How to Start Investing Money as A Fresher? Know These Basics First

We put in our all when entering the workforce after university with the hope of making a strong first impression and setting the stage for future success. Take the next step and 'Invest the money as a fresher' to secure your financial future.

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That's because we hope a solid first impression will help us get ahead in the company and set the stage for future success. 

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When starting as a fresher in a new industry or job, one of the best pieces of advice you can get from everybody is to save money right from the beginning.

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That's because saving can make a big difference, help you retire comfortably, and inculcate the good habit of saving.

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You still need to save for retirement, even if your company provides a retirement plan.

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In addition, since most people do not immediately need to start a family, now is an excellent time to begin saving and investing for the future.

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This expenditure will prove helpful in old age and whenever you feel like taking a break from your busy schedule.

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How to get started? 

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As a first step, calculate how much money you can stash away minus the expenses on your plate. Subtract the expenses from your monthly take-home pay to arrive at this figure.

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When you have this number, putting money into a savings account is a breeze. You should create a savings bank account as your initial investing strategy.

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It might also be used as a place to deposit paychecks. You have as much time as you need to save the sum you've set as your goal.

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The next step is to put your savings into a fixed deposit. The annual interest rate is 7.25%. If you are just starting with investing, this is a great way to get your feet wet.

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However, you should educate yourself on various investment tools before making any hasty decisions about where to put your money.

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Your investing plan may, in reality, be broken up into three distinct periods. It can be based on concepts with varying time horizons.

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Start small and set a good budget 

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Remember when you wanted something in high school or college, and your parents would say - "apne paise se khareed lena (get this from your money)." Well, guess what - that time is finally here! 

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Buying an iPhone, splurging on a Zara sale, or shopping it all on your first Sephora store visit. We've all been there when the excitement of seeing money flowing through the account every month tends to swirl us into an array of purchases we've wished we could spend on before we started earning! 

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While this is the phase to enjoy the excitement of earning on your terms, it's also when you understand why budgeting is so important and how compartmentalizing your money can ensure it lasts from one paycheck to the next. 

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Since this is your first stint as a new salaried professional, it's best to work on your savings slowly but consistently. This process requires you to understand your monthly spending pattern and what's left behind after all bills have been paid. 

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You must never discount the importance of beginning with a small amount and working toward setting a monthly amount that you're comfortable parting with, regardless of the other significant financial responsibilities you have.

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Do not invest your money straight away in stock markets 

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It is common knowledge that stock markets are high-risk investments in which there is no assurance that you will receive a return on the primary amount invested.

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Therefore, it is prudent to avoid succumbing to the allure of bigger returns on investments, especially since you're a beginner in the world of investments.

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It is recommended that you wait to participate in the stock market until you have accumulated a chunk of capital from investment channels that are more reliable and less prone to market volatility. Start by building your bank account and have enough security before you invest in the market.

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Once you have enough money to act as a cushion to any emergency, start taking calculated risks and slowly move into the stock market. We'll still recommend this move only once you've figured out the fundamentals of how this bull market works. 

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Save money and set goals 

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You should ideally align your investments according to your short-, medium-, and long-term monetary objectives. Making these time-bound goals may be difficult while you're young, but you should still give it a shot. 

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Some examples of reasonable time frames for saving and investing include: saving Rs. 1 lakh in a year to purchase a high-end laptop, saving Rs. 4 lakh in three years as a downpayment to buy your first car, saving Rs. 20 lakh in five years for a down payment on your first home, and so on. 

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Your investment amount, duration, risk tolerance, investment products, liquidity needs, etc., all revolve around your financial objectives.

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Savings are frequently introduced to first-time job workers through income-tax planning. Every salaried employee must produce evidence and accounts of costs and investments made from January through March to avoid taxes.

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Invest in a stock-linked savings plan. These mutual fund schemes provide income tax benefits under Section 80C. Or, you can browse through ELSS, which provides you with a plethora of equities while saving you taxes.

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Try to avoid cryptocurrency just yet

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Everybody is talking about cryptocurrency these days.

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Yes, cryptocurrencies have grown in popularity recently, and many young adults have begun investing in them. However, if this is your first job, avoid cryptocurrency.

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They're complicated, and you'll need to do a lot of research before you can differentiate one cryptocurrency from another.

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Many young people are tempted to buy cryptocurrencies because of the enormous profits. Typically, such investments are intended for astute investors willing to lose a large amount of money.

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As a beginner, we suggest you take it slow and start with equities such as mutual funds and Public Provident Funds, also known as PPFs, to get experience in investing.

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Keep money aside for insurance

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The beauty of life is the fact that nothing remains constant. The saying goes the same for your health too. So, while you're busy making the most of your money, do not forget to take a sliver out of this and park it for your life and health insurance. 

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These insurance policies can act as a cushion to fall back on against any unforeseen events and can keep you protected against any adversities in life that comes your way. 

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Before we wrap up 

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After a few years on the job, you can increase your investments and SIPs and include a few additional mutual fund schemes.

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You can then use this money to purchase a car, a home, or even to plan for your marriage. The less you have to borrow, the less interest you will need to pay. When it pertains to investing, avoid procrastinating and get started right away.

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With time, you'll begin noticing how saving becomes a habit, and you can start looking at ways to invest in riskier options like mutual funds and the stock market.

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Use the time you're building your savings to learn about other investments, and when the time's right, you'll be ready to grow your wealth for a lifetime!

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If savings seems like an alien concept to you, which seems tedious and, more importantly, difficult to achieve - then you can try your hands on doing daily savings on the Jar app! 

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You don't need to bid a good chunk of your money monthly if you're not ready yet with a financial roadmap.

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Start away with the auto-invest feature, save as little as Rs.10 a day, or invest the spare change from your daily transaction - all on digital gold. The best part?

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The savings you do on the Jar app don't pinch your wallet, and you can enjoy the ROIs on digital gold - one of the lesser volatile investments. 

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Start creating your investment journey on the Jar app; it's simple to use, your money is safe, and you get better returns - what's not to love?