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Ramalingam Kalirajan |10881 Answers |Ask -Follow
Mutual Funds, Financial Planning Expert - Answered on Jun 23, 2025
Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Jun 21, 2025Hindi
How can somebody start investing from 18? I would be joining college this year and please somebody guide me.
Ans: Starting at 18 shows great foresight.
Time is your biggest friend now.
Small steps today grow into large gains later.
Understanding Your Cash Flows
Note every rupee that enters your pocket.
Include pocket money, part-time pay, gifts, internships.
List every rupee that leaves.
Cover food, books, data packs, outings, gadgets.
Keep this list simple and honest.
Aim for a clear monthly surplus.
Setting Clear Goals
Goals give direction to money.
Write short-term goals like laptop purchase.
Write medium goals like post-grad fees.
Write long goals like early home purchase.
Put rough target dates beside each goal.
Update goals each year without fail.
Building Right Money Habits
Pay yourself first each month.
Save before spending, not after.
Use separate bank accounts for spends and saves.
Track spends weekly for control.
Avoid impulse online buys.
Use cash or UPI, avoid credit traps.
Creating Emergency Cushion
Life throws sudden costs at everyone.
Keep at least three months expenses handy.
Use a simple savings account or liquid fund.
Build this fund before aggressive investing.
Refill the fund whenever you use it.
Learning Basics of Banking
Maintain one primary savings account.
Enable auto-debit for savings and SIPs.
Keep minimum balance rules in mind.
Avoid unnecessary account charges.
Use net banking for quick monitoring.
Insurance Protection First
Insurance shields wealth from shocks.
At 18, health cover matters more than life cover.
Join family floater if parents have one.
Otherwise, buy a student health policy.
Premium is low at your age.
Review cover size each year.
Understanding Tax Basics
Income below the basic slab pays no tax.
Grants and gifts from parents are generally tax free.
Investment returns can still attract tax.
Equity mutual fund gains above Rs 1.25 lakh yearly face 12.5% tax.
Short-term equity gains attract 20% tax.
Debt fund gains match your tax slab.
Keep digital records for all transactions.
File returns once you cross taxable income.
Choosing Simple Investment Vehicles
Avoid fancy products with long locks.
Stick to proven instruments first.
Equity oriented mutual funds
Suitable for goals beyond five years.
Start SIP as low as Rs 500.
Choose funds through a Certified Financial Planner.
Planner guides selection, risk match, and reviews.
Avoid do-it-yourself confusion at this stage.
Balanced hybrid mutual funds
Good for medium term goals.
Mix of equity and debt gives smoother ride.
Planner helps decide right allocation.
Recurring deposits
Ideal for short goals within two years.
Simple, safe, predictable returns.
Use bank app to open quickly.
Public Provident Fund (PPF)
Long term, tax friendly, government backed.
Lock-in of fifteen years suits retirement kitty.
You can deposit small sums anytime.
Skip real estate at this age.
Skip annuity plans completely.
Skip complex market linked insurance plans.
Using Power of SIP
SIP means Systematic Investment Plan.
Money auto-debited into mutual funds monthly.
Removes timing worries from investing.
Builds discipline without effort.
Top up SIP amount yearly with pay hikes.
Automating the Process
Create an auto rule for saving first.
Example: move 20% of income on salary day.
Schedule SIP two days after salary date.
Automation kills procrastination.
Monitoring and Review
Review portfolio every six months.
Check goal progress, fund performance, and risk level.
Talk with your Certified Financial Planner during review.
Do not panic sell on short term falls.
Stay the course for compounding magic.
Developing Investor Mind-set
Read one personal finance book each quarter.
Follow reputable finance podcasts.
Discuss money with mentors and parents.
Stay patient during market swings.
Remember: volatility is normal, panic is optional.
Avoiding Common Mistakes
Do not chase quick profits in stocks.
Do not borrow for investing.
Do not break emergency fund for gadgets.
Do not ignore small expenses; they add up.
Do not trust random tips from friends.
Building Credit Reputation Carefully
Student credit card can build early credit score.
Use card only for planned spends.
Pay entire bill before due date.
One missed payment hurts score badly.
Good credit score eases future loan approvals.
