Need investment advice - 35k salary, 27 years old

[shekar]

I am 27 years old. I am earning Rs. 35,000 per month. From this, I want to invest up to Rs. 8,000 per month. What kind of schemes should I choose for this? I have taken personal accident insurance for Rs. 20 lakhs. Do I need term insurance?

[Anita]

Before chasing returns, secure your risks. Investments can wait, but protection cannot. 

I'll share from my own experience: early in my career, I thought a personal accident policy was enough. But I quickly realized that without a pure term life insurance plan, my family's long-term goals were exposed. A term plan is non-negotiable. It's the simplest, most cost-effective way to ensure that your loved ones are financially secure if something happens to you. Accident policies alone don't cover natural causes, and that's a gap you cannot afford.

Next, I advise enhancing your accident cover to at least ₹50 lakhs. I've seen firsthand how disability or accidental death can derail a family's financial stability. This cover acts as a safety net for your earning ability, which is the backbone of your financial plan.

Health insurance is another pillar. Medical costs in India are rising faster than most people realize. A single hospitalization can wipe out years of savings. I've seen it happen to families who thought "it won't happen to us." Personally, I maintain a comprehensive family floater plan with adequate coverage, and I encourage clients to do the same. It's not just about the premium; it's about peace of mind.

Then comes the emergency fund. I keep six months of expenses parked in a liquid mutual fund. It's boring, yes, but when COVID hit, that fund gave me the confidence to ride out uncertainty without touching my long-term investments. I always tell clients: this fund is your financial shock absorber. Job loss, medical emergencies, or sudden expenses won't throw you off track if you have it.

Only after these basics are in place, I talk about wealth creation. For someone starting with ₹8,000 a month, a disciplined SIP in equity mutual funds is the smartest route. Equity works best with time. Give it 10 years or more, and compounding will surprise you. I've seen clients achieve goals like buying a home or funding their children's education simply by sticking to this plan. The key is consistency, not timing the market.