What you must do the day you start earning

Haven’t you been planning what to do with your first salary since forever? Now that you have finally begun working and payday is around the corner, we recommend you start investing right, right from the start.

Your pay cheque may not be fat when you start but don’t make the mistake of not investing. You may be earning less, but your responsibilities are also lesser.

Start with a simple mantra – divide your income into components and maintain financial discipline right from the start.

Ideally, keep 25% of your income for investing and another 10% to buy a term insurance plan to protect yourself and your family against the eventualities of life. We recommend that you do not mix insurance with investment (more about this in future posts).

Now that you have decided to invest 25% of your income, you also have to decide to invest it right. The key to financial growth is in choosing the right products and staying invested for a long term to mitigate market risks and reap in the power of compounding.

You would have understood from our posts till now that mutual funds are the best class of investments for higher returns. But as a starter, it is only natural that you are not well versed with the market and are bombarded by more advice than you can handle.

We suggest that you start with a Systematic Investment Plan initially, while you learn more about investing in the market and slowly and gradually, you can start investing in equity funds as well.

Equity Funds offer much higher returns but also entail much higher risks, so it is very important you understand the fund well. It is also a good idea to take the services of a financial advisor such as Dr Celso at Navemarg, so that you are well advised at all times on your investment journey!

Have you decided what to do with your first pay cheque then?


Buy your home sooner by investing right

We have been speaking about the importance of investing right – in tandem with your life goals such as planning your retirement, your child’s education, marriage and of course, your home. Honestly, if you ask whether you should invest in property or mutual funds, we would always ask you to choose as per your risk appetite, though you must read this article to understand that property is as volatile as mutual funds.

In India, we are traditionally brought up with the mindset of owning our house and aim to buy property as our first investment. So how about investing in mutual funds to create a corpus that would fund your property purchase successfully?

Firstly, the key to successful investment is starting early. If you have decided to buy a house in the next ten years, start an SIP as early as you get your first salary. Ensure you invest at least 10% of your salary in the portfolio and take into account the cost of the property after building in the property inflation rates in it.

On an average, a well planned fund can give you returns over 15% over a long period of time (up to ten years or more). If you are investing your savings in bank deposits and similar schemes, the returns would barely keep up with inflation. Take advantage of starting early and consult Dr. Celso, Goa’s first financial doctor, to save smart for your life goals.

Planning for your child’s education? …Make it a child’s play…

Remember our parents saving every penny possible to provide us quality education of our choice – especially for those born in the eighties, the hefty amounts they planned to save to send us abroad for our higher education?

Now that we are sailing in the same boat as they did then, have you planned your child’s education yet?

Do you know that a graduate course in the United States could cost up to INR 50 lacs, with living expenses in addition to that amount. A similar course in Australia would cost almost 30 lacs. Further, did you know that the education sector has recorded the highest inflation in the past few years? This means that you need to account for over 10% inflation depending on when your child would be ready for higher education.

Sounds scary, doesn’t it? Especially because now you understand the effect of inflation on your investments, you do realise that there is an uphill task ahead.


The aim is not to scare you, but to reiterate the importance of aligning your life goals to your investments. In fact, your investment strategy must be based on what you are saving for! A retirement fund should be your priority and your longest term goal, followed by saving for your child’s education, which would be a medium term goal (7 to 15 years).

Creating a portfolio especially meant to fund the education of your children is a great idea. You must plan it now with the help of an expert financial planner such as Dr. Celso at Navemarg. The portfolio you create will depend on your risk appetite though it is important that you invest in equity, as it is the only option that has given over 14% returns consistently in the past and continues to do so.

In order to mitigate the risk, some amount can be invested in debt funds and fixed deposits as well.

Here are some tips to keep you on track:

  1. Start investing early. The earlier you start saving, the more your money grows. The later you start, the smaller the corpus and you might have to compromise on your retirement fund!
  2. Review the performance of your portfolio once every year to ensure that you are on track.
  3. As you head closer to the time of admission, start a systematic transfer from equity to less risky options.
  4. If you have only 2-5 years in hand, opt for safer options such as fixed deposits and debt funds. Make sure you choose a plan with enough liquidity to cater for emergencies.

You cannot compromise with your child’s education, nor can you delay it. Be prudent and start saving now so that you don’t have to fret at the last moment and end up with a heavy education loan.