Wealthy Mindset

Tag: financial goals

  • Achieving Financial Independence in India: A Roadmap for FIRE

    Achieving Financial Independence in India: A Roadmap for FIRE

    The dream of Financial Independence, Retire Early (FIRE) is becoming increasingly popular in India. The concept focuses on living frugally, investing strategically, and achieving financial independence to retire early. Here’s a step-by-step roadmap to help you embark on this journey:

    1. Define Your FIRE Number

    Your FIRE number is the amount of money you need to live comfortably without relying on a job. A common rule is to save 25x your annual expenses. For instance, if you need ₹10 lakhs annually, aim for ₹2.5 crore as your FIRE corpus.

    2. Live Below Your Means

    Adopting a frugal lifestyle is essential for FIRE. Differentiate between needs and wants. Focus on saving a significant portion of your income—ideally 50–70%—by cutting unnecessary expenses.

    Pro Tip: Use apps like Walnut or YNAB to track spending and identify areas to save.

    3. Invest Aggressively and Consistently

    Investing is the cornerstone of FIRE. Focus on high-growth instruments such as:

    • Equity Mutual Funds or SIPs: Long-term returns can outpace inflation.
    • Direct Stock Market Investments: Diversify and research before investing.
    • Index Funds: Low-cost options ideal for long-term wealth creation.
    • PPF and NPS: For safer, tax-saving growth.

    4. Build Passive Income Streams

    Create multiple streams of passive income to reduce reliance on your primary job. Consider options like:

    • Dividend-paying stocks or mutual funds.
    • Rental income from real estate.
    • Digital products like e-books or courses.
    • Freelancing or consulting in your area of expertise.

    5. Protect Your Wealth

    FIRE isn’t just about earning—it’s about preserving wealth. Ensure you have:

    • Health Insurance: To avoid medical emergencies draining your savings.
    • Term Insurance: To protect your family’s financial future.

    6. Stay Disciplined

    FIRE requires discipline and consistency. Avoid lifestyle inflation as your income grows. Regularly review your progress and adjust strategies if needed.

    7. Think Beyond FIRE

    Once you achieve FIRE, think about how you’ll spend your time. Pursue hobbies, volunteer, or explore passion projects to stay fulfilled and motivated.

    Final Thoughts

    Achieving FIRE in India is possible with careful planning, disciplined saving, and smart investing. Start early, stay consistent, and watch your dreams turn into reality.

  • Simplify to Prosper: The power of minimalism in building wealth

    Building wealth is often associated with the idea of accumulating more and more possessions and resources, but in reality, the path to financial freedom may lie in the opposite direction. Minimalism, or the practice of living with less, has become increasingly popular in recent years, and for good reason. By embracing a simpler and more frugal lifestyle, you can free up more resources to save and invest, ultimately helping you build wealth over time.

    The key to building wealth through minimalism is to focus on your values and what truly matters to you. By identifying what is truly important to you and letting go of everything else, you can reduce your expenses and focus on the things that truly matter to you. This can mean downsizing your home, getting rid of unnecessary possessions, or cutting back on expensive habits like eating out or buying designer clothes.

    One of the most important benefits of a minimalist lifestyle is that it can help you save more money. By living with less, you can reduce your expenses and increase your savings rate. This can be especially beneficial for millennials who are starting their careers and looking to build a solid financial foundation.

    Investing is another important aspect of building wealth through minimalism. By saving more money, you can invest more in stocks, mutual funds, or real estate. By investing in assets that have the potential to appreciate in value over time, you can create a solid foundation for your future financial security.

    Minimalism can also help you find happiness and fulfillment in life. By letting go of the things that don’t truly matter, you can focus on the things that do, such as relationships, experiences, and personal growth. This can lead to a more fulfilling and meaningful life, which can ultimately help you build a better future for yourself.

