How Much Money Do I Need to Start Investing?



Jul 25, 2022

The economic rise of the developed countries gave birth to a consumption-driven world. More and more people started taking consumer loans not only for their necessities but also to fund their luxuries. It even became a trend among youngsters to borrow money to fund their trips. In all this, what took the back seat was the habit of regular savings and investments that our elders have always taught us. 

Surprisingly, the Covid-19 pandemic and the Russia-Ukraine war have done the balancing act, teaching us that investing money is the most crucial step toward a secure future. Not only do investments provide a safety net, but they also help you build your wealth.

However, budding investors always ask, “how much do you need to become an investor?” What’s the minimum amount you can start investing with? This blog aims to answer all your questions about starting your first investment.

What to do Before You Start Investing?

Here are 3 major things you should do before investing your money.

  1. Manage Your Debts Efficiently 

Who doesn’t like to earn more? But it can be disastrous to park your money in investments when you still have debts to repay. It takes time for the investments to provide returns. On the other hand, debts need to be repaid on the due dates, failing which, can attract penalties. 

If you invest the money before paying off your debts, you might suddenly find yourself in a cash crunch. Thus, it is better to clear your debts first.

  1. Budget Your Monthly Expenses

While the word itself can have different meanings at micro and macro levels, budgeting for a household is fairly simple. You need to break your income into 3 different components, namely, essential expenses, luxuries, and savings. Suppose you earn Rs. 50,000 per month; here’s how experts suggest making a budget.



Monthly Income

Rs. 50,000

Essential Expenditure: 50% of Income

Rs. 25,000

Luxury Expenses: 30% of Income

Rs. 15,000

Savings & Investments 20% of Income

Rs. 10,000

The idea is to decide the maximum limit for your expenditures so that you can save and invest more money. Once you prepare your budget, you should always try to meet it and regularly save and invest the decided amount. 

  1. Plan for Emergencies

There is another important aspect that the experts prescribe. It is to save some money as a buffer or emergency fund. This money can be very useful in unforeseen situations where it might be time-consuming to liquidate your investments. Ideally, you should maintain liquidity that can help you sustain your expenses for at least 6 months.

How Much Money is Needed to Start Investing?

Having discussed the prerequisites of starting your investments, let’s talk about the elephant in the room. How much money do you need to become an investor? If you are an Indian investor, some of your popular investment choices would be FDs, PPF, stock markets, P2P investments, etc. Here’s how much money you need to start investing in each of these investment opportunities.

  • Fixed Deposits: Rs. 1,000 – 5,000 (It can be higher depending on the bank or FI)
  • PPF Accounts: Rs. 100 for Opening Accounts (Deposit Rs. 500 every year)
  • Stocks: No minimum amount. You can even start investing with Rs. 10!
  • Mutual Funds: You can start a SIP with as low as Rs. 100 per month
  • Gold ETFs: You can purchase the paper gold equivalent of Rs. 1,000 (99.50% purity)
  • P2P Investments: Start P2P investments with LenDenClub in a modest way with the opportunity to get good returns at a relatively lower risk 

So, how much money do you need to start investing? From the above discussion, it is evident that you can start with almost anything. While there is no minimum limit for investing in stock markets, you can start small for most of the above investments. 


Things to Keep in Mind Before Investing

Now that you know how much do you need to start investing, are you ready to make your first investment? Well, not yet. Here are some things you should keep in mind before you set on to make your investments. 

Identify Your Investing Goals 

It is by far one of the most important steps which many investors do not consider. You might invest in funding your children’s education or some event, in building a house or purchasing a car, go on a world tour, or simply grow your wealth. 

While there can be diverse investment goals, the time for which you invest your money, as well as your risk tolerance, depends on the type of investment objective. If you are saving for the future of your children, your risk tolerance can be low. At the same time, you can invest in the long term if you want to save money for your retirement.

Pick the Best Investment Opportunity

Based on your investment objective, risk tolerance, and the tenure of investment, you should choose the investment opportunity that suits you. If you can tolerate high risk, you should opt for investing in stock markets. On the other hand, if you are risk-averse, investments like fixed deposits can help you. Another popular investment opportunity is peer-to-peer lending. It is direct lending between individuals in exchange for monthly repayments. 

P2P platforms like LenDenClub provide an online marketplace where investors can register and start investing online within just a few clicks. With LenDenClub, you can earn up to 12% p.a. without facing any market risk. Because of robust borrower screening on 200+ data points, only creditworthy borrowers are listed on the portal, and the default rates faced by the P2P investors are as low as 3-4%. And, what’s more? Individuals, NRIs, and institutions can start their investment journeys with LenDenClub without worrying about the nuances of investing. LendenClub leverages AI-based filters for borrower shortlisting, and priority investments. All an investor has to do is sign up, complete the KYC, and update the borrower preference details. And, the investor is ready to go. 

Diversify a Small Portfolio

Every investment carries a certain degree of risk. While some investment opportunities carry low risk, others carry high risk. However, you can minimize the risk of losing your money by diversifying your investments. 

For Ex: The value of your stock investments is dependent on the fluctuation in market prices. Hence, it carries a high degree of risk. Although, you can reduce this risk by including stocks from different sectors in your portfolio.

P2P investment with LenDenClub provides the best diversification options for you. You can simply distribute your money among various borrowers. Suppose you want to invest Rs. 10,000 on LenDenClub. Now you can distribute it as Rs. 500 each among 20 borrowers. This diversification and risk distribution capabilities of LenDenClub make it one of the popular investment avenues in India. 

Consistency is the Key

Investing consistently over a period of time is the best way to build a good corpus. Let’s take an example. Assuming that the rate of returns is 10% p.a., if you invest Rs. 10,000 every month for 10 years; here’s how your investment will grow.


Opening Balance


Interest @ 10%

Closing Balance

1st Year

Rs. – 

Rs. 1,20,000

Rs. 6,702.81

Rs. 1,26,702.81

5th Year

Rs. 5,92,118

Rs. 1,20,000

Rs. 68,705

Rs. 7,80,824

10th Year

Rs. 17,55,000

Rs. 1,20,000

Rs. 1,90,478

Rs. 20,65,520


Our main objective with this blog was to clarify how much you need to start investing. We hope that you have now understood that you can start investing even with a small amount and gradually increase your investments. 

By following all the steps listed in this blog and planning your investments accordingly, you can easily start investing. If you wish to try P2P investments, log on to the LenDenClub platform to enjoy high returns with great interest.