According to the Securities and Exchange Board of India (SEBI) data, new demat account additions rose to an all-time high of 10.7 million between April 2020 – 2021.
Imagine Raj, a young man from Kolkata, earning ₹60,000 a month. He has saved ₹1,00,000 and wants to invest it, but he’s unsure where to start. Should he use his savings, take a personal loan in Kolkata, or invest in stocks? Raj is confused about his options.
Here are 7 important things Raj (and you) should keep in mind before making your first investment:
1. Understand Your Financial Situation
For example, Raj earns ₹60,000 a month. He spends ₹40,000 on rent, food, and transport, leaving him with ₹20,000 for savings or investment.
Before investing, Raj needs to know how much money he has left after expenses. If he takes a personal loan in Kolkata, he should ensure he can repay it without affecting his daily spending.
2. Set Clear Investment Goals
For example, Raj wants to buy a car worth ₹5,00,000 in 5 years. He plans to invest ₹1,00,000 now to help reach his goal.
Raj’s goal is to buy a car in 5 years. Since it’s a short-term goal, he might choose safer investments like fixed deposits or bonds, which offer stable returns and lower risk, helping him reach his target without too much risk.
3. Educate Yourself About Investment Options
For example, Raj is considering investing ₹1,00,000. He learns that stocks might give a return of ₹ 15,000, while bonds could offer ₹ 8,000 in 1 year.
Raj understands that stocks offer higher returns, but they are riskier. Bonds are safer, with lower returns. Raj can start by learning more through articles or videos to decide which option suits his risk level and financial goals.
4. Consider the Risks Involved
For example, Raj borrows ₹500,000 using a personal loan in Kolkata to invest in stocks. If the stock price falls and he loses ₹200,000, he still needs to repay the full loan amount of ₹500,000.
Raj understands that taking a loan to invest is risky. If his investment loses money, he still has to repay the loan with interest, making it more dangerous.
5. Diversify Your Investments
For instance, Raj spends ₹40,000 on stocks and ₹30,000 on bonds and ₹30,000 on fixed deposits. If stocks lose ₹10,000, his bonds and fixed deposit might still provide steady returns.
By diversifying, Raj reduces risk. If one investment loses money, others can help balance the overall return.
Here is a table to show how Raj could divide his ₹1,00,000 to diversify:
| Investment Type | Amount Invested | Expected Return | Risk Level |
| Stocks | ₹40,000 | High | High |
| Bonds | ₹30,000 | Moderate | Low |
| Fixed Deposit | ₹30,000 | Low | Very Low |
6. Monitor Your Investments Regularly
For instance, Raj invests ₹ 50,000 in stocks and ₹ 50,000 in bonds. After 3 months, his stocks lose ₹ 5,000, but his bonds earn ₹ 4,000.
Raj regularly checks his investments. If stocks lose money, he may sell them while adding more to his bonds, which are giving good returns, to stay on track with his goals.
7. Seek Professional Advice if Needed
For example, Raj plans to borrow ₹ 1,00,000 through a personal loan in Kolkata to invest. He meets a financial advisor to understand how to manage the loan and invest wisely.
The advisor helps Raj decide the best investment strategy and explains how to safely manage the loan, ensuring Raj doesn’t face financial trouble later.
Fact: A study reveals that Indian investors prefer low-risk options like fixed deposits (FDs) and debt funds. RBI data shows over ₹103 trillion is held in 24.23 million FDs.
Conclusion
Investing is like sowing a tree; it requires time and care. Raj started by understanding his finances, setting goals, learning about options, managing risks, diversifying, and monitoring regularly. This approach ensures his investments grow steadily, just like a strong tree.
If Raj follows these steps, invests wisely, and uses a personal loan in Kolkata to boost his savings, he could buy his dream car in 5 years. However, without proper planning or understanding of the risks, he could face financial trouble. Careful thinking will help Raj achieve his goals.
Investing may seem tricky at first, but with the right planning and advice, anyone can get started confidently.
