How many times have you said to yourself, "I am not investing now because I don't have enough money?"

Well, even if your answer is 'once', you are only fooling yourself.

If you are waiting to amass your savings to invest, you are wasting your time. That, seldom happens. Before it gets too late, start investing today. And you don't need a fortune to do that. You can start with a mere investment of just Rs 500 per month. The amount is of little significance, the regularity matters more.

After all, "People who create wealth are those, who invest on a regular basis and not occasionally," says Certified Financial Planner, Gaurav Mashruwala.

The important question is where and how to invest?

According to investment advisor Sandeep Shanbhag, one can maintain discipline with a monthly investment pattern. "First, asset allocation between debt and equity needs to be determined as per the investor's risk profile and situation. Once this is determined, monthly investment in debt and or equity can be done."

As far as debt instruments are concerned, Public Provident Fund (PPF), bank fixed deposits, recurring deposits and post office schemes are good options. The minimum investment in PPF is Rs. 500 and it gives 8% tax-free return. In fact, it is a must in any investor's portfolio, big or small. The downside of PPF is that it has a long lock-in period of 6 years.

Talking about recurring deposits, Mashruwala says that although there is no risk of any loss, the liquidity is at cost. You may not be able to withdraw the savings for a certain period and if you do so, either you have to pay penalty or some amount would be deducted. Moreover, he cautions that the interest on these deposits is taxable. These deposits usually give an interest of anywhere between 6 per cent and 7 per cent depending on the term. So, a post tax return on these deposits can be quite low.

As against that, post office schemes like national savings certificates offer taxable returns of 8 per cent.
"Investing in debt based mutual funds through SIP (Systematic Investment Planning), is also a good option," says Mashruwala. Systematic investing is especially valuable for the investor who wants to get his investments going, but doesn't have a large sum of money to invest.

"Systematic investing works particularly well if you fear that you might buy a mutual fund at its peak, just before the stock market and your fund's shares head into a slump.

"It offers a disciplined way to invest a portion of your income at regular intervals without trying to second-guess the market, thereby also protecting you from extreme fluctuations in the market. And, its effect on your investment's growth over time can be nothing short of amazing. This concept is called rupee cost averaging.

In addition to helping you organise the process of investing, the SIP offers several important advantages that may boost your chances of achieving your important goals.

 

	Minimum invest-ment (Rs)	Returns	Lock-in	Tax on returns
PPF	500	8%	6 years	Tax free
NSC	100	8%	6 years	Taxable
Recurring Deposit	500	7-8%	Depending upon the terms of deposit	Taxable
Post office recurring deposit	10	8%	5 years	Taxable
Debt Mutual Funds	500	Depends on fund performance	No lock-in period except under ELFS scheme, where the period is 3 years	Dividends are tax free. Short term and long term capital gains tax apply.
Equity Mutual Funds	500	Depends on market performance	No lock-in period.	Dividends are tax free. Short term capital gains tax apply.

"As far as equity is concerned, a regular investment in an equity-diversified fund is the best course of action if you want to invest with small amounts", says Shanbhag.

"The averaging that happens on account of the regular investments such as SIP gives immunity from market volatility," he advices.

If you want to get a bit more savvy, you could try and buy equity shares directly. With the invention of demat accounts, things have become far more easier. Although, one may not be able to invest in high-value shares like those of Infosys [Get Quote], good shares of mid-cap or small-cap companies can always be bought. However, these investments must be made after sufficient research and study.

The options are many but the choice is yours. "Depending upon goals, need for liquidity and your liabilities, you must invest vigilantly," says Mashruwala. So, for a good long-term investment health, investing regularly in your chosen debt equity mix.

The bottom line, says Shanbhag, "Invest regularly, how much you can, whenever you can."

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