For many working professionals in India, the realisation to start investing often dawns after a few years into their career. As savings begin to build and long-term financial goals like buying a home or planning retirement appear on the horizon, simply parking surplus funds in a savings account starts to feel insufficient. This pivotal moment, however, is frequently accompanied by uncertainty and perceived risk due to the complexities of financial markets. According to banking and personal finance expert Adhil Shetty, writing on January 6, 2026, a foundational understanding is key to overcoming this initial hesitation and embarking on a successful wealth-building journey.
Shifting Mindset: From Event to Journey
A common misconception among novice investors is viewing investing as a single, clever decision after which money grows automatically. Shetty emphasises that in reality, investing is a gradual process that unfolds over years, even decades. Financial markets are inherently volatile, experiencing both upward rallies and sharp corrections, often unpredictably. It is vital to understand that this volatility is a normal characteristic of markets, not an indicator of failure. Adopting a strategy of regular, disciplined investing helps navigate these phases smoothly and eliminates the futile pressure of trying to 'time the market' perfectly.
Building a Purpose-Driven Portfolio
Every financial instrument has a distinct role in a portfolio. Equity investments, such as stocks and mutual funds, aim for capital appreciation and beating inflation over the long term but come with short-term price fluctuations. Debt instruments and fixed deposits provide stability and predictable returns, focusing on capital preservation. Assets like gold often act as a hedge, adding diversification and balance. Shetty points out that when an investor clearly understands the primary purpose of each asset class, it becomes easier to set realistic expectations and avoid knee-jerk reactions during market downturns.
This clarity is best achieved by letting your financial goals dictate your investment choices. A goal-based approach means the strategy for a family holiday next year will be starkly different from saving for a child's education or one's own retirement two decades later. Short-term objectives require capital safety and easy liquidity, while long-term goals can afford to ride out market volatility for potentially higher returns. Without clearly defined goals, investors risk reacting impulsively to market noise instead of following a structured, personal plan.
Personalising Risk and Optimising Returns
Risk tolerance is not a one-size-fits-all metric. Shetty explains that an individual's capacity for risk depends on multiple personal factors including age, income stability, existing loan obligations (like home or car loans), and family responsibilities. What is comfortable for a peer may be stressful for you. A critical mistake beginners make is concentrating too much capital in a single stock, sector, or asset class, which heightens vulnerability. Diversification—spreading investments across various assets—is a fundamental principle to manage this risk and maintain a balanced portfolio.
Furthermore, what appears as a gain on paper is not always what you ultimately retain. Shetty cautions investors to pay close attention to the silent eroders of wealth: costs and taxes. Expenses like mutual fund expense ratios, brokerage fees, and administrative charges can significantly dent compounded returns over time. Similarly, tax implications on short-term versus long-term capital gains can alter the net outcome. Being mindful of the cost structure and tax treatment of each investment helps in keeping a larger share of the earnings.
The most powerful ally for any investor, especially a beginner, is time. Many delay starting their investment journey, waiting for a 'right' amount or a 'right' market moment. Shetty's advice is unequivocal: starting early, even with modest sums, is far more important than the initial size of the investment. Regular investing cultivates financial discipline and leverages the magic of compounding. Over extended periods, consistency and time in the market typically contribute more to wealth creation than attempting to invest a large lump sum perfectly.
While investing may seem daunting initially, it becomes more intuitive with knowledge and experience. Knowing the purpose of each investment, understanding personal risk boundaries, and maintaining consistency are pillars that reduce uncertainty. Ultimately, as Adhil Shetty concludes, investing transforms from a source of anxiety into a productive habit, with real financial progress emerging from the steady, informed decisions made year after year.
