How to invest my salary wisely?

 How will you start your investment journey with a salary of Rs. 10,000? I will tell you 4 options. No.

1, safe option. No. 2, medium risk option.

No. 3, high risk option. And No.

4, according to me, the best option. Let's start. No.

1, the love of parents, everyone's desire, fixed deposit. It's a safe option. You have a salary of Rs.

10,000. You won't take a lot of load, you won't take a lot of risk. You will invest all your salary in FD.

And if you invest in FD, you can earn 6-7% on an average. And you will feel that it is very good. Let's see how that works.

So, we will try to invest 30% of your Rs. 10,000 salary on an average. That means, every month, invest Rs.

3,000. In the remaining Rs. 7,000, you have to pay your expenses, your rent, food, transportation, so on and so forth.

And as I told you, you will invest all your money in FD. Which, on an average in the last 10 years, has given you a return of 6.05%. Now let's see, if you earn 6% on an average every month, every year, what will that change? We will assume two things. We will assume, not assume.

One, that every year, you will be able to increase this saving, which is Rs. 3,000 per month, by 10%. So, next year, you will start investing Rs.

3,300. The next year, you will start investing Rs. 3,630.

So on and so forth. Let's see how this money will increase in years. After 10 years, your salary will be roughly Rs.

23,000. This is based on the normal increments that people get. Out of this Rs.

23,000, you will be investing Rs. 7,000 per month on an average. This is after 10 years.

And in 10 years, you will have a corpus of Rs. 0.07 crore, which is equivalent to Rs. 7 lakh.

The value of this corpus, according to today's money, is equivalent to Rs. 0.05 crore, which is equivalent to Rs. 5 lakh.

The same thing, after 20 years, your salary will be roughly Rs. 60,000. Out of which, you will be investing Rs.

18,000. And this corpus will increase to Rs. 33 lakh, which is equivalent to Rs.

12 lakh, according to today's money. After 30 years, you will be earning some, and investing some. You will be sitting on a corpus of Rs.

1.11 crore, but its value will be only Rs. 26 lakh. And after 40 years, if you keep investing like this, if you keep investing like this, then you will be sitting on Rs.

3.34 crore, and its value will be roughly Rs. 50 lakh, according to today's money. Doesn't look all that attractive, right? But it's stable, it's risk-free, and a lot of people may go for that.

In my opinion, 20s is the decade to take risks. You can change a lot with a salary of Rs. 10,000.

Which brings me to the second option, and that is, you move from FD to the stock market. We won't be trading in the stock market, we will be investing. Disciplined, long-term investing.

We won't even think about which stock to buy, which company is good, which one is not, because at least I am not an expert, and I don't even suggest that you should try to become one. Unless, of course, you want to make it into a career. There are a lot of people whose 24 hours are spent on this.

And you should ride on their expertise. Best example of that, mutual funds. In a mutual fund, a fund manager does all the hard work for you and decides which stock to buy, how much to buy, which one to sell, how much to sell, when to buy, when to sell, and you are sold.

You sit and passively invest in it every month with all your heart. If you buy something called index mutual funds, which don't change very quickly, then their cost is also very low. That means over a period of time, you would have not paid a lot of money to the fund and accrued a lot to yourself.

Let's talk about three index funds. One is Nifty 50 index fund, which invests in India's top 50 companies, which are listed on the National Stock Exchange. You can find any index fund of Nifty 50 and invest in it.

The second index fund is called the Mid Cap Index Fund. Mid Cap Index Fund invests in India's index of mid-sized companies, which is usually an index of 100 companies. Again, a great way to invest and you should definitely consider that as well.

And number three, Small Cap Index Mutual Fund. Small Cap Index Mutual Fund invests in India's small-sized companies and it is a bigger index, around 250 companies. What is the difference between these three index funds? Biggest is risk.

Nifty 50 is relatively less risky. Why? Because they are India's top companies. Reliance, TCS, Infosys, HDFC, SBI.

So you know that they won't go up and down like crazy. So over a period of time, they will give you consistent returns and their risk or volatility, which goes up and down every day, will also be less. In Mid Cap, as you can expect, the risk is more.

Because these are mid-sized companies, so sometimes it goes up and down, sometimes it goes up and down. So you may see a lot of volatility in there, but because of that volatility, over a long period of time, you get slightly better returns. And then, Small Cap.

Maximum risk. These are very small companies. Anything can happen.

It can also close. The fund manager will handle everything. But even if you have to handle it, there is a risk built in.

There is a lot of risk. There is a lot of risk. Over only a long period of time, it can give consistent returns.

But in that period, it keeps going up and down. Which maybe at the salary of 10,000, you don't want to do. But if I were to show you how it has been in the last decade, on an average, Nifty 50 has given a return of 10.57%. On an average, Mid Cap 100 has given a return of 14.24%. And on an average, Small Cap 250 has given a return of 18.10%. So you can see that it is progressively higher return, but with higher risk.

Option number 2. If you go above FD, then it will go above 6%. And you will start playing in this range with a portfolio. And let's see how that works.

So you will remove money from FD. And you will go to Nifty 50, where you will invest 70% of your investment, which is 3,000 right now. Then in Mid Cap, 20.

In Small Cap, 10. So your 3,000 will be split like this. Rs.

21 will go to Nifty 50, Rs. 600 to Mid Cap, and Rs. 300 to Small Cap.

Same thing, we will increase 10% every year. We will assume an inflation of 5%. Now let's see how this money will grow in 10, 20, 30 and 40 years.

After 10 years, your corpus will be Rs. 10 lakhs. And it will be worth Rs.

