Imagine you have ₹5,000 saved up and want to start investing. You might think ₹5,000 is too little, but let’s break it down. If you invest ₹2,000 in stocks, ₹1,000 in bonds, ₹1,000 in real estate, and₹1,000 in commodities, you’ve already created a diversified portfolio.
Over time, these investments can grow, even with just ₹5,000. Many people avoid investing because they think they need more money, but starting small is the first step to growing wealth.
Fact: A recent report by National Stock Exchange (NSE), highlighted that around 37 lakh new retail investors joined NSE in September taking the total investor base to 10.37 crore.
1. Why diversification matters
If you invest all ₹5,000 in one stock, like XYZ Ltd, and the price drops by 50%, you’ll lose ₹2,500, leaving you with ₹2,500. But if you split the ₹5,000 into three parts—₹2,000 in stocks, ₹1,500 in bonds, and ₹1,500 in real estate—the risk is smaller.
Even if one investment loses money, the others could still grow. For example, if stocks drop, bonds or real estate might go up. Diversifying your investments helps protect your money from big losses.
2. Start small, but think big.
Imagine you have ₹5,000 to invest. Instead of buying just one expensive stock, like Reliance, for ₹3,000, you can invest in a mutual fund or ETF. For example, a mutual fund may invest ₹5,000 in 50 different companies, including Reliance, TCS, and Infosys.
So, with just ₹5,000, you own small parts of many companies, spreading your risk and increasing your chances of making a profit over time.
3. Using a Quick Personal Loan to Kickstart Your Investments
Imagine you take a quick personal loan of ₹10,000 at 12% annual interest. After one year, you would need to repay₹10,000 plus ₹1,200 as interest, making a total of ₹ 11,200. You use the ₹10,000 to invest in stocks or mutual funds.
However, if your investments don’t grow as expected, you still need to pay back ₹11,200.
Borrowing money to invest is risky; you must repay the loan even if investments fail.
4. Choosing the Right Types of Investment
Now that you have some money to invest, it’s time to think about where to put it. Here are some different types of investments you can consider:
| Investment Type | What It Is | Example | Risk Level |
| Stocks | Buying small parts of companies (shares) | ₹1,000 in Infosys or TCS | High |
| Bonds | Lending money to governments or companies for interest | ₹2,000 in government bonds | Low |
| Real Estate | Investing in property or property funds (REITs) | ₹1,000 in a real estate fund | Medium |
| Commodities | Investing in things like gold, silver, or oil | ₹1,000 in gold ETFs | Medium |
You can divide your ₹5,000 or ₹10,000 across these investments to lower your risk. For example, you could invest ₹2,000 in stocks, ₹1,000 in bonds, ₹1,000 in real estate, and ₹1,000 in commodities.
5. Invest regularly, no matter the amount.
Imagine you invest ₹1,000 every month in mutual funds. In the first month, the price of the fund is ₹50 per unit, so you buy 20 units. The next month, the price drops to ₹40, so you buy 25 units.
By investing regularly, you get more units when prices are low, helping you grow your wealth steadily.
6. Rebalance Your Portfolio
Imagine you invested ₹ 5,000 with ₹ 3,000 in stocks and ₹ 2,000 in bonds. After a few months, stocks grew to ₹ 4,000.
To rebalance, you sell some stocks and buy more bonds, keeping your original mix.
Facts:
- The mutual fund industry AUM has hit an all-time high of Rs 67.90 lakh crore in September
- The monthly note stated that growth/equity-oriented schemes closed the month at a record Rs 31.10 lakh crore (46% of the AUM industry), led by strong inflows and MTM gains.
Conclusion
Imagine you have ₹ 5,000 to invest. You decide to divide it as follows: ₹2,000 in stocks, ₹1,000 in bonds, ₹1,000 in real estate, and ₹1,000 in commodities.
By spreading your money across different assets, you reduce the risk of losing all your money if one investment does poorly.
For example, if stocks drop but real estate rises, your total investment still has a chance to grow. Like planting a tree, investing takes time. Be patient, stay consistent, and your money will grow over time.
