I am 28 and I want to start off my investment journey. How can I start investing in equity funds and debt funds?

I am 28 and I want to start off my investment journey. How can I start investing in equity funds and debt funds. My monthly salary is more than Rs 1 lakh.   

Name withheld

Reply by Santosh Joseph, CEO and  Founder, Refolio Investments and Germinate Investor Services

To begin your investing journey at the age of 28 years is a great start with at least three decades to experiment. If you're someone who is earning more than Rs 1 lakh at 28 years, it is good that you start with a long-term investment plan as at this age you might have little or no liabilities. The reason I stress on starting on a long-term investment plan is because you have many years of a working career or even a business career and therefore your ability to invest in assets that are prone to be volatile but provide a good return profile is very high. 

Therefore, you can start on a good mix of equity and hybrid investments depending on your goals. You could maybe begin by setting off a small safety net for an emergency or a safety basket. Once you're done with it, start aggressively investing in equity and a combination of equity and debt funds in hybrid segment. 

Now depending on your age and your risk profile, I think you may be well suited to take a slightly higher allocation to equity as high as maybe 50-60% or maybe slightly more depending on your profile. But clearly you can make the most out of investing in aggressive equity for long term because traditionally equities are an asset, which help you beat inflation. This can help you generate long-term wealth. Fixed income on the other hand gives you stability and liquidity that you may need for any short-term requirements. 

So, begin with setting aside an emergency basket if you don't already have one. Number two, plan your outlay either by a lump-sum investment or committing yourself to start saving systematically through a disciplined month-on-month SIP which can help you achieve life's goals and also plan for your investment corpus and keep in mind that this could also help you in your retirement planning. So the summary is that it is a great age to start investing, the sooner the better and therefore at 28 it's an ideal age to take long-term investment decisions.

Additionally, you have to also remember that investing is also about ensuring your financial goals and needs are met. Therefore, plan your investments not only for just saving money but also to help you meet some of your financial goals. In essence, a diversified well-rounded portfolio should help you do well.

Investment plan for those in their 20s

Individuals in their 20s harbour ambitious financial aspirations, including endeavours like achieving a net worth of Rs 1 crore by the age of 30 and aiming for early retirement by 40. The realisation of these substantial fiscal objectives hinges on crafting a robust financial blueprint.

Initiating with fundamental financial milestones, young adults in their 20s should contemplate the following initial steps:

> Establishment of an Emergency Fund, earmarked to cover living expenses for a span of 9 to 12 months.
> Formulating a wealth objective, such as accumulating savings amounting to Rs. 1 crore before reaching the age of 30.
> Pioneering a retirement savings target, striving toward amassing a retirement fund of Rs. 10 crores by the age of 60.

Moreover, alongside these primary financial targets, individuals may broaden their scope to encompass supplementary objectives as they mature, which could encompass endeavors like property ownership, annual vacations, provision for children's educational costs, and more.

SIPs: Automating investments offers a streamlined approach to wealth accumulation. A primary advantage lies in its ability to simplify the investment process, making it more efficient and consistent. One of the most recommended methods to automate investments is by initiating a Systematic Investment Plan (SIP) within a Mutual Fund.

SIP enables investors to allocate a fixed sum of money regularly, often on a monthly basis, towards purchasing units of a Mutual Fund. This regularity is typically scheduled for a specific date each month.

Commencing a monthly SIP with even modest amounts, such as Rs. 500, can pave the way for gradual wealth development. Over time, these small yet consistent contributions have the potential to yield a substantial corpus, especially for young investors looking to enhance their financial portfolios.

Investing in SIPs and expecting returns of 12% p.a.

Monthly SIP Amount	10 years	20 years	30 years
Rs. 1,000	Rs. 2.32 lakh	Rs. 9.99 lakh	Rs. 35.29 lakh
Rs. 5,000	Rs. 11.61 lakh	Rs. 49.95 lakh	Rs. 1.76 crore
Rs. 10,000	Rs. 23.20 lakh	Rs. 99.9 lakh	Rs. 3.53 crore
R. 25,000	Rs. 58.08 lakh	Rs. 2.50 crore	Rs. 8.82 crore
Rs. 40,000	Rs. 92.93 lakh	Rs. 3.99 crore	Rs. 14.12 crore