    In conclusion, building wealth through minimalism can be a powerful way to achieve financial freedom. By embracing a simpler and more frugal lifestyle, you can free up more resources to save and invest, ultimately helping you build wealth over time. And, at the same time, it can also lead to a more fulfilling and meaningful life.

  • Think Rich, Be Rich: How Mindset Shapes Your Financial Future

    The role of mindset in building wealth is a crucial aspect that is often overlooked. Many people believe that wealth is simply a matter of hard work and luck, but the truth is that a positive and proactive mindset is essential for achieving financial success. Having the right mindset can help you overcome obstacles and make better decisions that lead to increased wealth.

    One of the key strategies for developing a wealth-building mindset is to adopt a growth mindset. According to Carol Dweck, a leading researcher in the field of psychology, a growth mindset is the belief that one’s abilities and intelligence can be developed through effort and learning. In contrast, a fixed mindset is the belief that one’s abilities and intelligence are set in stone and cannot be changed. By adopting a growth mindset, you can be open to learning and growth, which are essential for achieving financial success.

    Another important strategy is to develop a wealth-creating vision. Tony Robbins, a renowned motivational speaker and author, suggests that one of the most powerful ways to create wealth is to develop a clear and compelling vision of what you want to achieve financially. By having a clear and motivating vision, you can focus your energy and efforts on achieving your financial goals.

    The book “Think and Grow Rich” by Napoleon Hill is a classic that has helped many people to understand the power of mindset in creating wealth. He states that one of the major keys to success is to develop a positive attitude and think positively. Hill encourages individuals to develop a burning desire for wealth, which can drive them to achieve their financial goals.

    In addition to reading books and authors that can provide strategies for building a wealth-building mindset, it’s also important to take practical steps towards achieving financial success. For example, setting specific and measurable financial goals, creating a budget, and investing in yourself and your education are all important steps that can help you build wealth over time.

    One good way to put this mindset in practice is to educate yourself about financial management and investing. By understanding the ins and outs of money management and learning about different investment options, you can make smarter financial decisions that will help you build wealth over time. Additionally, it’s important to surround yourself with people who have a similar wealth-building mindset, as they can provide valuable support and guidance as you work towards achieving your financial goals.

    Another important aspect of mindset in building wealth is the ability to manage and control one’s emotions and thoughts. It is important to be aware of the thoughts and emotions that are holding you back and to find ways to overcome them. For example, if you tend to feel guilty or ashamed about money, it can be hard to take steps towards building wealth. In such cases, consider seeking professional guidance or therapy to help you overcome these emotional blocks.

    Another important aspect of mindset is the ability to delay gratification. Many people have a hard time saving money and investing for the long-term because they are focused on instant gratification. They find it hard to give up short-term pleasures for long-term goals. This is where developing self-discipline and learning to prioritize long-term goals over short-term gains is important.

    The book “The Intelligent Investor” by Benjamin Graham is another great resource for understanding the role of mindset in building wealth. The book is a guide to successful long-term investing, and Graham stresses the importance of discipline, patience, and rationality in investing. He encourages investors to take a long-term view and to avoid getting caught up in market fluctuations and emotions.

    In summary, the role of mindset in building wealth is crucial. By developing a growth mindset, creating a wealth-creating vision, managing and controlling emotions, having self-discipline, and taking practical steps towards achieving financial success, you can set yourself up for long-term financial success. Remember to read books, surround yourself with people who have similar wealth-building mindset and seek professional help when needed.

  • Don’t Delay: How to Start Saving for Retirement as a Millennial in India

    Retirement planning may not be at the top of most millennials’ minds, but it’s never too early to start building your retirement corpus. With longer life expectancy and the possibility of living without active income for longer periods of time, it’s more important than ever for millennials in India to take steps towards a secure financial future.

    One of the biggest challenges for millennials when it comes to retirement planning is the lack of priority given to this goal. It’s easy to get caught up in the day-to-day expenses and demands of life and push retirement planning to the back burner. However, the earlier you start saving for retirement, the more time you have to take advantage of the power of compounding.