Creating Habit of Giving
Allocate small amount for charity.
Sharing builds healthy money attitude.
Even Rs 100 monthly builds empathy.
Leveraging Campus Opportunities
Many colleges host finance clubs.
Join and learn practical money skills.
Participate in mock trading contests for exposure.
Attend seminars by industry experts.
Balancing Studies and Earnings
Prioritise academics over earnings.
If time permits, pick skill-based freelancing.
Use freelancing income to boost investments.
Keep study schedule intact.
Role of Technology
Use budgeting apps for spend tracking.
Use investment apps from trusted AMCs only.
Enable two-factor security everywhere.
Keep passwords strong and unique.
Staying Compliant With Regulations
Complete KYC before opening investment accounts.
Use PAN and Aadhaar for fast verification.
Update contact details after any change.
Follow RBI and SEBI alerts for fraud prevention.
Power of Compounding Explained Simply
Money earns returns every year.
Returns then earn more returns.
Longer you stay, bigger the snowball.
Starting at 18 gives over 40 years runway.
Sample Timeline for First Three Years
Month 1: Open savings and demat accounts.
Month 2: Build Rs 5,000 emergency fund.
Month 3: Start Rs 500 SIP in equity fund.
Month 6: Emergency fund reaches one month expense.
Month 12: Raise SIP to Rs 1,000 using internship income.
Month 18: Emergency fund hits two months spend.
Month 24: Add Rs 500 hybrid fund SIP.
Month 30: Review goals with planner.
Month 36: Emergency fund complete at three months spend.
Importance of Regular Funds and CFP Guidance
Regular funds pay small trail fee to planner.
Fee keeps planner accountable and available.
Planner provides goal alignment and behavioural support.
Direct funds lack personalised guidance.
Wrong fund selection can lower returns heavily.
Money saved on fee may cost in wrong choices.
Handling Market Corrections
Markets fall every few years.
Continue SIP during falls.
You buy more units at low price.
This boosts long term returns.
Avoid stopping SIP out of fear.
Adapting Investment Mix Over Time
Risk tolerance changes with age and income.
Increase equity share in early years.
Add more debt instruments nearing goals.
Planner adjusts mix as goals approach.
Learning Tax-Efficient Withdrawals
Redeem equity funds after one year to lower tax.
Spread redemptions across financial years if gains high.
Use goal deadlines to plan redemption schedule.
Keep proof of purchase dates for compliance.
Income Enhancement Strategies
Focus on skill development for higher internships.
Certifications boost employability and pay.
Higher income accelerates investment capacity.
Peer Influence Management
Friends may chase flashy purchases.
Stick to your budget plan.
Share financial learning with friends if receptive.
Build group discipline instead of peer pressure.
Role of Parents in Early Investing
Discuss your plan with parents.
They may co-sign insurance or investments.
Parents can share practical money lessons.
Respect their experience but own your choices.
Staying Updated With Policy Changes
Budget announcements can affect tax and interest rates.
Follow reliable news sources for changes.
Adjust plan with planner whenever policy shifts.
Maintaining Financial Records
Keep soft copies of statements in cloud storage.
Organise files by year and instrument.
Records ease tax filing and goal reviews.
Protecting Against Fraud
Ignore unknown investment schemes promising huge returns.
Verify SEBI registration of intermediaries.
Report suspicious messages to cyber cell.
Balancing Fun and Finance
Allocate small fun budget each month.
Guilt-free spending prevents burnout.
Stay mindful yet flexible.
Using Windfalls Wisely
Birthday cash or scholarships can be sizable.
Allocate at least half to investments.
Use remainder for necessary purchases.
Continuous Education in Finance
Finance field evolves with technology.
Attend webinars and workshops regularly.
Subscribe to trusted finance newsletters.
Learning keeps mistakes minimal.
Preparing for First Job
Review salary structure with planner.
Optimise for tax efficiency.
Increase SIPs immediately as salary kicks in.
Final Insights
Starting at 18 creates unmatched compounding benefit.
Build habits before chasing returns.
Emergency fund, health cover, and budgeting give safety.
SIP in equity oriented mutual funds drives growth.
Guidance from Certified Financial Planner keeps you on track.
