I am a 24-year-old female who is new to finance. Currently, I have savings of Rs 17 lakhs. I recently relocated to India to begin working here and my monthly salary is around 1 lakh, with an additional RSU value of approximately 1.5K dollars.
My current expenses include a rent of 25,000 Rs and a gym membership costing around 20K. I also intend to send a certain amount of money to my parents every month, as my father will be retiring in a few years.
I am interested in investing in stocks and would like guidance on how to get started, as well as how much I should aim to save. Should I begin with stocks or consider SIP? I am researching on my own, but I would appreciate advice from experienced finance professionals on how to better manage my salary.
I am also curious about setting financial goals and would like to know what my net worth goals should be by the age of 27, aiming ambitiously. I am willing to aggressively save if recommended.
Advice by Akhil Rathi, Senior Vice President, Financial Concierge at 1 Finance
Investing is often perceived as an aggressive endeavour where taking higher risks equates to higher returns. However, the most crucial element in wealth creation is not aggression but consistency. Many investors believe that making bold investment decisions will accelerate their financial growth, but the reality is that staying invested for the long term with a disciplined approach yields better results. Rather than focusing on high-risk strategies, it is more beneficial to develop strong financial habits, such as regularly setting aside a portion of your income for investments. This ensures that you benefit from compounding over time and do not expose yourself to unnecessary financial volatility.
Since you are interested in researching stocks, it is important to recognise the time and effort required for active investing. Analyzing individual stocks, tracking market movements, and making informed decisions can be time-consuming, potentially affecting your job productivity and leading to stress or anxiety. Many professionals find that the effort required to consistently outperform the market is substantial, which is why structured investment options like Systematic Investment Plans (SIPs) in mutual funds are often preferred. These allow you to participate in market growth without the need for constant monitoring, enabling you to focus on your career while still building wealth efficiently.
Before jumping into investments, it is essential to ensure that your financial foundation is secure. This includes having an emergency fund that covers at least six months of expenses, which acts as a safety net in case of unforeseen circumstances. Additionally, securing adequate health and life insurance is crucial, particularly since you plan to support your parents financially. A well-structured financial plan begins with protection before growth—without these safeguards, even the best investment strategy can be compromised by unexpected financial burdens.
Once these foundational aspects are covered, you can then focus on defining your financial goals. It helps to categorize them into hard goals, such as buying a house or ensuring your parents’ financial security, and soft goals, like travel or lifestyle upgrades. Not all goals need to be met through equity investments alone—debt instruments, gold, and other asset classes can also play a role in balancing your portfolio.
Additionally, tracking your expenses and distinguishing between necessities and discretionary spending can help optimize your savings. If certain expenses seem high, adjusting them can accelerate your financial growth. By consistently saving, investing wisely, and managing risks effectively, you can achieve your ambitious financial goals while ensuring long-term financial security and peace of mind.