    So how can millennials in India start building their retirement corpus? Here are a few steps to consider:

    1. Determine your retirement goals. What do you want your retirement to look like? Do you want to travel the world, start a new hobby, or simply relax and enjoy your golden years? Knowing what you want to achieve in retirement will help you determine how much you’ll need to save.
    2. Set a budget. Take a close look at your current expenses and determine how much you can realistically set aside for retirement each month. It’s important to find a balance between saving for the future and enjoying the present. Ideally one should save at least 10-15% of monthly income towards retirement fund.
    3. Consider investing in long-term savings products such as the Public Provident Fund (PPF), Employee Provident Fund (EPF), and National Pension System (NPS). These products offer tax benefits and the potential for higher returns over the long term.
    4. Use the power of compounding to your advantage. The earlier you start saving for retirement, the more time you have for your money to grow. By starting to save in your 20s or 30s, you can take advantage of the power of compounding and potentially build a larger retirement corpus over time.

    Retirement planning may not be the most exciting goal to focus on, but it’s an important one. By taking steps towards building your retirement corpus now, you can set yourself up for a secure and fulfilling future.

    It’s important to remember that retirement planning is not a one-time event, but rather a continuous process. As you progress through your career and your financial situation changes, you’ll want to revisit your retirement goals and make adjustments as needed. Here are a few additional tips to keep in mind as you work towards building your retirement corpus:

    1. Make the most of your employer’s retirement benefits. Many employers offer a retirement savings plan such as a EPF or a pension plan. These plans can be a great way to save for retirement, especially if your employer offers a matching contribution.
    2. Diversify your investments. Don’t put all your eggs in one basket – consider a mix of investment products such as mutual funds, stocks, and bonds to help spread the risk and potentially increase your returns.
    3. Keep an eye on your expenses. It can be easy to let your expenses creep up over time, but it’s important to be mindful of your spending and make sure you’re not overstretching your budget. Cutting back on unnecessary expenses can free up more money for retirement savings.
    4. Stay informed about the latest retirement planning strategies. As you near retirement age, you’ll want to be up-to-date on the latest retirement planning strategies and options available to you. Consider working with a financial advisor to help you make informed decisions about your retirement savings.

    By following these tips and staying committed to your retirement goals, you can work towards a secure and fulfilling financial future. Don’t wait – start building your retirement corpus today.

  • Equal-Weighted vs Market Cap-Weighted Index Funds: Which is Right for You?

    When it comes to investing in index funds, one important decision you’ll need to make is whether to choose an equal-weighted index fund or a market cap-weighted index fund. Both types of index funds have their own advantages and disadvantages, and the right choice for you will depend on your investment goals and risk tolerance.

    Equal-weighted index funds, as the name suggests, give each component of the index an equal weighting. For example, in an equal-weighted index fund tracking the NIFTY 50 index, each of the 50 stocks in the index would have a weight of 2%. In contrast, market cap-weighted index funds give each component of the index a weight based on its market capitalization, or the total value of the company’s outstanding shares of stock. This means that larger, more valuable companies will have a higher weighting in the index.

    So which is better, an equal-weighted index fund or a market cap-weighted index fund? To answer this question, let’s compare the performance of the two types of index funds over different time periods using the NIFTY 50 index as an example.

    Over a three-year period, the NIFTY 50 Equal Weight Index has outperformed the NIFTY 50 Index (a market cap-weighted index) by a significant margin. From January 2019 to December 2021, the NIFTY 50 Equal Weight Index returned 23.9%, while the NIFTY 50 Index returned 15.7%.

    Over a five-year period, the performance of the two index funds is more mixed. From January 2018 to December 2022, the NIFTY 50 Equal Weight Index returned 17.8%, while the NIFTY 50 Index returned 18.2%.