Patience and discipline beat market noise.
Review goals and portfolio regularly.
Stay consistent, stay informed, and stay humble.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
Time is your biggest friend now.
Small steps today grow into large gains later.
Understanding Your Cash Flows
Note every rupee that enters your pocket.
Include pocket money, part-time pay, gifts, internships.
List every rupee that leaves.
Cover food, books, data packs, outings, gadgets.
Keep this list simple and honest.
Aim for a clear monthly surplus.
Setting Clear Goals
Goals give direction to money.
Write short-term goals like laptop purchase.
Write medium goals like post-grad fees.
Write long goals like early home purchase.
Put rough target dates beside each goal.
Update goals each year without fail.
Building Right Money Habits
Pay yourself first each month.
Save before spending, not after.
Use separate bank accounts for spends and saves.
Track spends weekly for control.
Avoid impulse online buys.
Use cash or UPI, avoid credit traps.
Creating Emergency Cushion
Life throws sudden costs at everyone.
Keep at least three months expenses handy.
Use a simple savings account or liquid fund.
Build this fund before aggressive investing.
Refill the fund whenever you use it.
Learning Basics of Banking
Maintain one primary savings account.
Enable auto-debit for savings and SIPs.
Keep minimum balance rules in mind.
Avoid unnecessary account charges.
Use net banking for quick monitoring.
Insurance Protection First
Insurance shields wealth from shocks.
At 18, health cover matters more than life cover.
Join family floater if parents have one.
Otherwise, buy a student health policy.
Premium is low at your age.
Review cover size each year.
Understanding Tax Basics
Income below the basic slab pays no tax.
Grants and gifts from parents are generally tax free.
Investment returns can still attract tax.
Equity mutual fund gains above Rs 1.25 lakh yearly face 12.5% tax.
Short-term equity gains attract 20% tax.
Debt fund gains match your tax slab.
Keep digital records for all transactions.
File returns once you cross taxable income.
Choosing Simple Investment Vehicles
Avoid fancy products with long locks.
Stick to proven instruments first.
Equity oriented mutual funds
Suitable for goals beyond five years.
Start SIP as low as Rs 500.
Choose funds through a Certified Financial Planner.
Planner guides selection, risk match, and reviews.
Avoid do-it-yourself confusion at this stage.
Balanced hybrid mutual funds
Good for medium term goals.
Mix of equity and debt gives smoother ride.
Planner helps decide right allocation.
Recurring deposits
Ideal for short goals within two years.
Simple, safe, predictable returns.
Use bank app to open quickly.
Public Provident Fund (PPF)
Long term, tax friendly, government backed.
Lock-in of fifteen years suits retirement kitty.
You can deposit small sums anytime.
Skip real estate at this age.
Skip annuity plans completely.
Skip complex market linked insurance plans.
Using Power of SIP
SIP means Systematic Investment Plan.
Money auto-debited into mutual funds monthly.
Removes timing worries from investing.
Builds discipline without effort.
Top up SIP amount yearly with pay hikes.
Automating the Process
Create an auto rule for saving first.
Example: move 20% of income on salary day.
Schedule SIP two days after salary date.
Automation kills procrastination.
Monitoring and Review
Review portfolio every six months.
Check goal progress, fund performance, and risk level.
Talk with your Certified Financial Planner during review.
Do not panic sell on short term falls.
Stay the course for compounding magic.
Developing Investor Mind-set
Read one personal finance book each quarter.
Follow reputable finance podcasts.
Discuss money with mentors and parents.
Stay patient during market swings.
Remember: volatility is normal, panic is optional.
Avoiding Common Mistakes
Do not chase quick profits in stocks.
Do not borrow for investing.
Do not break emergency fund for gadgets.
Do not ignore small expenses; they add up.
Do not trust random tips from friends.
Building Credit Reputation Carefully
Student credit card can build early credit score.
Use card only for planned spends.
Pay entire bill before due date.
One missed payment hurts score badly.
Good credit score eases future loan approvals.
Creating Habit of Giving
Allocate small amount for charity.
Sharing builds healthy money attitude.
Even Rs 100 monthly builds empathy.
Leveraging Campus Opportunities
Many colleges host finance clubs.
