I have Surplus Fund, But where do i start from??

So you have started to earn for the past few years, you have spent on all that you always wanted to and now maturity has dawned upon, now you want to save up for the future you. You go online, call your banker/Advisor and check for the best investment options available. Now you are exposed to a plethora of options Ranging from Fixed Deposits at 4.x% to Mutual funds, SIP’s, Equity investments, Insurance Investments and a lot more tools. The result ?? You are confused and decide to chuck the idea of investments and revisit it another day. A day that comes again after maybe 2 years and ends up with a similar result.
Is this scenario relatable?? Is this something that has happened to you?? Have you thought about why does this occur time and again ?? The answer is simple, we as Indians as always spoken about money in a negative connotation and refrain from talking about it with people around. It is almost taboo to ask others their income, and because there is no dialogue about this in our society, we tend to remain ill-informed at times misinformed and tend to make the wrong decisions. Earning money is a positive phenomenon and should in no way be construed as negative. Unfortunately, the setup we are brought up in, gets us thinking in that direction.
Now coming back to the topic, where do you invest your surplus?? Honestly, the answer truly lies with you. Investments are always done based on risk appetite and time-oriented goals.No form of investment is bad, be it Mutual funds, Equities, Bonds, Deposits they are all good in their own way. It is just about which tool fits you at what point in time.
Based on my experience, we normally recommend people to start investments through the SIP route since this will develop a sense of discipline and inculcate a habit of saving month after month. While doing this, you could also do a bit of research about equity stocks and start investing around 20% in large-cap stocks to be on the safe side. Now a lot of people might come back and say ” Stocks are risky and I am not ready for the risk”. The point here is that India is a growing economy and foreign investments are bound to come into the Indian markets in the long run, In case you are looking at making long term investments and benefitting out of the compounding game, investing in a few large-cap stocks in the beginning, wouldn’t be a bad idea.
Now that we have invested 40% into SIP’s and 20% into Equities, what do you do about the rest of the 40%?? It is recommended that we keep the rest of the 40% into easy to liquidate funds like say Liquid Mutual Funds, Bank Deposits to cater to any form of emergency. Please take note that normal Equity and Debt mutual funds normally take a little more than two working days to hit your account once redeemed. However, liquid mutual funds take just one day and are not very risky, hence there is no play involved here.
Now that you have come until here, open a Demat account with any of the brokerage houses and begin your journey to stable compounding returns!!

Please note-
The above article is meant for basic beginner investors, majorly ones who haven’t started out on their investment journey yet. I have intentionally not been technical here since it would defeat the purpose of keeping the article simple and easy to understand.
Lastly, though i work with the ICICI Group, my views are totally personal and based on the experience i hold. I have no intentions of naming or promoting any fund/financial product through this article.