    Over a seven-year period, the NIFTY 50 Index has outperformed the NIFTY 50 Equal Weight Index. From January 2016 to December 2022, the NIFTY 50 Index returned 13.7%, while the NIFTY 50 Equal Weight Index returned 12.3%.

    Over a ten-year period, the NIFTY 50 Index has again outperformed the NIFTY 50 Equal Weight Index. From January 2013 to December 2022, the NIFTY 50 Index returned 9.6%, while the NIFTY 50 Equal Weight Index returned 8.4%.

    Short-term performance: Over a three-year period, the NIFTY 50 Equal Weight Index has outperformed the NIFTY 50 Index (a market cap-weighted index) by a significant margin. From January 2019 to December 2021, the NIFTY 50 Equal Weight Index returned 23.9%, while the NIFTY 50 Index returned 15.7%.

    Long-term performance: Over a ten-year period, the NIFTY 50 Index has outperformed the NIFTY 50 Equal Weight Index. From January 2013 to December 2022, the NIFTY 50 Index returned 9.6%, while the NIFTY 50 Equal Weight Index returned 8.4%.

    Based on these performance figures, it appears that equal-weighted index funds may offer stronger short-term performance, while market cap-weighted index funds may offer stronger long-term performance. However, it’s important to note that past performance is no guarantee of future results, and it’s possible that the performance of the two types of index funds may vary over different time periods.

    One potential reason for the differing performance of the two types of index funds is that equal-weighted index funds are more diversified than market cap-weighted index funds. By giving each component of the index an equal weighting, equal-weighted index funds spread the risk more evenly across the index, which can help mitigate the impact of any single stock’s performance. On the other hand, market cap-weighted index funds are more heavily weighted toward larger, more valuable companies, which can increase the index’s overall risk.

    Another potential reason for the differing performance of the two types of index funds is that equal-weighted index funds tend to be more actively managed than market cap-weighted index funds. While market cap-weighted index funds simply track the composition and weightings of the index, equal-weighted index funds require regular rebalancing to ensure that each component of the index continues to have an equal weighting. This active management can add a layer of costs to equal-weighted index funds, which can eat into their overall returns.

    Volatility: Over the long term, both equal-weighted index funds and market cap-weighted index funds have had similar levels of volatility. However, in the short term, equal-weighted index funds tend to be more volatile than market cap-weighted index funds. This is because equal-weighted index funds are more diversified than market cap-weighted index funds, and diversification can help reduce the impact of any single stock’s performance on the overall index.

    So which type of index fund is right for you? As with any investment decision, it’s important to consider your own financial goals and risk tolerance. If you’re looking for a more diversified index fund with the potential for higher short-term returns, an equal-weighted index fund may be a good choice. However, if you’re more comfortable with a lower-risk, passively managed index fund with a focus on long-term growth, a market cap-weighted index fund may be a better fit.

    Ultimately, the best choice for you will depend on your individual financial situation and investment goals. It’s a good idea to consult with a financial advisor or do your own research to determine which type of index fund is right for you.

  • 5 ways to improve your finances and build wealth in the new year

    As the new year begins, many people are thinking about ways to improve their finances and build wealth in the year ahead. Whether you are looking to save for a major purchase, pay off debt, or grow your investments, there are steps you can take to set yourself up for success. Here are some tips for improving your finances and building wealth in the new year:

    1. Set financial goals: The first step in improving your finances is to set clear and specific financial goals. This might involve saving for a down payment on a home, paying off debt, or building up your emergency fund. Whatever your goals may be, be sure to make them specific, measurable, achievable, relevant, and time-bound (SMART).
    2. Create a budget: A budget is an important tool that can help you track your spending and ensure that you are allocating your money wisely. By creating a budget, you can get a better sense of where your money is going and make adjustments as needed. There are many tools and resources available to help you create a budget, including apps and software, so be sure to explore your options.
    3. Invest in your education: Another way to improve your finances is to invest in your education. This might involve taking a course or earning a degree that will help you advance in your career and earn more money. In addition to boosting your income, investing in your education can also increase your knowledge and skills, which can be valuable assets in your financial planning and decision-making.
    4. Automate your saving and investing: One of the most powerful ways to build wealth over time is to save and invest consistently. By automating your saving and investing, you can make it easier to stick to your financial goals and avoid the temptation to spend money on unnecessary or impulse purchases. There are many tools and resources available that can help you automate your saving and investing, such as automated savings plans and investment accounts.
    5. Seek professional advice: Finally, don’t be afraid to seek professional advice when it comes to your finances. A financial planner or advisor can help you create a plan that is tailored to your specific goals and circumstances, and can provide valuable insights and guidance as you work to improve your finances and build wealth.

