I am a college student. What is the best way to invest my spare pocket money per month?



I am 17 and will start college next year. I will have Rs 2,000-3,000 to spare every month then. I want to invest this money. How should I go about it?
Raj Khosla Founder and Managing Director, Mymoneymantra.com
 replies: Congratulations for your wise decision to save and invest from an early age. With disciplined investment and time in hand, you can create a huge corpus by leveraging the power of compounding. Since you will be a major next year, ensure proper documentation like PAN card, Aadhaar and bank accounts. Investments in mutual funds should be a mix of debt and equity instruments.

Subject to your investment goals and time horizon, opt for an SIP of Rs 1,500 in Franklin India Ultra Short Bond Fund-Super Institutional for the short term. Put Rs 1,500 every month in Kotak Standard Multicap Fund for a longer horizon. Review and rebalance your portfolio once a year. You can invest and track your portfolio online, in a hassle-free manner. However, it does require studying past performance of various funds and developing analytical capabilities and a sense for anticipating market movements.

I am a government employee. My wife is also working and together we bring home Rs 80,000 a month. I have an outstanding home loan of Rs 16 lakh, which I intend to clear in five years. I invest about Rs 8,500 a month in L&T Value Fund, Kotak Tax Saver and DSP through SIPs. My NPS contribution is Rs 10,000. Am I on the right track?
Rahul Parikh CEO, Bajaj Capital
 replies: You have not mentioned which DSP fund you are investing in. L&T Value and Kotak Tax Saver are good funds in their respective categories. If you have a long-term investment horizon and considering foreseeable market condition, you can think of adding a small cap fund to your portfolio. Axis Small Cap Fund or Kotak Small Cap Fund are good options. Once your loan term is over, increase your existing SIP amount. Also, review your portfolio every year.


Written by Loknath Das