India’s financial landscape is evolving rapidly. The past two years have seen an unprecedented rise in young investors entering equity markets, mutual funds, and digital platforms. According to data from the National Stock Exchange (NSE), over 28 million new demat accounts were opened in FY 2023–24, with a significant portion attributed to individuals under 30 (NSE India, 2024).
But starting early isn’t enough. Many young investors stall their progress due to emotional decisions, poor habits, or blindly following others. If you’re starting out, here are the most important money truths you need to understand first—before picking an app or a mutual fund.
Money Lessons That Matter
- Knowing Isn’t the Same as Doing
Most young Indians know they should save and invest. But knowing doesn’t always translate into action. A 2024 Times of India survey showed that only 24.5% of Gen Z respondents saved their first salary, while 38.8% spent it on gifts and celebrations. Delays happen not from ignorance, but fear—of doing it wrong, of losing money, or of seeming inexperienced. But the most powerful step is the first one, even if it’s small.
- Losses Feel Worse Than Gains Feel Good
Imagine investing ₹1,000 and it drops to ₹900. That ₹100 loss feels much worse than the joy of earning ₹100. This emotional imbalance pushes many to avoid smart investments, even in well-diversified funds. According to SEBI’s 2023 Investor Survey, over 70% of first-time investors still prefer FDs or recurring deposits—despite often earning negative real returns after inflation. Volatility is normal. Discomfort doesn’t mean danger. It means growth.
- We Follow the Crowd, Even When It’s Wrong for Us
“My friend invested here, so I did too.” Sound familiar? Herd thinking is common. The RBI Bulletin (March 2023) noted that during volatile periods, retail investors increased trading volumes, influenced largely by social media and trending advice, not their own goals. Before you invest, ask: Is this right for me? Use tools like:
- SEBI’s Risk Profiling Tool
- ET Money’s Investment Goal Planner
- NPS Risk Tolerance Calculator
Or consult a SEBI-registered financial advisor to tailor your investments.
- We Cling to Past Costs and Ignore Present Reality
Let’s say you bought a stock at ₹500 and it’s now ₹300. You hold on—not because it’s still good—but hoping it bounces back. But the market doesn’t care what you paid. What matters is what the asset is worth today, and whether it fits your current goals. According to SEBI’s 2023 investor bulletin, many retail investors hold on to poor-performing assets for too long due to emotional attachment.
Sometimes, moving on is the smartest move.
- Self-Awareness is a Superpower
The best investors aren’t the most informed—they’re the most aware. They know when they’re panicking. They ask questions. They track their expenses and automate their savings. A Morningstar India (2024) study showed that investors who wrote down goals and reviewed them quarterly earned 13% higher returns over five years.
What can you do?
- Track monthly income and expenses with tools like Walnut or Money View
- Set 1-year, 3-year, and 10-year goals using Goal-Based SIP Planners
- Automate SIPs on platforms like Groww, Zerodha Coin, or Kuvera
- Ask questions. Use SEBI’s SCORES, RBI’s awareness portals, and free webinars
Where to Start: Investment Options for Every Kind of Beginner
Whether you want to start small or play it safe, here are real, actionable investment ideas to consider.
If You’re Starting with Small Amounts
Even ₹500/month into a SIP is enough to build habit and confidence. Consider:
🔹 Navi Nifty 50 Index Fund – Tracks top 50 Indian companies; low cost, low maintenance
🔹 Parag Parikh Flexi Cap Fund – Includes Indian and global stocks; long-term performance focus
🔹 SBI Bluechip Fund – Focuses on stable, large companies
🔹 UTI Nifty Next 50 Fund – Slightly higher growth potential beyond top 50
If You’re Conservative or Want Stability
🔸 Debt Mutual Funds
Great for low-risk returns:
- ICICI Prudential Savings Fund – Better than a savings account, low volatility
- HDFC Short Term Debt Fund – For a 2–3 year horizon
- Nippon India Low Duration Fund – Ideal for short-term goals
- Bharat Bond ETF – 2025/2030 – Predictable returns, tax-efficient
Conservative Hybrid Funds
Blend of debt (70–90%) and equity:
- ICICI Prudential Regular Savings Fund
- SBI Conservative Hybrid Fund
Target Maturity Debt Funds (TMDFs)
Passive debt funds that mature on a specific date:
- Axis CRISIL IBX 50:50 Gilt Plus SDL April 2028
- Bharat Bond ETF 2027/2031
🔸 ULIPs with Capital Protection
Combines insurance + investment:
- HDFC Life Sanchay Plus
- ICICI Pru Signature (Balanced Fund Option)
Tax benefits under Section 80C; lower-risk fund choices available.
Conclusion
Money isn’t just about math—it’s about mindset. You don’t need to master the markets to build wealth. You just need to:
- Take small steps, not just gather information
- Accept discomfort, and stay consistent
- Think independently, not just socially
- Make decisions for tomorrow, not just today
- Stay curious, stay honest, and keep learning
Your financial confidence will grow the moment your actions start aligning with your goals.
References:
- Times of India. “A Gift to Family: How Gen Z Spends Its First Salary.” March 2024.
- SEBI. “Retail Investor Bulletin.” October 2023.
- RBI. “Investor Behaviour in Indian Equity Markets.” RBI Bulletin, March 2023.
- Morningstar India. “Impact of Goal-Based Investing.” 2024.
- NSE India. “Demat Account Growth FY 2023–24.” April 2024.
Disclaimer:
This article is for educational and informational purposes only and does not constitute investment advice or a recommendation. The views expressed are based on the author’s personal research and expertise in behavioral finance and wealth management, and are not affiliated with or endorsed by any mutual fund house or financial product provider. Professor (Dr.) Meghna Dangi is not a SEBI-registered investment advisor. These are not promotional endorsements of any specific brand or financial institution.
Mutual fund investments are subject to market risks. Please read all scheme-related documents and the offer document carefully before investing.