    As you look ahead to the new year, take these steps to improve your finances and build wealth. By setting financial goals, creating a budget, investing in your education, automating your saving and investing, and seeking professional advice, you can take control of your finances and set yourself up for a bright financial future. So, make the most of the new year by making a plan and sticking to it.

  • The ultimate budgeting guide for Indian middle-income families and individuals

    Creating a budget is an important step towards achieving your financial goals and improving your financial well-being. A budget helps you track your income and expenses, identify areas where you can save money, and make sure that you are spending your money in a way that aligns with your values and goals.

    If you are a middle-income family or individual in India looking to create a budget that works for you, here are some tips to get started:

    1. Gather your financial information: The first step in creating a budget is to gather all of your financial information, including your income, expenses, debts, and assets. This will give you a clear picture of where your money is coming from and going to.
    2. Track your expenses: It is important to track your expenses in order to understand where your money is going. You can do this by keeping receipts, tracking your spending in a spreadsheet or budgeting app, or using your bank and credit card statements.
    3. Set financial goals: Once you have a clear picture of your financial situation, you can start setting financial goals. These might include paying off debt, saving for a down payment on a house, or building an emergency fund. By setting goals, you can give yourself a roadmap to follow and stay motivated.
    4. Make a budget: With your financial information and goals in hand, you can start creating a budget. There are many different ways to do this, but a common approach is to create a list of your income and expenses, and then subtract your expenses from your income to see if you have a surplus or deficit. If you have a surplus, you can use it to pay off debt, save, or invest. If you have a deficit, you will need to find ways to cut expenses or increase income.
    5. Monitor and adjust your budget: Your budget is not set in stone – it is a living document that should be reviewed and adjusted regularly. Make sure to track your spending and compare it to your budget to see if you are on track. If you are over budget in certain areas, find ways to cut expenses. If you are under budget in other areas, consider increasing your savings or investing.

    In conclusion, creating a budget is an important step towards achieving your financial goals and improving your financial well-being. By gathering your financial information, tracking your expenses, setting financial goals, making a budget, and monitoring and adjusting your budget, you can take control of your finances and make sure that your money is being used in a way that aligns with your values and goals.

  • 5 powerful ways to think about money using first principles

    Thinking about money in first principles can be a powerful way to make better financial decisions and achieve your financial goals. First principles thinking involves breaking down a problem or concept into its fundamental building blocks and reasoning from there, rather than relying on preconceived notions or assumptions.

    Here are some powerful ways to think about money using first principles:

    1. Know your values: The first step in thinking about money in first principles is to know your values. What is important to you? What do you want to achieve with your money? By understanding your values, you can set financial goals that are aligned with what matters most to you.
    2. Understand your financial situation: It is important to understand your financial situation in order to make informed decisions about your money. This includes understanding your income, expenses, debts, and assets. By regularly tracking your finances, you can get a clear picture of where you stand and what you need to do to achieve your financial goals.
    3. Make a plan: Once you know your values and understand your financial situation, you can start making a plan to achieve your financial goals. This might involve setting a budget, creating a savings plan, or paying off debt. Whatever your goals, it is important to have a plan in place to help you stay on track.
    4. Take control of your spending: One of the most powerful ways to think about money in first principles is to take control of your spending. This means being mindful of where your money is going and making sure that it is aligned with your values and goals. By making conscious spending choices, you can make sure that your money is being used in a way that is meaningful to you.
    5. Invest in your future: Finally, thinking about money in first principles means looking to the future and investing in your long-term financial security. This might involve setting up a retirement plan, investing in education, or building an emergency fund. By taking a long-term view, you can make sure that you are setting yourself up for financial success in the future.

