD was a great idea . thanks !

    1. Dear Garima, in the light of the fact that your parents are some what dependent on you, you may go for a term plan of around 50L Rs. Purchase online plans. Regarding that saving & investment, first of all create an emergency fund of at least 6-9 months of your expenses.

      You may start investing in HDFC Tax saver & PPF account for tax saving & investment purpose.

      How much to invest to cover that 1L Rs. limit between these 2 is your personal choice.

      For pure investment purpose, you may invest in Quantum Long term Eq. fund.



  2. garima Chabbra says:

    Dear everyone
    Thankyou so much for all the replies. I am truly overwhelmed by all the help and the answers provided by you amazingly nice and generous and genuine people. I am still in office and will read each answer full when I get back home and reply to each person individually as soon as I can. Thank you again for the amazing response.
    Yours ,

    1. Dear Garima, please take your own time to read & understand. Do not make any hurried choice.



  3. Hi Garima

    I have a little different take on this . I would suggest invest in your knowledge and understanding for time being . Buy my book jagoinvestor which at the moment costs just Rs 299 from homeshop18 : and also read few more books on investments etc . Also read all articles on blog too ..

    For now you can either do 2 things

    1. Either put your money in a RD for 6 months and in these 6 months you can plans things out and do your background work .

    2. Start a PPF account just for the sake of it and keep investing Just Rs 500 as minimum amount . I saw Ramesh saying its not for you , I agree that the bulk should not go there,but you can anyways start it and keep minimum amount for now .

    3. Start the SIP in HDFC Prudence for now , as its a balanced fund , go with fundsindia (moneysights recently stopped their online mutual fund platform)


  4. Hi Garima ,

    I am about to get 23 and I am investing 50 % of my salary in MF’s and RD .Suggest you the same since you have no responsiblities now .Investing more in starting will get you a higher corpus in future even if you stop your investments .

  5. Dear Garima, As you told, in a year or so, you ‘ll get married. What are your future plans for your job, continue or part time or no job at all? What ‘ll happen to your ongoing investments then? Please share some details.



  6. 3sharad says:


    You are young and have time by your side.

    Put as much in equity funds as you can, you can choose Tax saving MFs to save tax on salary. Stay invested for long term.

    Debt options: PPF is good. Alternatively, you have balanced or pure debt MFs.

    By your age, I believe you would not be so risk averse and I suggest to invest 50% in large cap and 50% in mid-small cap funds. It’s the mid-caps and small caps that would become large companies tomorrow and hence would generate returns.

    Choose an online player you trust or you can open account with a brokerage firm (say Edelweiss, IIFl) who also provide online MF transactions. Having all things online and at one place would help in tracking and managing.

    Good that you thought about insurance. Though you might not have dependents but you would have them at some point. The point in taking insurance now is that you get it at a very low premium.
    A 1 cr cover from HDFC would cost you around 6K p.a. (barely INR 500 per month).

    Hope this helps.


  7. deepakgudla says:


    Good to hear that you started investing at the right time…

    No need to think about instruments where you want to invest first…

    My suggestion is to first read the book Jagoinvestor…. Its really useful to understand the basics..

    Next to the book, read the articles @

    Then you can check here for instruments where you can flow your income….

    All the best…

    Deepak G.

  8. Ramesh says:

    Go through these articles.

    1. Live well but within means.
    2. Invest in a SINGLE low cost diversified fund (choose any of Franklin Prima Plus, Quantum Long Term Equity, DSP Equity, HDFC Equity,Reliance RSF). All these companies let you have online access (no need to go through any other online portal). As I have always remembered throughout my education life: Less Study, Less Confusion. Apply it here too.
    3. Start SIP. With online access, you can add the extra money into the same fund, if you have left some extra money at the end of the month.
    4. Gold ETF is a brilliantly Dumb idea for long term wealth creation. Please do not. If you want to enjoy gold, buy jewellery for yourself. Even then, people nowadays choose diamond/platinum too. So, buy gold/Pt/hard carbon for your enjoyment and NOT as a proxy for investment.
    5. Do not go into the different caps of stocks. Let a competent manager decide about them.
    6. Insurance: Why? Does anybody depend upon your income stream? In other words, does your income mean anything for anybody else? Do your parents depend upon your salary? If the answer is No, then do not go for Any Insurance scheme (even if it is free or cheap).
    7. Since your income will attract some tax, put some money in a tax plan from the same MF company. Max. it out to 1 lakh (set it either as SIP 10k for next 10 months make it 1 lakh, or any other combination as it suits you).
    8. PPF. Not for you at the moment. Think about it only after 20 years (60-15 year locking period).

    Keep it Simple and Stupid.


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