Join and learn practical money skills.
Participate in mock trading contests for exposure.
Attend seminars by industry experts.
Balancing Studies and Earnings
Prioritise academics over earnings.
If time permits, pick skill-based freelancing.
Use freelancing income to boost investments.
Keep study schedule intact.
Role of Technology
Use budgeting apps for spend tracking.
Use investment apps from trusted AMCs only.
Enable two-factor security everywhere.
Keep passwords strong and unique.
Staying Compliant With Regulations
Complete KYC before opening investment accounts.
Use PAN and Aadhaar for fast verification.
Update contact details after any change.
Follow RBI and SEBI alerts for fraud prevention.
Power of Compounding Explained Simply
Money earns returns every year.
Returns then earn more returns.
Longer you stay, bigger the snowball.
Starting at 18 gives over 40 years runway.
Sample Timeline for First Three Years
Month 1: Open savings and demat accounts.
Month 2: Build Rs 5,000 emergency fund.
Month 3: Start Rs 500 SIP in equity fund.
Month 6: Emergency fund reaches one month expense.
Month 12: Raise SIP to Rs 1,000 using internship income.
Month 18: Emergency fund hits two months spend.
Month 24: Add Rs 500 hybrid fund SIP.
Month 30: Review goals with planner.
Month 36: Emergency fund complete at three months spend.
Importance of Regular Funds and CFP Guidance
Regular funds pay small trail fee to planner.
Fee keeps planner accountable and available.
Planner provides goal alignment and behavioural support.
Direct funds lack personalised guidance.
Wrong fund selection can lower returns heavily.
Money saved on fee may cost in wrong choices.
Handling Market Corrections
Markets fall every few years.
Continue SIP during falls.
You buy more units at low price.
This boosts long term returns.
Avoid stopping SIP out of fear.
Adapting Investment Mix Over Time
Risk tolerance changes with age and income.
Increase equity share in early years.
Add more debt instruments nearing goals.
Planner adjusts mix as goals approach.
Learning Tax-Efficient Withdrawals
Redeem equity funds after one year to lower tax.
Spread redemptions across financial years if gains high.
Use goal deadlines to plan redemption schedule.
Keep proof of purchase dates for compliance.
Income Enhancement Strategies
Focus on skill development for higher internships.
Certifications boost employability and pay.
Higher income accelerates investment capacity.
Peer Influence Management
Friends may chase flashy purchases.
Stick to your budget plan.
Share financial learning with friends if receptive.
Build group discipline instead of peer pressure.
Role of Parents in Early Investing
Discuss your plan with parents.
They may co-sign insurance or investments.
Parents can share practical money lessons.
Respect their experience but own your choices.
Staying Updated With Policy Changes
Budget announcements can affect tax and interest rates.
Follow reliable news sources for changes.
Adjust plan with planner whenever policy shifts.
Maintaining Financial Records
Keep soft copies of statements in cloud storage.
Organise files by year and instrument.
Records ease tax filing and goal reviews.
Protecting Against Fraud
Ignore unknown investment schemes promising huge returns.
Verify SEBI registration of intermediaries.
Report suspicious messages to cyber cell.
Balancing Fun and Finance
Allocate small fun budget each month.
Guilt-free spending prevents burnout.
Stay mindful yet flexible.
Using Windfalls Wisely
Birthday cash or scholarships can be sizable.
Allocate at least half to investments.
Use remainder for necessary purchases.
Continuous Education in Finance
Finance field evolves with technology.
Attend webinars and workshops regularly.
Subscribe to trusted finance newsletters.
Learning keeps mistakes minimal.
Preparing for First Job
Review salary structure with planner.
Optimise for tax efficiency.
Increase SIPs immediately as salary kicks in.
Final Insights
Starting at 18 creates unmatched compounding benefit.
Build habits before chasing returns.
Emergency fund, health cover, and budgeting give safety.
SIP in equity oriented mutual funds drives growth.
Guidance from Certified Financial Planner keeps you on track.
Patience and discipline beat market noise.
Review goals and portfolio regularly.
Stay consistent, stay informed, and stay humble.
Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Asked by Anonymous - Oct 04, 2025Hindi