    In conclusion, thinking about money in first principles can be a powerful way to make better financial decisions and achieve your financial goals. By understanding your values, understanding your financial situation, making a plan, taking control of your spending, and investing in your future, you can set yourself up for financial success.

  • The Value of Mental Models in Investing: Lessons from Charlie Munger

    Charlie Munger is a well-known investor and business philosopher known for his use of mental models in decision-making. Mental models are frameworks that help us understand and analyze complex situations by breaking them down into simpler concepts. In this article, we will explore several of Munger’s mental models and how investing lessons can be derived from them.

    One of the key investing lessons that can be derived from Munger’s use of mental models is the importance of considering multiple perspectives and viewpoints. Munger has often stressed the need to look at problems and opportunities from multiple angles and to avoid being trapped by a single perspective or ideology. This can help us avoid cognitive biases and make more informed, rational decisions. In investing, this mental model can help us avoid being swayed by hype or sensationalism and to instead focus on a balanced, objective analysis of the situation.

    Another mental model that Munger has emphasized is the “latticework of mental models.” This mental model encourages us to constantly seek out new knowledge and build a diverse set of mental models that we can use to better understand and analyze complex situations. This can help us make more informed and effective decisions, particularly in situations where we may not have a lot of expertise or experience. In investing, this mental model can help us broaden our knowledge base and avoid relying on a narrow set of assumptions or beliefs.

    Another mental model that Munger has discussed is the “paradox of value.” This mental model emphasizes the idea that the value of something is often not directly related to its price. Instead, value is often subjective and depends on an individual’s needs, preferences, and circumstances. Understanding this mental model can help us avoid paying too much for an investment and can help us focus on finding investments that offer good value. In investing, this mental model can help us avoid being swayed by hype or fads and to instead focus on finding investments that align with our long-term goals and values.

    The Doubt and avoidance tendency mental model describes the human tendency to avoid situations that cause us discomfort or uncertainty. This tendency can lead us to avoid taking risks or making difficult decisions, even when those risks or decisions may be necessary for our long-term success. In investing, this mental model can lead us to avoid making necessary changes to our portfolio or to shy away from potentially lucrative opportunities due to fear or uncertainty. To overcome this tendency, it is important to embrace a growth mindset and to be willing to take calculated risks and embrace uncertainty.

    The Over-optimism tendency mental model describes the human tendency to overestimate our ability to control outcomes and to be overly optimistic about the future. This tendency can lead us to make overly optimistic predictions and to underestimate the risks associated with our investments. In investing, this mental model can lead us to take on more risk than we can handle and to underestimate the potential consequences of our decisions. To overcome this tendency, it is important to be realistic about our limitations and to carefully assess the risks and uncertainties associated with different investments.

    The Deprival-super reaction tendency mental model describes the human tendency to overreact to the loss or threat of loss. This tendency can lead us to make impulsive decisions in an effort to avoid or minimize the loss, even if those decisions are not in our long-term best interest. In investing, this mental model can lead us to sell off our investments at the first sign of market turbulence or to hold onto losing investments in the hope that they will recover. To overcome this tendency, it is important to have a long-term perspective and to make decisions based on a clear, rational analysis of the situation, rather than on emotional reactions.

    Munger has also talked about the importance of understanding the “base rate” of a situation. The base rate is the probability of an event occurring based on historical data and other relevant information. By considering the base rate, we can make more informed decisions and avoid being swayed by anecdotes or other information that may not be representative of the overall situation. In investing, this mental model can help us avoid making decisions based on isolated examples or anecdotes and to instead focus on a more comprehensive analysis of the situation

    Overall, Charlie Munger’s mental models and investing lessons offer valuable insights and guidance for investors. By building a wide range of mental models and using them to make informed, rational decisions, we can improve our chances of success in the investing world.