6 lakhs today. Compare it with FD. In FD, this was Rs.

7 lakhs and this was Rs. 5 lakhs. You will say that there is not much difference.

It is very big. But the main difference will start coming in years. In 20 years, you have already reached Rs.

63 lakhs, which is worth Rs. 24 lakhs. In 30 years, you have reached Rs.

3 crores. In FD, this number was Rs. 1 crore 30 years later.

And the value of this 30 crores is Rs. 70 lakhs. And 40 years later, you will be at Rs.

14 crores, which will be worth Rs. 2 crores. This is the power of taking more risk.

But to mitigate that risk, you use time. The more time you give to your investment, the more consistent return it will give, without the risk of a negative or a low return. Then comes option 3, which is the riskiest.

In this case, we know that the small cap is giving the best return. It has been giving inconsistently over the last several decades. So let's assume that the same return can be replicated more or less.

And because you are playing a long game, a disciplined game, you are ready to take that risk. So even with a salary of Rs. 10,000, you will start your journey of mutual funds and make a portfolio that is risky.

And that risky portfolio will be that you will put 10% in Nifty 50, 20% in the big cap and 70% in the small cap. Now this is not something that I would recommend throughout the period. So if you are in your 20s and starting with a salary of Rs.

10,000, then you can start with this because you have the ability to take risks. And you can, if things go bad, recover because you have time. But as soon as you reach your late 20s, early 30s, late 30s, this mix should change.

But let's assume that you keep this mix the same. That you start with Rs. 300 every month, put it in Nifty 50, Rs.

600 in the mid cap, and Rs. 2100 in the small cap. Let's see what happens.

Now after 10 years, you will be sitting at Rs. 13 lakhs, which is equivalent to Rs. 8 lakhs.

There is not much of a difference. There is a difference of a few lakhs, which is fine. But you see, in 20 years, you will reach Rs.

1 crore. In 20 years, you will hit Rs. 1 crore.

With a salary of Rs. 10,000. And that will be equivalent to Rs.

40 lakhs today. In 30 years, you will be sitting at Rs. 6.7 crores, which is equivalent to Rs.

1.5 crores. And in 40 years, you will be sitting at Rs. 40 crores, which is equivalent to Rs.

0.75 crores. This is what happens when you allow compounding to take place. So in 10 years, if you compare, FD will give you Rs.

7 lakhs on the same salary of Rs. 10,000. A slightly less risky profile of a stock market will give you Rs.

10 lakhs. And a very risky stock market profile will give you Rs. 13 lakhs.

There is not much of a difference. But as soon as you put another decade in it, things change. FD will give you Rs.

1 crore after 30 years, whose value will be very low on today's date. The early plan of the stock market will give you Rs. 1 crore in 20-25 years, whose value will of course be better.

And this aggressive plan will make you a millionaire within 20 years, whose value will be relatively best, because it has already made Rs. 1 crore in the early phase. Don't be afraid of how much your salary is.

Motivate yourself with how long you are ready to commit. Which brings me to the fourth, and in my opinion, the best plan for you. I recently made a video, where I tried to determine the value of my time according to how many hours I have spent to earn that money in the last 25 years.

And the biggest takeaway in this was that I have determined the value of my time with the value of Rs. 9 per hour. I started my journey with the value of Rs.

9 per hour. I was 17 years old. I used to earn this money by taking tuitions.

And it didn't keep increasing. Rs. 9 became Rs.

14. Rs. 14 became Rs.

21. Rs. 21 became Rs.

70. Rs. 70 became Rs.

75. Then Rs. 125.

Rs. 200. Rs.

200. But after that, it fell. Rs.

134. And then, surprisingly, it became negative. Meaning, every time I gave Rs.

333 to someone. I didn't earn it. And this was my education.

My education. My experience. Which was the best investment for me.

Because after this loss of Rs. 333, I went up to Rs. 370, then Rs.

590, then Rs. 800. After that, of course, I became a startup founder.

So, I took another hit. And things went back up to the point where today, in my one hour, I earn around Rs. 2 lakh.

The point that I'm trying to make is this row right here. This row, this is the investment that I made in myself. Yes, my salary at that time was not Rs.

10,000, but Rs. 15,000. I used to earn Rs.

15,000 a year. Which was the job of a consultant. And at that point, I took a loan of Rs.

15 lakh. I took a loan of Rs. 15 lakh to go to ISB.

And that one year changed my life. I paid off that loan for 11 years. So, it wasn't like I took the loan in the air and it would pay off easily.

It took a lot of time to pay off that loan. But I'm so happy I made that investment. That investment was an investment on me.

So, if you earn Rs. 10,000 a month, and you're ready to invest Rs. 3,000 out of it, then invest some of that money in your own learning, your own experiences.

Invest in online courses. Invest in freelancing. Invest in tools.

If you can buy something and make your skill even better, invest in that. If you can meet someone, go to an event, and learn something from someone, then invest in that. If you can read books and get some inspiration from them, please invest in that.

If you can start a business and learn from it, then invest in that. When you're just starting, the best investment is for yourself. Because if you invest in your own growth, in your own understanding, in your own growth, in your own experiences, then no other market can beat that return.

And I'm a living example in front of you. I'm not the smartest person, I'm not the most hardworking person. I don't have anything special or good in which you can't be an expert or you can't do that thing.

And despite that, I have made my own income in the last 25 years by growing it by 49% annually. And I can tell you with confidence that there is no investment asset in this world that could give me 50% growth every year Only one thing has given me that growth. Myself.

And that is the best investment for you. I hope this helped.