  • Planning for Your Future: Investment Strategies for Young Professionals in India

    As a young professional in your 20s living in a tier 1 or tier 2 city in India, it is important to consider your long-term financial goals and develop an investment strategy to help you achieve them. Here are a few considerations to keep in mind:

    1. Start early: One of the biggest advantages of starting to invest in your 20s is the power of compound interest. By investing early, you can take advantage of the long-term growth potential of your investments and potentially build a significant nest egg over time. For example, if you start investing INR 5,000 per month at the age of 25 and earn an annual return of 10%, you could potentially accumulate over INR 50 lakh by the time you turn 60. On the other hand, if you wait until you are 35 to start investing, you would need to invest INR 10,000 per month to achieve the same result.
    2. Set financial goals: It is important to have a clear idea of your financial goals, whether it is saving for a down payment on a house, building an emergency fund, or planning for retirement. This will help you determine the right investment strategy for your needs. For example, if your goal is to save for a down payment on a house, you may consider investing in instruments such as fixed deposits or debt mutual funds that offer relatively stable and low-risk returns. On the other hand, if your goal is to build an emergency fund, you may consider investing in instruments such as liquid mutual funds that offer higher liquidity and low risk.
    3. Diversify your portfolio: As a young professional, you may have a higher risk tolerance and can consider investing in a mix of different asset classes such as equities, fixed income, and real estate to diversify your portfolio. This can help mitigate the impact of market fluctuations on your investments. For example, if you invest in a mix of equities, debt mutual funds, and real estate, you can potentially earn higher returns while also minimizing the risk of a downturn in any one sector.
    4. Consider tax-saving investments: As a working professional, you may be eligible for tax deductions on certain investments such as the Public Provident Fund (PPF) or National Savings Certificate (NSC). These investments offer tax-free returns and can be a good option to consider in your overall investment strategy. However, it is important to note that tax-saving investments often have fixed tenures and restrictions on withdrawal, so it is important to carefully consider your financial goals and risk tolerance before investing.
    5. Seek professional advice: As a young professional with limited investment experience, it may be a good idea to seek the guidance of a financial advisor or expert to help you develop an investment strategy that aligns with your financial goals and risk tolerance. A financial advisor can help you understand the different investment options available and recommend a customized investment plan that takes into account your individual circumstances.

    In terms of how much of your income you should save, it is generally recommended to save at least 20% of your income for long-term goals such as retirement, education, and home ownership. However, this number may vary depending on your individual circumstances and financial goals.

    It is also important to consider health and life risks when developing your investment strategy. This can include purchasing health insurance and life insurance to protect against unexpected medical expenses or income loss due to an untimely death. A financial advisor can help you understand your insurance needs and recommend suitable coverage.

    Finally, as you plan for your future, it is important to consider life events such as marriage, buying a house, and children’s education and marriage. These events can have a significant impact on your financial planning and it is important to factor them into your investment strategy. For example, if you plan to buy a house in the near future, you may consider investing in instruments such as fixed deposits or debt mutual funds that offer relatively stable and low-risk returns.

    In conclusion, as a young professional in your 20s living in a tier 1 or tier 2 city in India, it is important to start investing early, set financial goals, diversify your portfolio, and consider tax-saving investments. Seeking professional advice can also help you develop an investment strategy that is tailored to your needs. It is important to carefully consider the pros and cons of each investment option and choose an investment plan that aligns with your financial goals and risk tolerance. It is also important to save at least 20% of your income for long-term goals and consider health and life risks by purchasing appropriate insurance coverage. As you plan for your future, be sure to factor in life events such as marriage, home ownership, and children’s education and marriage into your investment strategy.